FinanceLooker

Excrept from filing document 2024-06-30

The aggregate market value of the ordinary shares held by non affiliates of the registrant computed by reference to the closing price of such shares as of the last business day of the registrant s most recently completed second quarter was 13 9 billion
Certain information required for Part III of this Annual Report on Form 10 K is incorporated by reference to the Amcor plc definitive Proxy Statement for its 2024 Annual Shareholder Meeting which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934 as amended within 120 days of Amcor plc s fiscal year end
This Annual Report on Form 10 K contains certain statements that are forward looking statements within the meaning of the safe harbor provisions of the U S Private Securities Litigation Reform Act of 1995 Forward looking statements are generally identified with words like believe expect target project may could would approximately possible will should intend plan anticipate commit estimate potential ambitions outlook or continue the negative of these words other terms of similar meaning or the use of future dates Such statements are based on the current expectations of the management of Amcor and are qualified by the inherent risks and uncertainties surrounding future expectations generally Actual results could differ materially from those currently anticipated due to a number of risks and uncertainties Neither of Amcor nor any of its respective directors executive officers or advisors provide any representation assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements will actually occur Risks and uncertainties that could cause actual results to differ from expectations include but are not limited to
a significant increase in our indebtedness or a downgrade in our credit rating could reduce our operating flexibility and increase our borrowing costs and negatively affect our financial condition and results of operations
increasing scrutiny and changing expectations from investors customers suppliers and governments with respect to our ESG practices and commitments resulting in additional costs or exposure to additional risks
Additional factors that could cause actual results to differ from those expected are discussed in this Annual Report on Form 10 K including in the sections entitled Item 1A Risk Factors and Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations and in Amcor s subsequent filings with the Securities and Exchange Commission
Forward looking statements made in this Annual Report on Form 10 K relate only to events as of the date on which the statements are made Amcor assumes no obligation and disclaims any obligation to update the information contained in this report All forward looking statements in this Annual Report on Form 10 K are qualified in their entirety by this cautionary statement
Amcor plc ARBN 630 385 278 is a public limited company incorporated under the Laws of the Bailiwick of Jersey Our history dates back more than 150 years with origins in both Australia and the United States of America Today we are a global leader in developing and producing responsible packaging solutions across a variety of materials for food beverage pharmaceutical medical home and personal care and other products Our global product innovation and sustainability expertise enable us to solve packaging challenges around the world every day producing a range of flexible packaging rigid packaging cartons and closures that are more functional appealing and cost effective for our customers and their consumers and importantly more sustainable for the environment
We believe that we are uniquely positioned to offer a variety of packaging solutions with a wide differentiated portfolio of products enabled by our constant innovation and close partnerships with our customers Our packaging expertise covers all main packaging materials including paper aluminum polymer resins recycled and bio based materials and the sustainable use of recyclable materials
Behind every one of our products stands a unique combination of technical know how business experience and expertise We work closely with our customers to identify feasible high performance responsible packaging solutions based on their unique needs Where solutions do not currently exist we work to innovate new ones
Sustainability is comprehensively embedded across our business and is one of our most important and exciting opportunities for growth For years Amcor has been an industry leader in driving progress toward a circular economy for packaging We aspire to improve the quality of lives protect ecosystems and preserve natural resources for future generations by offering a unique range of responsible packaging solutions leveraging our global scale reach and expertise to meet our customers growing sustainability expectations In January 2018 we became the world s first packaging company to pledge that all our packaging would be designed to be recyclable compostable or reusable by 2025 and also committed to increasing the amount of recycled materials we use In November 2022 we further increased our target for use of recycled materials to 30 by 2030 We continue making progress toward these commitments and leading in the development of a responsible packaging value chain through our innovations and partnerships We have identified a clear path to meeting our sustainability ambitions and those of our customers by focusing on the three elements of responsible packaging product innovation consumer participation and waste management infrastructure
Our business strategy consists of three components a focused portfolio differentiated capabilities and our aspiration to be THE leading global packaging company To fulfill our aspiration we are determined to win for our customers employees shareholders and the environment
The Amcor Way describes the capabilities deployed consistently across Amcor that enable us to get leverage across our portfolio Talent Commercial Excellence Operational Leadership Innovation and Cash and Capital Discipline Our values of Safety Integrity Collaboration Accountability and Results and Outperformance guide our behavior driving our winning aspiration to be THE leading global packaging company
Through our portfolio of focused businesses and differentiated capabilities we generate strong cash flow and redeploy cash to consistently create superior value for shareholders The nature of our consumer and healthcare end markets means that over time volatility should be relatively low measured on a constant currency basis Long term value creation has been strong and consistent and has reflected a combination of dividends organic growth in the base business and using free cash flow to pursue targeted acquisitions and or returning cash to shareholders via share buybacks
Accounting Standards Codification ASC 280 Segment Reporting establishes the standards for reporting information about segments in financial statements In applying the criteria set forth in ASC 280 we have determined we have two reportable segments Flexibles and Rigid Packaging The reportable segments produce flexible packaging rigid packaging specialty cartons and closure products which are sold to customers participating in a range of attractive end use areas throughout Europe North America Latin America Africa and the Asia Pacific regions Refer to Note 20 Segments of the notes to consolidated financial statements for financial information about reportable segments
Our Flexibles Segment develops and supplies flexible packaging globally With approximately 35 000 employees at 160 significant manufacturing and support facilities in 36 countries as of June 30 2024 the Flexibles Segment is one of the world s largest suppliers of polymer resin aluminum and fiber based flexible packaging In fiscal year 2024 Flexibles accounted for approximately 76 of consolidated net sales
Our Rigid Packaging Segment manufactures rigid packaging containers and related products in the Americas As of June 30 2024 the Rigid Packaging Segment employed approximately 5 000 employees at 52 significant manufacturing and support facilities in 11 countries In fiscal year 2024 Rigid Packaging accounted for approximately 24 of consolidated net sales
Our sales are made through a variety of distribution channels but predominantly through our direct sales force Sales offices and plants are located primarily throughout Europe North America Latin America and the Asia Pacific regions to provide prompt and economical service to thousands of customers Our technically trained sales force is supported by product development engineers design technicians field service technicians and customer service teams
The major markets in which we sell our products historically have been and continue to be highly competitive Areas of competition include service sustainability innovation quality and price We consider ourselves to be a significant participant in the markets in which we operate Competitors include AptarGroup Inc Ball Corporation Berry Global Group Inc CCL Industries Inc Crown Holdings Inc Graphic Packaging Holding Company Huhtamaki Oyj International Paper Company Mayr Melnhof Karton AG O I Glass Inc Sealed Air Corporation Silgan Holdings Inc and Sonoco Products Company and a variety of privately held companies
Working capital fluctuates throughout the year in relation to business volume and other marketplace conditions We maintain inventory levels that provide a reasonable balance between obtaining raw materials at favorable prices and maintaining adequate inventory levels to enable us to fulfill our commitment to promptly fill customer orders Manufacturing backlogs are not a significant factor in the markets in which we operate
Polymer resins and films paper inks solvents adhesives aluminum and chemicals constitute the major raw materials we use These are purchased from a variety of global industry sources and we are not significantly dependent on any one supplier for our raw materials While we have experienced industry wide shortages of certain raw materials in the past we have been able to manage supply disruptions by working closely with our suppliers and customers Supply shortages along with other factors can lead and have in the past led to increased raw material price volatility Increases in the price of raw materials are generally able to be passed on to customers including through contractual price mechanisms over time We manage the risks associated with our supply chain and have generally been able to maintain adequate raw materials through relationship management inventory management and evaluation of alternative sources when practical For more information see Item 1A Raw Materials Price fluctuations or shortages in the availability of raw materials energy and other inputs could adversely affect our business
We are the owner or licensee of more than a thousand United States and other country patents and patent applications that relate to our products manufacturing processes and equipment We have a number of trademarks and trademark registrations in the United States and in other countries We also keep certain technology and processes as trade secrets Our patents licenses and trademarks collectively provide a competitive advantage However the loss of any single patent or license alone would not have a material adverse effect on our results of operations as a whole or those of our reportable segments Patents patent applications and license agreements will expire or terminate over time by operation of law in accordance with their terms or otherwise
Sustainability is comprehensively embedded across our business from the investments we are making in packaging innovation and design to our global collaboration strategy to the work we undertake within our own operations and with our upstream and downstream partners to develop a more responsible packaging value chain
We believe there will always be a role for the primary packaging we produce to preserve food beverages and healthcare products protect consumers and promote brands Consumers also want cost effective convenient and easy to use packaging with a reduced environmental footprint and a responsible end of life solution We have identified a clear path to provide food beverages and healthcare products to people around the world in a more sustainable way and meet our sustainability ambitions and those of our customers by focusing on three key elements of responsible packaging product innovation consumer participation and waste management infrastructure We believe our commitment to responsible packaging is integral to our success Our responsible packaging solutions address both how the product is made as well as what happens after the consumer uses it offering a wide variety of options to advance sustainability while meeting our customers specific packaging needs
Innovation is central to Amcor s approach to sustainability and we spend approximately 100 million a year on research and development R D not including ongoing investment in incremental continuous improvements We are highly regarded for our innovation capabilities and have more than a thousand active patents as well as a global network of Innovation Centers focused on bringing advanced packaging technologies and more sustainable material science to our markets around the world We solve packaging challenges by developing differentiated products services and processes to protect our customers products and fulfill the needs of the consumers who rely on them Drawing on our unrivaled heritage in design science and manufacturing over a thousand Amcor R D professionals and engineers are constantly innovating across new materials formats functions and technologies
We collaborate with like minded partners including customers and suppliers in pursuit of innovative solutions to address some of the world s most urgent challenges including increasing recycling and reuse and reducing our environmental impacts We also partner with non governmental organizations promising startups and cross industry initiatives and bodies These partnerships enable us to learn experience other perspectives share our expertise and expand our innovation With our
partners we advocate for sound global design standards better waste management infrastructure and higher levels of consumer participation in recycling that will be required to develop a true circular economy for packaging
We know that our environmental footprint also extends beyond the products we create and we strive to reduce the environmental impacts of our operations For more than a decade our EnviroAction program has helped us significantly improve how we manage energy greenhouse gas GHG emissions water and waste in our manufacturing locations In January 2022 we further increased our ambition by committing to set science based targets to reduce GHG emissions and achieve net zero emissions by 2050 We submitted our near term science based targets in fiscal year 2023 and they were validated by the Science Based Targets initiative in fiscal year 2024 The new targets build on years of progress under our EnviroAction program We also submitted our long term net zero science based targets in fiscal year 2024 and expect they will be validated by the Science Based Targets Initiative in calendar year 2024 To support our ongoing process toward achieving science based targets we have developed a decarbonization strategy which focuses on five key GHG emission levers renewable electricity supply chain footprint reduction recycled materials product redesign and operational efficiency
With our global scale deep industry experience and strong capabilities we believe that we are uniquely positioned to lead the way in the design and development of more sustainable packaging and this is one of the most important and exciting growth opportunities for Amcor
Our operations and the real property we own or lease are subject to broad governmental laws and regulations including environmental laws and regulations by multiple jurisdictions These laws and regulations pertain to employee health and safety the discharge of certain materials into the environment handling and disposition of waste cleanup of contaminated soil and ground water other rules to control pollution and manage natural resources and other government regulations We believe that we are in substantial compliance with applicable health and safety laws environmental laws and regulations based on the execution of our Environmental Health and Safety Management System and regular audits of those processes and systems However we cannot predict with certainty that we will not in the future incur liability with respect to noncompliance with health and safety laws environmental laws and regulations due to contamination of sites formerly or currently owned or operated by us including contamination caused by prior owners and operators of such sites or the off site disposal of regulated materials or other broad government regulations which could be significant In addition these laws and regulations are constantly changing and we cannot always anticipate these changes Refer to Note 19 Contingencies and Legal Proceedings of the notes to consolidated financial statements for information about legal proceedings For a more detailed description of the various laws and regulations that affect our business see Item 1A Risk Factors
Our business and operations of each of the reportable segments is subject to moderate seasonality with demand usually increasing towards the end of our fiscal year due to increased demand for beverage and food products in certain markets Historically cash flow from operations has been lower in the first half of the fiscal year and higher in the second half of the fiscal year due to moderate seasonality working capital requirements and the timing of certain cash payments made in the first half of the year including incentive compensation
Amcor s aspiration is to be THE leading global packaging company Our people are core to the achievement of our aspiration We believe we are winning for our people when they feel safe engaged and are developing as part of a high performing global team We strive to build an outperformance culture in which we consistently deliver results and strive to surpass expectations At Amcor we are stronger because of the diverse strengths styles cultures and experiences of our people We aim to create inclusive working environments to ensure each colleague feels valued treated with respect encouraged to speak and empowered to be their best
As of June 30 2024 we had approximately 41 000 employees including part time and temporary workers worldwide with approximately 31 located in North America 29 located in Europe 21 located in Latin America and 19 located in the Asia Pacific region Collective bargaining agreements cover approximately 43 of our workforce As of June 30 2024 approximately 3 of our employees were working under expired contracts and approximately 20 were covered under collective bargaining agreements that expire within one year
Safety is a core value at Amcor as well as an integral component in our global Health and Safety programs We take care of ourselves and each other so everyone returns home safely every day We champion a safe and healthy workplace establish key accountabilities at all levels of the organization and aspire to achieve a true culture of care and an injury free Amcor All our facilities are subject to global Environment Health and Safety EHS standards which serve as blueprints for a safe and healthy workplace We also have established policies procedures and training intended to minimize risks to people property and reputation
Our Board of Directors receives monthly reports on health and safety performance and compliance with our global EHS standards During fiscal year 2024 we reduced the number of injuries by 12 and 73 of our sites were injury free Our Total Recordable Incident Rate TRIR which is an annual rate of workplace injuries that we use to track our safety efforts was 0 27 in fiscal year 2024 an improvement over fiscal year 2023 and reflecting a better performance than the industry average
