Smurfit Westrock plc

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Summary of Significant Accounting Policies

Description of Business

Smurfit Westrock plc (formerly known as Cepheidway Limited and Smurfit WestRock Limited) (“Smurfit Westrock,” or the “Company”) is a company limited by shares that was incorporated in Ireland on July 6, 2017. The registered office of the Company is Beech Hill, Clonskeagh, Dublin 4, Ireland, which is also the principal place of business of the Company. 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 renamed Smurfit Westrock plc.

Other than activities related to its formation and in anticipation of the combination with WestRock, the Company has not conducted any operations since its incorporation through the end of the quarter covered by this Quarterly Report on Form 10-Q. Unless the context otherwise requires, Smurfit Westrock and “the Company” refer to the business of Smurfit Westrock and its wholly-owned subsidiaries, which, as of June 30, 2024, did not include Smurfit Kappa Group plc (“Smurfit Kappa”), or WestRock Company (“WestRock”).

Basis of Presentation

Our independent registered public accounting firm has not audited the accompanying consolidated interim financial statements. The unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. The consolidated balance sheet at December 31, 2023, was derived from the audited consolidated financial statements included within Smurfit Westrock’s Registration Statement on Form S-4, which was declared effective on April 26, 2024 (as supplemented by the prospectus filed with the SEC on April 26, 2024, the “Registration Statement”). The unaudited consolidated interim financial statements are presented in United States Dollars.

In the opinion of the Company’s management, the accompanying unaudited consolidated interim financial statements contain all the adjustments necessary for a fair statement of the financial position and the results of operations and cash flows for the interim periods and as at the dates presented. The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the operating results for the full fiscal year or any future period because prior to the completion of the Combination, Smurfit Westrock had no assets, no operations, and only nominal capitalization. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Registration Statement.

Summary of Significant Accounting Policies

See “Note 1 Description of Business and Summary of Significant Accounting Policies” of the notes to the Consolidated Financial Statements of the Company included in the Registration Statement for a summary of our significant accounting policies.

2. Transaction Agreement and Combination with WestRock

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 “Transaction Agreement”).

On July 5, 2024, pursuant to the Transaction Agreement between Smurfit Kappa, WestRock, Smurfit Westrock and Sun Merger Sub, LLC (“Merger Sub”): (i) Smurfit Westrock acquired Smurfit Kappa by means of a scheme of arrangement (the “Scheme”) under the Companies Act 2014 of Ireland (as amended) (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 was subject to certain conditions set forth in the Transaction Agreement, including, but not limited to: certain regulatory clearances, approval by the stockholders of Smurfit Kappa and stockholders of WestRock, sanction of the Scheme by the High Court of Ireland, the Registration Statement for the offer of the shares of Smurfit Westrock being declared effective by the SEC, approval of the shares of Smurfit Westrock for listing on the New York Stock Exchange (“NYSE”), and approval of the shares of Smurfit Westrock for listing on the Official List of the Financial Conduct Authority (“FCA”).

Pursuant to the Transaction Agreement, 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”). On July 5, 2024, pursuant to a High Court-ordered transfer scheme of arrangement, the Company issued 261,094,836 ordinary shares to the former shareholders of Smurfit Kappa in exchange for their shares in Smurfit Kappa. The Scheme is not a business combination under GAAP as Smurfit Westrock had no historical operations or material assets prior to the Scheme, the ownership of Smurfit Westrock is the same as that of Smurfit Kappa immediately following the Scheme and prior to the Merger, and is a share for share exchange with no cash consideration. The Scheme does not give rise to any goodwill or change in accounting basis.

Each share of common stock, par value $0.01 per share, of WestRock (the “WestRock Common Stock”), was converted into the right to receiveone Smurfit Westrock Share and $5.00 in cash (the “Merger Consideration”) for an aggregate cash consideration of $1,291 million. On July 5, 2024, the Company issued 258,228,403 shares to the former shareholders of WestRock in exchange for the net assets of WestRock acquired through the Merger. Smurfit Kappa was deemed to be the accounting acquirer of WestRock for accounting purposes under ASC 805.

