☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Unless the context otherwise requires, “we”, “us”, “our”, “WestRock” and “the Company” refer to ~~the business of~~ WestRock Company, its wholly-owned subsidiaries and its partially-owned consolidated subsidiaries.

We are a multinational provider of sustainable fiber-based paper and packaging solutions. We partner with our customers to provide differentiated, sustainable paper and packaging solutions that help them win in the marketplace. Our team members support customers around the world from our operating and business locations in North America, South America, Europe, Asia and Australia.

Note 1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

Our independent registered public accounting firm has not audited the accompanying interim financial statements. We derived the consolidated balance sheet at September 30, ~~2022~~2023 from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2022~~2023 (the “Fiscal ~~2022~~2023 Form 10-K”). In the opinion of management, all normal recurring adjustments necessary for the fair presentation of the consolidated financial statements have been included for the interim periods reported.

WeThe interim financial statements have ~~condensed or omitted~~been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they omit certain notes and other information from the interim financial statements presented in this report. Therefore, these interim financial statements should be read in conjunction with the Fiscal ~~2022~~2023 Form 10-K. The results for the three months ended December 31, ~~2022~~2023 are not necessarily indicative of results that may be expected for the full year.

On December 1, 2022, we completed our previously announced acquisition of the remaining 67.7% interest in Gondi, S.A. de C.V. (“Grupo Gondi”) for $969.8 million in cash and the assumption of debt ("(“~~Grupo Gondi~~Mexico Acquisition"”). We have accounted for this acquisition as a business combination resulting in ~~consolidation of Grupo Gondi.~~its consolidation. See “Note 3. Acquisitions” for additional information.

On December 1, 2022, we sold our Eaton, IN, and Aurora, IL uncoated recycled paperboard mills for $50 million, subject to a working capital adjustment. We received proceeds of $25 million, a preliminary working capital settlement of $0.9 million and are financing the remaining $25 million. Pursuant to the terms of the sale agreement, we transferred the control of these mills to the buyer and recorded a pre-tax gain on sale of $11.1 million recorded in Other (expense) income, net in our consolidated statements of ~~income.~~operations. During the third quarter of fiscal 2023, we recorded a de minimis final working capital settlement.

Transaction Agreement with Smurfit Kappa

On September 12, 2023, we entered into a transaction agreement (the “Transaction Agreement”) with Smurfit Kappa Group plc, a public limited company incorporated in Ireland (“Smurfit Kappa”), Cepheidway Limited (to be renamed Smurfit WestRock plc), a private limited company incorporated in Ireland (“ListCo”), and Sun Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of ListCo (“Merger Sub”).

The Transaction Agreement provides, among other things, and subject to the satisfaction or waiver of the conditions set forth therein, that (a) pursuant to a scheme of arrangement (the “Scheme”) each issued ordinary share of Smurfit Kappa (the “Smurfit Kappa Shares”) will be exchanged for one ordinary share of ListCo (a “ListCo Share”), as a result of which Smurfit Kappa will become a wholly owned subsidiary of ListCo, and (b) following the implementation of the Scheme, Merger Sub will merge with and into the Company (the “Merger” and, together with the Scheme, the “Transaction”), with the Company surviving the Merger as a wholly owned subsidiary of ListCo. As a result of the Merger, each share of common stock, par value $0.01 per share, of the Company (the “Common Stock”), with certain exceptions, will be converted into the right to receive one ListCo Share and $5.00 in cash. All shares owned by the Company, any Company subsidiary, Smurfit Kappa, Merger Sub or any of their respective subsidiaries will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor.

~~In November 2022, we announced our entry into~~8

Notes to Consolidated Financial Statements (Unaudited) (Continued)

The Transaction Agreement also provides a ~~definitive agreement~~mechanism for converting outstanding Company equity awards to wholly divest our interior partitions converting operations (our ownership interest in RTS Packaging, LLC) and to sell our Chattanooga, TN uncoated recycled paperboard mill to our joint venture partner for $~~330~~ ~~million, subject to a working capital adjustment.~~ListCo awards. The ~~transaction~~Transaction is expected to close in early July 2024, conditional upon regulatory approvals, shareholder approvals and satisfaction of other closing conditions. We expect that the ListCo shares will be (i) registered under the Securities Exchange Act of 1934, as amended, and listed on the New York Stock Exchange (“~~2023~~NYSE,”) and (ii) listed on the Standard Listing segment of the Official List of the Financial Conduct Authority and admitted to trading on the main market for listed securities of the London Stock Exchange. Shares of our Common Stock will be delisted from the NYSE and deregistered under the Exchange Act.

The Transaction is subject to ~~the satisfaction of closing~~certain conditions ~~including the receipt of regulatory approval. Accordingly, the related assets and liabilities have been reported~~set forth in the ~~consolidated balance sheet as~~Transaction Agreement, including, but not limited to: certain regulatory clearances, approval by the shareholders and stockholders of ~~December 31, 2022 as assets~~both companies (the approval of the Scheme by 75% or more in value of the Smurfit Kappa Shares held by such shareholders of Smurfit Kappa that are present and ~~liabilities held~~voting at the Court Meeting (as defined in the Transaction Agreement), and the affirmative vote of the holders of a majority of the outstanding shares of Company Common Stock), the registration statement for ~~sale. See “~~the offer of ListCo Shares being declared effective by the SEC and the approval of the ListCo Shares for listing on the NYSE.

The Transaction Agreement contains certain termination rights for both parties. Upon termination of the Transaction Agreement under specified circumstances, including if our board changes or withdraws its recommendation to our stockholders or willfully breaches its non-solicitation covenant, we will be required to make a payment to Smurfit Kappa equal to $~~Note 4. Held for Sale~~147~~” for additional information.~~ million in cash. If the Transaction Agreement is terminated in connection with the failure to obtain our stockholders’ approval, we will be required to make a payment to Smurfit Kappa equal to $57 million in cash. Smurfit Kappa will be required to make payments to us in connection with the termination of the Transaction Agreement under specified circumstances.

The foregoing summary of the Transaction Agreement does not purport to be complete and is subject to and qualified in its entirety by the full text of the Transaction Agreement.

Reclassifications and Adjustments

Certain amounts in prior periods have been reclassified to conform with the current year presentation.

~~COVID-19 Pandemic~~

~~The global impact of the COVID-19 pandemic ("COVID~~") has affected our operational and financial performance to varying degrees. The extent of the effects of future public health crises, including a resurgence of COVID, or related containment measures and government responses are highly uncertain and cannot be predicted.

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~Ransomware Incident~~

As previously disclosed, on January 23, 2021 we detected a ransomware incident impacting certain of our systems. Promptly upon our detection of this incident, we initiated response and containment protocols and our security teams, supplemented by leading cyber defense firms, worked to remediate this incident. These actions included taking preventative measures, such as shutting down certain systems out of an abundance of caution, as well as taking steps to supplement existing security monitoring, scanning and protective measures. In our Form 10-Q for the second quarter of fiscal 2021, we announced that all systems were back in service.

~~In the first quarter of fiscal 2022, we received a $~~5 ~~million business interruption recovery related to the ransomware incident, which we recorded as a reduction of~~ ~~Cost of goods sold~~ ~~and presented in net cash provided by operating activities on our consolidated statements of cash flows.~~

~~See “Note 1. Description of Business and Summary of Significant Accounting Policies — Ransomware Incident” of the Notes to Consolidated Financial Statements section in the Fiscal 2022 Form 10-K for additional information, including other recoveries (fiscal 2021 $~~15 ~~million and fiscal 2022 $57.2~~ ~~million) and resiliency efforts and objectives.~~

Significant Accounting Policies

See “Note 1. Description of Business and Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements section in the Fiscal ~~2022~~2023 Form 10-K for a summary of our significant accounting policies.

Supplier Finance Program Obligations

We maintain supplier finance programs whereby we have entered into payment processing agreements with certain financial institutions. These agreements allow participating suppliers to track payment obligations from WestRock, and if voluntarily elected by the supplier, to sell payment obligations from WestRock to financial institutions at a discounted price. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the program, and we do not reimburse suppliers for any costs they incur for participation in the program. We have not pledged any assets as security or provided any guarantees as part of the programs. We have no economic interest in our suppliers’ decisions to participate in the programs. Our responsibility is limited to making payment in full to the respective financial institution according to the terms originally negotiated with the supplier, which generally do not exceed 120 days. WestRock or the financial institutions may terminate the agreements upon 30 or 90 days’ notice.

The outstanding payment obligations to financial institutions under these programs were $436.1 million and $425.8 million as of December 31, 2023 and September 30, 2023, respectively. These obligations are classified as accounts payable within the consolidated balance sheets.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

Recent Accounting Developments

New Accounting Standards — Recently Adopted

In ~~November 2021,~~September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2021-10, “Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance~~”. This ASU aims to increase the transparency of government assistance through the annual disclosure of the types of assistance, an entity’s accounting for the assistance and the effect of the assistance on an entity’s financial statements. This ASU is effective for annual periods beginning after December 15, 2021 (fiscal 2023 for us), with early adoption permitted. We ~~adopted~~ ~~the provisions of ASU 2021-10 beginning~~ ~~October 1, 2022. The adoption of this ASU did~~ no~~t have a material impact on our consolidated financial statements.~~

~~In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. This ASU provides temporary optional expedients and exceptions for applying generally accepted accounting principles in the U.S. ("GAAP~~") guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. In January 2021, the FASB issued ASU 2021-01, which adds implementation guidance to clarify certain optional expedients in Topic 848. The ASUs can be adopted after their respective issuance dates through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, “~~Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024.~~We are in the process of reviewing and updating our contracts to a new reference rate. We have been addressing the LIBOR transition in our applicable debt facilities and have completed the transition on all of our significant facilities. See “~~Note 13. Debt” of the Notes to Consolidated Financial Statements section in the Fiscal 2022 Form 10-K for additional information on our recent credit facility changes. We~~ ~~adopted~~ ~~the provisions of this optional guidance beginning~~ ~~October 1, 2022. The adoption of these ASUs did~~ no~~t have a material impact on our consolidated financial statements.~~

~~In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. This ASU requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606 “Revenue from Contracts with Customers” (“ASC 606”). This ASU is intended to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

at the date of and after a business combination. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024 for us), including interim periods therein, with early adoption permitted. We early ~~adopted~~ ~~the provisions of ASU 2021-08 beginning~~ ~~October 1, 2022. The adoption of this ASU did~~ no~~t have a material impact on our consolidated financial statements.~~

~~New Accounting Standards — Recently Issued~~

~~In September 2022, the FASB issued ASU~~ 2022-04, “Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”. This ASU requires that ~~a buyer in a~~all entities that use supplier finance ~~program~~programs in connection with the purchase of goods and services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024 for us), except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023 (fiscal 2025 for us), each with early adoption permitted. We ~~are evaluating~~adopted the ~~impact~~provisions of this ~~ASU.~~ASU beginning

October 1, 2023, other than the rollforward disclosure requirement which we will adopt in fiscal 2025. The adoption did not

~~In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions~~”. This ASU clarifies that contractual sale restrictions should not be considered in measuring the fair value of equity securities. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2025 for us), including interim periods therein, with early adoption permitted. We are evaluating thehave a material impact ~~of this ASU.~~on our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method”. This ASU expands and clarifies the portfolio layer method for fair value hedges of interest rate risk. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024 for us), including interim periods therein, with early adoption permitted. We adopted the provisions of this ASU beginning October 1, 2023. The adoption of this ASU did not have a material impact on our consolidated financial statements.

New Accounting Standards — Recently Issued

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. This update is effective for fiscal years beginning after December 15, 2024 (fiscal 2026 for us). All entities should apply the guidance prospectively but have the option to apply it retrospectively. Early adoption is permitted. We are evaluating the impact of this ASU.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. This ASU expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The updates will be applied retrospectively to all periods presented in financial statements. This ASU is effective for annual periods beginning after December 15, 2023 (fiscal 2025 for us), and for interim periods beginning after December 15, 2024 (fiscal 2026 for us). Early adoption is permitted. We are evaluating the impact of this ASU.

Note 2. Revenue Recognition

Disaggregated Revenue

Accounting Standards Codification (“ASC”) 606 “Revenue from Contracts with Customers” 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 tables below disaggregate our revenue by geographical market and product type (segment). Net sales are attributed to geographical markets based on our selling location. ~~Other Unallocated includes the results of Grupo Gondi.~~ See “Note 8.7. Segment Information” for additional information.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

The following tables summarize our disaggregated revenue by primary geographical markets (in millions):


	Three Months Ended December 31, 2022															Three Months Ended December 31, 2023
	Corrugated Packaging		Consumer Packaging		Global Paper		Distribution		Other Unallocated		Inter- segment Sales			Total		Corrugated Packaging		Consumer Packaging		Global Paper		Distribution		Intersegment Sales			Total
U.S.	$	1,973.5	$	703.0	$	1,022.7	$	276.7	$	—	$	(71.5	)	$	3,904.4	$	1,796.4	$	593.8	$	820.5	$	248.1	$	(61.0	)	$	3,397.8
Latin America																	485.4		6.1		23.5		40.4		(4.1	)		551.3
Canada		137.1		123.7		45.5		3.4		—		(1.5	)		308.2		135.1		116.7		51.1		1.2		(0.7	)		303.4
Latin America		123.3		51.7		33.6		41.4		102.2		(1.3	)		350.9
EMEA (1)		1.3		259.9		11.1		—		—		(0.1	)		272.2		3.0		270.9		11.9		—		(1.4	)		284.4
Asia Pacific		—		76.7		10.7		—		—		—			87.4		—		71.8		11.3		—		—			83.1
Total	$	2,235.2	$	1,215.0	$	1,123.6	$	321.5	$	102.2	$	(74.4	)	$	4,923.1	$	2,419.9	$	1,059.3	$	918.3	$	289.7	$	(67.2	)	$	4,620.0

(1)

Europe, Middle East and Africa ("~~EMEA"~~EMEA")


	Three Months Ended December 31, 2022
	Corrugated Packaging		Consumer Packaging		Global Paper		Distribution		Intersegment Sales			Total
U.S.	$	1,973.5	$	703.0	$	1,022.7	$	276.7	$	(71.5	)	$	3,904.4
Latin America		225.5		51.7		33.6		41.4		(1.3	)		350.9
Canada		137.1		123.7		45.5		3.4		(1.5	)		308.2
EMEA		1.3		259.9		11.1		—		(0.1	)		272.2
Asia Pacific		—		76.7		10.7		—		—			87.4
Total	$	2,337.4	$	1,215.0	$	1,123.6	$	321.5	$	(74.4	)	$	4,923.1

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Three Months Ended December 31, 2021

Corrugated Packaging

Consumer Packaging

Global Paper

Distribution

Inter-
segment
Sales

Total

U.S.

$
1,969.0

$
648.3

$
1,213.1

$
284.6

$
(82.4
)

$
4,032.6

Canada

140.4

114.3

57.9

3.5

(1.3
)

314.8

Latin America

107.6

45.5

48.3

36.7

(0.1
)

238.0

EMEA

3.0

252.1

15.9

—

(0.1
)

270.9

Asia Pacific

—

78.5

17.4

—

—

95.9

Total

$
2,220.0

$
1,138.7

$
1,352.6

$
324.8

$
(83.9
)

$
4,952.2

Revenue Contract Balances

~~Contract~~Our contract assets ~~are rights~~relate to ~~consideration in exchange~~the manufacturing of certain products that have no alternative use to us, with right to payment for ~~goods that we have transferred~~performance completed to date on these products, including a ~~customer when that right is conditional on something other than the passage of time.~~reasonable profit. Contract assets are reduced when the ~~control of~~customer takes title to the goods ~~passes to~~and assumes the ~~customer.~~risks and rewards for the goods. Contract liabilities represent obligations to transfer goods or services to a customer for which we have received consideration. Contract liabilities are reduced once control of the goods is transferred to the customer.

The opening and closing balances of our contract assets and contract liabilities are as follows. Contract assets and contract liabilities are reported within Other current assets and Other current liabilities, respectively, on the consolidated balance sheets (in millions).

Contract Assets
(Short-Term)

Contract Liabilities
(Short-Term)

Beginning balance - October 1, 2022

$
244.0

$
13.9

Ending balance - December 31, 2022

258.0

14.4

Increase

$
14.0

$
0.5


	Contract Assets (Short-Term)		Contract Liabilities (Short-Term)
Beginning balance - October 1, 2023	$	241.7	$	13.5
Increase (decrease)		9.4		(2.6	)
Ending balance - December 31, 2023	$	251.1	$	10.9

Note 3. Acquisitions

When we obtain control of a business by acquiring its net assets, or some or all of its equity interest, we account for those acquisitions in accordance with ASC 805, “Business Combinations” (“ASC 805”). The estimated fair values of all assets acquired and liabilities assumed in acquisitions are provisional and may be revised as a result of additional information obtained during the measurement period of up to one year from the acquisition date.

~~Grupo Gondi~~Mexico Acquisition

On December 1, 2022, we completed ~~our previously announced acquisition of~~ the ~~remaining~~ ~~67.7% interest in Grupo Gondi. Grupo Gondi~~Mexico Acquisition. The acquiree is a leading integrated producer of ~~corrugated and consumer~~fiber-based sustainable packaging solutions that operates four paper mills, nine corrugated packaging plants and six high graphic plants throughout Mexico, producing sustainable packaging for a wide range of end markets in the

Notes to Consolidated Financial Statements (Unaudited) (Continued)

region. This ~~tuck-in~~ acquisition ~~will provide~~provides us with further geographic and end market diversification as well as ~~position~~positions us to continue to grow in the attractive Latin American market.