At Amcor we are dedicated to attracting developing engaging and retaining the best talent to deliver our Winning Aspiration and ensure a strong succession pipeline for the future Our fiscal years 2023 2027 Human Capital Strategy is focused on ensuring that we have the right people in the right jobs at the right time to drive our growth agenda We recognize that we grow our business by developing our people and placing people at the center of what we do Our HR Strategy aims to create an exceptional employee experience through a range of ongoing initiatives focused on talent We continue to focus on attracting developing engaging and retaining the best talent and strengthening the Company s succession pipeline for the future Supported by our employment value proposition we also undertake a variety of recruitment strategies to attract top talent
We have a range of executive development leadership training education and awareness programs to help employees progress across all functions and experience levels Examples of these global leadership programs include our Executive Development program EDP which targets our most senior leaders and provides them an immersive experience in strategy development and strategic talent management We also have our Senior Leader Development program SLDP focusing on developing strategic management skills and inclusive leadership
Additionally we also deploy systems and processes to ensure our people have clear goals and are empowered to achieve them Through performance management we align these goals to business targets providing line of sight so each employee understands how they contribute to our success Through formal reviews performance coaching and feedback our leaders implement a rigorous cycle to foster talent
At Amcor we re committed to providing an inclusive environment that empowers us to achieve our full potential Becoming THE leading global packaging company requires us to create a culture in which everyone feels encouraged to speak and compelled to listen
Under the Talent Pillar the Amcor Leadership Mentoring Program is ongoing for the second year The program aims to develop emerging female talent by connecting them with senior leaders as well as through workshops and networking opportunities In addition we are working towards diversifying our global talent pool by reducing unconscious bias from talent attraction and development through a number of initiatives
Under the Community Pillar we have established a global network of DE I representatives from all business groups and corporate functions to come together share their experiences and support the execution of our agenda across Amcor The network also shares regular updates with the Global Management Team Our Employee Resource Groups are an important part of the Community Pillar that support the DE I strategy through local initiatives relevant to the countries and regions they are located in
Under the Awareness and Training Pillar our DE I training calendar provides an overview of opportunities for Amcor colleagues to build knowledge and capabilities aligning the entire organization on DE I topics Business groups organize these sessions in a variety of formats including live small group seminars large group webinars and e learnings Participants also receive supporting materials to better enable post training reinforcement of learnings including tips and reflection checks
Under the Data and Reporting Pillar progress is measured in a variety of ways such as through feedback from individuals engaged in DE I initiatives community representatives and members of employee resource groups We also receive feedback from across the organization through our engagement survey scores including scores related to DE I We continue to improve our scores by taking action both regionally and globally
We focus on strengthening talent through diversity and progress is reported to our Board annually We continually review opportunities to strengthen our diversity transparency practices while adhering to privacy legislation in certain regions where we operate The Board receives an annual report on our progress towards its DE I efforts
At Amcor we believe strongly in engagement being a key driver of performance and we prioritize engagement through various initiatives In addition to the annual global engagement survey where we provide all employees an opportunity to share anonymous feedback across a variety of topics we conduct regular feedback sessions and town halls to gather insights and foster open communication
Management is focused on continuously improving our employee s engagement and our engagement results help to drive action on various topics globally as well as locally in an effort to continuously improve employee engagement
Good corporate governance and transparency are fundamental to achieving our aspirations Our employees are expected to act with integrity and objectivity and to always strive to enhance our reputation and performance
We maintain a Code of Business Conduct and Ethics Policy which is signed by every Amcor employee and provides our framework for making ethical business decisions We provide targeted training across the globe to reinforce our commitment to ethics and drive adherence to the national laws in each country in which we operate
We are a large accelerated filer as defined in the Securities Exchange Act of 1934 as amended the Exchange Act Rule 12b 2 and we are also an electronic filer Electronically filed reports Forms 4 8 K 10 K 10 Q S 3 S 8 etc can be accessed at the SEC s website http www sec gov We make available free of charge other than an investor s own Internet access charges through the Investor Relations section of our website http www amcor com investors under Financial Information and then SEC Filings our Annual Report on Form 10 K Quarterly Reports on Form 10 Q Current Reports on Form 8 K and if applicable amendments to those reports filed or furnished pursuant to Section 13 a or 15 d of the Exchange Act as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC You may also obtain these reports by writing to us Attention Investor Relations Amcor plc Level 11 60 City Road Southbank VIC 3006 Australia We are not including the information contained on our website as part of or incorporating it by reference into this Annual Report on Form 10 K
The following factors as well as factors described elsewhere in this Annual Report on Form 10 K or in other filings by us with the Securities and Exchange Commission could have a material adverse effect on our business financial condition results of operations or cash flows Other factors not presently known to us or that we presently believe are not material could also affect our business operations and financial results
Sales of our products and services depend heavily on the volume of sales made by our customers to consumers Alternative consumer preferences for products in the industries that we serve or the packaging formats in which such products are delivered whether as a result of changes in cost economic environments regulatory developments including end user taxes convenience or health environmental and social concerns and perceptions such as pressure to reduce packaging waste and the use of petrochemical components may result in a decline in the demand for certain of our products or the obsolescence of some of our existing products Any new products we produce may fail to meet sales or margin expectations due to various factors including our or our customers inability to accurately predict customer demand end user preferences or movements in industry standards or to develop products that meet consumer demand in a timely and cost effective manner
Changing preferences for products and packaging formats may result in increased demand for other products we produce However if changing preferences are not offset by demand for new or alternative products changes in consumer preferences could have a material adverse effect on our business financial condition results of operations or cash flows
Key Customers and Customer Consolidation The loss of key customers a reduction in their production requirements or consolidation among key customers could have a significant adverse impact on our sales revenue and profitability
Relationships with our customers are fundamental to our success particularly given the nature of the packaging industry and other supply choices available to customers While we do not have a single customer accounting for more than 10 of our net sales customer concentration can be more pronounced within certain businesses Consequently the loss of any of our key customers or any significant reduction in their production requirements or an adverse change in the terms of our supply agreements with them could reduce our sales revenue and net profit In addition geopolitical tensions wars and terrorism can impact local demand for our products Although we have been largely successful in maintaining customer relationships in the past there is no assurance that existing customer relationships will be renewed at existing volume product mix or price levels or at all
Customers with operations subject to physical risks including those caused by natural disasters and adverse weather conditions related to climate change may relocate production to less affected areas which could be beyond the range of Amcor s production sites Supplying such relocated facilities may lead to additional costs New regulations can also affect our relationships with customers Any loss change or other adverse event related to our key customer relationships could have a material adverse effect on our business financial condition results of operations or cash flows
Furthermore in recent years some of our customers have acquired companies with similar or complementary product lines This consolidation has increased the concentration of our business with these customers Such consolidation may be accompanied by pressure from customers for lower prices reflecting the increase in the total volume of products purchased or the elimination of a price differential between the acquiring customer and the acquired company While we have generally been successful in managing customer consolidations increased pricing pressures from our customers could have a material adverse effect on our results of operations or cash flows
We operate in highly competitive geographies and end use areas each with varying barriers to entry industry structures and competitive behavior We regularly bid for new and continuing business in the industries and regions in which we operate and we continually adapt to changes in consumer demand While we cannot predict with certainty the changes that may impact our competitiveness the main methods of competition in the general packaging industry include price innovation sustainability service and quality
The loss of business from our larger customers or the renewal of business on less favorable terms may have a significant impact on our operating results Additionally our competitors may develop or utilize disruptive technologies or other technological innovations that could increase their ability to compete for our current or potential customers Our failure to adequately respond to the actions that established or potential competitors take could materially affect our ability to implement our plans and materially adversely affect our business financial condition results of operations or cash flows
Our business strategy includes both organic expansion of our existing operations particularly through efforts to strengthen and expand relationships with customers in emerging markets product innovation including to address changes in the industry or regulatory environments and expansion through investments and acquisitions However we may not be able to execute our strategy effectively for reasons within and outside our control Our ability to grow organically may be limited by among other things extensive saturation in the locations in which we operate or a change or reduction in our customers growth plans due to changing economic conditions strategic priorities or otherwise For many of our businesses organic growth depends on product innovation new product development and timely responses to changing consumer demands and preferences Consequently failure to develop new or improved products in response to changing consumer preferences in a timely manner may hinder our growth potential impact our competitive position and adversely affect our business and results of operations
Additionally we have pursued growth through acquisitions and there can be no assurance that we will be able to identify suitable acquisition targets in the right geographic regions and with the right participation strategy in the future or to complete such acquisitions on acceptable terms or at all If we are unable to identify acquisition targets that meet our investment criteria and close such transactions on acceptable terms our potential for growth by way of acquisition may be restricted which could have a material adverse effect on the achievement of our strategy and the resulting expected financial benefits
We also may face challenges in integrating acquisitions with our existing operations These challenges could include difficulties in integrating or consolidating business processes and systems as well as challenges in integrating business cultures which may result in synergies from acquisitions not being fully realized or taking longer to realize than expected or incurring additional costs to do so Further in pursuing growth through acquisitions we face additional risks common with an acquisition strategy including failure to identify significant contingencies or legal liabilities in the due diligence process diversion of management s attention from existing business and interruptions to normal business operations resulting from the process of integrating operations
We have also invested in companies in which we do not exercise control Our investment partners or other parties that hold the remaining ownership interests in companies that we do not control may not have interests that are aligned with our goals We have incurred losses in our equity method investments in the past and the recognition of our proportionate share of our investees results in the future could adversely affect our results of operations In addition our equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of our investment is not recoverable If we determine that an investment is other than temporarily impaired the resulting impairment charge could adversely affect our results of operations We have recognized impairment losses in the past in connection with our investments and we may be required to do so again in the future
Demand for our products and services depends on consumer demand for our packaging products including packaged food beverages healthcare personal care agribusiness industrial and other consumer goods Geopolitical events such as increased trade barriers or restrictions on global trade political financial or social instability wars civil or social unrest natural disasters or health crises could result in general economic downturns such as a recession or economic slowdown and could adversely affect our business operations and financial results
Recent global economic challenges including the conflict between Russia and Ukraine the Middle East conflict increasing tensions between China and Taiwan and relatively high inflation and interest rates may continue to put pressure on our business Current and future unrest in regions where we operate and political developments could have a material impact on our financial condition
When challenging economic conditions exist our customers may delay decrease or cancel purchases from us and may also delay payments or fail to pay us altogether For example during the first half of fiscal year 2024 our net sales were impacted by volume declines primarily attributed to destocking and lower consumer demand Suppliers may also have difficulties filling our orders and we may have difficulties getting our products to customers which may affect our ability to meet customer demands and result in a loss of business Weakened global economic conditions may also result in unfavorable changes in our product prices and product mix and lower profit margins Although we take measures to mitigate the impact of inflation including through pricing actions and productivity programs if these actions are not effective our cash flow financial condition and results of operations could be materially and adversely impacted In addition there could be a time lag between recognizing the benefit of our mitigating actions and the impact of inflation and there is no guarantee that our mitigating measures will fully offset the impacts of inflation
We have operations throughout the world including facilities in emerging markets In fiscal year 2024 approximately 73 of our sales revenue came from developed markets and 27 came from emerging markets We expect to continue to expand our operations in the future including in the emerging markets
Managing global operations is complex particularly due to substantial differences in the cultural political and regulatory environments of the countries where we operate In addition many countries where we have operations including Argentina Brazil China Colombia India and Peru have legal regulatory or political systems that are dynamic and subject to change
reversal of current political judicial or administrative policies encouraging foreign investment or foreign trade or related to the use of local agents representatives or partners in relevant jurisdictions
Furthermore prolonged periods of economic legal regulatory or political instability in the emerging markets where we operate could have a material adverse effect on our business cash flow financial condition and results of operations
The conflict between Russia and Ukraine has negatively impacted the global economy and led to various economic sanctions being imposed by the U S the European Union the United Kingdom and other countries against Russia It is not possible to predict the broader or longer term consequences of this conflict Continued escalation of geopolitical tensions including the conflict in the Middle East and tensions between China and Taiwan could result in the loss of property supply chain disruptions significant inflationary pressure on raw material prices and other resources such as energy and natural gas fluctuations in our customers buying patterns given regional shortages of food ingredients and other factors credit and capital market disruption which could impact our ability to obtain financing increase in interest rates and adverse foreign exchange impacts These broader consequences could have a material adverse effect on our business cash flow financial condition and results of operations
Our international operations involve limited sales to entities located in countries subject to economic sanctions administered by the U S Office of Foreign Assets Control the U S Department of State and the U S Department of Commerce and other applicable national and supranational organizations collectively Sanctions We also operate in certain countries that are occasionally subject to Sanctions which require us to maintain internal processes and control procedures Failure to do so could result in breach by our employees of various laws and regulations including those relating to money laundering corruption export control fraud bribery insider trading antitrust competition and economic sanctions whether due to a lack of integrity or awareness or otherwise Any such breach could result in sanctions including fines and penalties and could have a material adverse effect on our financial condition and reputation
As a manufacturer of packaging products our sales and profitability are dependent on the availability and cost of raw materials labor and other inputs including energy All of the raw materials we use are purchased from third parties and our primary inputs include polymer resins and films paper inks solvents adhesives aluminum and chemicals Prices for these raw materials are subject to substantial fluctuations that are beyond our control due to factors such as changing economic conditions including inflation currency and commodity price fluctuations resource availability and other supply chain challenges transportation costs geopolitical risks including the conflicts between Russia and Ukraine and in the Middle East pandemics and other health crises an increase in the demand for products manufactured from recycled materials weather conditions and natural disasters environmental regulations related to greenhouse gas emissions biodiversity and deforestation human rights due diligence regulations and other factors impacting supply and demand pressures For example energy prices have fluctuated significantly in the past few years and may fluctuate in the future which could negatively impact our results of operations