Due to the limited time between the transaction date and the Company’s filing of these financial statements for the quarter ended June 30, 2024 in this Form 10-Q, Smurfit Kappa’s initial accounting for the business combination is incomplete. The Company expects to provide preliminary purchase price allocation information within its consolidated interim financial statements as of and for the three and nine-months ended September 30, 2024, to be filed in its Form 10-Q for the period then ended. Accordingly, the financial results of Smurfit Westrock as of and for the periods ended prior to July 5, 2024, do not include the financial results of Smurfit Kappa or WestRock and future results will not be comparable to historical results.

Upon completion of the Combination, Smurfit Kappa and WestRock each became wholly owned subsidiaries of Smurfit Westrock with Smurfit Kappa shareholders owning approximately 50.4% and WestRock shareholders owning approximately 49.6%. The combined group is headquartered and domiciled in Dublin, Ireland, with North and South American headquarters in Atlanta, Georgia, U.S. Smurfit Westrock has a dual listing on the NYSE and the standard listing segment of the Official List of the FCA, and the Smurfit Westrock Shares have been admitted to trading on the NYSE and the main market for listed securities of the London Stock Exchange (“LSE”).

3. Stockholders’ Equity

On June 13, 2024, in connection with the Company’s re-registration as a public limited company for the purpose of satisfying minimum capitalization requirements under Irish law, the Company issued 24,900 ordinary shares with a par value of€1 for€1 each for an aggregate consideration of$26,852.

On June 26, 2024, the Company created and authorized 500,000,000 Preference Shares with a par value of$0.001 each. As of June 30, 2024, there wereno Preference Shares issued andoutstanding. The Preference Shares are non-voting and have a fixed 8% non-cumulative dividend right.

4. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in actual Dollars, except per share data):

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.

5. Subsequent Events

Combination with WestRock

Refer to Note 2.Transaction Agreement and Combination with WestRock, for details of the Combination which closed on July 5, 2024.

Issuance of Preference Shares

On July 2, 2024, the Company issued 10,000 shares of the Preference Shares in consideration for services previously provided by the Company’s legal advisors in connection with its re-registration as an Irish public limited company.

Re-designation of Ordinary Shares

On July 5, 2024, as part of Smurfit Westrock’s amendments to its Articles of Incorporation and Bylaws, the 25,000 issued ordinary shares of €1.00 each were re-designated as €25,000 Euro deferred ordinary shares of €1.00 each.

Prepayment and Cancellation of Subsidiary Debt

On July 5, 2024, Smurfit Kappa, a subsidiary of the Company subsequent to the Combination, cancelled its €1,350 million revolving credit facility. There wereno early termination penalties incurred as a result of the termination of the revolving credit facility. Additionally, on July 5, 2024, Smurfit Kappa, in exchange for an intercompany loan with WestRock, a subsidiary of the Company, funded the prepayment and cancellation of the $750 million delayed draw term loan agreement as held by WestRock at that date.

Guarantee of Indebtedness

On July 5, 2024, in connection with the Combination, Smurfit Westrock entered supplemental indentures to become a guarantor of various outstanding debt securities issued by subsidiaries of Smurfit Kappa and WestRock. Also on July 5, 2024, (i) Smurfit Westrock entered an accession letter to became a guarantor under the New Credit Agreement, as amended, by and among Smurfit Kappa, as guarantor, certain subsidiaries of Smurfit Kappa, as borrowers or guarantors, WestRock and certain of its subsidiaries, as guarantors, and the lenders thereto, (ii) Smurfit Westrock entered a joinder agreement to become a guarantor under the term loan credit agreement with CoBank, ACB, as administrative agent, as amended and restated, by and among WestRock, as guarantor, certain of its subsidiaries, as borrowers or guarantors, and the lenders thereto, and (iii) Smurfit Westrock entered an omnibus amendment to become the performance guarantor under the Eighth Amended and Restated Credit and Security Agreement, as amended, and Sixth Amended and Restated Receivables Sale Agreement, as amended, by and among WestRock, certain of its subsidiaries, and the lenders thereto.

Dividend Approval

Following approval on July 24, 2024 by the High Court of Ireland of a capital reduction in accordance with Part 3 of the Companies Act 2014, on July 26, 2024, Smurfit Westrock announced that the Board approved a quarterly dividend of $0.3025 per share on its ordinary shares. The quarterly dividend of $0.3025 per ordinary share is payable September 18, 2024 to shareholders of record at the close of business on August 15, 2024.