See below for a summary of the purchase consideration transferred as defined under ASC 805 (in millions):


	Purchase Consideration		Purchase Consideration
Cash consideration transferred for 67.7% interest	$	969.8	$	969.8
Fair value of the previously held interest		403.7		403.7
Settlement of preexisting relationships (net receivable from Grupo Gondi)		40.2
Settlement of preexisting relationships (net receivable from joint venture)				40.2
Purchase consideration transferred	$	1,413.7	$	1,413.7

In connection with the transaction, in the first quarter of fiscal 2023, we recognized a $46.8 million non-cash, pre-tax loss (or $24.6 million after release of a related deferred tax liability) on our original 32.3% investment. The loss is reflected in the Equity in income (loss) ~~income~~ of unconsolidated entities line item in our consolidated statements of ~~income~~operations and ~~includes~~included the

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

write-off of historical foreign currency translation adjustments previously recorded in Accumulated other comprehensive loss in our consolidated balance sheet, as well as the difference between the fair value of the consideration paid and the carrying value of our prior ownership interest. The fair value of our previously held interest in ~~Grupo Gondi~~the joint venture was estimated to be $403.7 million at the acquisition date based on the cash consideration exchanged for acquiring the 67.7% of equity interest adjusted for the deemed payment of a control premium.

This step-acquisition provided us with 100% control, ~~of Grupo Gondi~~ and we met the other requirements under ASC 805 for the transaction to be accounted for using the acquisition method of accounting. We have included the financial results of the acquired operations in our Corrugated Packaging segment. Post acquisition, sales to the operations acquired in the Mexico Acquisition are eliminated from our Global Paper segment results.

The following table summarizes the ~~preliminary~~ fair values of the assets acquired and liabilities assumed in the ~~Grupo Gondi~~Mexico Acquisition by major class of assets and liabilities as of the acquisition ~~date. We are in~~date, as well as adjustments made during the ~~process of analyzing~~one year period from the ~~estimated values of all assets acquired and liabilities assumed including, among other things, finalizing third-party valuations.~~

~~Opening balance effective December 1, 2022~~acquisition date (referred to as “measurement period adjustments”) (in millions):


			Amounts Recognized as of the Acquisition Date		Measurement Period Adjustments (1) (2)			Amounts Recognized as of Acquisition Date (as Adjusted)
Cash and cash equivalents	$	116.3	$	116.3	$	—		$	116.3
Current assets, excluding cash and cash equivalents		697.0		697.0		(71.2	)		625.8
Property, plant and equipment		1,380.3		1,380.3		43.0			1,423.3
Goodwill		231.2		231.2		6.2			237.4
Other long-term assets		101.4
Other noncurrent assets				101.4		0.6			102.0
Total assets acquired		2,526.2		2,526.2		(21.4	)		2,504.8

Current portion of debt ~~(1)~~(3)		13.2		13.2		—			13.2
Current liabilities, excluding debt		384.8		384.8		(50.4	)		334.4
Long-term debt due after one year ~~(1)~~(3)		591.4		591.4		36.2			627.6
Pension liabilities, net of current portion		35.2		35.2		(3.1	)		32.1
Deferred income taxes		69.8		69.8		(4.1	)		65.7
Other long-term liabilities		18.1
Other noncurrent liabilities				18.1		—			18.1
Total liabilities assumed		1,112.5		1,112.5		(21.4	)		1,091.1
Net assets acquired	$	1,413.7	$	1,413.7	$	—		$	1,413.7

(1)

The measurement period adjustments did not have a significant impact on our consolidated statements of operations in any period.

~~(1)~~(2)

The measurement period adjustments were primarily due to refinements to the carrying amounts of certain assets and liabilities. The net impact of the measurement period adjustments resulted in a net increase in goodwill.

(3)

Includes $494.8 million of ~~Grupo Gondi~~ debt that we assumed and repaid in connection with the closing of the ~~Grupo Gondi~~Mexico Acquisition. The remaining balance relates to current and long-term portions of finance leases.

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually

Notes to Consolidated Financial Statements (Unaudited) (Continued)

identified and separately recognized. The fair value assigned to goodwill is primarily attributable to buyer-specific synergies expected to arise after the acquisition (e.g., enhanced reach of the combined organization and other synergies), the assembled work force, ~~as well as due to establishing~~and the establishment of deferred tax liabilities for the difference between book and tax basis of the assets and liabilities acquired. The goodwill is not amortizable for income tax purposes.

Transaction costs to acquire ~~Grupo Gondi~~the Mexico Acquisition are expensed as incurred and recorded within Restructuring and other ~~costs.~~costs, net. See “Note 5.4. Restructuring and Other Costs, Net” for additional information. ~~The results of operations, assets and liabilities for Grupo Gondi for the month of December 2022 have been included in "Other unallocated" as described in “Note 8.Segment Information~~”.

Note 4. ~~Held For Sale~~

In November 2022, we announced our entry into a definitive agreement to divest our interior partitions converting operations (our ownership interest in RTS Packaging, LLC) and to sell our Chattanooga, TN uncoated recycled paperboard mill to our joint venture partner for $~~330~~ ~~million, subject to a working capital adjustment. The transaction is expected to close in~~ ~~2023~~, subject to the satisfaction of closing conditions, including the receipt of regulatory approval. Accordingly, the related assets and liabilities have been reported in the consolidated balance sheet as of December 31, 2022 as assets and liabilities held for sale. We discontinued recording depreciation and amortization while the assets are held for sale. We have also measured the disposal groups classified as held for sale at the lower of their carrying amount or fair value less cost to sale, noting no impairment. We determined that the disposal groups classified as held for sale do not meet the criteria for classification as discontinued operations.

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~Net assets and liabilities held for sale at December 31, 2022 and September 30, 2022 were $148.5~~ ~~million and $34.4~~ ~~million, respectively. Net assets held for sale at December 31, 2022, include $114.2~~ ~~million for the divestiture outlined above and $34.3~~ ~~million related to closed facilities. Net assets held for sale of $34.4~~ ~~million at September 30, 2022 were related to closed facilities. The net assets held for sale at December 31, 2022 associated with the divestiture consisted primarily of $72.8~~ ~~million of goodwill and $39.6~~ ~~million of property, plant and equipment, net.~~

~~Note 5. Restructuri~~ngRestructuring and Other Costs, Net

Summary of Restructuring and Other Initiatives

We recorded pre-tax restructuring and other costs, net of $~~33.0~~65.5 million for the three months ended December 31, ~~2022~~2023 and $~~2.3~~32.1 million for the three months ended December 31, ~~2021.~~2022. These amounts are not comparable since the timing and scope of the individual actions associated with each restructuring, acquisition, integration or divestiture can vary. We present our restructuring and other costs, net in more detail below.

The following table summarizes our Restructuring and other costs, net (in millions):


	Three Months Ended				Three Months Ended
	December 31,				December 31,
	2022		2021		2023		2022
Restructuring	$	16.3	$	2.1	$	62.7	$	15.4
Other		16.7		0.2		2.8		16.7
Restructuring and other costs	$	33.0	$	2.3
Restructuring and other costs, net					$	65.5	$	32.1

Restructuring

Our restructuring charges are primarily associated with restructuring portions of our operations (i.e., partial or complete facility closures). A partial facility closure may consist of shutting down a machine and/or a workforce reduction. We have previously incurred reduction in workforce actions, facility closure activities, impairment costs and certain lease ~~or other contract terminations.~~terminations from time to time.

We are committed to improving our return on invested capital as well as maximizing the performance of our assets. In fiscal 2023, we announced our plan to permanently cease operating our Tacoma, WA and North Charleston, SC containerboard mills. These mills ceased production in September 2023 and June 2023, respectively. The Tacoma and North Charleston mills' annual production capacity was 510,000 tons and 550,000 tons, respectively, of which approximately three-fifths and two-thirds, respectively, was shipped to external customers of the Global Paper segment. The combination of high operating costs and the need for significant capital investment were the determining factors in the decision to cease operations at these mills.

By closing these mills, significant capital that would have been required to keep the mills competitive in the future is expected to be deployed to improve key assets. Charges recognized are reflected in the table below ~~reflects~~in the Global Paper segment. We expect to record future restructuring charges, primarily associated with carrying costs. We expect these costs to be partially offset in a future period by proceeds from the sale of these facilities.

The numbers in the table below, particularly in the cumulative and total expected columns, also include various impairments and other charges associated with our fiscal 2022 decisions to permanently cease operations at our Panama City, FL mill and to permanently close the corrugated medium manufacturing operations at the St. Paul, MN ~~mill, as reflected in the Global Paper segment.~~mill. See “Note 4.5. Restructuring and Other Costs, Net” of the Notes to Consolidated Financial Statements section in the Fiscal ~~2022~~2023 Form 10-K for additional information.

While restructuring costs are not charged to our segments and, therefore, do not reduce each segment's Adjusted EBITDA (as hereinafter defined), we highlight the segment to which the charges relate. Since we do not allocate restructuring costs to our segments, charges incurred in the Global Paper segment will represent all charges associated with our vertically integrated mills and recycling operations. These operations manufacture for

Notes to Consolidated Financial Statements (Unaudited) (Continued)

the benefit of each reportable segment that ultimately sells the associated paper and packaging products to our external customers.

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

The following table presents a summary of restructuring charges related to active restructuring initiatives that we incurred during the three months ended December 31, ~~2022~~2023 and ~~2021,~~2022, the cumulative recorded amount since we started the initiatives and our ~~estimate~~estimates of the total charges we expect to incur (in millions):. These estimates are subject to a number of assumptions, and actual results may differ.


	Three Months Ended										Three Months Ended
	December 31,										December 31,
	2022			2021			Cumulative		Total Expected		2023			2022			Cumulative		Total Expected
Corrugated Packaging
PP&E and related costs	$	—		$	—		$	3.7	$	3.7	$	0.3		$	(0.9	)	$	12.7	$	12.7
Severance and other employee costs		1.7			(0.4	)		11.4		11.4		4.5			1.7			23.2		23.3
Other restructuring costs		0.1			0.3			6.2		12.0		3.2			0.1			10.9		33.0
Restructuring total	$	1.8		$	(0.1	)	$	21.3	$	27.1	$	8.0		$	0.9		$	46.8	$	69.0

Consumer Packaging
PP&E and related costs	$	—		$	—		$	2.2	$	2.2	$	0.7		$	—		$	5.0	$	5.0
Severance and other employee costs		6.4			1.8			31.3		31.3		18.6			6.4			46.3		47.8
Other restructuring costs		(0.3	)		—			9.9		9.9		1.6			(0.3	)		8.3		17.1
Restructuring total	$	6.1		$	1.8		$	43.4	$	43.4	$	20.9		$	6.1		$	59.6	$	69.9

Global Paper
PP&E and related costs	$	(1.1	)	$	—		$	371.3	$	371.3	$	(4.1	)	$	(1.1	)	$	951.6	$	951.6
Severance and other employee costs		(0.2	)		—			11.4		12.6		(5.1	)		(0.2	)		36.9		37.9
Other restructuring costs		6.0			—			22.2		102.4		44.0			6.0			168.8		268.0
Restructuring total	$	4.7		$	—		$	404.9	$	486.3	$	34.8		$	4.7		$	1,157.3	$	1,257.5

Distribution
Severance and other employee costs											$	(0.1	)	$	—		$	1.7	$	1.7
Other restructuring costs												(2.8	)		—			8.2		10.5
Restructuring total											$	(2.9	)	$	—		$	9.9	$	12.2

Corporate
PP&E and related costs	$	0.4		$	0.9		$	11.2	$	11.2	$	—		$	0.4		$	2.6	$	2.6
Severance and other employee costs		2.2			—			6.2		6.2		0.3			2.2			7.5		7.5
Other restructuring costs		1.1			(0.5	)		5.6		5.6		1.6			1.1			19.6		23.7
Restructuring total	$	3.7		$	0.4		$	23.0	$	23.0	$	1.9		$	3.7		$	29.7	$	33.8

Total (1)
Total
PP&E and related costs	$	(0.7	)	$	0.9		$	388.4	$	388.4	$	(3.1	)	$	(1.6	)	$	971.9	$	971.9
Severance and other employee costs		10.1			1.4			60.3		61.5		18.2			10.1			115.6		118.2
Other restructuring costs		6.9			(0.2	)		43.9		129.9		47.6			6.9			215.8		352.3
Restructuring total	$	16.3		$	2.1		$	492.6	$	579.8	$	62.7		$	15.4		$	1,303.3	$	1,442.4

~~(1)~~

~~The Cumulative and Total Expected columns each exclude approximately $~~1 ~~million for our Distribution segment restructuring charges that were incurred in prior periods since the table includes no current year or prior year period activity for that segment.~~

We ~~define~~have defined “PP&E and related costs” as used in this Note 54 primarily as property, plant and equipment write-downs, subsequent adjustments to fair value for assets classified as held for sale, subsequent (gains) or losses on sales of property, plant and equipment, related parts and supplies on such assets, and deferred major maintenance costs, if any. We define "Other restructuring costs" as lease or other contract termination costs, facility carrying costs, equipment and inventory relocation costs, ~~lease or other contract termination costs,~~ and other ~~items.~~items, including impaired intangibles attributable to our restructuring actions.

Other Costs

Our other costs consist of acquisition, integration and divestiture costs. We incur costs when we acquire or divest businesses. Acquisition costs include costs associated with transactions, whether consummated or not, such as advisory, legal, accounting, valuation and other professional or consulting fees, as well as ~~potential~~ litigation costs associated with those activities. We incur integration costs pre- and post-acquisition that reflect work performed to

Notes to Consolidated Financial Statements (Unaudited) (Continued)

facilitate merger and acquisition integration, such as work associated with information systems and other projects including spending to support future acquisitions, and primarily consist of professional services and labor. Divestiture costs consist primarily of similar professional fees. We consider acquisition, integration and divestiture costs to be corporate costs regardless of the segment or segments involved in the transaction.

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

The following table presents our acquisition, integration and divestiture costs (in millions):


	Three Months Ended				Three Months Ended
	December 31,				December 31,
	2022		2021		2023		2022
Acquisition costs	$	11.0	$	0.2	$	1.9	$	11.0
Integration costs		4.3		—		0.6		4.3
Divestiture costs		1.4		—		0.3		1.4
Other total	$	16.7	$	0.2	$	2.8	$	16.7

Acquisition costs in fiscal 2024 and 2023 in the table above primarily include transaction costs related to the ~~acquisition of~~Transaction and the ~~remaining interest in Grupo Gondi.~~Mexico Acquisition, respectively.

Accruals

The following table summarizes the changes in the restructuring accrual, which is primarily composed of accrued severance and other employee costs, and a reconciliation of the restructuring accrual charges to the line item “Restructuring and other costs, net” on our consolidated statements of ~~income~~operations (in millions):


	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
Accrual at beginning of fiscal year	$	25.2		$	13.4		$	55.5		$	25.2
Additional accruals		11.6			1.8			22.1			11.6
Payments		(13.7	)		(1.9	)		(15.0	)		(13.7	)
Adjustment to accruals		(1.7	)		(0.4	)		(4.0	)		(1.7	)
Foreign currency rate changes and other		—			(0.2	)		0.4			—
Accrual at December 31	$	21.4		$	12.7		$	59.0		$	21.4

Reconciliation of accruals and charges to restructuring and other costs, net (in millions):


	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
Additional accruals and adjustments to accruals (see table above)	$	9.9		$	1.4		$	18.1		$	9.9
PP&E and related costs		(0.7	)		0.9			(3.1	)		(1.6	)
Severance and other employee costs		0.1			—			0.2			0.1
Acquisition costs		11.0			0.2			1.9			11.0
Integration costs		4.3			—			0.6			4.3
Divestiture costs		1.4			—			0.3			1.4
Other restructuring costs		7.0			(0.2	)		47.5			7.0
Total restructuring and other costs	$	33.0		$	2.3
Total restructuring and other costs, net							$	65.5		$	32.1

Note 6.5. Retirement Plans

We have defined benefit pension plans and other postretirement benefit plans for certain U.S. and non-U.S. employees. Certain plans were frozen for salaried and non-union hourly employees at various times in the past, and nearly all of our remaining U.S. salaried and U.S. non-union hourly employees accruing benefits ceased accruing benefits as of December 31, 2020. In addition, we participate in several multiemployer pension plans (“MEPP” or “MEPPs”) that provide retirement benefits to certain union employees in accordance with various collective bargaining agreements and have participated in other MEPPs in the past. We also have supplemental

Notes to Consolidated Financial Statements (Unaudited) (Continued)

executive retirement plans and other non-qualified defined benefit pension plans that provide unfunded supplemental retirement benefits to certain of our current and former executives. See “Note 5.6. Retirement Plans” of the Notes to Consolidated Financial Statements section in the Fiscal ~~2022~~2023 Form 10-K for more information regarding our involvement with retirement plans.

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

MEPPs

In the normal course of business, we evaluate our potential exposure to MEPPs, including potential withdrawal liabilities. In fiscal 2018, we submitted formal notification to withdraw from the Pace Industry Union-Management Pension Fund (“PIUMPF”) and recorded a ~~liability for both a~~ withdrawal liability and a liability for our proportionate share of PIUMPF’s accumulated funding deficiency. Subsequently, in fiscal 2019 and 2020, we received demand letters from PIUMPF, including a demand for withdrawal liabilities and for our proportionate share of PIUMPF's accumulated funding deficiency. In July 2021, PIUMPF filed suit against us in the U.S. District Court for the Northern District of Georgia claiming the right to recover our pro rata share of the pension fund’s accumulated funding deficiency along with interest, liquidated damages and attorney's fees. We believe we are adequately reserved for this matter. See “Note 5.6. Retirement Plans — Multiemployer Plans” of the Notes to Consolidated Financial Statements section in the Fiscal ~~2022~~2023 Form 10-K for additional information on our MEPPs and see “Note ~~17.~~16. Commitments and Contingencies — Other Litigation” for additional information on the litigation.

At December 31, ~~2022~~2023 and September 30, ~~2022,~~2023, we had recorded withdrawal liabilities of $~~212.4~~203.7 million and $~~214.7~~203.2 million, respectively, including liabilities associated with PIUMPF's accumulated funding deficiency demands.