Additionally changes in international trade policies in the countries in which we operate could materially impact the cost and supply of raw materials as duties are assessed on raw materials used in our production process and the global supply of key raw materials is disrupted For example in fiscal year 2024 the U S government assessed retroactive duties on a small number of our aluminum imports into the U S where it was determined that the rollstock originated from China The introduction of new duties tariffs quotas or other similar trade restrictions may have a negative impact on our business financial condition results of operations or cash flows
While we have largely been able to successfully manage through any supply disruptions and related price volatility in the past there is no assurance that we will be able to successfully navigate any future disruptions Increases in costs and disruptions in supply can have a material adverse effect on our business and financial results We seek to mitigate these risks through various strategies including entering into contracts with certain customers that permit price adjustments to reflect increased raw material and other costs or by otherwise seeking to increase our prices to offset increases in raw material and other costs and seeking alternative sources of supply for key raw materials However there is no guarantee that we will be able to anticipate or mitigate commodity and input price movements or supply disruptions In addition there may be delays in adjusting prices to correspond with underlying raw material costs and corresponding impacts on our working capital and level of indebtedness and any failure to anticipate or mitigate against such movements could have a material adverse effect on our business financial condition results of operations or cash flows
We face a number of commercial risks including i operational disruption such as mechanical or technological failures disruptions due to natural disasters geopolitical conflicts or health crises each of which could lead to production loss and or increased costs ii shortages in manufacturing inputs due to the loss of key suppliers or their inability to supply inputs and iii risks associated with development projects such as cost overruns and delays
Supply or workforce shortages fluctuations in freight costs limitations on shipping capacity or other disruptions in our supply chain including sourcing materials from a single supplier or those that may occur related to wars geopolitical tensions natural disasters health crises or new regulations could affect our ability to obtain timely delivery of raw materials equipment and other supplies and in turn adversely impact our ability to supply products to our customers Additionally severe weather events and other adverse effects of climate change could have negative effects on agricultural productivity leading customers to face both availability and price challenges with agricultural commodities which may impact the demand for our products For example in fiscal year 2023 adverse weather conditions in the United States reduced cattle herds leading to a rise in meat prices which ultimately contributed to lower meat packaging sales volumes which continued in the first half of fiscal year 2024 The potential magnitude of these commercial risks on our business financial condition results of operations or cash flows could be material
Additionally the insolvency of or contractual default by any of our customers suppliers and financial institutions such as banks and insurance providers may have a material adverse effect on our operations and financial condition Such risks are exacerbated in times of economic volatility either globally or in the geographies and industries in which our customers suppliers or financial institutions operate If a counterparty defaults on its payment obligation to us we may be unable to collect the amounts owed and some or all of these outstanding amounts may need to be written off If a counterparty becomes insolvent or is otherwise unable to meet its obligations in connection with a particular project we may need to find a
replacement to fulfill that party s obligations or alternatively fulfill those obligations ourselves which may be more expensive The occurrence of any of these risks could have a material adverse effect on our business financial condition results of operations or cash flows which may result in a competitive disadvantage
Our business and financial results may be negatively impacted by outbreaks of contagious diseases Health crises have resulted in the past and could in the future result in supply chain disruptions due to the temporary closure of our facilities the facilities of our suppliers or other suppliers in our supply chain the shut down of customers operations volatility in raw material costs and labor shortages and may have broader global economic or geopolitical implications In addition any major animal disease outbreak could adversely impact the demand for our packaging While we have established protocols to manage these potential impacts the extent to which health crises may impact our business and operations is unknown and the effect on our business financial condition results of operations or cash flows could be material
Our continued success depends on our ability to identify attract motivate develop and retain skilled and diverse personnel in our global executive management team and our operations We focus on our talent acquisition processes as well as our onboarding and talent and leadership programs to ensure that our key new hires and skilled personnel s efficiency and effectiveness align with Amcor s values and ways of working In March 2024 we announced the retirement of our Chief Executive Officer Ron Delia and the appointment of Peter Konieczny as our Interim Chief Executive Officer Our Board of Directors has launched a search process for a permanent Chief Executive Officer Any failure to successfully transition key roles could impact our ability to execute on our strategic plans make it difficult to meet our performance objectives and be disruptive to our business In addition there is no assurance that our Board of Directors will be successful in finding a permanent Chief Executive Officer in a timely manner which may create additional uncertainty among our employees customers suppliers lenders and investors and which could negatively impact our business financial condition results of operations cash flows and share price
inflationary pressures on wages a competitive labor market changing demographics and changing work life balance expectations While we have been successful to date in responding to regional labor shortages and maintaining plans for continuity of succession there can be no assurance that we will be able to manage future labor shortages or recruit develop assimilate motivate and retain employees in the future who actively promote and meet the standards of our culture
Approximately 43 of our employees are covered by collective bargaining agreements Although we have not experienced any significant labor disputes in recent years we have experienced isolated work stoppages from time to time We may experience labor disputes in the future including protests and strikes which could disrupt our business operations and have an adverse effect on our business and results of operations We may also be unable to renegotiate collective bargaining agreements at acceptable terms Renewal of collective bargaining agreements could also result in higher wages or benefits paid Although we consider our relations with our employees to be good we may be unable to maintain a satisfactory working relationship with our employees in the future We may also be adversely affected by strikes and other labor disputes by the employees of our suppliers customers and other parties
Climate change may have a progressively adverse impact on our business and those of our customers suppliers and partners Many of the geographic areas where our production is located and where we conduct business may be affected by natural disasters including snowstorms extreme heat hurricanes flooding forest fires deforestation loss of biodiversity earthquakes and drought Such events may have a physical impact on our facilities workforce inventory suppliers and equipment and any unplanned downtime at any of our facilities could result in unabsorbed costs that could negatively impact
Longer term climate change patterns could significantly alter supplier availability or customer demand which is especially true for suppliers and customers who rely on supply chains routinely impacted by weather For example agricultural supply chains could be impacted by increased levels of drought or flooding and customers in coastal regions could be impacted by frequent flooding
Increased cyber attacks including computer viruses ransomware unauthorized access attempts phishing hacking and other types of attacks pose a risk to the security and availability of our information technology systems including those provided by third parties Emerging artificial intelligence technologies may intensify these cybersecurity risks In addition to traditional attacks we face threats from sophisticated nation state and nation state supported actors who engage in attacks including advanced persistent threat intrusions We have experienced and expect to continue to experience actual and attempted cyber attacks on our information technology systems by threat parties of all types including nation states criminal enterprises individuals or advanced persistent threat groups Geopolitical turmoil including as a result of the Russia Ukraine conflict evolution scope and sophistication of cyber attacks accessibility of our data by third parties through interconnected networks and an increase in work from home arrangements heighten the risk of cyber attacks We have operational safeguards in place to detect and prevent cyber attacks such as employee training monitoring of our networks and systems ensuring strong data protection standards and maintaining and upgrading security systems but it is virtually impossible to entirely eliminate this risk To date we have not experienced any significant impacts However our safeguards may not always be able to prevent a cyber attack from impacting our systems and we may not be able to successfully and timely execute our business recovery protocol which could have a material impact on our business financial condition results of operations or cash flows Further as cybersecurity threats continue to evolve we may be required to make significant investments to modify or enhance our systems to improve our ability to respond and recover In addition our customers suppliers and third party service providers are susceptible to cyber attacks and disruption to their information technology systems which could result in reduced demand for our products or limit our ability to supply our products
We also maintain and have access to sensitive confidential or personal data or information that is subject to privacy and security laws regulations and customer controls Data privacy laws and regulations continue to evolve and impose more complex and stringent requirements especially in the U S Europe and China which increases the complexity of our processes and associated costs Despite our efforts to protect such information and to comply with privacy and data protection laws and regulations our facilities and systems and those of our customers suppliers and third party service providers may be vulnerable to security breaches cyber attacks misplaced or lost data and programming and or user errors that could lead to the compromising of sensitive confidential or personal data or information the improper use of our systems and networks and the manipulation and destruction of data Information system damages disruptions shutdowns or compromises could result in production downtimes and operational disruptions transaction errors loss of customers and business opportunities violation of privacy laws and legal liability regulatory fines penalties or intervention negative publicity resulting in reputational damage reimbursement or compensatory payments and other costs any of which could have an adverse effect on our business financial condition results of operations or cash flows which affect may be material and result in a competitive disadvantage Although we attempt to mitigate these risks by employing a number of measures our systems networks products and services remain potentially vulnerable to advanced and persistent threats
Information Technology A failure or disruption in our information technology systems could disrupt our operations compromise customer employee supplier and other data and could negatively affect our business
We rely on the successful and uninterrupted functioning of our information technology and control systems to securely manage operations and various business functions and on various technologies to process store and report information about our business and to interact with customers suppliers and employees around the world In addition our information systems rely on internal information technology systems and third party systems including cloud solutions which require different security measures These measures cover technical changes to our network security organization and governance changes as well as alignment of third party suppliers on market standards As with all information technology systems our systems may be susceptible to damage disruption information loss or shutdown due to a variety of factors including power outages failures during the process of upgrading or replacing software hardware failures cyber attacks e g phishing ransomware computer viruses natural disasters telecommunications failures user errors unauthorized access and malicious or accidental
destruction or catastrophic events Infrastructure changes including migration to new data centers or cloud solutions updates or patches to our core software infrastructure and changes in our data processing pipelines could lead to significant business disruptions due to human error in our deployment processes or third party software errors While we have established and regularly test our business disaster recovery plan there is no guarantee that it will resolve issues resulting from those disruptions in a timely manner We may suffer material adverse effects on our business financial condition results of operations and cash flows
Indebtedness and Credit Rating A significant increase in our indebtedness or a downgrade in our credit rating could reduce our operating flexibility increase our borrowing costs and negatively affect our financial condition and results of operations
As of June 30 2024 we had 6 7 billion of debt outstanding including borrowings of 1 4 billion under revolving credit facilities in an aggregate principal amount of 3 8 billion and we are not restricted in incurring and may incur additional indebtedness in the future Increased indebtedness could have significant consequences for our business and any investment in our securities including increasing our vulnerability to adverse economic
industry or competitive developments requiring more of our cash flows from operations to be used to pay principal and interest on our indebtedness thus limiting our cash flows available to fund our operations capital expenditures and other future business opportunities or the return of cash to our shareholders
Our ability to pay interest and repay the principal of our indebtedness is dependent on our ability to generate sufficient cash flows which is dependent in part on prevailing economic and competitive conditions and certain legislative regulatory and other factors beyond our control If we are unable to maintain sufficient cash flows from operations to meet our debt commitments and related covenants our financial condition and results of operations are likely to be materially adversely impacted Additionally conditions in financial markets could affect financial institutions with which we have relationships and could result in adverse effects on our ability to utilize fully our committed borrowing facilities For example a lender under the senior secured credit facilities may be unwilling or unable to fund a borrowing request and we may not be able to replace such lender
We use cash provided by operations commercial paper issuances bank term loans committed and uncommitted revolving credit facilities asset divestitures debt issuances and equity issuances to meet our funding needs Credit rating agencies rate our debt securities on many factors including our financial results their view of the general outlook for our industry and their view of the general outlook for the global economy Any significant additional indebtedness would likely negatively affect the credit ratings of our debt Actions taken by the rating agencies include maintaining upgrading or downgrading the current rating or assigning a negative outlook as occurred in May 2024 when one rating agency lowered its outlook from stable to negative for a possible future downgrade If rating agencies downgrade our credit rating place us on a watch list or if there are adverse market conditions including disruptions in the commercial paper market the impacts could include reduced access to commercial paper credit and capital markets an increase in the cost of our borrowings or the fees associated with our bank credit facilities or an increase in the credit spread incurred when issuing debt in the capital markets While we have not experienced a significant financial impact from the negative outlook assigned by one credit rating agency there is no assurance it will not have a significant impact in the future Our desire to maintain the Company s investment grade rating may also cause us to take certain actions designed to improve our cash flow including sale of assets suspension or reduction of our dividend or share buybacks and reductions in capital expenditures and working capital Refer to Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources of this Annual Report on Form 10 K for more information on our credit rating profile
In addition a significant number of our operating subsidiaries are not guarantors of our indebtedness In the event that any non guarantor subsidiary becomes insolvent liquidates reorganizes dissolves or otherwise winds up the assets of such subsidiary will be used to satisfy the claims of its creditors The non guarantor subsidiaries have no direct obligations in respect of our indebtedness and therefore a direct claim against any non guarantor subsidiary and any claims to enforce payment on our indebtedness will be structurally subordinated to all of the claims of the creditors of our non guarantor subsidiaries
As of June 30 2024 approximately 30 of our indebtedness was subject to variable interest rates When interest rates increase our debt service obligations on our variable rate indebtedness increase even when the amount borrowed remains the same In order to dampen inflation central bank
rates could increase the costs of obtaining new debt and refinancing existing fixed rate debt as well as variable rate indebtedness negatively impacting our business financial condition results of operations or cash flow
We manage exposure to interest rates by maintaining a mixture of fixed rate and variable rate debt monitoring global interest rates and where appropriate entering into various derivative instruments However if our derivative instruments are not effective in mitigating our interest rate risk if we are under hedged or if a hedge provider defaults on their obligations under hedging arrangements it could have a material adverse impact on our business financial condition results of operations or cash flows
In addition continued increases in interest rates could reduce the attractiveness of cash management programs we use such as customer and supply chain finance programs which could negatively impact our cash and working capital and increase our borrowings Refer to Note 13 Debt of the notes to consolidated financial statements for information about our variable rate borrowings Also refer to Item 7A Quantitative and Qualitative Disclosures About Market Risk including interest rate risk in this Annual Report on Form 10 K
We are subject to foreign exchange rate risk both transactional and translational which may negatively affect our reported cash flow financial condition and results of operations Transactional foreign exchange exposures are associated with transactions in currencies other than the entity s functional currency Translational foreign exchange exposures result from exchange rate fluctuations in the conversion of entity functional currencies to U S dollars our reporting currency and may affect the reported value of our assets and liabilities and our income and expenses In particular our translational exposure may be impacted by movements in the exchange rate between the Euro the Brazilian Real the Swiss Franc the Chinese Yuan and the United Kingdom Pound Sterling against the U S dollar Refer to Item 7A Quantitative and Qualitative Disclosures About Market Risk including foreign exchange risk in this Annual Report on Form 10 K
Exchange rates between transactional currencies may change rapidly due to a variety of factors In addition we have recognized foreign exchange losses related to the currency devaluation in Argentina and its designation as a highly inflationary economy under U S GAAP For example in December 2023 Argentina s government devalued the Argentine peso relative to the U S dollar by approximately 55 following the election of a new President which adversely impacted the results and operations of our businesses in Argentina Refer to Note 2 Significant Accounting Policies of the notes to consolidated financial statements in this Annual Report on Form 10 K for further information regarding highly inflationary accounting
To the extent currency devaluation occurs across our business we are likely to experience a lag in the timing to pass through U S dollar denominated input costs across our business which would adversely impact our margins and profitability As such we may be exposed to future exchange rate fluctuations and such fluctuations could have a material adverse effect on our reported cash flow financial condition and results of operations Our Board of Directors has approved a hedging policy to limit and manage the risk of such foreign exchange fluctuations however if our hedges are not effective in mitigating our foreign currency risks if we are under hedged or if a hedge provider defaults on their obligations under hedging arrangements it could have a material adverse impact on our reported cash flow financial condition and results of operations
Goodwill and Other Intangible Assets A significant write down of goodwill and or other intangible assets would have a material adverse effect on our reported results of operations and financial position
As of June 30 2024 we had 6 7 billion of goodwill and other intangible assets We review our goodwill balance for impairment at least once a year and whenever events or a change in circumstances indicate that an impairment may have occurred using the appropriate business valuation methods in accordance with current accounting standards Future changes in the cost of capital market multiples market growth expected cash flows or other factors may cause our goodwill and or other intangible assets to be impaired resulting in a non cash charge in our results of operations to reduce the value of these assets to their fair value Furthermore if we make changes to our business strategy or if external conditions adversely affect our business operations we could be required to record an impairment charge for goodwill and or intangible assets which could have a material adverse effect on our business financial condition and results of operations We have identified the valuation of goodwill and other intangible assets as a critical accounting estimate Refer to Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Estimates and Judgments of this Annual Report on Form 10 K
Internal Controls If we fail to maintain an effective system of internal control over financial reporting we may not be able to accurately report our financial results which may adversely affect investor confidence and adversely impact our stock price
We have been subject to the requirements of Section 404 of the Sarbanes Oxley Act SOX since fiscal year 2020 Management is responsible for establishing and maintaining adequate internal controls over financial reporting and while they meet the standards set forth in SOX our internal control over financial reporting may not prevent or detect misstatements as any controls or procedures no matter how well designed and operated can provide only reasonable assurance against misstatement If we fail to maintain the adequacy of our internal controls we could be subject to regulatory scrutiny civil or criminal penalties or litigation In addition failure to maintain adequate internal controls could result in financial statements that do not accurately reflect our financial condition and we may be required to restate previously published financial information which could lead to a material adverse effect on our operations loss of investor confidence and a negative impact on the trading price of our common stock
We seek protection from a number of our key operational risk exposures through the purchase of insurance A significant portion of our insurance is placed in the insurance market with third party reinsurers Our policies with such third party reinsurers cover a variety of risk exposures including property damage and business interruption Although we believe the coverage provided by such policies is consistent with industry practice the insurance coverage does not insure us against all risks in our operations or all claims we may receive and there is no guarantee that any claims made under such policies will ultimately be paid or that we will be able to maintain such insurance at acceptable premium cost levels in the future
Additionally we retain a portion of our insurable risk through a captive insurance company Amcor Insurances Pte Ltd which is located in Singapore Our captive insurance company collects annual premiums from our business groups and assumes specific risks relating to various risk exposures including property damage The captive insurance company may be required to make payments for insurance claims that exceed the captive s reserves which could have a material adverse effect on our business financial condition results of operations or cash flows
Intellectual Property Our inability to defend our intellectual property rights or intellectual property infringement claims against us could have an adverse impact on our ability to compete effectively
Our ability to compete effectively depends in part on our ability to protect and maintain the proprietary nature of our owned and licensed intellectual property We own a number of patents on our products aspects of our products methods of use and or methods of manufacturing and we own or have licenses to use the material trademark and trade name rights used in connection with the packaging marketing and distribution of our major products We also rely on trade secrets know how and other unpatented proprietary technology If we are unable to detect the infringement of our intellectual property or to enforce our intellectual property rights our competitive position may suffer The unauthorized use of our intellectual property by someone else could reduce certain of our competitive advantages cause us to lose sales or otherwise harm our business
We attempt to protect and restrict access to our intellectual property and proprietary information by relying on the patent trademark copyright and trade secret laws of the countries in which we operate as well as non disclosure agreements However it may be possible for a third party to obtain our information without authorization independently develop similar technologies or breach a non disclosure agreement entered into with us Our pending patent applications and our pending trademark registration applications may not be allowed or competitors may challenge the validity or scope of our patents or trademarks Our competitors might avoid infringement by designing around our intellectual property rights or by developing non infringing competing technologies In addition our patents trademarks and other intellectual property rights may not provide us with a significant competitive advantage Furthermore many of the countries in which we operate particularly emerging markets do not have intellectual property laws that protect proprietary rights as fully as the laws of more developed jurisdictions such as the United States and the European Union The costs associated with protecting our intellectual property rights could also adversely impact our business
Similarly while we have not received any significant claims from third parties suggesting that we may be infringing directly or indirectly on their intellectual property rights there can be no assurance that we will not receive such claims in the future If we were held liable for a claim of infringement we could be required to pay damages obtain licenses or cease making using or selling certain products or technologies Intellectual property litigation which could result in substantial costs to us and divert the attention of management may be necessary to protect our trade secrets or proprietary technology or for us to defend against claimed infringement of the rights of others and to determine the scope and validity of others proprietary rights We may not prevail in any such litigation and if we are unsuccessful we may not be able to obtain any necessary
licenses on reasonable terms or at all Failure to protect our patents trademarks and other intellectual property rights could have a material adverse effect on our business financial condition results of operations or cash flows
Litigation Litigation including product liability claims and litigation related to Environmental Social and Governance ESG impacts or regulatory developments could adversely affect our business operations and financial performance
We are and in the future will likely become involved in lawsuits regulatory inquiries and governmental and other legal proceedings that arise in the ordinary course of our business including product liability claims which may lead to financial or reputational damages We may be exposed to litigation related to the environmental health and human rights impacts of our operations products and sourcing activities as well as our external communications related to such topics Given our global footprint we are exposed to uncertainty regarding the regulatory environment The timing of the final resolutions to lawsuits regulatory actions and inquiries and governmental and other legal proceedings is typically uncertain Additionally the possible outcomes of or resolutions to these proceedings could include adverse judgments or settlements either of which could require substantial payments
ESG Practices Increasing scrutiny and changing expectations from investors customers suppliers and governments with respect to our ESG practices and commitments may impose additional costs on us or expose us to additional risks
There is increased scrutiny from investors customers suppliers governments and other stakeholders on corporate ESG practices Our commitment to sustainability and ESG practices remains at the core of our business and we have established related goals and targ
ets For example we have made a public commitment to achieve net zero greenhouse gas emissions by 2050 and have set interim emissions targets which have been approved by the Science Based Targets initiative SBTi Howe
ver our ESG practices may not meet the standards of all of our stakeholders and advocacy groups may campaign for further changes Many of our large global customers are also committing to long term targets to reduce greenhouse gas emissions within their supply chains If we are unable to support our customers in achieving these reductions customers may seek out competitors who are better able to support such reductions A failure or perceived failure to respond to expectations of all parties including with meeting our own climate related and other ESG target ambitions could cause harm to our business and reputation and have a negative impact on the trading price of our common stock Moreover not all of our competitors establish or will be legally required to establish climate or other ESG sustainability targets and goals at levels comparable to ours which could result in competitors having lower supply chain operating or compliance costs as well as reduced reputational and legal risks associated with not meeting such goals
Numerous ESG related legislative and regulatory initiatives including those related to our products operations and sourcing activities have been passed and are likely to continue to be introduced in the various jurisdictions in which we operate These new ESG related regulations are evolving rapidly and the regulations being enacted are often not harmonized across the jurisdictions in which we operate increasing the complexity and cost of compliance and exposing us to increased legal risks associated with compliance Our failure to comply with ESG regulatory reporting requirements could result in fines loss of reputation and other negative impacts which could be material and the cost of compliance may negatively impact our business financial condition and results of operations
Additionally increased regulation of emissions linked to climate change including greenhouse gas emissions and other climate related regulations could potentially increase the cost of our operations due to increased costs of compliance which may not be recoverable through adjustment of prices increased cost of fossil fuel based inputs and increased cost of energy intensive raw material inputs We could also incur additional compliance costs for monitoring and reporting emissions and for maintaining permits However any such changes are uncertain and we cannot predict the amount of additional capital expenses or operating expenses that would be necessary for compliance
Increased environmental legislation or regulation including regulations related to extended producer responsibility EPR could result in higher costs for us in the form of higher raw material costs increased energy and freight costs new taxes on packaging products which could reduce demand for our products and result in increased litigation It is possible that certain materials might cease to be permitted to be used in our processes Government bans of or restrictions on certain materials or packaging formats may close off markets to Amcor s business For example governmental authorities in the U S Europe and in other countries have become increasingly focused on the contamination of soil air and water exacerbated by the use of non degradable chemicals including per and polyfluoroalkyl substances PFAS Various U S states have implemented or are in the process of implementing laws to restrict the use of PFAS in various applications including in
packaging materials While we believe we are in compliance with existing regulations the cost of compliance in the future to modify our products may be significant and adversely impact our financial position results of operations and cash flows
Increased social legislation or regulation including requirements related to human rights due diligence and modern slavery reporting could result in increased costs of compliance resulting from enhanced efforts to assess and remediate potential human rights risk across our global operations and supply chain Gaps in our ability to identify potential human rights violations could lead to negative publicity or loss of business
We are a manufacturing entity that utilizes petrochemical based raw materials to produce many of our products Plastic bans or mandates to reduce plastic use may require shifts to more costly alternative materials or additional investment in the redesign of existing products and these costs might not be able to be passed on to our customers Mandates to use certain types of materials such as post consumer recycled PCR content may lead to supply shortages and higher prices for those materials as current recycling rates may be insufficient to meet increased demand for PCR within and beyond the packaging industry
Additionally a sizable portion of our business comes from healthcare packaging and food and beverage packaging both highly regulated markets Therefore we are also subject to certain local and international standards related to such products Compliance with these laws and regulations can require a significant expenditure of financial and employee resources A failure to comply with these regulatory requirements could adversely affect our reputation our results of operations or result in among other things litigation revocation of required licenses internal investigations governmental investigations or proceedings administrative enforcement actions fines and civil and criminal liability
Operational EHS Risks We are subject to costs and liabilities related to environment health and safety EHS laws and regulations as well as changes in the global climate that could adversely affect our business
We are required to comply with EHS laws rules and regulations in each of the countries in which we operate and do business Federal state provincial and local laws and requirements pertaining to workplace health and safety conditions are significant factors in our business to ensure our people at all locations are able to go home safely every day Changes to these laws and requirements may result in additional costs and actions across the affected country and or region Various government agencies may promulgate new or modified legislation and implement special emphasis programs and enforcement actions that could impact specific Amcor operations covered by the respective programs
Federal state provincial foreign and local environmental requirements relating to air soil and water quality handling discharge storage and disposal of a variety of substances are also significant factors in our business and changes to such requirements generally result in an increase to our costs of operations We may be found to have environmental liability for the costs of remediating soil or water that is or was contaminated by us or a third party at various facilities we own used or operate including facilities that may be acquired by us in the future For instance an increase in legislation with respect to litter related to plastic packaging or related recycling programs may cause legislators in some countries and regions in which our products are sold to consider banning or limiting certain packaging formats or materials or applying taxes or fees on some types of our products Legal proceedings may result in the imposition of fines or penalties as well as mandated remediation programs that require substantial and in some instances unplanned capital expenditures
We have incurred in the past and may incur in the future fines penalties and legal costs relating to environmental matters and costs relating to the damage of natural resources lost property values and toxic tort claims Provisions are raised when it is considered probable that we have some liability and the amount can be reasonably estimated However because the extent of potential environmental damage and the extent of our liability for such damage is usually difficult to assess and may only be ascertained over a long period of time our actual liability in such cases may end up being substantially higher than the currently provisioned amount Accordingly additional charges could be incurred that would have an adverse effect on our operating results and financial position which may be material
We are subject to income and other taxes in the many jurisdictions in which we operate Tax laws and regulations are complex and the determination of our global provision for income taxes and current and deferred tax assets and liabilities requires judgment and estimation We are subject to routine examinations of our income tax returns and tax authorities may disagree with our tax positions and assess additional tax Our future income taxes could also be negatively impacted by our mix of earnings in the jurisdictions in which we operate being different than anticipated given differences in statutory tax rates in the countries in which we operate In addition we may be adversely impacted by certain tax policy efforts including any tax law