Pension and Postretirement ~~Income / Expense~~Cost

The following table presents a summary of the components of net pension cost ~~(income)~~ (in millions):


	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
Service cost	$	7.5		$	12.5		$	6.6		$	7.5
Interest cost		63.7			47.4			65.5			63.7
Expected return on plan assets		(75.8	)		(92.5	)		(76.0	)		(75.8	)
Amortization of net actuarial loss		14.5			2.2			8.1			14.5
Amortization of prior service cost		2.1			2.1			1.7			2.1
Company defined benefit plan cost (income)		12.0			(28.3	)
Company defined benefit plan cost								5.9			12.0
Multiemployer and other plans		0.3			0.3			0.4			0.3
Net pension cost (income)	$	12.3		$	(28.0	)
Net pension cost							$	6.3		$	12.3

The non-service elements of our pension and postretirement ~~costs~~cost set forth in this Note 65 are reflected in the consolidated statements of ~~income~~operations line item “Pension and other postretirement non-service income (cost) ~~income”~~”. The service cost components are reflected in “Cost of goods sold” and “Selling, general and administrative expense excluding intangible amortization” line items.

We maintain other postretirement benefit plans that provide certain health care and life insurance benefits for certain salaried and hourly employees who meet specified age and service requirements as defined by the plans. The following table presents a summary of the components of the net postretirement cost (in millions):


	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
Service cost	$	0.2		$	0.3		$	0.2		$	0.2
Interest cost		1.8			1.5			1.9			1.8
Amortization of net actuarial gain		(1.1	)		(0.4	)		(1.3	)		(1.1	)
Amortization of prior service credit		(0.2	)		(0.2	)		(0.1	)		(0.2	)
Net postretirement cost	$	0.7		$	1.2		$	0.7		$	0.7

Notes to ~~Condensed~~ Consolidated Financial Statements (Unaudited) (Continued)

Employer Contributions

During the three months ended December 31, ~~2022,~~2023, we made contributions to our qualified and supplemental defined benefit pension plans of $~~7.6~~4.3 million and for the three months ended December 31, ~~2021~~2022 we made contributions of $~~4.1~~7.6 million.

During the three months ended December 31, ~~2022,~~2023, we funded an aggregate of $~~1.5~~1.8 million to our other postretirement benefit plans and for the three months ended December 31, ~~2021~~2022, we funded an aggregate of $~~1.2~~1.5 million.

Note 8.7. Segment Information

We report our financial results of operations in the following four reportable segments:

•

Corrugated Packaging, which substantially consists of our integrated corrugated converting operations and generates its revenues primarily from the sale of corrugated containers and other corrugated ~~products;~~products, including the operations acquired in the Mexico Acquisition;

•

Consumer Packaging, which consists of our integrated consumer converting operations and generates its revenues primarily from the sale of consumer packaging products such as folding cartons, interior partitions (before divestiture in September 2023) and ~~interior partitions;~~other consumer products;

•

Global Paper, which consists of our commercial paper operations and generates its revenues primarily from the sale of containerboard and paperboard to external customers; and

•

Distribution, which consists of our distribution and display assembly operations and generates its revenues primarily from the distribution of packaging products and assembly of display products.

We determined our operating segments based on the products and services we offer. Our operating segments are consistent with our internal management structure, and we do not aggregate operating segments. We report the benefit of vertical integration with our mills in each reportable segment that ultimately sells the associated paper and packaging products to our external customers. We account for intersegment sales at prices that approximate market prices.

Adjusted EBITDA is our measure of segment profitability in accordance with ASC 280, “Segment Reporting” (“ASC 280”) because it is used by our chief operating decision maker ("CODM") to make decisions regarding allocation of resources and to assess segment performance. Certain items are not allocated to our operating

Notes to Consolidated Financial Statements (Unaudited) (Continued)

segments and, thus, the information that our CODM uses to make operating decisions and assess performance does not reflect such amounts. Adjusted EBITDA is defined as pre-tax earnings of a reportable segment before depreciation, depletion and amortization, and excludes the following items our CODM does not consider part of our segment performance: ~~gain on sale of certain closed facilities, multiemployer pension withdrawal income,~~ restructuring and other costs, net, non-allocated expenses, interest expense, net, other (expense) income, net, gain on sale of RTS and Chattanooga, and other adjustments - each as outlined in the table below ("Adjusted EBITDA"). Management believes excluding these items is useful in the

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

evaluation of operating performance from period to period because ~~they~~these items are not representative of our ongoing operations or are items our CODM does not consider part of our reportable segments.

Due to the timing of the Grupo Gondi Acquisition, it was not practicable to allocate the results of Grupo Gondi to our operating segments for the first quarter of fiscal 2023. As a result, we included the results for December 2022 in "Other unallocated". We expect to report the results in the appropriate reportable segment in the second quarter of fiscal 2023.

The tables in this Note 87 show selected financial data for our reportable segments ~~as well as the financial data for Grupo Gondi since the date of the Grupo Gondi Acquisition, which is reflected in the tables that follow as "Other unallocated"~~ (in millions):


	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
Net sales (aggregate):
Corrugated Packaging	$	2,235.2		$	2,220.0		$	2,419.9		$	2,337.4
Consumer Packaging		1,215.0			1,138.7			1,059.3			1,215.0
Global Paper		1,123.6			1,352.6			918.3			1,123.6
Distribution		321.5			324.8			289.7			321.5
Other unallocated		102.2			—
Total	$	4,997.5		$	5,036.1		$	4,687.2		$	4,997.5
Less net sales (intersegment):
Corrugated Packaging	$	67.2		$	74.2		$	59.2		$	68.4
Consumer Packaging		4.7			6.0			5.3			4.7
Distribution		1.3			3.7			2.7			1.3
Other unallocated		1.2			—
Total	$	74.4		$	83.9		$	67.2		$	74.4
Net sales (unaffiliated customers):
Corrugated Packaging	$	2,168.0		$	2,145.8		$	2,360.7		$	2,269.0
Consumer Packaging		1,210.3			1,132.7			1,054.0			1,210.3
Global Paper		1,123.6			1,352.6			918.3			1,123.6
Distribution		320.2			321.1			287.0			320.2
Other unallocated		101.0			—
Total	$	4,923.1		$	4,952.2		$	4,620.0		$	4,923.1
Adjusted EBITDA:
Corrugated Packaging	$	309.2		$	288.9		$	327.8		$	329.4
Consumer Packaging		183.3			169.3			166.2			183.3
Global Paper		157.3			232.4			118.4			157.3
Distribution		10.8			6.5			9.0			10.8
Other unallocated		17.3			—
Total		677.9			697.1			621.4			680.8
Depreciation, depletion and amortization		(373.2	)		(366.5	)		(381.8	)		(373.2	)
Gain on sale of certain closed facilities		0.9			14.4
Multiemployer pension withdrawal income		—			3.3
Restructuring and other costs		(33.0	)		(2.3	)
Restructuring and other costs, net								(65.5	)		(32.1	)
Non-allocated expenses		(25.8	)		(16.8	)		(50.7	)		(28.7	)
Interest expense, net		(97.3	)		(86.7	)		(101.4	)		(97.3	)
Other income, net		25.2			0.2
Other (expense) income, net								(4.7	)		25.2
Gain on sale of RTS and Chattanooga								0.5			—
Other adjustments		(119.6	)		(0.3	)		(34.8	)		(119.6	)
Income before income taxes	$	55.1		$	242.4
Income (loss) before income taxes							$	(17.0	)	$	55.1

See “

Note 4. Restructuring and Other Costs, Net” for additional information on how the Restructuring and other costs, net relate to our reportable segments.

Notes to ~~Condensed~~ Consolidated Financial Statements (Unaudited) (Continued)

Additional selected financial data (in millions):


	Three Months Ended					Three Months Ended
	December 31,					December 31,
	2022			2021		2023			2022
Depreciation, depletion and amortization:
Corrugated Packaging	$	181.4		$	167.0	$	205.3		$	192.2
Consumer Packaging		84.1			86.3		86.5			84.1
Global Paper		89.1			106.2		81.1			89.1
Distribution		6.9			5.8		7.3			6.9
Other unallocated		9.6			—
Corporate		2.1			1.2		1.6			0.9
Total	$	373.2		$	366.5	$	381.8		$	373.2

Other adjustments:
Corrugated Packaging	$	46.8		$	—	$	5.1		$	49.8
Consumer Packaging		31.6			0.2		3.6			31.6
Global Paper		17.5			0.1		1.5			17.5
Other unallocated		3.0			—
Distribution							(0.3	)		—
Corporate		20.7			—		24.9			20.7
Total	$	119.6		$	0.3	$	34.8		$	119.6

Equity in (loss) income of unconsolidated entities:
Equity in income (loss) of unconsolidated entities:
Corrugated Packaging	$	(35.8	)	$	15.0	$	3.2		$	(35.8	)
Consumer Packaging		—			3.4		—			—
Global Paper		(0.2	)		—		1.0			(0.2	)
Total	$	(36.0	)	$	18.4	$	4.2		$	(36.0	)

Other adjustments in the table above for the three months ended December 31, 2023 consist primarily of:

•

business systems transformation costs in Corporate of $24.9 million, and

•

losses at facilities in the process of being closed of $9.1 million (excluding depreciation and amortization), split across our segments.

Other adjustments in the table above for the three months ended December 31, 2022 ~~substantially~~ consist of primarily of:

•

a $46.8 million non-cash, pre-tax loss in the Corrugated Packaging segment ~~on Grupo Gondi~~related to the Mexico Acquisition as discussed in “Note 3. Acquisitions”, a

•

incremental work stoppage costs at our Mahrt mill of $31.3 million of pre-tax ~~loss~~ in ~~the~~our Consumer Packaging segment and $10.3 million pre-tax ~~loss~~ in ~~the~~our Global Paper segment, ~~related to the incremental work stoppage costs at our Mahrt mill, $~~

~~20.2~~•

~~million of~~ business systems transformation costs in Corporate of $20.2 million, and

•

acquisition accounting inventory-related adjustments of $5.5 million and $3.0 million in the Global Paper ~~segment~~ and ~~Other unallocated, respectively, for purchase accounting inventory related adjustments.~~Corrugated Packaging segments, respectively.

Notes to ~~Condensed~~ Consolidated Financial Statements (Unaudited) (Continued)

~~The decrease in equity method investments at December 31, 2022, was due to the Grupo Gondi Acquisition in December 2022. See~~ “~~Note 3. Acquisitions~~” ~~for additional information.~~

Notes to ~~Condensed~~ Consolidated Financial Statements (Unaudited) (Continued)

Note ~~19.~~18. Earnings Per Share

The restricted stock grants to non-employee directors prior to fiscal 2022 were considered participating securities as they received non-forfeitable rights to dividends at the same rate as our Common Stock. As participating securities, we included these instruments in the earnings allocation in computing earnings per share under the two-class method described in ASC 260, “~~Earnings per Share~~”. Beginning in fiscal 2022, non-employee directors began receiving equity grants in the form of restricted stock units, which are not considered participating securities as the rights to dividends accrued during the vesting period are forfeitable. The following table sets forth the computation of basic and diluted (loss) earnings per share ~~under the two-class method~~ (in millions, except per share data):


	Three Months Ended				Three Months Ended
	December 31,				December 31,
	2022		2021		2023			2022
Numerator:
Net income attributable to common stockholders	$	45.3	$	182.3
Net (loss) income attributable to common stockholders					$	(22.4	)	$	45.3

Denominator:
Basic weighted average shares outstanding		254.7		264.6		257.0			254.7
Effect of dilutive stock options and non- participating securities		2.0		2.3		—			2.0
Diluted weighted average shares outstanding		256.7		266.9		257.0			256.7

Basic earnings per share attributable to common stockholders	$	0.18	$	0.69
Diluted earnings per share attributable to common stockholders	$	0.18	$	0.68
Basic (loss) earnings per share attributable to common stockholders					$	(0.09	)	$	0.18
Diluted (loss) earnings per share attributable to common stockholders					$	(0.09	)	$	0.18

During the three months ended December 31, 2021 in the table above, the amount of distributed and undistributed income available to participating securities was de minimis and did not impact net income attributable to common stockholders.

Approximately ~~1.0~~2.1 million and ~~0.4~~1.0 million shares underlying awards in the three months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively, were not included in computing diluted earnings per share because the effect would have been antidilutive.

3332

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included herein and our audited consolidated financial statements and notes thereto for the fiscal year ended September 30, ~~2022,~~2023, as well as the information under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are part of the Fiscal ~~2022~~2023 Form 10-K. The following discussion includes certain non-GAAP financial measures. See our reconciliations of non-GAAP financial measures in the “Definitions and Non-GAAP Financial Measures” section below.

OVERVIEW

Presentation

We report our financial results of operations in four reportable segments: Corrugated Packaging, Consumer Packaging, Global Paper and Distribution. ~~Our~~Adjusted EBITDA is our measure of segment profitability ~~for each reportable segment is Adjusted EBITDA~~in accordance with ASC 280, because it is the measure used by our CODM to make decisions regarding allocation of resources and to assess segment performance. See “Note 7.Segment Information” for additional information.

Strategic Portfolio Actions

We are committed to improving our return on invested capital as well as maximizing the performance of our assets. From time to time, we have completed acquisitions that have expanded our product and geographic scope, allowed us to increase our integration levels and impacted our comparative financials. Subject to restrictions in the Transaction Agreement, we expect to continue to evaluate potential transactions in the future, although their size may vary.

On December 1, 2022, we completed ~~our previously announced acquisition of~~ the ~~remaining 67.7% interest in Grupo Gondi~~Mexico Acquisition for $969.8 million in cash and the assumption of debt. We ~~have~~ accounted for this acquisition as a business combination resulting in ~~consolidation~~its consolidation. We have included the operations acquired in the Mexico Acquisition in our Corrugated Packaging segment. In conjunction with our Mexico Acquisition, we also moved certain existing consumer converting operations in Latin America into our Corrugated Packaging segment in line with how we are managing the business effective January 1, 2023. We did not recast prior year results related to these operations as they were not material. However, we have disclosed those impacts in the respective results of Grupo Gondi. In connection with the transaction, we recognized a $46.8 million non-cash, pre-tax loss that was partially offset by a write-off of $22.2 million of deferred taxes. The loss represents the write-off of historical foreign currency translation adjustments recorded in Accumulated other comprehensive loss, as well as the difference between the fair value of the consideration paid and the carrying value of our prior ownership interest.operations section below. See “Note 3. Acquisitions” of the Notes to Consolidated Financial Statements for additional information.

~~Due to the timing of the Grupo Gondi Acquisition, it was not practicable to allocate the results of Grupo Gondi to~~In addition, in fiscal 2023, we divested our ~~operating segments for the first quarter of fiscal 2023. As a result, we included the results for December 2022~~interior partitions converting operations and sold our Chattanooga, TN uncoated recycled paperboard mill, sold our ownership interest in ~~"Other unallocated". See “Note 8.Segment Information” for additional information. We expect to report the results~~an unconsolidated displays joint venture, sold our Seven Hills mill joint venture in ~~the appropriate reportable segment in the second quarter of fiscal 2023.~~

~~On December 1, 2022, we~~Lynchburg, VA, and sold our Eaton, IN, and Aurora, IL uncoated recycled paperboard ~~mills~~mills. These divestitures align with our commitment to optimize our portfolio and ~~recorded a pre-tax gain~~focus our strategy on ~~sale of $11.1 million recorded in Other income, net in our consolidated statements of income.~~key end markets. See “Note 1. Basis of Presentation and Significant Accounting Policies” of the Notes to Consolidated Financial Statements for additional information.

In fiscal 2023, we announced our plan to permanently cease operating our Tacoma, WA and North Charleston, SC containerboard mills and recorded various impairment and other charges associated with the closures. These mills ceased production in September 2023 and June 2023, respectively. By closing these mills, significant capital that would have been required to keep the mills competitive in the future is expected to be deployed to improve key assets. See “Note 4. Restructuring and Other Costs, Net” of the Notes to Consolidated Financial Statements for additional information.

Transaction Agreement with Smurfit Kappa

On September 12, 2023, we entered into Transaction Agreement with Smurfit Kappa. As a result of the proposed Transaction, each share of Common Stock, with certain exceptions, will be converted into the right to

receive one ListCo Share and $5.00 in cash. The Transaction is expected to close in early July 2024, conditional upon regulatory approvals, shareholder approvals and satisfaction of other closing conditions. See “Note 1. Basis of Presentation and Significant Accounting Policies” of the Notes to Consolidated Financial Statements for additional information.

Business Systems Transformation

In the fourth quarter of fiscal 2022, we launched a multi-year phased business systems transformation project that is expected to cost approximately $0.5 to $0.6 billion. The investment will replace much of our existing disparate systems and transition them to a standardized enterprise resource planning (“ERP”) system on a cloud-based platform, as well as a suite of other complementing technologies, across ~~approximately 90%~~over an estimated 80% of our footprint based on net sales. Approximately ~~85%~~90% of the project spend is expected to be related to the implementation of the ERP, including process definition, standardization and simplification, with the remaining costs primarily related to the implementation of complementing technologies.

The new systems are intended to transform areas such as manufacturing, supply chain, procurement, quote to cash, financials and analytics, and position us to better leverage automation and process efficiency and enable productivity enhancements. An implementation of this scale is a major financial undertaking and will require substantial time and attention of management and key employees. Project completion dates and anticipated costs may also change. As the systems are phased in, they will become a significant component of our internal control over financial reporting. ~~See also Item 1A.~~ “~~Risk Factors — We May Not Be Able To Successfully Implement~~

~~Our Strategic Transformation Initiatives, Including Our New Business Systems Transformation~~” ~~in our Fiscal 2022 Form 10-K~~.

Due to the nature, scope and magnitude of this investment, management believes these incremental transformation costs are above the normal, recurring level of spend for information technology to support operations. These strategic investments are not expected to recur in the foreseeable future, and are not considered representative of our underlying operating performance. As such, management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in our operations and is useful for period-over-period comparisons. This presentation also allows investors to view our underlying operating results in the same manner as they are viewed by management.

The expenses expected to be adjusted from Net (loss) income attributable to common stockholders ("Net Income") are expensed as incurred during the implementation of software applications and other enabling technologies, and do not include deferred or capitalized costs, depreciation and/or amortization, and costs to support or maintain these software applications or systems once they are in productive use. During the investment period, the normal level of spend associated with non-transformative programs is expected to be maintained and these expenses will not be adjusted in our non-GAAP measures. The items adjusted from Net Income will also be adjusted in our presentation of Consolidated Adjusted EBITDA.