changes resulting from the Organization for Economic Cooperation and Development OECD and the G20 s inclusive framework on Base Erosion and Profit Shifting BEPS which has proposed a 15 global minimum tax applied on a country by country basis the Pillar Two rule and many countries including countries in which we operate have enacted or begun the process of enacting laws adopting the Pillar Two rule The first component of the Pillar Two rule applies to us from July 1 2024 While we do not currently expect the Pillar Two rule to have a material impact on our effective tax rate our analysis is ongoing as the OECD continues to release guidance and as countries begin implementing legislation Future developments could change our current assessment and it is possible that the Pillar Two rule could adversely impact our tax rate and subsequent tax expense
Our ordinary shares are issued under the laws of Jersey Channel Islands which may not provide the level of legal certainty and transparency afforded by incorporation in a U S jurisdiction and which differ in some respects to the laws applicable to U S corporations
We are organized under the laws of Jersey Channel Islands a British crown dependency that is an island located off the coast of Normandy France Jersey is not a member of the European Union Jersey Channel Islands legislation regarding companies is largely based on English corporate law principles The rights of holders of our ordinary shares are governed by Jersey law including the Companies Jersey Law 1991 as amended and by the Amcor Articles of Association as may be amended from time to time These rights differ in some respects from the rights of other shareholders in corporations incorporated in the United States Further there can be no assurance that the laws of Jersey Channel Islands will not change in the future or that they will serve to protect investors in a similar fashion afforded under corporate law principles in the U S which could adversely affect the rights of investors
A significant portion of our assets is located outside of the United States and several of our directors and officers are citizens or residents of jurisdictions outside of the United States As a result it may be difficult for investors to successfully serve a claim within the United States upon those non U S directors and officers or to enforce judgments realized in the United States
Judgments of U S courts may not be directly enforceable outside of the U S and the enforcement of judgments of U S courts outside of the U S including those in Australia and Jersey may be subject to limitations Investors may also have difficulties pursuing an original action brought in a court in a jurisdiction outside the U S including Australia and Jersey for liabilities under the securities laws of the U S Additionally our Articles of Association provide that while the Royal Court of Jersey will have non exclusive jurisdiction over actions brought against us the Royal Court of Jersey will be the sole and exclusive forum for derivative shareholder actions actions for breach of fiduciary duty by our directors and officers actions arising out of Companies Jersey Law 1991 as amended or actions asserting a claim against our directors or officers governed by the internal affairs doctrine The exclusive forum provision would not prevent derivative shareholder actions based on claims arising under U S federal securities laws from being raised in a U S court and would not prevent a U S court from asserting jurisdiction over such claims However there is uncertainty whether a U S or Jersey court would enforce the exclusive forum provision for actions claiming breach of fiduciary duty and other claims
We engage in an annual enterprise wide risk assessment process which includes an evaluation of cybersecurity risks We recognize the critical importance of securing the information of the Company s customers vendors and employees and maintaining the security of our systems and data and have developed a comprehensive cybersecurity incident response plan
While everyone at the Company plays a part in managing cybersecurity risks oversight responsibility is shared by the Board of Directors the Audit Committee and management The full Board of Directors receives an annual information technology report and an update from management which includes an update on our cybersecurity efforts The Board of Directors has delegated to the Audit Committee the review of the quarterly cybersecurity reports from management which outline our cybersecurity risk management framework and include updates on our completed on going and planned actions relating to cybersecurity risks
Our Chief Information Security Officer CISO leads our global Security Operations Center and has over 20 years of experience in cybersecurity including serving in similar roles at other public companies Our CISO reports to our Vice President of Information Technology who has 28 years of experience in Manufacturing and Financial Services and has been leading our IT function for 14 years Our Vice President of Information Technology reports to our Chief Financial Officer Our employees supporting our information security program have relevant educational and industry experience
Our Security Operations Center team members have extensive experience in deploying and operating cybersecurity technologies which is enhanced on an ongoing basis through interactions with third party experts we employ to help protect the Company from cybersecurity threats In addition we maintain a global cross functional cyber crisis team which is responsible for evaluating cybersecurity threats and overseeing compliance with regulatory security requirements
We have implemented an extensive cybersecurity program that leverages the National Institute of Standards and Technology NIST Cybersecurity Framework Our cybersecurity program is designed to assess identify and manage risks from cybersecurity threats while maintaining the confidentiality and availability of our information systems We have adopted physical technological and administrative controls on data security and have a defined procedure for data incident detection containment response and remediation We perform periodic assessments to identify and assess cybersecurity risks including through the utilization of third parties to assess our system vulnerabilities We also regularly train employees on cybersecurity risks including through monthly phishing simulations
We perform cybersecurity risk assessments of the third party vendors we utilize and have processes to identify cybersecurity risks posed by using third party systems We also request our third party vendors to promptly notify us of any actual or suspected breach that could impact our data or operations
Our global footprint exposes us to numerous and evolving cybersecurity risks that could have an adverse effect on our business financial condition and results of operations To date we have not experienced any significant impacts from cybersecurity threats However our safeguards may not always be able to prevent a cyber attack from impacting our systems or successfully execute our business recovery protocol which could have a material impact on our business financial condition results of operations or cash flows Refer to the risk factor captioned Cybersecurity Risk The disruption of our operations or risk of loss of our sensitive business information could negatively impact our financial condition and results of operations in Item 1A Risk Factors of this Annual Report on Form 10 K for additional narrative on our cybersecurity risks and the potential related impacts to us
We consider our plants and other physical properties whether owned or leased to be suitable adequate and of sufficient productive capacity to meet the requirements of our business Our manufacturing plants operate at varying levels of
This segment has 160 significant manufacturing and support facilities located in 36 countries of which 111 are owned directly by us and 49 are leased from outside parties Initial building lease terms typically provide for minimum terms in a range of two to 36 years and have one or more renewal options
This segment has 52 significant manufacturing and support facilities located in 11 countries of which 12 are owned directly by us and 40 are leased from outside parties Initial building lease terms typically provide for minimum terms in a range of two to 20 years and have one or more renewal options
Our ordinary shares are traded on the New York Stock Exchange the NYSE under the symbol AMCR and our CHESS Depositary Instruments CDIs are traded on the Australian Securities Exchange the ASX under the symbol AMC As of June 30 2024 there were 96 121 registered holders of record of our ordinary shares and CDIs
We did not repurchase shares during the three months ended June 30 2024 The table below is presented in millions except number of shares which are reflected in thousands and per share amounts which are expressed in U S dollars
On February 7 2023 our Board of Directors approved an on market share buyback of up to 100 million of ordinary shares and or CDIs during the following twelve months On February 6 2024 our Board of Directors extended the approval for the remaining 39 million on market share buyback of ordinary shares and or CDIs of the 100 million buyback for an additional twelve months The timing volume and nature of share repurchases may be amended suspended or discontinued at any time
The information under this caption Shareholder Return Performance in this Item 5 of this Annual Report on Form 10 K is not deemed to be soliciting material or to be filed with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 as amended or the Exchange Act except to the extent we specifically incorporate it by reference into such a filing
The line graph below illustrates our cumulative total shareholder return on our ordinary shares as compared with the cumulative total return of our Peer Group the S P 500 Index the S P 500 Materials Index and the ASX 200 Index for the period beginning June 30 2019 The graph assumes 100 was invested on June 30 2019 and that all dividends were reinvested
The Peer Group consists of Ansell Limited AptarGroup Inc Avery Dennison Corporation Ball Corporation Berry Global Group Inc Brambles Limited Coles Group Limited Conagra Brands Inc Crown Holdings Inc Danone SA General Mills Inc Graphic Packaging Holding Company Huhtamäki Oyj International Paper Company Johnson Johnson The Kraft Heinz Company Mondelez International Inc Nestlé S A O I Glass Inc Orora Limited Pepsico Inc The Procter Gamble Company Sealed Air Corporation Silgan Holdings Inc Sonoco Products Company Treasury Wine Estates Limited Unilever PLC Wesfarmers Limited WestRock Company and Woolworths Group Limited
The following is a discussion and analysis of changes in the results of operations for fiscal year 2024 compared to fiscal year 2023 A discussion and analysis regarding our results of operations for fiscal year 2023 compared to fiscal year 2022 that are not included in this Annual Report on Form 10 K can be found in Part II Item 7 of our Annual Report on Form 10 K for the fiscal year ended June 30 2023 filed with the SEC on August 17 2023 and incorporated by reference
Amcor is a global leader in developing and producing responsible packaging solutions across a variety of materials for food beverage pharmaceutical medical home and personal care and other products We work with leading companies around the world to protect products differentiate brands and improve supply chains We offer a range of innovative differentiating flexible and rigid packaging specialty cartons closures and services We are focused on making packaging that is increasingly recyclable reusable lighter weight and made using an increasing amount of recycled content In fiscal year 2024 41 000 Amcor people generated 13 6 billion in annual sales from operations that span 212 locations in 40 countries
After experiencing more challenging market conditions in calendar year 2023 which impacted both fiscal year 2023 and fiscal year 2024 with softer consumer and customer demand and increased destocking customer volume trajectory sequentially improved in the second half of fiscal year 2024 with a return to volume growth in the fourth quarter of fiscal year 2024 The improvement in the second half of fiscal year 2024 is attributed primarily to the abatement of destocking across many end markets and higher customer demand in parts of our business While we continue to be impacted by softer consumer demand and customer order volatility in certain markets and higher inflation in certain areas such as labor costs we have flexed our cost base to adjust to market conditions Higher inflation especially in Europe and the United States over the last two fiscal years has led central banks to rapidly raise interest rates to dampen inflation which has resulted in higher interest expense on our variable rate debt particularly on U S dollar and Euro denominated debt
The underlying causes for the market volatility experienced can be attributed to a variety of factors such as geopolitical tension and conflicts higher inflation in many economies impacting consumption and consumer demand and customer destocking following a period of supply chain constraints In this context we have remained focused on taking price and cost actions to offset inflation aligning our cost base with market dynamics and managing working capital
Russia s invasion of Ukraine that began in February 2022 continues as of the date of the filing of this annual report In advance of the invasion we proactively suspended operations at our small manufacturing site in Ukraine We also operated three manufacturing facilities in Russia Russian business until their sale on December 23 2022 for net cash proceeds of 365 million In addition we repatriated approximately 65 million in cash held in Russia as part of the transaction We recorded a pre tax net gain on sale of 215 million The carrying value of the Russian business had previously been impaired by 90 million in the quarter ended June 30 2022
On February 7 2023 we announced that we expect to invest 110 million to 130 million of the sale proceeds from the Russian business in various cost savings initiatives to partly offset divested earnings from the Russian business the 2023 Restructuring Plan or the Plan We expect total Plan cash and non cash net expenses to total approximately 220 million of which approximately 130 million is expected to result in net cash expenditures Of the remaining cash received from the sale of the Russian business we allocated 100 million to repurchase shares and the remainder was used to reduce debt From the initiation of the Plan through June 30 2024 we have incurred 82 million in employee related expenses 31 million in fixed asset related expenses 47 million in other restructuring expenses and 21 million in restructuring related expenses To date the Plan has resulted in approximately 70 million of net cash outflows
Management initiated other restructuring actions in the fourth quarter of fiscal year 2022 to help mitigate the impact of the Russian sale Management expects to realize an annualized pre tax benefit of approximately 50 million from structural cost reduction actions taken as a result of all Russia related restructuring by the end of fiscal year 2025
We have subsidiaries in Argentina that historically had a functional currency of the Argentine Peso As of June 30 2018 the Argentine economy was designated as highly inflationary for accounting purposes Accordingly beginning July 1 2018 we began reporting the financial results of our Argentine subsidiaries with a functional currency of the Argentine Peso at the functional currency of the parent which is the U S dollar Following the governmental election in the second quarter of fiscal year 2024 Argentina devalued the Argentine Peso by approximately 55 against the U S dollar and the Argentine peso has since been relatively stable against the U S dollar Highly inflationary accounting resulted in a negative impact of 53 million and 24 million in foreign currency transaction losses that were reflected in the consolidated statements of income for the fiscal years ended June 30 2024 and 2023 respectively Our operations in Argentina represented approximately 2 of our consolidated net sales and annual adjusted earnings before interest and tax in the last two fiscal years
Net sales decreased by 1 054 million or 7 in fiscal year 2024 compared to fiscal year 2023 Excluding the positive currency impacts of 171 million the negative impacts from the pass through of lower raw material costs of 220 million and the negative impact from the disposed Russian business of 156 million the remaining decrease in net sales for fiscal year 2024 was 849 million or 6 reflecting 5 lower sales volumes and an unfavorable price mix impact of 1
Net income attributable to Amcor plc decreased by 318 million or 30 in fiscal year 2024 compared to fiscal year 2023 This is mainly due to the non recurrence of the pre tax net gain of 215 million on disposal of the Russian business in fiscal year 2023 a decrease in other income expenses net of 61 million primarily from the adverse impact on monetary balances from highly inflationary accounting in Argentina and higher net interest expense of 51 million offset by a decrease in income tax expense of 30 million
Diluted earnings per share Diluted EPS decreased by 0 200 or 28 in fiscal year 2024 compared to fiscal year 2023 with the net income attributable to ordinary shareholders of Amcor plc decreasing by 30 due to the above items and the diluted weighted average number of shares outstanding decreasing by 2 in fiscal year 2024 compared to fiscal year 2023 The decrease in the diluted weighted average number of shares outstanding was largely due to the repurchase of shares under previously announced share buyback programs
Net sales decreased by 822 million or 7 in fiscal year 2024 compared to fiscal year 2023 Excluding the positive currency impacts of 141 million the negative impacts from the pass through of lower raw material costs of approximately 180 million and the negative impact from the disposed Russian business of 156 million the remaining variation in net sales for fiscal year 2024 was a decrease of approximately 625 million or 6 This stems from unfavorable sales volumes of 4 mainly reflecting lower market and customer demand and destocking most notably within the first half of the year and unfavorable price mix impact of 2
Adjusted earnings before interest and tax Adjusted EBIT decreased by 34 million or 2 in fiscal year 2024 compared to fiscal year 2023 Excluding positive currency impacts of 15 million and the negative net impact from the disposed Russian business of 50 million the remaining variation in Adjusted EBIT for fiscal year 2024 was an increase of 1 million reflecting the net positive effect of 7 from favorable operating cost performance more than offsetting unfavorable volumes but largely offset by net negative price mix of 7
Net sales decreased by 232 million or 7 in fiscal year 2024 compared to fiscal year 2023 Excluding the positive currency impacts of 30 million and the negative impact from the pass through of lower raw material costs of approximately 40 million the remaining variation in net sales for fiscal year 2024 was a decrease of approximately 225 million or 6 reflecting unfavorable volumes of 8 partly offset by price mix benefits of approximately 2
Adjusted EBIT decreased by 6 million or 2 in fiscal year 2024 compared to fiscal year 2023 Excluding the positive currency impacts of 3 million the remaining variation in adjusted EBIT for fiscal year 2024 was a decrease of 9 million or 4 reflecting the net negative effect of 13 from unfavorable volumes and favorable operating cost performance partly offset by favorable price mix of 9
Gross profit decreased by 13 million in fiscal year 2024 compared to fiscal year 2023 The decrease was primarily driven by the impact of the disposed Russian business and lower volumes Gross profit as a percentage of sales increased to 19 9 for fiscal year 2024 driven by an improvement in operating cost performance
Restructuring impairment and other related activities net changed by 201 million or 193 in fiscal year 2024 compared to fiscal year 2023 The change was mainly a result of a pre tax net gain of 215 million on the disposal of the Russian business in fiscal year 2023 partially offset by a decrease in restructuring and related expenses net of 14 million in the current year primarily related to the 2023 Restructuring Plan
Other income expenses net changed by 61 million in fiscal year 2024 compared to fiscal year 2023 primarily from the 53 million adverse impact on monetary balances from highly inflationary accounting in Argentina
Income tax expense decreased by 30 million or 16 in fiscal year 2024 compared to fiscal year 2023 primarily due to lower earnings The higher effective tax rate for fiscal year 2024 is largely attributable to the non taxable gain on the disposal of the Russian business in the comparative period
This Annual Report on Form 10 K refers to non GAAP financial measures adjusted earnings before interest and taxes Adjusted EBIT earnings before interest and tax EBIT adjusted net income and net debt Such measures have not been prepared in accordance with accounting principles generally accepted in the United States of America U S GAAP These non GAAP financial measures adjust for factors that are unusual or unpredictable These measures exclude the impact of certain amounts related to the effect of changes in currency exchange rates acquisitions and restructuring including employee related costs equipment relocation costs accelerated depreciation and the write down of equipment These measures also exclude gains or losses on sales of significant property and divestitures significant property and other impairments net of insurance recovery certain regulatory and litigation matters significant pension settlements impairments in goodwill and equity method investments and certain acquisition related expenses including transaction and integration expenses due diligence expenses professional and legal fees purchase accounting adjustments for inventory order backlog intangible amortization changes in the fair value of contingent acquisition payments and economic hedging instruments on commercial paper CEO transition costs and impacts related to the Russia Ukraine conflict Note that while amortization of acquired intangible assets is excluded from non GAAP adjusted financial measures the revenue of the acquired entities and all other expenses unless otherwise stated are reflected in Adjusted EBIT and adjusted net income and the acquired assets contribute to revenue generation
This adjusted information should not be construed as an alternative to results determined in accordance with U S GAAP We use the non GAAP measures to evaluate operating performance and believe that these non GAAP measures are useful to enable investors and other external parties to perform comparisons of our current and historical performance
Net loss on disposals excluding the disposal of our Russian business includes an expense of 10 million from the disposal of non core assets in fiscal year 2022 Refer to Note 10 Fair Value Measurements for more information
Property and other losses net in fiscal year 2023 includes property claims and losses of 5 million and 3 million of net insurance recovery related to the closure of our South African business Fiscal year 2022 includes business losses primarily associated with the destruction of our Durban South Africa facility during general civil unrest in July 2021 net of insurance recovery
Restructuring and other related activities net in fiscal year 2024 primarily includes costs incurred in connection with the 2023 Restructuring Plan Fiscal year 2023 includes a pre tax net gain on the sale of our Russian business of 215 million incremental costs of 18 million and restructuring and related expenses of 107 million incurred in connection with the conflict Fiscal year 2022 includes 138 million of impairment charges 57 million of restructuring and related expenses and 5 million of other expenses Refer to Note 4 Restructuring Impairment and Other Related Activities Net and Note 6 Restructuring for further information
CEO transition costs primarily reflect accelerated compensation including share based compensation granted to our former Chief Executive Officer who retired from that role in April 2024 and other transition related expenses
Other in fiscal year 2024 includes fair value losses of 16 million on economic hedges retroactive foil duties certain litigation reserve adjustments and pension settlements partially offset by changes in contingent purchase consideration Fiscal year 2023 includes other restructuring acquisition litigation and integration expenses of 13 million pension settlement expenses of 5 million and fair value gains of 16 million on economic hedges Fiscal year 2022 includes costs associated with the Bemis transaction and pension settlement expenses of 8 million
Amcor plc along with certain wholly owned subsidiary guarantors guarantee the following senior notes issued by the wholly owned subsidiaries Amcor Flexibles North America Inc Amcor UK Finance plc Amcor Finance USA Inc and Amcor Group Finance plc
The six notes issued by Amcor Flexibles North America Inc are guaranteed by its parent entity Amcor plc and the subsidiary guarantors Amcor Pty Ltd Amcor Finance USA Inc Amcor Group Finance plc and Amcor UK Finance plc The two notes issued by Amcor UK Finance plc are guaranteed by its parent entity Amcor plc and the subsidiary guarantors Amcor Pty Ltd Amcor Flexibles North America Inc Amcor Finance USA Inc and Amcor Group Finance plc The note issued by Amcor Finance USA Inc is guaranteed by its ultimate parent entity Amcor plc and the subsidiary guarantors Amcor Pty Ltd Amcor Flexibles North America Inc Amcor Group Finance plc and Amcor UK Finance plc The note issued by Amcor Group Finance plc is guaranteed by its ultimate parent entity Amcor plc and the subsidiary guarantors Amcor Pty Ltd Amcor Finance USA Inc Amcor Flexibles North America Inc and Amcor UK Finance plc
All guarantors fully unconditionally and irrevocably guarantee on a joint and several basis to each holder of the notes the due and punctual payment of the principal of and any premium and interest on such note and all other amounts payable when and as the same shall become due and payable whether at stated maturity by declaration of acceleration call for redemption or otherwise in accordance with the terms of the notes and related indenture The obligations of the applicable guarantors under their guarantees will be limited as necessary to recognize certain defenses generally available to guarantors including those that relate to fraudulent conveyance or transfer voidable preference financial assistance corporate purpose or similar laws under applicable law The guarantees will be unsecured and unsubordinated obligations of the guarantors and will rank equally with all existing and future unsecured and unsubordinated debt of each guarantor None of our other subsidiaries guarantee such notes The issuers and guarantors conduct large parts of their operations through other subsidiaries of Amcor plc
Amcor Flexibles North America Inc is incorporated in Missouri in the United States Amcor UK Finance plc and Amcor Group Finance plc are incorporated in England and Wales United Kingdom Amcor Finance USA Inc is incorporated in Delaware in the United States and the guarantors are incorporated under the laws of Jersey Australia the United States and England and Wales and therefore insolvency proceedings with respect to the issuers and guarantors could proceed under and be governed by among others Jersey Australian United States or English insolvency law as the case may be if either issuer or any guarantor defaults on its obligations under the applicable Notes or Guarantees respectively
Set forth below is the summarized financial information of the combined Obligor Group made up of Amcor plc as parent guarantor Amcor Flexibles North America Inc Amcor UK Finance plc Amcor Group Finance plc and Amcor Finance USA Inc as subsidiary issuers of the notes and guarantors of each other s notes and Amcor Pty Ltd as the remaining subsidiary guarantor
The following summarized financial information is presented for the parent issuer and guarantor subsidiaries Obligor Group on a combined basis after elimination of intercompany transactions between entities in the combined group and amounts related to investments in any subsidiary that is a non guarantor
We finance our business primarily through cash flows provided by operating activities borrowings from banks and proceeds from issuances of debt and equity We periodically review our capital structure and liquidity position in light of market conditions expected future cash flows potential funding requirements for debt refinancing capital expenditures and acquisitions the cost of capital sensitivity analyses reflecting downside scenarios the impact on our financial metrics and credit ratings and our ease of access to funding sources
We believe that our cash flows provided by operating activities together with borrowings available under our credit facilities and access to the commercial paper market backstopped by our bank debt facilities will continue to provide sufficient liquidity to fund our operations capital expenditures and other commitments including dividends and purchases of our ordinary shares and CHESS Depositary Instruments under authorized share repurchase programs into the foreseeable future
Net cash provided by operating activities increased by 60 million in fiscal year 2024 compared to fiscal year 2023 The increase in cash flow is primarily driven by lower working capital outflows in the current period
Net cash used in investing activities increased by 167 million in fiscal year 2024 compared to fiscal year 2023 The increase is primarily driven by the disposal proceeds collected from the sale of the Russian business in the prior period partially offset by lower outflows for investments in affiliated companies and business acquisitions compared to the prior period
We borrow from financial institutions and debt investors in the form of bank overdrafts bank loans corporate bonds unsecured notes and commercial paper We have a mixture of fixed and floating interest rates and use interest rate swaps to provide further flexibility in managing the interest cost of borrowings
Short term debt consists of bank debt with a duration of less than 12 months and bank overdrafts which are classified as current due to the short term nature of the borrowings except where we have the ability and intent to refinance and as such extend the debt beyond 12 months The current portion of long term debt consists of debt amounts repayable within a year after the balance sheet date
Our primary bank debt facilities and notes are unsecured and subject to negative pledge arrangements limiting the amount of secured indebtedness we can incur to 10 0 of our total tangible assets subject to some exceptions and variations by facility In addition the covenants of the bank debt facilities require us to maintain a leverage ratio not higher than 3 9 times The negative pledge arrangements and the financial covenants are defined in the related debt agreements As of June 30 2024 we were in compliance with all applicable covenants under our bank debt facilities
As of June 30 2024 we had undrawn credit facilities available in the amount of 2 4 billion Our senior facilities are available to fund working capital growth capital expenditures and refinancing obligations and are provided to us by two bank syndicates On April 23 2024 we extended the maturity of our three year syndicated facility agreement by one year until April 2026 The three year syndicated facility agreement will be reduced from 1 9 billion to 1 7 billion effective April 2025 Our five year syndicated credit facility matures in April 2027 and provides a revolving credit facility of 1 9 billion The three year facility has one 12 month option available to us to extend the maturity date and the five year facility has two 12 month options available to us to extend the maturity date
As of June 30 2024 the revolving senior bank debt facilities had an aggregate limit of 3 8 billion of which 1 4 billion had been drawn inclusive of amounts drawn under commercial paper programs reducing the overall balance of available senior facilities Subject to certain conditions we can request the total commitment level under each agreement to be increased by up to 500 million For further information refer to Note 13 Debt
On May 21 2024 we issued U S dollar notes with an aggregate principal amount of 500 million and a contractual maturity in May 2029 The notes pay a coupon of 5 45 per annum payable semi annually in arrears The notes are unsecured senior obligations of Amcor and are fully and unconditionally guaranteed by Amcor plc and certain of its subsidiaries In conjunction with this issuance we entered into U S dollar to Swiss franc cross currency swap contracts with a total notional amount of 500 million to effectively convert the fixed rate U S dollar denominated debt into Swiss franc denominated debt including semi annual interest payments and the payment of principal at maturity Under the terms of the cross currency swaps we receive a fixed U S dollar rate of interest of 5 45 and pay a fixed weighted average Swiss franc rate of interest of 2 218
On May 22 2024 we issued Euro notes with an aggregate principal amount of 500 million and a contractual maturity in May 2032 The notes pay a coupon of 3 95 per annum payable annually in arrears The notes are unsecured senior obligations of Amcor and are fully and unconditionally guaranteed by Amcor plc and certain of its subsidiaries
In fiscal years 2024 2023 and 2022 we paid 722 million 723 million and 732 million respectively in dividends The dividend per share has increased in each of the years with the total amount paid declining due to repurchase of shares under announced share buyback programs
Our capital structure and financial practices have earned us investment grade credit ratings from two internationally recognized credit rating agencies These investment grade credit ratings are important to our ability to issue debt at favorable rates of interest for various terms and from a diverse range of markets that are highly liquid including European and U S debt capital markets and from global financial institutions
On February 7 2023 our Board of Directors approved a 100 million buyback of ordinary shares and or CDIs in the following twelve months On February 6 2024 our Board of Directors extended the approval for the remaining 39 million of
We had cash outflows of 48 million 221 million and 143 million for the purchase of our shares in the open market during fiscal years 2024 2023 and 2022 respectively as treasury shares to satisfy the vesting and exercises of share based compensation awards As of June 30 2024 2023 and 2022 we held treasury shares at cost of 11 million 12 million and 18 million representing 1 million 1 million and 2 million shares respectively
Our material cash requirements for future periods from known contractual obligations are included below We expect to fund these cash requirements primarily through cash flows provided by operating activities borrowings from banks and proceeds from issuances of debt and equity These amounts reflect material cash requirements for which we are contractually committed
Debt obligations and interest payments Refer to Note 13 Debt of the notes to consolidated financial statements for additional information about our debt obligations and interest payments and the related timing of these expected payments
Employee benefit plan obligations Refer to Note 12 Defined Benefit Plans of the notes to consolidated financial statements for additional information about our employee benefit plan obligations and the related timing of the expected payments
Other purchase obligations Amcor has other purchase obligations including commitments to purchase a specified minimum amount of goods inclusive of raw materials utilities and other These obligations are legally binding and non cancellable Where we are unable to determine the periods in which these obligations could be payable under these contracts we present the cash requirement in the earliest period in which the minimum obligation could be payable The estimated future cash outlays are approximately 1 1 billion 250 million 100 million 100 million and 100 million in fiscal years 2025 2026 2027 2028 and 2029 respectively
Liquidity risk arises from the possibility that we might encounter difficulty in settling our debts or otherwise meeting our obligations related to financial liabilities We manage liquidity risk centrally and such management involves maintaining available funding and ensuring that we have access to an adequate amount of committed credit facilities Due to the dynamic nature of our business the aim is to maintain flexibility within our funding structure through the use of bank overdrafts bank loans corporate bonds unsecured notes and commercial paper The following guidelines are used to manage our liquidity risk
Our three and five year syndicated unsecured facility agreements each provide a revolving credit facility of 1 9 billion 3 8 billion in total On April 23 2024 we extended the maturity of our three year syndicated facility agreement by one year until April 2026 The three year syndicated facility agreement will be reduced from 1 9 billion to 1 7 billion effective April 2025 Our five year syndicated credit facility matures in April 2027 and provides a revolving credit facility of 1 9 billion The three year facility has one 12 month option available to us to extend the maturity date and the five year facility has two 12 month options available to us to extend the maturity date
As of June 30 2024 and 2023 an aggregate principal amount of 1 4 billion and 2 5 billion respectively was drawn under commercial paper programs However such programs are backstopped by committed bank syndicated loan facilities with maturities in April 2026 and April 2027 with options to extend under which we had 2 4 billion in unused capacity remaining as of June 30 2024
We expect long term future funding needs to primarily relate to refinancing and servicing our outstanding financial liabilities maturing as outlined above and to finance our capital expenditure and payments for acquisitions that may be completed We expect to continue to fund our long term business needs on the same basis as in the past i e partially through the cash flow provided by operating activities available to the business and management of the capital of the business in particular through issuance of commercial paper and debt securities on a regular basis We decide on discretionary growth capital expenditures and acquisitions individually based on among other factors the return on investment after related financing costs and the payback period of required upfront cash investments in light of our mid term liquidity planning covering a period of four years post the current fiscal year Our long term access to liquidity depends on both our results of operations and on the availability of funding in financial markets
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements which have been prepared in accordance with U S GAAP The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period On an ongoing basis we evaluate our estimates and judgments including those related to retirement benefits intangible assets goodwill and expected future performance of operations Our estimates and judgments are based on historical experience and various other factors that are believed to be reasonable under the circumstances Actual results may differ from these estimates under different assumptions or conditions
We believe the following are critical accounting estimates used in the preparation of our consolidated financial statements The critical accounting estimates discussed below should be read together with our significant accounting policies in Note 2 Significant Accounting Policies of the notes to our consolidated financial statements