We expect approximately half of the estimated $0.5 to $0.6 billion investment will represent incremental operating costs to be adjusted in our Consolidated Adjusted EBITDA and Adjusted Earnings Per Diluted Share non-GAAP measures over the course of the project, with substantially all such costs being recorded within Selling, general and administrative ~~excluding intangible amortization~~expense (“SG&A”) in the consolidated statements of ~~income.~~operations. These non-GAAP adjustments would not include any cash operating costs that are expected to continue to recur after the business systems transformation project is completed.

In fiscal 2023, we invested $138 million in our business systems transformation; $91 million of this amount was expensed as incurred within SG&A, including amortization, and $47 million was deferred or capitalized. Of the amount expensed, $79 million, or 87%, was adjusted from Net Income for our non-GAAP measures. The deferred and capitalized costs are being amortized as the project is deployed.

In fiscal 2024, we expect the aggregate investment in our business systems transformation to be approximately ~~$170 million.~~$0.2 billion. We expect approximately ~~$80 million~~$0.1 billion to be expensed when incurred, of which approximately ~~90%~~80% would be adjusted from Net Income for our non-GAAP financial measures. Approximately ~~$90 million~~$0.1 billion is expected to be deferred or capitalized and amortized over future periods as the project is deployed. The level of spending in the current fiscal year may increase or decrease depending on the timing of the various waves of deployment, which may be impacted by the timing of the Transaction.

EXECUTIVE SUMMARY

Net sales of ~~$4,923.1 million~~$4.6 billion for the first quarter of fiscal ~~2023~~2024 decreased ~~$29.1~~$303.1 million, or ~~0.6%~~6.2%, compared to the first quarter of fiscal ~~2022.~~2023. This decrease was primarily due to lower volumes excluding the Mexico Acquisition, lower selling price/mix and ~~unfavorable foreign exchange rates, which~~lower sales due to prior year mill and interior partition divestitures. These items were partially offset by ~~higher selling price/mix and~~ increased sales due to the ~~Grupo Gondi Acquisition.~~Mexico Acquisition and favorable foreign exchange rates.

Net ~~income~~loss attributable to common stockholders ~~of $45.3~~was $22.4 million for the first quarter of fiscal ~~2023 decreased $137.0~~2024 compared to net income of $45.3 million ~~or 75.2%, compared to~~in the first quarter of fiscal ~~2022. Increased net cost inflation,~~2023. The $67.7 million decrease was primarily driven by lower selling price/mix, the impact of increased economic downtime and prior year mill closures, lower volumes ~~economic downtime,~~excluding the Mexico Acquisition and higher restructuring and other costs, net. These costs were partially offset by increased cost savings and the additional two months of contribution from the Mexico Acquisition.

The prior year quarter was also impacted by the Mahrt mill work stoppage ~~increased non-cash pension costs, increased restructuring and other costs, business systems transformation costs~~ and a non-cash loss related to the ~~Grupo Gondi~~Mexico Acquisition that were partially offset by a gain on foreign currency exchange contract derivatives entered into in anticipation of the ~~margin impact from higher price mix~~Mexico Acquisition and a gain on sale of two ~~uncoated recycled paperboard ("~~URB") mills. ~~In addition,~~The Mexico Acquisition non-cash loss primarily relates to the non-cash write-off of prior foreign currency translation adjustments recorded in accumulated other comprehensive loss, as well as the difference between the fair value of the consideration paid and the carrying value of our prior ownership interest. Consolidated Adjusted EBITDA of ~~$652.1~~$570.7 million for the first quarter of fiscal ~~2023~~2024 decreased ~~$28.2~~$81.4 million, or ~~4.1%~~12.5%, ~~compared to $680.3~~from $652.1 million in the first quarter of fiscal ~~2022.~~2023 primarily due to lower Adjusted EBITDA for each of the Global Paper and Consumer Packaging segments.

~~Earnings~~In the three months ended December 31, 2023 and 2022, loss per diluted share was $0.09 and earnings per diluted share were $0.18 respectively. Adjusted Earnings Per Diluted Share were $0.20 and ~~$0.68~~$0.55 in the three months ended December 31, ~~2022~~2023 and ~~2021, respectively. Adjusted Earnings Per Diluted Share were $0.55 and $0.65 in the three months ended December 31,~~ 2022, ~~and 2021,~~ respectively. See the discussion and tables under “Definitions and Non-GAAP Financial Measures” below with respect to Consolidated Adjusted EBITDA and Adjusted Earnings Per Diluted Share.

Net cash provided by operating activities in the three months ended December 31, ~~2022~~2023 and December 31, ~~2021~~2022 was $275.0 million and $265.9 million, ~~and $252.8 million,~~ respectively. The $9.1 million increase was primarily due to ~~$68.4~~$120.5 million of reduced working capital usage compared to the prior year period, partially offset by lower earnings. During the three months ended December 31, ~~2022,~~2023, we invested ~~$282.2~~$247.3 million in capital expenditures and returned ~~$70.0~~$77.6 million in capital to stockholders in dividend payments. During the three months ended December 31, ~~2022,~~2023, debt increased ~~$1,675.6 million, primarily due to the Grupo Gondi Acquisition. See “Note 3. Acquisitions” for additional information.~~$0.1 billion and was largely offset by an increase in cash and cash equivalents.

Expectations for the Second Quarter of Fiscal ~~2023~~2024

In the second quarter of fiscal ~~2023,~~2024, we expect a sequential ~~increase~~improvement in ~~net sales~~consolidated volumes and ~~net income from the first quarter~~continued realization of fiscal 2023, reflecting the normal seasonal sequential volume increases in many of our businesses as well as the inclusion of a full quarter of Grupo Gondi results. The second quarter of fiscal 2023 has four additional Fibre Box Association shipping days sequentially. However, we expect continued macroeconomic uncertainty to impact our results of operations. In addition, our Global Paper and Distribution segments face difficult year-over-year comparisons due to strong quarterly performance in the second quarter of fiscal 2022.

We also expect scheduled mill maintenance outages, resulting in approximately 132,000 tons of maintenance downtime. We expect unfavorable non-cash pension expense of approximately $40 million driven by higher interest rates and market volatility. We further expect sequential natural gas deflation of approximately 20%, and stable recycled fiber, virgin fiber, chemicals and freight costs. We expect the continued flow through of previously published price ~~increases in our Consumer segment and~~declines. We plan to continue balancing our supply with our customers’ demand. We expect sequentially higher energy and recycled fiber costs, and relatively flat virgin fiber, chemical and freight costs. In addition, the second quarter of fiscal 2024 will be negatively impacted by winter weather disruptions that occurred in January 2024.

A detailed review of our performance appears below under “Results of Operations”.

~~COVID-19 Pandemic~~

The global impact of COVID has affected our operational and financial performance to varying degrees. The extent of the effects of future public health crises, including a resurgence of COVID, or related containment measures and government responses are highly uncertain and cannot be predicted.

~~Ransomware Incident~~

In the first quarter of fiscal 2022, we received a $5 million business interruption recovery related to the ransomware incident, which we recorded as a reduction of Cost of goods sold and presented in net cash provided by operating activities on our consolidated statements of cash flows.

~~See “Note 1. Description of Business and Summary of Significant Accounting Policies — Ransomware Incident~~” of the Notes to Consolidated Financial Statements section in the Fiscal 2022 Form 10-K for additional information, including other recoveries (fiscal 2021 $15 million and fiscal 2022 $57.2 million) and resiliency efforts and objectives.

RESULTS OF OPERATIONS

The following table summarizes our consolidated results for the three months ended December 31, ~~2022~~2023 and December 31, ~~2021~~2022 (in millions):

Three Months Ended

December 31,

2022

2021

Net sales

$
4,923.1

$
4,952.2

Cost of goods sold

4,157.9

4,155.6

Gross profit

765.2

796.6

Selling, general and administrative excluding
   intangible amortization

479.1

452.9

Selling, general and administrative intangible
   amortization

86.6

88.0

Gain on disposal of assets

(1.7
)

(13.9
)
Multiemployer pension withdrawal income

—

(3.3
)
Restructuring and other costs

33.0

2.3

Operating profit

168.2

270.6

Interest expense, net

(97.3
)

(86.7
)
Pension and other postretirement non-service
   (cost) income

(5.0
)

39.9

Other income, net

25.2

0.2

Equity in (loss) income of unconsolidated entities

(36.0
)

18.4

Income before income taxes

55.1

242.4

Income tax expense

(8.3
)

(58.6
)
Consolidated net income

46.8

183.8

Less: Net income attributable to noncontrolling
   interests

(1.5
)

(1.5
)
Net income attributable to common stockholders

$
45.3

$
182.3


	Three Months Ended
	December 31,
	2023			2022
Net sales	$	4,620.0		$	4,923.1
Cost of goods sold		3,861.2			4,157.1
Gross profit		758.8			766.0
Selling, general and administrative expense excluding intangible amortization		527.1			479.1
Selling, general and administrative intangible amortization expense		82.0			86.6
Restructuring and other costs, net		65.5			32.1
Operating profit		84.2			168.2
Interest expense, net		(101.4	)		(97.3	)
Pension and other postretirement non-service income (cost)		0.2			(5.0	)
Other (expense) income, net		(4.7	)		25.2
Equity in income (loss) of unconsolidated entities		4.2			(36.0	)
Gain on sale of RTS and Chattanooga		0.5			—
(Loss) income before income taxes		(17.0	)		55.1
Income tax expense		(5.7	)		(8.3	)
Consolidated net (loss) income		(22.7	)		46.8
Less: Net loss (income) attributable to noncontrolling interests		0.3			(1.5	)
Net (loss) income attributable to common stockholders	$	(22.4	)	$	45.3

Net Sales (Unaffiliated Customers)


(In millions, except percentages)	(In millions, except percentages)	First Quarter			Second Quarter		Third Quarter		Fourth Quarter		Fiscal Year		(In millions, except percentages)	First Quarter			Second Quarter		Third Quarter		Fourth Quarter		Fiscal Year
Fiscal 2022		$	4,952.2		$	5,382.1	$	5,519.7	$	5,402.5	$	21,256.5
Fiscal 2023		$	4,923.1											$	4,923.1		$	5,277.6	$	5,121.1	$	4,988.2	$	20,310.0
Fiscal 2024														$	4,620.0
% Change			(0.6	)%											(6.2	)%

Net sales in the first quarter of fiscal ~~2023~~2024 decreased ~~$29.1~~$303.1 million compared to the first quarter of fiscal ~~2022.~~2023. This decrease was primarily due to lower volumes excluding the Mexico Acquisition, lower selling price/mix and ~~unfavorable foreign exchange rates which~~lower sales due to prior year mill and interior partition divestitures. These items were partially offset by ~~higher selling price/mix and~~ increased sales due to the ~~Grupo Gondi Acquisition.~~Mexico Acquisition and favorable foreign exchange rates.

~~The~~See “Segment Information” below for detailed information regarding the change in net sales before intersegment eliminations by ~~reportable segment is outlined below for each reportable~~ segment.

Cost of Goods Sold


(In millions, except percentages)	(In millions, except percentages)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Fiscal Year			(In millions, except percentages)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Fiscal Year
Fiscal 2022		$	4,155.6		$	4,378.4		$	4,360.3		$	4,341.5		$	17,235.8
Fiscal 2023																		$	4,157.1		$	4,357.6		$	4,100.6		$	4,110.2		$	16,725.5
(% of Net Sales)			83.9	%		81.4	%		79.0	%		80.4	%		81.1	%			84.4	%		82.6	%		80.1	%		82.4	%		82.4	%

Fiscal 2023		$	4,157.9
Fiscal 2024																		$	3,861.2
(% of Net Sales)			84.5	%															83.6	%

The ~~$2.3~~$295.9 million ~~increase~~decrease in cost of goods sold in the first quarter of fiscal ~~2023~~2024 compared to the prior year quarter was primarily due to ~~increased~~lower volumes, the impact of cost savings and relatively flat estimated net cost ~~inflation and higher operating costs. Net~~inflation.

The relatively flat net cost inflation consisted primarily of higher wage and ~~benefit~~other costs, ~~freight, energy, chemicals~~recycled fiber costs and ~~virgin fiber~~chemical costs, which were ~~partially~~largely offset by lower ~~recycled~~energy costs including hedges, virgin fiber and freight costs.

See “Note 14. Derivatives” of the Notes to Consolidated Financial Statements for more information on our natural gas hedges. We discuss our operations in greater detail below for each reportable segment, as applicable.

Selling, General and Administrative Expense Excluding Intangible Amortization


(In millions, except percentages)	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Fiscal Year			First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Fiscal Year
Fiscal 2022	$	452.9		$	493.1		$	504.3		$	482.3		$	1,932.6
Fiscal 2023																$	479.1		$	498.9		$	541.5		$	494.9		$	2,014.4
(% of Net Sales)		9.1	%		9.2	%		9.1	%		8.9	%		9.1	%		9.7	%		9.5	%		10.6	%		9.9	%		9.9	%

Fiscal 2023	$	479.1
Fiscal 2024																$	527.1
(% of Net Sales)		9.7	%														11.4	%

~~Selling, general and administrative expenses (“~~SG&A”) excluding intangible amortization increased ~~$26.2~~$48.0 million in the first quarter of fiscal ~~2023~~2024 compared to the prior year quarter. The increase was primarily due to ~~$21.7~~$20.6 million related to the consolidation of the Mexico Acquisition that included two additional months in the current year quarter compared to the prior year quarter. In addition, we incurred $7.8 million of higher business systems transformation costs ~~incurred in~~compared to the prior year quarter. Compared to the first quarter of fiscal ~~2023.~~2023, and excluding the Mexico Acquisition and business systems transformation costs, we incurred $9.2 million of higher professional fees related to various initiatives.

Selling, General and Administrative Intangible Amortization Expense

SG&A intangible amortization expense was ~~$86.6~~$82.0 million and ~~$88.0~~$86.6 million in the first quarter of fiscal 2024 and 2023, ~~and 2022,~~ respectively.

~~Gain on Disposal of Assets~~

In the three months ended December 31, 2022, we recorded a gain on disposal of assets of $1.7 million. In the three months ended December 31, 2021, we recorded a gain on disposal of assets of $13.9 million that was primarily due to the sale of a previously closed facility.

Restructuring and Other Costs, Net

We recorded aggregate pre-tax restructuring and other costs, net of ~~$33.0~~$65.5 million and ~~$2.3~~$32.1 million in the first quarter of fiscal 2024 and 2023, ~~and 2022,~~ respectively.

These amounts are not comparable since the timing and scope of the individual actions associated with a given restructuring, acquisition, integration or divestiture vary. We generally expect the integration of a closed facility’s assets and production with other facilities to enable the receiving facilities to better leverage their fixed costs while eliminating fixed costs from the closed facility. While restructuring costs are not charged to our segments and, therefore, do not reduce each segment's Adjusted EBITDA, we highlight the segment to which the charges relate. See “Note 5.4. Restructuring and Other Costs, Net” of the Notes to Consolidated Financial Statements for additional ~~information.~~information, including a description of the type of costs incurred. We have restructured portions of our operations from time to time, have current restructuring initiatives taking place, and it is likely that we will engage in future restructuring activities.

Interest Expense, net

Interest expense, net for the first quarter of fiscal ~~2023~~2024 was ~~$97.3~~$101.4 million compared to ~~$86.7~~$97.3 million for the prior year quarter. Interest expense, net increased in the current year period primarily due to higher interest rates on debt in the current year period and increased average debt primarily associated with the Mexico Acquisition, which was partially offset by higher interest income. The first quarter of fiscal 2024 included three months of debt associated with the ~~Grupo Gondi Acquisition.~~Mexico Acquisition instead of one month in the prior year quarter. See “Note 8. Interest Expense, Net” of the Notes to Consolidated Financial Statements for additional information.

Pension and Other Postretirement Non-Service ~~Costs (Income)~~Income (Cost)

Pension and other postretirement non-service ~~costs~~income (cost) for the first quarter of fiscal ~~2023 were $5.0~~2024 was income of $0.2 million compared to ~~income~~cost of ~~$39.9~~$5.0 million for the first quarter of fiscal ~~2022.~~2023. The lower costs in fiscal 2024 are primarily the ~~first quarter~~result of an actuarial gain in fiscal 2023. The actuarial gain was largely driven by reduced U.S. pension plan benefit obligations that were positively impacted in fiscal 2023 ~~were primarily due to higher interest rates driving~~by a 61-basis point increase in the ~~decrease in plan asset balances used to determine the expected return on plan assets for fiscal 2023~~discount rate compared to ~~greater plan assets used to determine the expected return in~~ the prior ~~year.~~measurement date, and non-U.S. pension plan obligations that were positively impacted by

a 73-basis point increase for the same period. Customary pension and other postretirement ~~costs (income)~~income (cost) are included in our segment results. See “Note 6.5. Retirement Plans” of the Notes to Consolidated Financial Statements for more information.

Other (Expense) Income, net

Other (expense) income, net for the first quarter of fiscal ~~2023~~2024 was ~~$25.2~~expense of $4.7 million compared to ~~$0.2~~income of $25.2 million in the first quarter of fiscal ~~2022. The results in~~2023. Other (expense) income, net, for the first quarter of fiscal ~~2023 included~~2024 compared to the prior year was lower primarily due to an unfavorable $17.9 million of other non-operating costs primarily due to a $19.7 million gain on foreign currency exchange contract derivatives entered into in anticipation of the ~~Grupo Gondi~~Mexico Acquisition in the prior year quarter and an unfavorable $10.2 million related to the sale of businesses that was primarily due to an $11.1 million gain

on the sale of our Eaton, IN, and Aurora, IL, uncoated recycled paperboard ~~mills. Additionally, Other income, net included a favorable $7.1~~mills in the prior year period. In addition, we incurred an unfavorable $6.6 million impact of foreign currency and ~~$8.7~~$1.4 million of increased expense in connection with the sale of receivables. These items were partially offset by a $6.2 million gain on sale of fixed assets, primarily for the sale of an airplane.