The majority of our principal defined benefit plans are closed to new entrants and future accruals The accounting for defined benefit pension plans requires us to recognize the overfunded or underfunded status of the pension plans on our balance sheet A significant portion of our pension amounts relates to our defined benefit plans in the United States Switzerland United Kingdom and Germany The net periodic pension cost recorded in fiscal year 2024 was 12 million compared to net periodic pension cost of 11 million in fiscal year 2023 and 12 million in fiscal year 2022 We expect our net periodic pension cost before the effect of income taxes for fiscal year 2025 to be approximately 16 million
For our sponsored plans the relevant accounting guidance requires management to make certain assumptions relating to the long term rate of return on plan assets discount rates used to determine the present value of future obligations and expenses salary inflation rates mortality rates and other assumptions We believe the accounting estimates related to our pension plans are critical accounting estimates because they are highly susceptible to change from period to period based on the performance of plan assets actuarial valuations market conditions and contractual benefit changes The selection of assumptions is based on historical trends known economic and market conditions at the time of valuation and independent studies of trends performed by our actuaries However actual results may differ substantially from the estimates that were based on the critical assumptions
The difference between the fair value of plan assets and the projected benefit obligation of a pension plan must be recorded on the consolidated balance sheets as an asset in the case of an overfunded plan or as a liability in the case of an underfunded plan Gains or losses and prior service costs or credits that arise but are not recognized as components of pension cost are recorded as a component of other comprehensive income loss Pension plan liabilities are revalued annually or when an event occurs that requires remeasurement based on updated assumptions and information about the individuals covered by the plan Accumulated actuarial gains and losses in excess of a 10 percent corridor and the prior service cost are amortized on a straight line basis from the date recognized over the average remaining service period of active participants or over the average life expectancy for plans with significant inactive participants
We review annually the discount rates used to calculate the present value of pension plan liabilities The discount rates used at each measurement date is determined based on a high quality corporate bond yield curve derived based on bond universe information sourced from reputable third party indexes data providers and rating agencies In countries where there is not a deep market for corporate bonds we generally use a government bond approach to set the discount rate Additionally the expected long term rates of return on plan assets is derived for each benefit plan by considering the expected future long term return assumption for each individual asset class A single long term return assumption is then derived for each plan based on the plan s target asset allocation
Goodwill represents the excess of the aggregate purchase price over the fair value of net assets acquired including intangible assets Goodwill is not amortized but is instead tested for impairment annually as of April 1 of each fiscal year or when events and circumstances indicate an impairment may have occurred Our reporting units each contain goodwill that is assessed for potential impairment All goodwill is assigned to a reporting unit which we have defined as an operating segment based on the relative fair value of the reporting unit at the time of each acquisition We have six reporting units of which five are included in our Flexibles reportable segment The other reporting unit Rigid Packaging is also a reportable segment
In our impairment analysis we may elect to first assess qualitative factors to determine whether a quantitative test is necessary If we determine that a quantitative test is necessary or elect to perform a quantitative test instead of the qualitative test we derive an estimate of fair values for each of our reporting units using income approaches The most significant assumptions used in the determination of the estimated fair value of the reporting units are revenue growth projected operating income growth market multiples terminal values and discount rates When the carrying value of a reporting unit exceeds its fair value we recognize an impairment loss equal to the difference between the carrying value and estimated fair value of the reporting unit adjusted for any tax benefits limited to the amount of the carrying value of goodwill
Our estimates associated with the goodwill impairment tests are considered critical due to the amount of goodwill recorded on our consolidated balance sheets and the judgment required in determining fair value amounts including projected future cash flows Judgment is also used in assessing whether goodwill should be tested more frequently for impairment than annually Factors such as a significant decrease in expected net earnings adverse equity market conditions and other external events such as significant inflation and rising interest rates may result in the need for more frequent assessments
Intangible assets consist primarily of purchased customer relationships technology trademarks and software and are amortized using the straight line method over their estimated useful lives ranging from one to twenty years We review these intangible assets for impairment when changes in circumstances or the occurrence of events suggest that the remaining value is not recoverable The impairment test requires us to make estimates about fair value most of which are based on projected future cash flows and discount rates These estimates and projections require judgments about future events conditions and amounts of future cash flows
Significant judgments and estimates are required in determining our deferred tax assets and liabilities and uncertain tax positions as tax laws are often complex and may be subject to differing interpretations by the taxpayer and the relevant taxing authorities Determining uncertain tax positions involves evaluating whether the weight of available positive and negative evidence indicates that it is more likely than not that the position taken or expected to be taken in the tax return will be sustained upon tax audit including resolution of related appeals or litigation processes if any The recognized tax benefits are measured as the largest benefit of having a more likely than not likelihood of being sustained upon settlement Additionally we are required to assess the likelihood of recovering deferred tax assets against future sources of taxable income which may result in the need for a valuation allowance on deferred tax assets including operating loss capital loss and tax credit carryforwards if we do not reach the more likely than not threshold based on all available evidence Examples of factors considered in determining deferred tax asset realizability include the expected future performance of operations and taxable earnings the expected timing of the reversal of temporary differences as well as the feasibility of tax planning strategies If actual results differ from these estimates or if there are future changes in tax laws or statutory tax rates we may need to adjust valuation allowances or deferred tax liabilities which could have a material impact on our consolidated financial position and results of operations
Disposal groups held for sale are assessed for impairment by comparing their fair values less cost to sell to their carrying values The fair values of disposal groups held for sale are estimated using accepted valuation techniques including earnings multiples discounted cash flows and indicative bids Several significant estimates and assumptions are involved in the application of these techniques including forecasting sales expenses and various other factors We consider historical experience guidance received from third parties and all information available at the time the estimates are made to derive fair value However the fair value that is ultimately realized upon the divestiture of a business may significantly differ from the estimated fair value recognized in our consolidated financial statements especially for disposal groups located in conflict regions Refer to Note 5 Acquisitions and Divestitures
Our activities expose us to a variety of market risks and financial risks Our overall risk management program seeks to minimize potential adverse effects of these risks on Amcor s financial performance From time to time we enter into various derivative financial instruments such as foreign exchange contracts commodity fixed price swaps on behalf of customers cross currency swaps and interest rate swaps to manage these risks Our hedging activities are conducted on a centralized basis through standard operating procedures and delegated authorities which provide guidelines for control counterparty risk and ongoing reporting These derivative instruments are designed to reduce the economic risk associated with movements in foreign exchange rates raw material prices and to fixed and variable interest rates but may not have been designated or qualify for hedge accounting under U S GAAP and hence may increase income statement volatility However we do not trade in derivative financial instruments for speculative purposes In addition we may enter into loan agreements in currencies other than the respective legal entity s functional currency to economically hedge foreign exchange risk in net investments in our non U S subsidiaries which do not qualify for hedge accounting under U S GAAP and hence may increase income statement volatility
There have been no material changes in the risks described below other than increased inflation and market volatility attributed to a variety of factors including the Russia Ukraine conflict in fiscal years 2024 and 2023
Our policy is to manage exposure to interest rate risk by maintaining a mixture of fixed rate and variable rate debt monitoring global interest rates and where appropriate hedging floating interest rate exposure or debt at fixed interest rates through the use of various interest rate derivative instruments including but not limited to interest rate swaps cross currency interest rate swaps and interest rate locks
A hypothetical but reasonably possible increase of 1 in the floating rate on the relevant interest rate yield curve applicable to both derivative and non derivative instruments denominated in U S dollars and Euros the currencies with the largest interest rate sensitivity outstanding as of June 30 2024 would have resulted in an adverse impact on income before income taxes and equity in loss of affiliated companies of 28 million expense for the fiscal year ended June 30 2024
For the year ended June 30 2024 a hypothetical but reasonably possible adverse change of 1 in the underlying average foreign currency exchange rate for the Euro would have resulted in an adverse impact on our net sales of 22 million
Economic and political events in Argentina expose us to heightened levels of foreign currency exchange risks Although our functional currency in Argentina is the U S dollar we have net assets and transactions in Argentina that are denominated in pesos In fiscal year 2024 the new Argentine government devalued the Argentine peso by approximately 55 against the U S dollar which was the primary factor in our recognition of a 53 million loss on monetary balances in this fiscal year We are focused on reducing our foreign exchange risk in Argentina including through utilization of new Argentine government programs to reduce our Argentine peso net assets As of June 30 2024 a hypothetical but reasonably possible 10 devaluation of the Argentine peso against the U S dollar would have resulted in an adverse impact on our Argentine peso monetary assets of approximately 5 million Our operations in Argentina represented approximately 2 of our consolidated net sales and annual adjusted earnings before interest and tax in the last two fiscal years
During fiscal years 2024 and 2023 51 and 52 of our net sales respectively were effectively generated in U S dollar functional currency entities During fiscal year 2024 and 2023 16 and 18 respectively of our net sales were generated in Euro functional currency entities with the remaining 33 and 30 of net sales respectively being generated in entities with functional currencies other than U S dollars and Euros The impact of translating Euro and other non U S dollar net sales and operating expenses into U S dollar for reporting purposes will vary depending on the movement of those currencies from period to period
The primary raw materials for our products are polymer resins and films inks solvents adhesives aluminum and chemicals We have market risk primarily in connection with the pricing of our products and are exposed to commodity price risk from a number of commodities and other raw materials and energy price risk
Changes in prices of our primary raw materials may result in a temporary or permanent reduction in income before income taxes and equity in loss of affiliated companies depending on the level of recovery by material type The level of recovery depends both on the type of material and the market in which we operate Across our business we have a number of contractual provisions that allow for passing on of raw material price fluctuations to customers within predefined periods
A hypothetical but reasonably possible 1 increase on average prices for polymer resins and films inks solvents adhesives aluminum and chemicals not passed on to the customer by way of a price adjustment would have resulted in an increase in cost of sales and hence an adverse impact on income before income taxes and equity in loss of affiliated companies of approximately 50 million for fiscal year 2024 before any contractual pass through to selling price
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss We are exposed to credit risk arising from financing activities including deposits with banks and financial institutions foreign exchange transactions and other financial instruments as well as from over the counter raw material and commodity related derivative instruments
We manage our credit risk from balances with financial institutions through our counterparty risk policy which provides guidelines on setting limits to minimize the concentration of risks and therefore mitigating financial loss through potential counterparty failure and on dealing and settlement procedures The investment of surplus funds is made only with approved counterparties and within credit limits assigned to each specific counterparty Financial derivative instruments can only be entered into with high credit quality approved financial institutions As of June 30 2024 and 2023 we did not have a significant concentration of credit risk in relation to derivatives entered into in accordance with our hedging and risk management activities
We have audited the accompanying consolidated balance sheets of Amcor plc and its subsidiaries the Company as of June 30 2024 and 2023 and the related consolidated statements of income comprehensive income equity and cash flows for each of the three years in the period ended June 30 2024 including the related notes and schedule of valuation and qualifying accounts and reserves for each of the three years in the period ended June 30 2024 appearing under Item 15 a 2 collectively referred to as the consolidated financial statements We also have audited the Company s internal control over financial reporting as of June 30 2024 based on criteria established in Internal Control Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission COSO
In our opinion the consolidated financial statements referred to above present fairly in all material respects the financial position of the Company as of June 30 2024 and 2023 and the results of its operations and its cash flows for each of the three years in the period ended June 30 2024 in conformity with accounting principles generally accepted in the United States of America Also in our opinion the Company maintained in all material respects effective internal control over financial reporting as of June 30 2024 based on criteria established in Internal Control Integrated Framework 2013 issued by the COSO
The Company s management is responsible for these consolidated financial statements for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in Management s Report on Internal Control Over Financial Reporting appearing under Item 9A Our responsibility is to express opinions on the Company s consolidated financial statements and on the Company s internal control over financial reporting based on our audits We are a public accounting firm registered with the Public Company Accounting Oversight Board United States PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits in accordance with the standards of the PCAOB Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement whether due to error or fraud and whether effective internal control over financial reporting was maintained in all material respects
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the consolidated financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the consolidated financial statements Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk Our audits also included performing such other procedures as we considered necessary in the circumstances We believe that our audits provide a reasonable basis for our opinions
A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles A company s internal control over financial reporting includes those policies and procedures that i pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company ii provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and iii provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that i relates to accounts or disclosures that are material to the consolidated financial statements and ii involved our especially challenging subjective or complex judgments The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates
As described in Notes 2 and 9 to the consolidated financial statements the Company s consolidated goodwill balance was 5 345 million as of June 30 2024 and the goodwill associated with the Flexibles Segment was 4 373 million which includes goodwill associated with the Flexibles Latin America reporting unit Management conducts an impairment analysis as of April 1 of each financial year or whenever events and circumstances indicate an impairment may have occurred during the financial year Management s quantitative assessment utilizes discounted cash flow models to determine the fair value of the reporting unit As disclosed by management if the carrying value of a reporting unit exceeds its fair value management would recognize an impairment loss equal to the difference between the carrying value and the estimated fair value of the reporting unit adjusted for any tax benefits limited to the amount of the carrying value of goodwill Management s projected future cash flows for the Flexibles Latin America reporting unit included key assumptions relating to revenue growth projected operating income growth market multiples terminal values and discount rate
The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Flexibles Latin America reporting unit within the Flexibles Segment is a critical audit matter are i the significant judgment by management when developing the fair value estimate of the reporting unit ii a high degree of auditor judgment subjectivity and effort in performing procedures and evaluating management s significant assumptions related to revenue growth and the discount rate and iii the audit effort involved the use of professionals with specialized skills and knowledge