See “Note 11. Fair Value — Accounts Receivable Monetization Agreements” of the Notes to Consolidated Financial Statements for additional information on our sale of receivables ~~each as compared to the first quarter of fiscal 2022.~~and associated expenses.

Equity in Income (Loss) ~~Income~~ of Unconsolidated Entities

Equity in income (loss) ~~income~~ of unconsolidated entities for the first quarter of fiscal ~~2023~~2024 was income of $4.2 million compared to a loss of $36.0 ~~million compared to income of $18.4~~ million for the first quarter of fiscal ~~2022.~~2023. The loss in the first quarter of fiscal 2023 was driven by a $46.8 million non-cash, pre-tax loss to recognize the write-off of historical foreign currency translation adjustments recorded in Accumulated other comprehensive loss, as well as the difference between the fair value of the consideration paid for the ~~Grupo Gondi~~Mexico Acquisition and the carrying value of our prior ownership interest. The change year-over-year was also impacted by no longer recording equity income after the December 2022 purchase of our remaining interest in the operations acquired in the Mexico Acquisition and the sale of a displays joint venture in the third quarter of fiscal 2023. See “Note 3. Acquisitions” of the Notes to Consolidated Financial Statements for additional ~~information.~~information on the Mexico Acquisition.

Provision for Income Taxes

We recorded income tax expense of $5.7 million for the three months ended December 31, 2023 compared to $8.3 million for the three months ended December 31, ~~2022 compared to $58.6 million~~2022. The effective tax rate for the three months ended December 31, ~~2021. The~~2023 was (33.5)% due to the loss, while the effective tax rate for the three months ended December 31, 2022 was 15.1%~~, while the effective tax rate for the three months ended December 31, 2021 was 24.2%~~.

See “Note 7.6. Income Taxes” of the Notes to Consolidated Financial Statements for the primary factors impacting our effective tax rates.

SEGMENT INFORMATION

Corrugated Packaging Segment

Corrugated Packaging Shipments

Corrugated Packaging shipments are expressed as a tons equivalent in thousands of tons, which includes external and intersegment shipments from our corrugated converting operations, principally for the sale of corrugated containers and other corrugated products. ~~Tons sold from period to period may be impacted by customer conversions to lower basis weight products.~~ In addition, we disclose North American Corrugated Packaging shipments in billion square feet ("(“BSF"”) and millions of square feet ("(“MMSF"”) per shipping day. In the industry, the term “North American Corrugated Packaging” commonly refers to U.S. and Canadian operations only. We have presented ~~the Corrugated Packaging shipments~~this shipment data in this manner because we believe investors, potential investors, securities analysts and others find this breakout useful when evaluating our operating performance. Tons sold from period to

period may be impacted by customer conversions to lower basis weight products. Quantities in the table may not sum across due to trailing decimals.


	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Fiscal Year		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Fiscal Year
Fiscal 2022
Corrugated Packaging Shipments - thousands of tons (1)		1,621.0		1,646.3		1,635.8		1,567.9		6,471.1
Fiscal 2023 (1)
Corrugated Packaging Shipments - thousands of tons												1,556.2		1,751.1		1,745.7		1,753.9		6,806.9
North American Corrugated Packaging Shipments - BSF		24.5		24.7		24.5		23.4		97.1		22.7		22.7		22.3		22.5		90.3
North American Corrugated Packaging Per Shipping Day - MMSF		401.0		385.8		389.3		365.5		385.2		378.8		354.9		353.8		363.4		362.5

Fiscal 2023
Fiscal 2024
Corrugated Packaging Shipments - thousands of tons		1,474.9										1,717.3
North American Corrugated Packaging Shipments - BSF		22.4										22.1
North American Corrugated Packaging Per Shipping Day - MMSF		373.2										363.0

(1)

~~Fiscal 2022~~In the fourth quarter of fiscal 2023, the fiscal 2023 Corrugated Packaging Shipments ~~have been~~were revised by an immaterial amount.

Corrugated Packaging Segment – Net Sales and Adjusted EBITDA


(In millions, except percentages)	Net Sales (1)		Adjusted EBITDA		Adjusted EBITDA Margin			Net Sales (1)		Adjusted EBITDA		Adjusted EBITDA Margin
Fiscal 2022
Fiscal 2023
First Quarter	$	2,220.0	$	288.9		13.0	%	$	2,337.4	$	329.4		14.1	%
Second Quarter		2,319.0		328.7		14.2			2,627.4		407.5		15.5
Third Quarter		2,382.5		385.2		16.2			2,565.7		429.7		16.7
Fourth Quarter		2,386.1		383.9		16.1			2,524.4		433.8		17.2
Total	$	9,307.6	$	1,386.7		14.9	%	$	10,054.9	$	1,600.4		15.9	%

Fiscal 2023
Fiscal 2024
First Quarter	$	2,235.2	$	309.2		13.8	%	$	2,419.9	$	327.8		13.5	%

(1)

Net sales before intersegment eliminations, also referred to as segment sales.

Net Sales (Aggregate) — Corrugated Packaging Segment

Net sales before intersegment eliminations for the Corrugated Packaging segment increased ~~$15.2~~$82.5 million in the first quarter of fiscal ~~2023~~2024 compared to the prior year quarter. The increase primarily consisted of ~~$204.0~~$209.2 million of ~~higher selling price/mix largely~~sales from the operations acquired in the Mexico Acquisition as the current year quarter included three months versus only one month in the prior year quarter and $41.6 million associated with the converting operations formerly in the Consumer Packaging segment. These items were partially offset by ~~$189.0~~$132.1 million of lower ~~volumes.~~selling price/mix and $30.2 million of lower volumes excluding the Mexico Acquisition.

Adjusted EBITDA — Corrugated Packaging Segment

Corrugated Packaging segment Adjusted EBITDA in the first quarter of fiscal ~~2023 increased $20.3~~2024 decreased $1.6 million compared to the prior year quarter primarily due to an estimated ~~$206.0~~$124.7 million of margin impact from ~~higher~~lower selling price/mix ~~that was largely~~and $3.2 million of lower volumes. These items were partially offset by $65.5 million of increased cost savings and an estimated ~~$79.0~~$11.9 million impact of lower economic downtime and prior year mill closures and an estimated $11.3 million of increased net cost ~~inflation, $57.8~~deflation. Additionally, we had $37.6 million of ~~lower volumes~~other net favorable items compared to the prior year quarter that consisted primarily of $19.3 million from the operations acquired in the Mexico Acquisition, $10.1 million of favorable planned downtime including maintenance outages and ~~$39.2~~$6.1 million ~~higher operating costs including an estimated $56.5 million impact of economic downtime.~~associated with the converting operations formerly in the Consumer Packaging segment.

Consumer Packaging Segment

Consumer Packaging Shipments

Consumer Packaging shipments are expressed as a tons equivalent in thousands of tons, which includes external and intersegment shipments from our consumer converting operations, principally for the sale of folding cartons, interior partitions (before divestiture in September 2023) and other consumer products. We have presented the Consumer Packaging shipments in this manner because we believe investors, potential investors, securities analysts and others find this breakout useful when evaluating our operating performance. Quantities in the table may not sum across due to trailing decimals.

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Fiscal
Year

Fiscal 2022

Consumer Packaging Shipments -
thousands of tons

374.2

401.3

399.3

391.4

1,566.2

Fiscal 2023

Consumer Packaging Shipments -
thousands of tons

360.2


	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Fiscal Year
Fiscal 2023
Consumer Packaging Shipments - thousands of tons		360.2		356.3		346.5		348.3		1,411.3

Fiscal 2024
Consumer Packaging Shipments - thousands of tons		298.1

Consumer Packaging Segment – Net Sales and Adjusted EBITDA


(In millions, except percentages)	Net Sales (1)		Adjusted EBITDA		Adjusted EBITDA Margin			Net Sales (1)		Adjusted EBITDA		Adjusted EBITDA Margin
Fiscal 2022
Fiscal 2023
First Quarter	$	1,138.7	$	169.3		14.9	%	$	1,215.0	$	183.3		15.1	%
Second Quarter		1,250.6		205.8		16.5			1,265.1		218.6		17.3
Third Quarter		1,270.2		234.9		18.5			1,250.6		230.0		18.4
Fourth Quarter		1,305.7		219.2		16.8			1,211.1		203.8		16.8
Total	$	4,965.2	$	829.2		16.7	%	$	4,941.8	$	835.7		16.9	%

Fiscal 2023
Fiscal 2024
First Quarter	$	1,215.0	$	183.3		15.1	%	$	1,059.3	$	166.2		15.7	%

(1)

Net sales before intersegment eliminations, also referred to as segment sales.

Net Sales (Aggregate) — Consumer Packaging Segment

~~The $76.3 million increase in net~~Net sales before intersegment eliminations for the Consumer Packaging segment decreased $155.7 million in the first quarter of fiscal ~~2023~~2024 compared to the prior year ~~quarter~~quarter. The decrease was primarily due to ~~$132.3~~$109.5 million of lower volumes, $54.2 million due to the prior year divestiture of our interior partition operations and $37.8 million of net sales for converting operations now included in the Corrugated Packaging segment. These items were partially offset by $31.2 million of higher selling price/mix ~~that was partially offset by $52.4~~and $14.7 million of ~~unfavorable~~favorable foreign exchange rates.

Adjusted EBITDA — Consumer Packaging Segment

Consumer Packaging segment Adjusted EBITDA in the first quarter of fiscal ~~2023 increased $14.0~~2024 decreased $17.1 million compared to the prior year quarter primarily due to $37.4 million of lower volumes, an estimated ~~$132.3~~$30.1 million impact of higher economic downtime and an estimated $20.7 million of increased net cost inflation. These items were partially offset by $48.9 million of increased cost savings and an estimated $28.9 million margin impact from higher selling price/~~mix~~mix. Additionally, we had $6.7 million of other net unfavorable items compared to the prior year quarter that ~~was~~consisted primarily of $8.9 million due to the prior year divestiture of our interior partition operations and $4.4 million of Adjusted EBITDA from the first quarter of fiscal 2023 associated with the converting operations now included in the Corrugated Packaging segment, which were partially offset by ~~an estimated $54.0~~$6.7 million of ~~increased net cost inflation, $34.4 million of higher operating costs, $12.1 million of unfavorable foreign exchange rates and $9.2 million of higher non-cash pension costs.~~favorable planned downtime including maintenance outages.

Global Paper Segment

Global Paper Shipments

Global Paper shipments in thousands of tons include the sale of containerboard, paperboard, market pulp and specialty papers (including kraft papers and saturating kraft) to external customers. The shipment data table excludes gypsum paperboard liner tons produced by our Seven Hills ~~Paperboard LLC~~mill joint venture in Lynchburg, VA (prior to its September 2023 sale) since it iswas not consolidated. We have presented the Global Paper shipments in this manner because we believe investors, potential investors, securities analysts and others find this breakout useful when evaluating our operating performance. Tons sold from period to period may be impacted by customer conversions to lower basis weight products. Quantities in the table may not sum across due to trailing decimals.

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Fiscal
Year

Fiscal 2022

Global Paper Shipments - thousands
of tons

1,515.9

1,658.2

1,632.7

1,377.4

6,184.3

Fiscal 2023

Global Paper Shipments - thousands
of tons

1,091.9


	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Fiscal Year
Fiscal 2023
Global Paper Shipments - thousands of tons		1,091.9		1,178.7		1,126.8		1,129.5		4,526.9

Fiscal 2024
Global Paper Shipments - thousands of tons		1,008.5

Global Paper Segment – Net Sales and Adjusted EBITDA


(In millions, except percentages)	Net Sales (1)		Adjusted EBITDA		Adjusted EBITDA Margin			Net Sales (1)		Adjusted EBITDA		Adjusted EBITDA Margin
Fiscal 2022
Fiscal 2023
First Quarter	$	1,352.6	$	232.4		17.2	%	$	1,123.6	$	157.3		14.0	%
Second Quarter		1,538.1		308.6		20.1			1,168.2		187.1		16.0
Third Quarter		1,610.3		399.0		24.8			1,065.7		177.0		16.6
Fourth Quarter		1,429.2		306.4		21.4			1,012.4		133.6		13.2
Total	$	5,930.2	$	1,246.4		21.0	%	$	4,369.9	$	655.0		15.0	%

Fiscal 2023
Fiscal 2024
First Quarter	$	1,123.6	$	157.3		14.0	%	$	918.3	$	118.4		12.9	%

(1)

Net sales before intersegment eliminations, also referred to as segment sales.

Net Sales (Aggregate) — Global Paper Segment

The ~~$229.0~~$205.3 million decrease in net sales before intersegment eliminations for the Global Paper segment in the first quarter of fiscal ~~2023~~2024 compared to the prior year quarter was primarily due to ~~$328.6~~$114.1 million of lower selling price/mix, $42.1 million of lower volumes ~~including an estimated $20.3 million related to weather, which was partially offset by $99.8~~and $26.6 million of ~~higher selling price/mix. Containerboard volumes were impacted by inventory destocking and shifting consumer spending~~lower sales associated with prior year mill divestitures. Additionally, net sales are $22.7 million lower than the prior year period as sales to the operations acquired in the ~~first quarter of fiscal 2023.~~Mexico Acquisition are eliminated following the acquisition.

Adjusted EBITDA — Global Paper Segment

Global Paper segment Adjusted EBITDA in the first quarter of fiscal ~~2023~~2024 decreased ~~$75.1~~$38.9 million compared to the prior year quarter primarily due to ~~$113.7~~$91.4 million of margin impact from lower selling price/mix, an estimated $61.6 million impact of higher economic downtime and prior year mill closures and $4.4 million of lower volumes, including $11.5 million due to weather, an estimated $47.9 million of increased net cost inflation, $17.1 million of higher non-cash pension costs, $1.6 million higher operating costs including an estimated $41.1 million impact of economic downtime that was largely offset by lower maintenance downtime and other items, an estimated $4.0 million loss related to weather excluding volume and $3.6 million of unfavorable foreign exchange rates.volumes. These items were partially offset by ~~$114.7~~an estimated $102.1 million of ~~margin impact from higher selling price/mix.~~increased cost savings and $18.2 million of net cost deflation. Additionally, we had $1.8 million of other net unfavorable items compared to the prior year quarter that consisted primarily of $10.1 million of lower Adjusted EBITDA associated with prior year mill divestitures, which was largely offset by.an estimated $7.7 million of lower planned downtime including maintenance outages.

Distribution Segment

Distribution Shipments

Distribution shipments are expressed as a tons equivalent in thousands of tons, which includes external and intersegment shipments from our distribution and display assembly operations. We have presented the Distribution shipments in this manner because we believe investors, potential investors, securities analysts and others find this breakout useful when evaluating our operating performance. Quantities in the table may not sum across due to trailing decimals.

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Fiscal
Year

Fiscal 2022

Distribution Shipments - thousands of tons

48.5

50.8

59.8

46.8

205.9

Fiscal 2023

Distribution Shipments - thousands of tons

34.1


	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Fiscal Year
Fiscal 2023
Distribution Shipments - thousands of tons		34.1		45.4		40.8		32.8		153.0

Fiscal 2024
Distribution Shipments - thousands of tons		31.4

Distribution Segment – Net Sales and Adjusted EBITDA


(In millions, except percentages)	Net Sales (1)		Adjusted EBITDA		Adjusted EBITDA Margin			Net Sales (1)		Adjusted EBITDA		Adjusted EBITDA Margin
Fiscal 2022
Fiscal 2023
First Quarter	$	324.8	$	6.5		2.0	%	$	321.5	$	10.8		3.4	%
Second Quarter		362.3		28.0		7.7			307.3		9.3		3.0
Third Quarter		357.7		19.2		5.4			317.8		6.0		1.9
Fourth Quarter		374.1		26.0		7.0			314.1		10.9		3.5
Total	$	1,418.9	$	79.7		5.6	%	$	1,260.7	$	37.0		2.9	%

Fiscal 2023
Fiscal 2024
First Quarter	$	321.5	$	10.8		3.4	%	$	289.7	$	9.0		3.1	%

(1)

Net sales before intersegment eliminations, also referred to as segment sales.

Net Sales (Aggregate) — Distribution Segment

The ~~$3.3~~$31.8 million decrease in net sales before intersegment eliminations for the Distribution segment in the first quarter of fiscal ~~2023~~2024 compared to the prior year quarter was primarily due to ~~$24.7~~$36.0 million of lower volumes that were partially offset by ~~$19.9~~$4.0 million of higher selling price/mix. The lower volumes were primarily due to lower moving & storage and automotive business volumes.

In April 2023, one of our larger Distribution segment customers notified us that they were transitioning their business to a third party. We do not expect the impact on our consolidated operations to be material, although we expect the segment’s net sales and Adjusted EBITDA to be reduced until the sales are replaced.

Adjusted EBITDA — Distribution Segment

Distribution segment Adjusted EBITDA in the first quarter of fiscal ~~2023 increased $4.3~~2024 decreased $1.8 million compared to the prior year quarter primarily due to ~~a $19.9 million margin impact from higher selling price/mix that was partially offset by~~ an estimated ~~$13.2~~$10.0 million of lower volumes and an estimated $8.4 million of increased net cost inflation, ~~and $3.6~~which were largely offset by $12.5 million of ~~lower volumes.~~

~~Other Unallocated~~

~~Due to the timing~~cost savings and $4.0 million of ~~the Grupo Gondi Acquisition, it was not practicable to allocate the Grupo Gondi results to our operating segments for the first quarter~~margin impact of fiscal 2023. As a result, we included the results for the month of December 2022 in “Other unallocated”. We expect to allocate the results into our operating segments in the second quarter of fiscal 2023.

Net sales before intersegment eliminations for the operations from the Grupo Gondi Acquisition in the first quarter of fiscal 2023 were $102.2 million. Adjusted EBITDA in the first quarter of fiscal 2023 was $17.3 million.

higher selling price/mix.

LIQUIDITY AND CAPITAL RESOURCES

We ~~fund~~have funded our working capital requirements, capital expenditures, mergers, acquisitions and investments, restructuring activities, dividends and stock repurchases from net cash provided by operating activities, borrowings under our credit facilities, proceeds from the sale of receivables under our accounts receivable ~~sales~~monetization agreements, proceeds from the sale of property, plant and equipment removed from service and proceeds received

in connection with the issuance of debt and equity securities. See “Note ~~13.~~12. Debt” of the Notes to Consolidated Financial Statements for more information regarding our debt.

Cash and cash equivalents were $488.1 million at December 31, 2023 and $393.4 million at September 30, 2023. Approximately three-fifths of the cash and cash equivalents at December 31, 2023 were held outside of the U.S. The proportion of cash and cash equivalents held outside of the U.S. generally varies from period to period. At December 31, 2023 and September 30, 2023, total debt was $8.7 billion and $8.6 billion, respectively, $462.3 million and $533.0 million of which was short-term at December 31, 2023 and September 30, 2023, respectively. Included in our total debt at December 31, 2023 was $152.2 million of non-cash acquisition-related step-up. During the three months ended December 31, 2023, debt increased $0.1 billion and was largely offset by an increase in cash and cash equivalents. Funding for our domestic operations in the foreseeable future is expected to come from sources of liquidity within our domestic operations, including cash and cash equivalents, and available borrowings under our credit facilities. As such, our foreign cash and cash equivalents are not expected to be a key source of liquidity to our domestic operations.

Cash and cash equivalents were $415.2 million at December 31, 2022 and $260.2 million at September 30, 2022. Approximately two-thirds of the cash and cash equivalents at December 31, 2022 were held outside of the U.S. The proportion of cash and cash equivalents held outside of the U.S. generally varies from period to period. At December 31, 2022 and September 30, 2022, total debt was $9,462.8 million and $7,787.2 million, respectively, $497.0 million and $212.2 million of which was short-term at December 31, 2022 and September 30, 2022, respectively. Included in our total debt at December 31, 2022 was $170.6 million of non-cash acquisition-related

~~step-up. During the three months ended December 31, 2022, debt increased $1,675.6 million primarily due to the Grupo Gondi Acquisition. See “Note 3. Acquisitions” for additional information.~~

~~At December 31, 2022,~~2023, we had approximately ~~$3.3~~$3.4 billion of ~~availability~~available liquidity under our long-term committed credit facilities and cash and cash equivalents. Our primary availability is under our revolving credit facilities and Receivables Securitization ~~Facility.~~Facility, the majority of which matures July 2027. This liquidity may be used to provide for ongoing working capital needs and for other general corporate purposes, including acquisitions ~~dividends~~ and ~~stock repurchases.~~dividends.

Our credit facilities contain certain restrictive covenants, including a covenant to satisfy a debt to capitalization ratio. We test and report our compliance with ~~all of~~ these covenants as required by these facilities and were in compliance with ~~all~~them as of ~~these covenants at~~ December 31, ~~2022.~~2023.

At December 31, ~~2022,~~2023, we had ~~$77.9~~$80.0 million of outstanding letters of credit not drawn upon.

We use 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 a receivables securitization ~~facility.~~facilities. We describe these programs below.

We engage 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 us. Receivables transferred under these customer-based SCF programs generally meet the requirements to be accounted for as sales in accordance with guidance under ASC 860 resulting in derecognition of such receivables from our consolidated balance sheets. Receivables involved with these customer-based SCF programs constitute approximately 2% of our annual net sales. In addition, we have monetization facilities that sell to third-party financial institutions all of the short-term receivables generated from certain customer trade accounts. See “Note ~~12.~~11. Fair Value — Accounts Receivable ~~Sales~~Monetization Agreements” for a discussion of our monetization facilities.

Our working capital management strategy includes working with our suppliers to revisit terms and conditions, including the extension of payment terms. Our current payment terms with the majority of our suppliers generally range from payable upon receipt to 120 days and vary for items such as the availability of cash discounts. We do not believe our payment terms will be shortened significantly in the near future, and we do not expect our 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 our suppliers, at their sole discretion, to sell their receivables from us to the financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus might be more beneficial to our suppliers. We and our 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 us goods or services and issue the associated invoices to us 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. Our 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 us under SCF programs, and we have no economic interest in a supplier’s decision to participate in the SCF program. Therefore, amounts due to our suppliers that elect to participate in SCF programs are included in the line items Accounts payable and Other current liabilities in our consolidated balance sheets and the activity is reflected in net cash provided by operating activities in our consolidated statements of cash flows. Based on correspondence with the financial institutions that are involved with our 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 ~~17%~~19% to ~~19%~~21% of our accounts payable balance.

We also participate in certain vendor financing and commercial card programs to support our travel and entertainment expenses and smaller vendor purchases. Amounts outstanding under these programs are classified as debt primarily because we receive the benefit of extended payment terms and a rebate from the financial institution that we would not have otherwise received without the financial ~~institutions’~~institution’s involvement. We also have the Receivables Securitization Facility that allows for borrowing availability based on ~~the eligible~~ underlying accounts receivable eligibility and compliance with certain covenants. See “Note ~~13.~~12. Debt” for a discussion of our Receivables Securitization Facility and the amount outstanding under our vendor financing and commercial card programs.

Cash Flow Activity


	Three Months Ended						Three Months Ended
(In millions)	December 31,						December 31,
	2022			2021			2023			2022
Net cash provided by operating activities	$	265.9		$	252.8		$	275.0		$	265.9
Net cash used for investing activities	$	(1,080.2	)	$	(154.8	)
Net cash provided by (used for) financing activities	$	982.9		$	(104.3	)
Net cash provided by (used for) investing activities							$	625.4		$	(1,080.2	)
Net cash (used for) provided by financing activities							$	(804.0	)	$	982.9

Net cash provided by operating activities during the three months ended December 31, ~~2022~~2023 increased ~~$13.1~~$9.1 million compared to the three months ended December 31, ~~2021,~~2022 primarily due to ~~a $68.4~~$120.5 million ~~net decrease in the use~~ of reduced working capital usage compared to the prior year period, ~~that was~~ partially offset by lower earnings.

Net cash provided by investing activities of $625.4 million in the three months ended December 31, 2023 consisted primarily of $860.0 million of proceeds from the collection of an installment note receivable related to our Timber Notes and $8.3 million of proceeds from the sale of property, plant and equipment that were partially offset by $247.3 million for capital expenditures. Net cash used for investing activities of ~~$1,080.2 million~~$1.1 billion in the three months ended December 31, 2022 consisted primarily of $853.5 million of cash paid for the purchase of businesses, net of cash acquired, for the Mexico Acquisition and $282.2 million for capital expenditures that were partially offset by $25.9 million of proceeds from the sale of two URB mills and $23.2 million of proceeds from currency forward ~~contracts and $4.5 million~~contracts. See “Note 3. Acquisitions” of ~~proceeds from~~ the ~~sale of property, plant and equipment. Net cash used~~Notes to Consolidated Financial Statements for ~~investing activities of $154.8 million in~~additional information on the three months ended December 31, 2021 consisted primarily of $173.1 million for capital expenditures that was partially offset by $22.4 million of proceeds from the sale of property, plant and equipment, primarily for the sale of a previously closed facility.Mexico Acquisition.

~~Going into fiscal 2023, we expected capital expenditures of~~We expect to invest approximately ~~$1.0~~$1.2 to ~~$1.1 billion. We now expect~~$1.5 billion in capital expenditures in fiscal ~~2023 to be approximately $1.0 billion. At~~2024. We expect this level of capital investment ~~we expect that we~~ will allow us to continue to invest in safety, environmental and maintenance projects, while also making investments to support productivity and growth in our ~~business.~~business and complete certain asset recapitalization and to initiate strategic investments. However, our capital expenditure assumptions may change, project completion dates may change, or we may decide to invest a different amount depending upon opportunities we identify, or changes in market conditions or to comply with changes in ~~environmental~~ laws and regulations.

In the three months ended December 31, 2023, net cash used for financing activities of $804.0 million consisted primarily of a $774.0 million payment of a secured financing liability related to our Non-recourse Liabilities, and cash dividends paid to stockholders of $77.6 million which were partially offset by a net increase in debt of $49.1 million. In the three months ended December 31, 2022, net cash provided by financing activities of $982.9 million consisted primarily of a net increase in debt of $1,050.9 million which was partially offset by cash dividends paid to stockholders of $70.0 million. In the three months ended December 31, 2021, net cash used for financing activities of $104.3 million consisted primarily of share repurchases of $100.1 million and cash dividends paid to stockholders of $66.3 million, which were partially offset by a net increase in debt of $48.1 million.

OnSee “Note 15. Special Purpose Entities” of the Notes to Consolidated Financial Statements for additional information on the installment note receivable and secured financing liability referenced above.

In January ~~27, 2023,~~2024, our board of directors declared a quarterly dividend of ~~$0.275~~$0.3025 per share. In November ~~2022,~~2023, we paid a quarterly dividend of ~~$0.275~~$0.3025 per share, representing a ~~$1.10~~$1.21 per share annualized dividend, or an increase of 10% from the prior year. In November ~~2021,~~2022, we paid a quarterly dividend of ~~$0.25~~$0.275 per share.

~~In July 2015, our board of directors authorized~~We have a share repurchase program that has been indefinitely suspended in light of up to 40.0 million shares of our outstanding Common Stock, representing approximately 15% of our outstanding Common Stock as of July 1, 2015. On May 4, 2022, our board of directors authorized a new repurchase program of up to 25.0 million shares of our Common Stock, representing approximately 10% of our outstanding Common Stock, plus any unutilized shares left from the July 2015 authorization. Shares of our Common Stock may be purchased from time to time in open market or privately negotiated transactions. The timing, manner, price and amount of repurchases will be determinedproposed Transaction (and related restrictions imposed by ~~management at its discretion based on factors, including~~ the market price of our Common Stock, general economic and market conditions and applicable legal requirements. The repurchase program may be commenced, suspended or discontinued at any time. Pursuant to the programs, in the three months ended December 31, 2022, we had no share repurchases.Transaction Agreement). In the three months ended December 31, 2021, we repurchased approximately 2.1 million shares of our Common Stock for an aggregate cost of $97.5 million. The amount reflected as purchased in the consolidated statements of cash flows varies due to the timing of share settlement. As of December 31,2023 and 2022, we had ~~approximately 29.0 million shares~~no share repurchases under these programs. See “Note 17. Equity and Other Comprehensive Income — Equity — Stock Repurchase Program” of ~~Common Stock available~~the Notes to Consolidated Financial Statements for ~~repurchase under the program.~~additional information.

The U.S. federal, state and foreign net operating losses and other U.S. federal and state tax credits available to us aggregated approximately ~~$51~~$41 million in future potential reductions of U.S. federal, state and foreign cash taxes at the end of the previous fiscal year. These items are primarily for foreign and state net operating losses and credits that generally will be utilized between fiscal ~~2023~~2024 and ~~2040.~~2042. Our cash tax rate is highly dependent on our taxable income, utilization of net operating losses and credits, changes in tax laws or tax rates, capital expenditures and other factors. Barring significant changes in our current assumptions, including changes in tax laws or tax rates,

forecasted taxable income, levels of capital expenditures and other items, we expect our fiscal ~~2023~~2024 cash tax rate will be ~~slightly lower~~approximately 15 percentage points higher than our expected income tax ~~rate and our~~rate. The higher cash tax rate expected in fiscal 2024 ~~will~~is primarily due to the timing of depreciation on our qualifying capital investments as allowed under the Tax Cuts and Jobs Act, legislation requiring amortization of research and experimental costs instead of a full deduction in the year incurred and cash taxes due as a result of a deferred payment on the sale of our interior packaging operations and Chattanooga mill. We expect our fiscal 2025 and 2026 cash tax rates to be ~~driven slightly~~approximately 5 percentage points higher than our income tax rate primarily due to the timing of depreciation on our qualifying capital investments as allowed under the Tax Cuts and Jobs ~~Act.~~Act and legislation requiring amortization of research and experimental costs instead of a full deduction in the year incurred. These rates are subject to change for a variety of reasons, including as a result of consummation of the proposed Transaction.

~~Our pension plans in the U.S. are overfunded and we have a $453.7 million pension asset on our consolidated balance sheet as of December 31, 2022.~~ We made contributions of ~~$7.6~~$4.3 million to our qualified and supplemental defined benefit pension plans during the three months ended December 31, ~~2022.~~2023. Based on current facts and assumptions, we expect to contribute an aggregate of approximately ~~$23~~$25 million to our qualified and supplemental defined benefit pension plans in fiscal ~~2023.~~2024. We have made contributions and expect to continue to make contributions in the coming years to our pension plans in order to ensure that our funding levels remain adequate in light of projected liabilities and to meet the requirements of the Pension Protection Act of 2006 and other regulations. Our ~~estimates~~pension plans in the U.S. are ~~based~~overfunded, and we had a $629.5 million pension asset on ~~current factors, such~~our consolidated balance sheet as ~~discount rates and expected return on plan assets. It is possible that our assumptions may change, actual market performance may vary or we may decide to contribute different amounts.~~of December 31, 2023.

In the normal course of business, we evaluate our potential exposure to MEPPs, including with respect to potential withdrawal liabilities. In fiscal 2018, we submitted formal notification to withdraw from certain MEPPs, including PIUMPF, and recorded estimated withdrawal liabilities for each. We also have liabilities associated with other MEPPs ~~that~~from which we, or legacy companies, have withdrawn ~~from~~ in the past. In fiscal ~~2023,~~2024, we expect to pay approximately ~~$12~~$11 million ~~a year~~ in withdrawal liabilities, excluding accumulated funding deficiency demands. With respect to certain other MEPPs, in the event we withdraw from one or more of the MEPPs in the future, it is reasonably possible that we may incur withdrawal liabilities in connection with such withdrawals. Our estimate of any such withdrawal liability, both individually and in the aggregate, is not material for the remaining plans in which we participate.

At December 31, ~~2022~~2023 and September 30, ~~2022,~~2023, we had recorded withdrawal liabilities of ~~$212.4~~$203.7 million and ~~$214.7~~$203.2 million, respectively, including liabilities associated with PIUMPF’s accumulated funding deficiency demands. See “Note 6.5. Retirement Plans — MEPPs” of the Notes to Consolidated Financial Statements for more information regarding these liabilities. ~~See also Item 1A.~~ “~~Risk Factors — We May Incur Withdrawal Liability and/or Increased Funding Requirements in Connection with Multiemployer Pension Plans~~” ~~in our Fiscal 2022 Form 10-K~~.

~~We anticipate~~The Transaction Agreement provides that we will ~~be able~~generally continue to ~~fund~~conduct our business in the ordinary course and consistent with past practice in all material respects. It also contains covenants that restrict our ability to undertake certain actions without consent from Smurfit Kappa, including incurrence of debt or modification of existing debt arrangements under certain circumstances. Subject to these restrictions, we anticipate funding our capital expenditures, ~~interest payments,~~debt service obligations, dividends, ~~and stock repurchases,~~ pension payments, working capital needs, ~~note repurchases,~~ restructuring activities ~~repayments of current portion of long-term debt~~ and other corporate actions for the foreseeable future from cash generated from operations, borrowings under our credit facilities, proceeds from our accounts receivable ~~sales~~monetization agreements, proceeds from the issuance of debt ~~or equity~~ securities orand other ~~additional long-term~~ debt ~~financing, including new or amended facilities.~~financing. In addition, we ~~continually~~regularly review our capital structure and conditions in the private and public debt markets in order to optimize our mix of indebtedness. In connection with these reviews, and subject to restrictions imposed in the Transaction Agreement, we may seek to refinance existing indebtedness to extend maturities, reduce borrowing costs or otherwise improve the terms and composition of our indebtedness. In light of the Transaction, we do not anticipate refinancing our $600 million 3.750 % bond due March 2025 prior to the anticipated closing date of the Transaction.

4645

Guarantor Summarized Financial Information

WRKCo, Inc. (the “Issuer”), a wholly owned subsidiary of WestRock Company (“Parent”), has issued the following debt securities pursuant to offerings registered under the Securities Act of 1933, as amended (collectively for purposes of this subsection, the “Notes”) (in millions, except percentages):


Aggregate Principal Amount	Aggregate Principal Amount	Stated Coupon Rate			Maturity Date	Aggregate Principal Amount	Stated Coupon Rate			Maturity Date
$	500		3.000	%	September 2024	600		3.750	%	March 2025
$	600		3.750	%	March 2025	750		4.650	%	March 2026
$	750		4.650	%	March 2026	500		3.375	%	September 2027
$	500		3.375	%	September 2027	600		4.000	%	March 2028
$	600		4.000	%	March 2028	500		3.900	%	June 2028
$	500		3.900	%	June 2028	750		4.900	%	March 2029
$	750		4.900	%	March 2029	500		4.200	%	June 2032
$	500		4.200	%	June 2032	600		3.000	%	June 2033
$	600		3.000	%	June 2033

Upon issuance, the Notes maturing in ~~2024,~~ 2025, 2027 and March 2028 were fully and unconditionally guaranteed by two other wholly owned subsidiaries of Parent: WestRock ~~Company:~~ RKT, LLC and MWV, together, (the “Guarantor Subsidiaries”). ~~WestRock Company~~Parent has also fully and unconditionally guaranteed these Notes. The remaining Notes were issued by the Issuer subsequent to the consummation of the acquisition of KapStone Paper and Packaging Corporation in November 2018 and were fully and unconditionally guaranteed at the time of issuance by the Parent and the Guarantor Subsidiaries. Accordingly, each series of the Notes is fully and unconditionally guaranteed on a joint and several basis by the Parent and the Guarantor Subsidiaries (together, the “Guarantors”). Collectively, the Issuer and the Guarantors are the “Obligor Group”.

For additional information regarding the notes, related indentures and other information, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Guarantor Summarized Financial Information” in our Fiscal ~~2022~~2023 Form 10-K.

Pursuant to amended Rule 3-10 of Regulation S-X, the summarized financial information below is presented for the Obligor Group on a combined basis after the elimination of intercompany balances and transactions among the Obligor Group and equity in earnings from and investments in the non-Guarantor Subsidiaries. The summarized financial information below should be read in conjunction with the Company’s consolidated financial statements contained herein as the summarized financial information may not necessarily be indicative of results of operations or financial position had the subsidiaries operated as independent entities (in millions).

SUMMARIZED STATEMENT OF OPERATIONS


	Three Months Ended			Three Months Ended
(In millions)	December 31, 2022			December 31, 2023

Net sales to unrelated parties	$	405.0		$	357.5
Net sales to non-Guarantor Subsidiaries	$	310.4		$	267.9
Gross profit	$	264.1		$	266.5
Interest expense, net with non-Guarantor Subsidiaries	$	(38.4	)	$	(122.4	)
Net income and net income attributable to the Obligor Group	$	30.1
Net loss and net loss attributable to the Obligor Group				$	(51.7	)

SUMMARIZED BALANCE SHEETS


(In millions)	December 31, 2022		September 30, 2022		December 31, 2023		September 30, 2023

ASSETS
Current amounts due from non- Guarantor Subsidiaries					$	150.6	$	—
Other current assets						208.3		192.4
Total current assets	$	238.9	$	227.4	$	358.9	$	192.4

Noncurrent amounts due from non- Guarantor Subsidiaries	$	294.4	$	370.1	$	242.3	$	262.2
Other noncurrent assets (1)		1,792.4		1,812.8		1,613.0		1,607.9
Total noncurrent assets	$	2,086.8	$	2,182.9	$	1,855.3	$	1,870.1

LIABILITIES
Current amounts due to non- Guarantor Subsidiaries	$	2,488.5	$	2,253.5	$	1,252.4	$	1,106.2
Other current liabilities		480.0		144.5		452.6		427.4
Total current liabilities	$	2,968.5	$	2,398.0	$	1,705.0	$	1,533.6

Noncurrent amounts due to non- Guarantor Subsidiaries	$	1,906.2	$	3,097.5	$	6,560.7	$	6,472.6
Other noncurrent liabilities		7,842.9		6,872.7		7,037.5		7,056.6
Total noncurrent liabilities	$	9,749.1	$	9,970.2	$	13,598.2	$	13,529.2

(1)

Other noncurrent assets includes aggregate goodwill and intangibles, net of ~~$1,576.8~~$1,371.0 million and ~~$1,601.2~~$1,395.5 million as of December 31, ~~2022~~2023 and September 30, ~~2022,~~2023, respectively.

New Accounting Standards

See “Note 1. Basis of Presentation and Significant Accounting Policies” of the Notes to Consolidated Financial Statements for a description of recent accounting pronouncements.

DEFINITIONS AND NON-GAAP FINANCIAL MEASURES

Definitions

We calculate cost savings as the year-over-year change in certain costs incurred for manufacturing, procurement, logistics, and SG&A, in each case excluding the impact of economic downtime and inflation. Cost savings achieved to date may not recur in future periods, and estimates of future savings are subject to change.

Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, management believes certain non-GAAP financial measures provide ~~our management, board of directors, investors, potential investors, securities analysts and others with~~ additional meaningful financial information that ~~should~~may be ~~considered~~relevant when assessing our ongoing ~~performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions, and in evaluating our~~ performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative ~~for,~~to, our GAAP results. The non-GAAP financial measures we present may differ from similarly captioned measures presented by other companies.

We use the non-GAAP financial measures “Adjusted Net Income” and “Adjusted Earnings Per Diluted Share”. Management believes these measures provide our management, board of directors, investors, potential investors, securities analysts and others with useful information to evaluate our performance because they exclude restructuring and other costs, net, business systems transformation costs and other specific items that management believes are not indicative of the ongoing operating results of the business. We and our board of directors use this information ~~to evaluate~~when making financial, operating and planning decisions and when evaluating our performance relative to other periods. We believe that the most directly comparable GAAP measures to Adjusted Net Income and Adjusted Earnings Per Diluted Share are Net (loss) income attributable to common stockholders and ~~Earnings~~(Loss)

earnings per diluted share, respectively. See Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — Business Systems Transformation”

for additional information regarding our business systems transformation.

Set forth below is a reconciliation of the non-GAAP financial measure Adjusted Earnings Per Diluted Share to ~~Earnings~~(Loss) earnings per diluted share, the most directly comparable GAAP measure (in dollars per share) for the periods indicated.

Three Months Ended

December 31,

2022

2021

Earnings per diluted share

$
0.18

$
0.68

Mahrt mill work stoppage

0.12

—

Restructuring and other items

0.10

0.01

Loss on sale of previously held equity method investment
net of deferred taxes

0.09

—

Business systems transformation costs

0.06

—

Purchase accounting inventory related adjustments

0.02

—

Losses at closed facilities, transition and start-up costs

0.01

—

Gain on sale of two uncoated recycled paperboard mills

(0.03
)

—

Gain on sale of certain closed facilities

—

(0.04
)
Adjusted Earnings Per Diluted Share

$
0.55

$
0.65


	Three Months Ended
	December 31,
	2023			2022
(Loss) earnings per diluted share	$	(0.09	)	$	0.18
Restructuring and other costs, net		0.19			0.10
Business systems transformation costs		0.07			0.06
Losses at closed facilities		0.03			0.01
Work stoppages		0.01			0.12
Accelerated depreciation on certain consolidated facilities		0.01			—
Loss on consolidation of previously held equity method investment net of deferred taxes		—			0.09
Acquisition accounting inventory related adjustments		—			0.02
Gain on sale of airplane		(0.02	)		—
Gain on sale of two uncoated recycled paperboard mills		—			(0.03	)
Adjusted Earnings Per Diluted Share	$	0.20		$	0.55

The as reported results in the table below for Pre-Tax, Tax and Net of Tax are equivalent to the line items ~~“Income~~“(Loss) income before income taxes”, “Income tax expense” and “Consolidated net (loss) income”, respectively, as reported on the consolidated statements of ~~income.~~operations. Set forth below are reconciliations of Adjusted Net Income to the most directly comparable GAAP measure, Net (loss) income attributable to common stockholders (represented in the table below as the as reported results for Consolidated net (loss) income (i.e., Net of Tax) less ~~net income~~Net loss (income) attributable to ~~Noncontrolling~~noncontrolling interests), for the periods indicated (in millions):


	Three Months Ended									Three Months Ended									Three Months Ended									Three Months Ended
	December 31, 2022									December 31, 2021									December 31, 2023									December 31, 2022
	Pre-Tax			Tax			Net of Tax			Pre-Tax			Tax			Net of Tax			Pre-Tax			Tax			Net of Tax			Pre-Tax			Tax			Net of Tax
As reported	$	55.1		$	(8.3	)	$	46.8		$	242.4		$	(58.6	)	$	183.8		$	(17.0	)	$	(5.7	)	$	(22.7	)	$	55.1		$	(8.3	)	$	46.8
Mahrt mill work stoppage (1)		41.6			(10.2	)		31.4			—			—			—
Restructuring and other items		33.0			(8.0	)		25.0			2.3			(0.5	)		1.8
Loss on sale of previously held equity method investment net of deferred taxes (1)		46.8			(22.2	)		24.6			—			—			—
Restructuring and other costs, net																				65.5			(16.2	)		49.3			32.1			(7.8	)		24.3
Business systems transformation costs (1)		20.2			(4.9	)		15.3			—			—			—			24.9			(6.1	)		18.8			20.2			(4.9	)		15.3
Purchase accounting inventory related adjustments (1)		8.5			(2.1	)		6.4			—			—			—
Losses at closed facilities, transition and start-up costs (1)		2.5			(0.5	)		2.0			0.3			(0.1	)		0.2
Losses at closed facilities (1)																				10.4			(2.5	)		7.9			2.5			(0.5	)		2.0
Accelerated depreciation on certain consolidated facilities																				2.0			(0.5	)		1.5			—			—			—
Work stoppages (1)																				1.8			(0.5	)		1.3			41.6			(10.2	)		31.4
Loss on consolidation of previously held equity method investment net of deferred taxes (1)																				—			—			—			46.8			(22.2	)		24.6
Acquisition accounting inventory related adjustments (1)																				—			—			—			8.5			(2.1	)		6.4
Gain on sale of airplane																				(6.2	)		1.5			(4.7	)		—			—			—
Gain on sale of unconsolidated entities, net (1)																				(1.0	)		0.2			(0.8	)		—			—			—
Gain on sale of RTS and Chattanooga																				(0.5	)		0.2			(0.3	)		—			—			—
Gain on sale of two uncoated recycled paperboard mills		(11.1	)		2.8			(8.3	)		—			—			—			—			—			—			(11.1	)		2.8			(8.3	)
Gain on sale of certain closed facilities		(0.9	)		0.2			(0.7	)		(14.4	)		3.6			(10.8	)
Other (1)		0.5			(0.1	)		0.4			—			—			—			0.3			(0.1	)		0.2			0.5			(0.1	)		0.4
Adjusted Results	$	196.2		$	(53.3	)	$	142.9		$	230.6		$	(55.6	)	$	175.0		$	80.2		$	(29.7	)	$	50.5		$	196.2		$	(53.3	)	$	142.9
Noncontrolling interests								(1.5	)								(1.5	)								0.3									(1.5	)
Adjusted Net Income							$	141.4								$	173.5								$	50.8								$	141.4

(1)

These footnoted items, other than “Other” for the three months ended December 31, 2023, represent the "Other adjustments" reported in the additional segment information table in our segment footnote. The “Losses at closed ~~facilities, transition and start-up costs”~~facilities” line for the three months ended December 31, 2023 and 2022, includes $1.3 million and $0.5 million, respectively, of depreciation and amortization. See “Note 8.7. Segment Information” for additional information.

We also use the non-GAAP financial measure “Consolidated Adjusted EBITDA”, along with other ~~factors~~measures such as ~~"Adjusted EBITDA"~~Adjusted EBITDA (a GAAP measure of segment performance our CODM uses to evaluate our segment results), to evaluate our overall performance. The composition of Adjusted EBITDA is not addressed or prescribed by GAAP.

Management believes that the most directly comparable GAAP measure to Consolidated Adjusted EBITDA is "Net (loss) income attributable to common stockholders". Management believes this measure provides our management, board of directors, investors, potential investors, securities analysts and others with useful information to evaluate our performance because it excludes restructuring and other

costs, net, business systems transformation costs and other specific items that management believes are not indicative of the ongoing operating results of the business. We and our board of directors use this information ~~to evaluate~~in making financial, operating and planning decisions and when evaluating our performance relative to other periods.

Set forth below is a reconciliation of the non-GAAP financial measure Consolidated Adjusted EBITDA to Net (loss) income attributable to common stockholders for the periods indicated (in millions).


	Three Months						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
Net income attributable to common stockholders	$	45.3		$	182.3
Net (loss) income attributable to common stockholders							$	(22.4	)	$	45.3
Adjustments: (1)
Less: Net income attributable to noncontrolling interests		1.5			1.5
Less: Net (loss) income attributable to noncontrolling interests								(0.3	)		1.5
Income tax expense		8.3			58.6			5.7			8.3
Other income, net		(25.2	)		(0.2	)
Other expense (income), net								4.7			(25.2	)
Interest expense, net		97.3			86.7			101.4			97.3
Restructuring and other costs		33.0			2.3
Multiemployer pension withdrawal income		—			(3.3	)
Gain on sale of certain closed facilities		(0.9	)		(14.4	)
Restructuring and other costs, net								65.5			32.1
Gain on sale of RTS and Chattanooga								(0.5	)		—
Depreciation, depletion and amortization		373.2			366.5			381.8			373.2
Other adjustments		119.6			0.3			34.8			119.6
Consolidated Adjusted EBITDA	$	652.1		$	680.3		$	570.7		$	652.1

(1)

The table above adds back expense or subtracts income for certain financial statement and segment footnote items to compute Consolidated Adjusted EBITDA.

The non-GAAP measure Consolidated Adjusted EBITDA can also be derived by adding together each segment's "Adjusted EBITDA" plus "Non-allocated expenses" from our segment footnote. See “Note 8.7. Segment Information” of the Notes to Consolidated Financial Statements.

Forward-Looking Statements

Statements in this report that do not relate strictly to historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the Company’s current expectations, beliefs, plans or forecasts and use words such as “may”, “will”, “could”, “should”, “would”, “anticipate”, “intend”, “estimate”, “project”, “plan”, “believe”, “expect”, “target”, "prospects", “potential”, "commit" and "forecast", or words of similar import or meaning or refer to future time periods. Forward-looking statements involve estimates, expectations, projections, goals, targets, forecasts, assumptions, risks and uncertainties. A forward-looking statement is not a guarantee of future performance, and actual results could differ materially from those contained in the forward-looking statement.

Forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, such as developments related to pricing cycles and volumes; economic, competitive and market conditions generally, including macroeconomic uncertainty, customer inventory rebalancing, the impact of inflation and increases in energy, raw materials, shipping, labor and capital equipment costs; reduced supply of raw materials, energy and transportation, including from supply chain disruptions and labor shortages; intense competition; results and impacts of ~~acquisitions; divestitures as well as risks related to our joint ventures;~~acquisitions, including operational and financial effects from the Mexico Acquisition and divestitures; business disruptions, including ~~from public health crises such as a resurgence of COVID,~~ the occurrence of severe weather or a natural disaster or other unanticipated problems, such as labor difficulties, equipment failure or unscheduled maintenance and ~~repair;~~repair or public health crises; failure to respond to changing customer ~~preferences;~~ preferences and to protect our intellectual property;

the amount and timing of capital expenditures, including installation costs, project development and implementation costs, and costs related to resolving disputes with third parties with which we work to manage and implement capital projects; risks related to international sales and operations; the production of faulty or contaminated products; the loss of certain customers; adverse legal, reputational, operational and financial effects resulting from ~~cyber~~information security incidents and the effectiveness of business continuity plans during a ransomware or other cyber incident; work stoppages and other labor relations difficulties; inability to attract, motivate ~~train~~ and retain qualified ~~personnel;~~personnel, including as a result of the proposed Transaction; risks associated with sustainability and climate change, including our ability to achieve ~~ESG~~sustainability targets and ~~goals~~commitments and realize climate-related opportunities on announced timelines or at all; our inability to successfully identify and make performance improvements and ~~productivity improvements~~deliver cost savings and risks associated with completing strategic projects on ~~the~~ anticipated timelines and realizing anticipated financial or operational improvements on

announced timelines or at all, including with respect to our business systems transformation; risks related to the proposed Transaction, including our ~~indebtedness;~~ability to complete the Transaction on the anticipated timeline, or at all, restrictions imposed on our business under the Transaction Agreement, disruptions to our business while the proposed Transaction is pending, the impact of management’s time and attention being focused on consummation of the proposed Transaction, costs associated with the proposed Transaction, and integration difficulties; risks related to our indebtedness, including increases in interest rates; the scope, costs, timing and impact of any restructuring of our operations and corporate and tax structure; ~~our desire or ability to repurchase company stock; and~~ the scope, timing and outcome of any litigation, claims or other proceedings or dispute resolutions and the impact of any such litigation (including with respect to the Brazil tax liability matter).; and additional impairment charges. Such risks and other factors that may impact forward-looking statements are discussed ~~in Item 1A “Risk Factors~~” in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, ~~2022.~~2023. The information contained herein speaks as of the date hereof, and the Company does not have or undertake any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. Forward-looking statements, including projections herein, could also change as a result of consummation of the proposed Transaction.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See the “Quantitative and Qualitative Disclosures About Market Risk” section in the Fiscal ~~2022~~2023 Form 10-K for a discussion of certain of the market risks to which we are exposed. ~~The majority of~~While we have experienced changes in commodity prices and certain input costs in fiscal 2024, there have been no material changes in our more significant risks are associated with our mill operations: sales of containerboard and paperboard, energy, recycled fiber, virgin fiber and freight. The Grupo Gondi Acquisition added approximately 1 million tons of mill capacityexposure to ~~our pre-acquisition mill capacity of approximately 15.2 million tons. Our~~ market risk therefore increased fairly proportionally. In addition, we are exposed to changes in interest rates. Based on the amounts and mix of our fixed and floating rate debt at December 31, 2022, if market interest rates increased an average of 100 basis points, our annual interest expense would increase by approximately $26 million. At December 31, 2022, the notional amount of our natural gas commodity derivatives was 16.9 million MMBtu. Based on our open contracts as of December 31, 2022, the effect of a 10% change in the price per MMBtu, other than for January 2023 which period is already priced, would impact Cost of goods sold by approximately $6 million.sensitivities since September 30, 2023.

Item 4. CONTROLS AND PROCEDURES

Our Chief Executive Officer and our Chief Financial Officer evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this quarterly report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, ~~2022~~2023 to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the ~~Securities and Exchange Commission’s (“SEC~~”)SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

There has been no change in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except as described below. During the quarter ended December 31, 2022, we completed the Grupo Gondi Acquisition. Subsequent to the Grupo Gondi Acquisition, we have begun integration and controls assessment activities. See “~~Note 3. Acquisitions~~” of the Notes to Consolidated Financial Statements for additional information. In accordance with the SEC's published guidance, we plan to exclude these operations from our efforts to comply with Section 404 of the Sarbanes-Oxley Act for fiscal 2023 because we acquired these operations during the fiscal year. SEC rules require that we complete our assessment of the internal control over financial reporting of the acquisition within one year after the date of the acquisition.reporting.

5150

PART II: OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

See “Note ~~17.~~16. Commitments and Contingencies” of the Notes to Consolidated Financial Statements for more information.

Item 1A. RISK FACTORS

Certain risks and events that could adversely affect our results of operations, cash flows and financial condition, and the trading price of our Common Stock, are described in the “Risk Factors” section of the Fiscal ~~2022~~2023 Form 10-K. There have been no material changes in our risk factors from those disclosed in the “Risk Factors” section of our Fiscal ~~2022~~2023 Form 10-K.

Item 6. EXHIBITS

See separate Exhibit Index attached hereto and hereby incorporated by reference.

5251

WESTROCK COMPANY

INDEX TO EXHIBITS



Exhibit 3.1		Amended and Restated Certificate of Incorporation of WestRock Company, effective as of November 2, 2018 (incorporated by reference to Exhibit 3.1 of WestRock’s Current Report on Form 8-K filed on November 5, 2018).

Exhibit 3.2		Certificate of Correction to the Amended and Restated Certificate of Incorporation of WestRock Company dated November 13, 2018 (incorporated by reference to Exhibit 3.2 of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2018).

Exhibit 3.3		Second Amended and Restated Bylaws of WestRock Company, effective as of October 27, 2022 (incorporated by reference to Exhibit 3.1 of WestRock’s Current Report on Form 8-K filed on November 2, 2022).

Exhibit 10.1^*		Form of Repayment Obligations Letter.

Exhibit 22		List of Guarantor Subsidiaries and Issuers of Guaranteed Securities (incorporated by reference to Exhibit 22 of WestRock’s ~~Quarterly~~Annual Report on Form ~~10-Q~~10-K for the ~~quarter~~year ended ~~December 31, 2020)~~September 30, 2023).

Exhibit 31.1*		Certification Accompanying Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by David B. Sewell, Chief Executive Officer and President of WestRock Company.

Exhibit 31.2*		Certification Accompanying Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by Alexander W. Pease, Executive Vice President and Chief Financial Officer of WestRock Company.

Exhibit ~~32.1#~~32.1*#		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by David B. Sewell, Chief Executive Officer and President of WestRock Company, and by Alexander W. Pease, Executive Vice President and Chief Financial Officer of WestRock Company.


Exhibit 101.INS*		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Exhibit 101.SCH*		Inline XBRL Taxonomy Extension ~~Schema.~~Schema with Embedded Linkbases Document.

Exhibit 101.CAL*		~~Inline XBRL Taxonomy Extension Calculation Linkbase.~~

Exhibit 101.DEF*		~~Inline XBRL Taxonomy Extension Definition Label Linkbase.~~

Exhibit 101.LAB*		~~Inline XBRL Taxonomy Extension Label Linkbase.~~

Exhibit 101.PRE*		~~Inline XBRL Taxonomy Extension Presentation Linkbase.~~

Exhibit 104*		Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101).

* Filed as part of this quarterly report.
^ Management contract or compensatory plan or arrangement.
# In accordance with SEC Release No. 33-8238, Exhibit 32.1 is to be treated as “accompanying” this report rather than “filed” as part of the report.

5352

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			WESTROCK COMPANY
			(Registrant)

Date:	February ~~3, 2023~~2, 2024	By:	/s/ Alexander W. Pease
			Alexander W. Pease
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer and duly authorized officer)

5453


Delaware		37-1880617
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1000 Abernathy Road NE, Atlanta, Georgia		30328
(Address of Principal Executive Offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	WRK	New York Stock Exchange


Class		Outstanding as of January ~~20, 2023~~19, 2024
Common Stock, $0.01 par value		~~254,651,783~~256,966,731


	Three Months Ended
	December 31,
(In millions)	2022			2021

Consolidated net income	$	46.8		$	183.8
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
Foreign currency translation gain (loss)		117.5			(16.3	)
Recognition of previously unrealized foreign currency losses on consolidation of equity investment		29.0			—
Derivatives:
Deferred loss on cash flow hedges		(21.8	)		—
Reclassification adjustment of net loss on cash flow hedges included in earnings		9.9			—
Defined benefit pension and other postretirement benefit plans:
Amortization and settlement recognition of net actuarial loss, included in pension cost		9.7			1.3
Amortization and settlement recognition of prior service cost, included in pension cost		1.4			1.4
Other comprehensive income (loss), net of tax		145.7			(13.6	)
Comprehensive income		192.5			170.2
Less: Comprehensive income attributable to noncontrolling interests		(1.8	)		(1.5	)
Comprehensive income attributable to common stockholders	$	190.7		$	168.7


	Three Months Ended
	December 31,
(In millions)	2023			2022

Consolidated net (loss) income	$	(22.7	)	$	46.8
Other comprehensive income, net of tax:
Foreign currency translation adjustments:
Foreign currency translation gain		158.8			117.5
Reclassification of previously unrealized net foreign currency loss upon consolidation of equity investment		—			29.0
Derivatives:
Deferred loss on cash flow hedges		(11.6	)		(21.8	)
Reclassification adjustment of net loss on cash flow hedges included in earnings		3.9			9.9
Defined benefit pension and other postretirement benefit plans:
Amortization and settlement recognition of net actuarial loss, included in pension and postretirement cost		4.9			9.7
Amortization and curtailment recognition of prior service cost, included in pension and postretirement cost		1.1			1.4
Other comprehensive income, net of tax		157.1			145.7
Comprehensive income		134.4			192.5
Less: Comprehensive loss (income) attributable to noncontrolling interests		0.3			(1.8	)
Comprehensive income attributable to common stockholders	$	134.7		$	190.7


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


		Page
PART I	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Statements of ~~Income~~Operations for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022	3

	Consolidated Statements of Comprehensive Income for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022	4

	Consolidated Balance Sheets at December 31, ~~2022~~2023 and September 30, ~~2022~~2023	5

	Consolidated Statements of Equity for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022	6

	Consolidated Statements of Cash Flows for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3433

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5150

Item 4.	Controls and Procedures	5150

PART II	OTHER INFORMATION	5251

Item 1.	Legal Proceedings	5251

Item 1A.	Risk Factors	5251

Item 6.	Exhibits	5251

	Index to Exhibits	5352


	Three Months Ended
	December 31,
(In millions, except per share data)	2022			2021

Net sales	$	4,923.1		$	4,952.2
Cost of goods sold		4,157.9			4,155.6
Gross profit		765.2			796.6
Selling, general and administrative excluding intangible amortization		479.1			452.9
Selling, general and administrative intangible amortization		86.6			88.0
Gain on disposal of assets		(1.7	)		(13.9	)
Multiemployer pension withdrawal income		—			(3.3	)
Restructuring and other costs		33.0			2.3
Operating profit		168.2			270.6
Interest expense, net		(97.3	)		(86.7	)
Pension and other postretirement non-service (cost) income		(5.0	)		39.9
Other income, net		25.2			0.2
Equity in (loss) income of unconsolidated entities		(36.0	)		18.4
Income before income taxes		55.1			242.4
Income tax expense		(8.3	)		(58.6	)
Consolidated net income		46.8			183.8
Less: Net income attributable to noncontrolling interests		(1.5	)		(1.5	)
Net income attributable to common stockholders	$	45.3		$	182.3

Basic earnings per share attributable to common stockholders	$	0.18		$	0.69
Diluted earnings per share attributable to common stockholders	$	0.18		$	0.68

Basic weighted average shares outstanding		254.7			264.6
Diluted weighted average shares outstanding		256.7			266.9


(In millions, except per share data)	December 31, 2022			September 30, 2022			December 31, 2023			September 30, 2023

ASSETS
Current assets:
Cash and cash equivalents	$	415.2		$	260.2		$	488.1		$	393.4
Accounts receivable (net of allowances of $61.0 and $66.3)		2,665.5			2,683.9
Accounts receivable (net of allowances of $58.6 and $60.2)								2,439.9			2,591.9
Inventories		2,570.9			2,317.1			2,391.3			2,331.5
Other current assets		1,713.9			689.8
Other current assets (amount related to SPEs of $0 and $862.1)								739.2			1,584.8
Assets held for sale		214.6			34.4			87.6			91.5
Total current assets		7,580.1			5,985.4			6,146.1			6,993.1
Property, plant and equipment, net		11,398.7			10,081.4			11,230.2			11,063.2
Goodwill		6,073.4			5,895.2			4,270.2			4,248.7
Intangibles, net		2,855.4			2,920.6			2,507.3			2,576.2
Prepaid pension asset		453.7			440.3			629.5			618.3
Other assets		1,980.4			3,082.6
Other noncurrent assets (amount related to SPEs of $383.5 and $382.7)								1,962.9			1,944.2
Total Assets	$	30,341.7		$	28,405.5		$	26,746.2		$	27,443.7

LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt	$	497.0		$	212.2		$	462.3		$	533.0
Accounts payable		2,270.6			2,252.1			2,159.2			2,123.9
Accrued compensation and benefits		410.9			627.9			415.4			524.9
Other current liabilities		1,767.4			810.6
Liabilities held for sale		66.1			-
Other current liabilities (amount related to SPEs of $0 and $776.7)								931.9			1,737.6
Total current liabilities		5,012.0			3,902.8			3,968.8			4,919.4
Long-term debt due after one year		8,965.8			7,575.0			8,235.9			8,050.9
Pension liabilities, net of current portion		211.9			189.4			194.7			191.2
Postretirement benefit liabilities, net of current portion		106.9			105.4			100.9			99.1
Deferred income taxes		2,814.1			2,761.9			2,254.4			2,433.2
Other long-term liabilities		1,671.8			2,445.8
Commitments and contingencies (Note 17)
Redeemable noncontrolling interests		6.9			5.5
Other noncurrent liabilities (amount related to SPEs of $330.7 and $330.2)								1,826.9			1,652.2
Commitments and contingencies (Note 16)
Equity:
Preferred stock, $0.01 par value; 30.0 million shares authorized; no shares outstanding		—			—			—			—
Common Stock, $0.01 par value; 600.0 million shares authorized; 254.6 million and 254.4 million shares outstanding at December 31, 2022 and September 30, 2022, respectively		2.5			2.5
Common Stock, $0.01 par value; 600.0 million shares authorized; 257.0 million and 256.4 million shares outstanding at December 31, 2023 and September 30, 2023, respectively								2.6			2.6
Capital in excess of par value		10,652.6			10,639.4			10,710.2			10,698.5
Retained earnings		2,188.3			2,214.4			176.5			278.2
Accumulated other comprehensive loss		(1,308.9	)		(1,454.3	)		(741.5	)		(898.6	)
Total stockholders’ equity		11,534.5			11,402.0			10,147.8			10,080.7
Noncontrolling interests		17.8			17.7			16.8			17.0
Total equity		11,552.3			11,419.7			10,164.6			10,097.7
Total Liabilities and Equity	$	30,341.7		$	28,405.5		$	26,746.2		$	27,443.7


	Three Months Ended December 31, 2021
	Corrugated Packaging		Consumer Packaging		Global Paper		Distribution		Inter- segment Sales			Total
U.S.	$	1,969.0	$	648.3	$	1,213.1	$	284.6	$	(82.4	)	$	4,032.6
Canada		140.4		114.3		57.9		3.5		(1.3	)		314.8
Latin America		107.6		45.5		48.3		36.7		(0.1	)		238.0
EMEA		3.0		252.1		15.9		—		(0.1	)		270.9
Asia Pacific		—		78.5		17.4		—		—			95.9
Total	$	2,220.0	$	1,138.7	$	1,352.6	$	324.8	$	(83.9	)	$	4,952.2


	Contract Assets (Short-Term)		Contract Liabilities (Short-Term)
Beginning balance - October 1, 2022	$	244.0	$	13.9
Ending balance - December 31, 2022		258.0		14.4
Increase	$	14.0	$	0.5


	December 31, 2022		September 30, 2022
Assets:
Corrugated Packaging	$	10,866.6	$	11,382.5
Consumer Packaging		6,774.8		6,704.5
Global Paper		6,739.9		7,039.2
Distribution		849.3		863.0
Other unallocated		2,468.7		—
Assets held for sale		214.6		34.4
Corporate		2,427.8		2,381.9
Total	$	30,341.7	$	28,405.5

Intangibles, net:
Corrugated Packaging	$	619.6	$	648.4
Consumer Packaging		1,508.4		1,523.5
Global Paper		596.3		612.6
Distribution		131.1		136.1
Total	$	2,855.4	$	2,920.6

Equity method investments:
Corrugated Packaging	$	78.1	$	479.3
Consumer Packaging		0.5		0.5
Global Paper		0.7		0.5
Corporate		0.1		0.1
Total	$	79.4	$	480.4


	Corrugated Packaging		Consumer Packaging			Global Paper			Distribution		Other Unallocated			Total
Balance as of Sep. 30, 2022	$	2,802.8	$	1,588.4		$	1,366.5		$	137.5	$	—		$	5,895.2
Acquisitions		—		—			—			—		231.2			231.2
Divestitures		—		(7.4	)		(4.1	)		—		—			(11.5	)
Transferred to assets held for sale		—		(33.9	)		(38.9	)		—		—			(72.8	)
Translation adjustments		16.1		9.1			7.8			0.8		(2.5	)		31.3
Balance as of Dec. 31, 2022
Goodwill	$	2,818.9	$	1,556.2		$	1,331.3		$	138.3	$	228.7		$	6,073.4


	December 31, 2022		September 30, 2022
Public bonds due fiscal 2024 to 2028	$	3,434.5	$	3,433.4
Public bonds due fiscal 2029 to 2033		2,749.9		2,753.3
Public bonds due fiscal 2037 to 2047		177.6		177.8
Revolving credit and swing facilities		182.0		286.3
Term loan facilities		1,596.9		598.2
Receivables securitization		375.0		—
Commercial paper		301.5		—
International and other debt		131.4		127.6
Finance lease obligations		393.0		287.5
Vendor financing and commercial card programs		121.0		123.1
Total debt		9,462.8		7,787.2
Less: current portion of debt		497.0		212.2
Long-term debt due after one year	$	8,965.8	$	7,575.0


	December 31, 2023		September 30, 2023
Public bonds due fiscal 2025 to 2028	$	2,939.4	$	2,938.6
Public bonds due fiscal 2029 to 2033		2,735.9		2,739.5
Public bonds due fiscal 2037 to 2047		177.2		177.3
Revolving credit and swing facilities		43.6		32.0
Term loan facilities		1,347.7		1,347.4
Receivables securitization		525.0		425.0
Commercial paper		249.2		283.9
International and other debt		48.4		61.9
Finance lease obligations		521.2		472.6
Vendor financing and commercial card programs		110.6		105.7
Total debt		8,698.2		8,583.9
Less: current portion of debt		462.3		533.0
Long-term debt due after one year	$	8,235.9	$	8,050.9


	December 31, 2022			September 30, 2022			December 31, 2023			September 30, 2023
Finished goods and work in process	$	1,155.6		$	1,102.4		$	1,083.8		$	1,044.9
Raw materials		1,316.1			1,135.9			1,045.8			1,049.8
Spare parts and supplies		572.8			529.6			601.7			578.2
Inventories at FIFO cost		3,044.5			2,767.9			2,731.3			2,672.9
LIFO reserve		(473.6	)		(450.8	)		(340.0	)		(341.4	)
Net inventories	$	2,570.9		$	2,317.1		$	2,391.3		$	2,331.5


	December 31, 2022			September 30, 2022			December 31, 2023			September 30, 2023
Property, plant and equipment at cost:
Land and buildings	$	3,038.2		$	2,646.4		$	3,099.3		$	2,994.7
Machinery and equipment		17,658.5			16,592.5			18,026.7			17,682.4
Forestlands		98.9			95.7			113.3			105.2
Transportation equipment		22.6			24.2			27.9			27.3
Leasehold improvements		103.9			103.4			100.9			98.8
Construction in progress								927.4			967.8
		20,922.1			19,462.2			22,295.5			21,876.2
Less: accumulated depreciation, depletion and amortization		(9,523.4	)		(9,380.8	)		(11,065.3	)		(10,813.0	)
Property, plant and equipment, net	$	11,398.7		$	10,081.4		$	11,230.2		$	11,063.2


	Consolidated Balance Sheet Caption	December 31, 2022			September 30, 2022			Consolidated Balance Sheet Caption	December 31, 2023			September 30, 2023
Operating leases:
Operating lease right-of-use asset	Other assets	$	700.7		$	699.6		Other noncurrent assets	$	622.2		$	648.5

Current operating lease liabilities	Other current liabilities	$	197.1		$	191.9		Other current liabilities	$	195.5		$	202.4
Noncurrent operating lease liabilities	Other long-term liabilities		547.1			551.1		Other noncurrent liabilities		477.4			499.7
Total operating lease liabilities		$	744.2		$	743.0			$	672.9		$	702.1

Finance leases:
Property, plant and equipment		$	287.9		$	177.4			$	453.5		$	400.6
Accumulated depreciation			(42.4	)		(37.3	)			(65.7	)		(105.3	)
Property, plant and equipment, net		$	245.5		$	140.1			$	387.8		$	295.3

Current finance lease liabilities	Current portion of debt	$	20.8		$	14.5		Current portion of debt	$	25.9		$	62.9
Noncurrent finance lease liabilities	Long-term debt due after one year		372.2			273.0		Long-term debt due after one year		495.3			409.7
Total finance lease liabilities		$	393.0		$	287.5			$	521.2		$	472.6


	Metric	December 31, 2023		September 30, 2023
Designated cash flow hedges:
Natural gas commodity contracts	MMBtu		20.4		22.0


		Three Months Ended
		December 31,
	Consolidated Statement of Income Caption	2022			2021
Natural gas commodity contracts	Cost of goods sold	$	(13.2	)	$	—


		Three Months Ended
		December 31,
	Consolidated Statement of Operations Caption	2023			2022
Natural gas commodity contracts	Cost of goods sold	$	(5.2	)	$	(13.2	)


	Deferred (Loss) Income on Cash Flow Hedges			Defined Benefit Pension and Postretirement Plans			Foreign Currency Items			Total (1)			Deferred (Loss) Income on Cash Flow Hedges			Defined Benefit Pension and Postretirement Plans			Foreign Currency Items			Total (1)
Balance at September 30, 2022	$	(9.1	)	$	(741.6	)	$	(703.6	)	$	(1,454.3	)
Balance at September 30, 2023													$	(4.9	)	$	(572.0	)	$	(321.7	)	$	(898.6	)
Other comprehensive (loss) income before reclassifications		(21.8	)		—			117.2			95.4			(11.6	)		—			158.8			147.2
Amounts reclassified from accumulated other comprehensive loss		9.9			11.1			29.0			50.0			3.9			6.0			—			9.9
Net current period other comprehensive (loss) income		(11.9	)		11.1			146.2			145.4			(7.7	)		6.0			158.8			157.1
Balance at December 31, 2022	$	(21.0	)	$	(730.5	)	$	(557.4	)	$	(1,308.9	)
Balance at December 31, 2023													$	(12.6	)	$	(566.0	)	$	(162.9	)	$	(741.5	)