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements These procedures included testing the effectiveness of controls relating to management s goodwill impairment assessment including controls over the valuation of the Flexibles Latin America reporting unit These procedures also included among others i testing management s process for developing the fair value estimate of the reporting unit ii evaluating the appropriateness of the discounted cash flow models used by management iii testing the completeness and accuracy of underlying data used in the discounted cash flow models and iv evaluating the reasonableness of the significant assumptions used by management related to revenue growth and the discount rate Evaluating management s assumptions related to revenue growth and the discount rate involved evaluating whether the assumptions used by management were reasonable considering i the current and past performance of the reporting unit ii the consistency with external market and industry data and iii whether the assumptions were consistent with evidence obtained in other areas of the audit Professionals with specialized skills and knowledge were used to assist in evaluating i the appropriateness of the discounted cash flow model and ii the reasonableness of the discount rate assumption
See accompanying notes to consolidated financial statements including Note 22 Supplemental Cash Flow Information Cash and cash equivalents at the beginning of fiscal year 2023 include cash and cash equivalents classified as held for sale
Amcor plc Amcor or the Company is a public limited company incorporated under the Laws of the Bailiwick of Jersey The Company s history dates back more than 150 years with origins in both Australia and the United States of America Today Amcor is a global leader in developing and producing responsible packaging solutions across a variety of materials for food beverage pharmaceutical medical home and personal care and other consumer goods end markets The Company s innovation excellence and global packaging expertise enable the Company to solve packaging challenges around the world every day producing a range of flexible packaging rigid packaging cartons and closures that are more functional appealing and cost effective for its customers and their consumers and importantly more sustainable for the environment
The Company s business activities are organized around two reportable segments Flexibles and Rigid Packaging The Company has a globally diverse operating footprint selling to customers in Europe North America Latin America Africa the Middle East and the Asia Pacific regions The Company s sales are widely diversified with the majority of sales made to the food beverage pharmaceutical medical device home and personal care and other consumer goods end markets All markets are considered to be highly competitive as to price innovation quality and service
The consolidated financial statements include the accounts of the Company and its subsidiaries for which the Company has a controlling financial interest All significant intercompany transactions and balances have been eliminated The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America U S GAAP Certain amounts in the Company s notes to consolidated financial statements may not add up or recalculate due to rounding
The Company uses the acquisition method of accounting which requires separate recognition of assets acquired and liabilities assumed from goodwill at the acquisition date fair values Goodwill as of the acquisition date is measured as the excess of consideration transferred and the fair value of any non controlling interests in the acquiree over the net of the acquisition date fair values of the assets acquired and liabilities assumed During the measurement period which may be up to one year from the acquisition date the Company has the ability to record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill After the measurement period or final determination of the values of assets acquired or liabilities assumed whichever comes first any subsequent adjustments are recorded in the consolidated statements of income
The Company classifies assets and liabilities the disposal group as held for sale in the period when all of the relevant criteria to be classified as held for sale are met These criteria include management s commitment to sell the disposal group in its present condition and the sale being deemed probable of being completed within one year Assets held for sale are reported at the lower of their carrying value or fair value less cost to sell Fair value is determined based on management s assessment of indicative bids a market multiples model in which a market multiple is applied to forecasted earnings before interest taxes depreciation and amortization EBITDA discounted cash flows appraised values or management s estimates depending on the specific situation Any loss resulting from the measurement is recognized in the period when the held for sale criteria are met If the disposal group meets the definition of a business the goodwill within the reporting unit is allocated to the disposal group based on its relative fair value The Company assesses the fair value of a disposal group less any costs to sell each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group as long as the new carrying value does not exceed the initial carrying value of the disposal group Assets held for sale are not amortized or depreciated The Company recorded an impairment charge on assets held for sale of 90 million for the fiscal year ended June 30 2022 See Note 5 Acquisitions and Divestitures for further information
A disposal group that represents a strategic shift to the Company or is acquired with the intention to sell is reflected as a discontinued operation on the consolidated statements of income and prior periods are recast to reflect the earnings or losses as income from discontinued operations
The preparation of financial statements in conformity with U S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods
These estimates are based on historical experience and various assumptions believed to be reasonable under the circumstances Management evaluates these estimates on an ongoing basis and adjusts or revises them as circumstances change As future events and their impacts cannot be determined with precision actual results may differ from these estimates In the opinion of management the consolidated financial statements reflect all adjustments necessary to fairly present the results of the periods presented
The reporting currency of the Company is the U S dollar The functional currency of the Company s subsidiaries is generally the local currency of each entity Transactions in currencies other than the functional currency of the entity are recorded at the exchange rates prevailing at the transaction date Monetary assets and liabilities in currencies other than the entity s functional currency are remeasured at the exchange rates as of the balance sheet date to the entity s functional currency Foreign currency transaction gains and losses are recorded in other income expenses net in the consolidated statements of income These foreign currency transaction net gains or net losses not including losses on monetary balances in Argentina amounted to a net loss of 10 million a net loss of 17 million and a net gain of 19 million during the fiscal years ended June 30 2024 2023 and 2022 respectively
Upon consolidation the results of operations of subsidiaries with functional currencies other than the reporting currency of the Company are translated using average exchange rates during each year Assets and liabilities of operations with a functional currency other than the U S dollar are translated at the exchange rates as of the balance sheet date while equity
A highly inflationary economy is defined as an economy with a cumulative inflation rate of approximately 100 percent or more over a three year period As of July 1 2018 the Argentine economy was designated as highly inflationary for accounting purposes Accordingly the U S dollar replaced the Argentine peso as the functional currency for the Company s subsidiaries in Argentina The impact of highly inflationary accounting on monetary balances was a loss of 53 million 24 million and 16 million for the fiscal years ended June 30 2024 2023 and 2022 respectively in the consolidated statements of income
The Company generates revenue primarily by providing its customers with flexible and rigid packaging serving a variety of markets including food beverage consumer products and healthcare end markets The Company enters into a variety of agreements with customers including quality agreements pricing agreements and master supply agreements which outline the terms under which the Company does business with a specific customer The Company also sells to some customers solely based on purchase orders The Company has concluded for the vast majority of its revenues that its contracts with customers are either a purchase order or the combination of a purchase order with a master supply agreement All revenue recognized in the consolidated statements of income is considered to be revenue from contracts with customers
The Company typically satisfies the obligation to provide packaging to customers at a point in time upon shipment when control is transferred to customers Revenue is recognized net of allowances for returns and customer claims and any taxes collected from customers which are subsequently remitted to governmental authorities The Company does not have any material contract assets or contract liabilities The Company disaggregates revenue based on geography Disaggregation of revenue is presented in Note 20 Segments
Determining whether products and services should be accounted for as distinct performance obligations or as combined performance obligations may require significant judgment The Company has identified potential performance obligations in its customer master supply agreements and determined that none of them are capable of being distinct as the customer can only benefit from the supplied packaging Therefore the Company has concluded that it has one performance obligation which is to supply packaging to customers
The Company may provide variable consideration in several forms which are determined through its agreements with customers The Company can offer prompt payment discounts sales rebates or other incentive payments to customers Sales rebates and other incentive payments can be awarded contingent on the achievement of certain performance metrics including volume The Company accounts for variable consideration using the most likely amount method The Company utilizes forecasted sales data and rebate percentages specific to each customer agreement and updates its judgment of the amounts to which the customer is entitled each period
The Company enters into long term agreements with certain customers under which it is obligated to make various up front payments for which it expects to receive a benefit in excess of the cost over the term of the contract These up front payments are deferred and reflected in prepaid expenses and other current assets or other non current assets on its consolidated balance sheets Contract incentives are typically recognized as a reduction to revenue over the term of the customer agreement
The Company sells primarily through its direct sales force Any external sales commissions are expensed when incurred because the amortization period would be one year or less External sales commission expense is included in selling general and administrative expenses in the consolidated statements of income
The Company accounts for shipping and handling activities as fulfillment costs Accordingly shipping and handling costs are classified as a component of cost of sales while amounts billed to customers are classified as a component of net sales
The Company excludes from the measurement of the transaction price all taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue producing transaction and collected from the customer including sales taxes value added taxes excise taxes and use taxes Accordingly the tax amounts are not included in net sales
Restructuring costs are recognized when the liability is incurred The Company calculates severance obligations based on its standard customary practices Accordingly the Company records provisions for severance when payments are probable and estimable and when the Company has committed to the restructuring plan In the absence of a standard customary practice or established local practice liabilities for severance are recognized when incurred If fixed assets become impaired as a result of the Company s restructuring efforts these assets are written down to their fair value less costs to sell as the Company commits to dispose of them and they are no longer in use Depreciation is accelerated on fixed assets for the period of time the asset continues to be used until the asset ceases to be used Other restructuring costs including costs to relocate equipment are generally recorded as the cost is incurred or the service is provided See Note 6 Restructuring for more information on the Company s restructuring plans
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents Cash equivalents include demand deposits that can be readily liquidated without penalty at the Company s option Cash equivalents are carried at cost which approximates fair market value The Company had immaterial amounts of restricted cash as of June 30 2024 and 2023
Trade accounts receivable net are stated at the amount the Company expects to collect which is net of an allowance for sales returns and the estimated losses resulting from the inability of its customers to make required payments The allowance for doubtful accounts is estimated based on the current expected credit loss model CECL and it incorporates information about past events current conditions and reasonable and supportable forecasts of future economic conditions When determining the collectability of specific customer accounts several factors are evaluated including customer creditworthiness past transaction history with the customer and changes in customer payment terms or practices In addition overall historical collection experience current economic industry trends and a review of the current status of trade accounts receivable are considered when determining the required allowance for credit losses Changes in allowance for doubtful accounts were not material for fiscal years ended June 30 2024 2023 and 2022
The Company enters into customer based supply chain financing programs from time to time to sell trade receivables to third party financial institutions Agreements which result in true sales of the transferred receivables which occur when receivables are transferred without recourse to the Company are reflected as a reduction of trade receivables net on the consolidated balance sheets and the proceeds are included in the cash flows from operating activities in the consolidated statements of cash flows Agreements that allow the Company to maintain effective control over the transferred receivables and which do not qualify as a true sale are accounted for as secured borrowings and recorded on the consolidated balance sheets within trade receivables net and short term debt The expenses associated with receivables factoring are recorded in the consolidated statements of income primarily as a reduction of net sales The Company did not factor any material trade receivables in fiscal years 2024 and 2023 which did not qualify as true sales of the receivables
Inventories are stated at the lower of cost and net realizable value The cost of inventories is based upon the first in first out FIFO method or average cost method Costs related to inventories include raw materials direct labor and manufacturing overhead
PP E is carried at cost less accumulated depreciation and impairment and includes expenditures for new facilities and equipment as well as costs that substantially increase the useful lives or capacity of existing PP E Cost of constructed assets includes capitalized interest incurred during the construction period Maintenance and repairs that do not improve efficiency or extend economic life are expensed as incurred
PP E including assets held under finance leases is depreciated using the straight line method over the estimated useful lives of the assets or in the case of leasehold improvements and finance leases over the period of the lease or useful life of the asset as described below The Company periodically reviews these estimated useful lives and when appropriate changes are made prospectively
The Company reviews long lived assets primarily PP E and certain identifiable intangible assets with finite lives for impairment when facts or circumstances indicate that the carrying amount of an asset or asset group may not be recoverable If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets the carrying values are reduced to their estimated fair value Fair values are determined based on quoted market values discounted cash flows or external appraisals as applicable
The Company enters into leasing arrangements for certain manufacturing sites offices warehouses land vehicles and equipment The Company determines at the inception of the contract whether the contract is or contains a lease A contract is a lease if it conveys the right to control an identified asset for a period of time in exchange for consideration
For leases with an original term of more than twelve months the Company recognizes a right of use ROU asset and a lease liability Short term leases with a term of twelve months or less are not recorded on the consolidated balance sheets and the related expense is recognized on a straight line basis over the term of the lease
Lease liabilities are recognized at the commencement date based on the present value of the remaining lease payments over the lease terms which include any noncancellable lease terms and any renewal periods that the Company is reasonably certain to exercise A significant portion of the Company s leases includes an option or options to extend the lease term The Company re evaluates its leases on a regular basis to consider the economic and strategic incentives of exercising lease renewal options As the implicit rates in the Company s leases generally cannot be readily determined the Company uses estimates of its incremental borrowing rate as the discount rates to determine the lease liabilities
Certain leases require variable payments that are dependent on usage output or other factors Variable lease payments that do not depend on an index or rate are excluded from lease payments in the measurement of the ROU lease asset and lease liability and recognized as an expense in the period in which the obligation for the payments occur
Goodwill represents the excess of cost over the fair value of net assets acquired in a business combination Goodwill is not amortized but is instead tested annually for impairment by the Company as of April 1 of each fiscal year or whenever events and circumstances indicate an impairment may have occurred during the fiscal year Factors that could trigger an impairment review include a significant decline in a reporting unit s operating results compared to its operating plan or historical performance and competitive pressures and changes in the general markets in which it operates All goodwill is assigned to a reporting unit which is defined as the operating segment The Company has six reporting units with goodwill that are assessed for potential impairment
When performing the required impairment tests the Company has the option to first assess qualitative factors to determine if a quantitative assessment for goodwill impairment is necessary If the qualitative assessment concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value the Company performs a quantitative assessment The Company s quantitative assessment utilizes discounted cash flow models to determine the fair value of the reporting units Deriving fair value using discounted cash flows requires judgment and is sensitive to changes in underlying assumptions and market factors Key assumptions include revenue growth projected operating income growth market multiples terminal values and discount rates Sensitivity analyses are performed around certain of these assumptions to assess
the reasonableness of the assumptions and the resulting estimated fair values If current expectations of future growth rates and margins are not met or if market factors beyond the Company s control such as factors impacting the applicable discount rate or economic or political conditions in key markets change significantly then goodwill allocated to one or more reporting units may be impaired
In fiscal year 2024 the Company performed quantitative impairment tests for all of its reporting units and the Company concluded that goodwill was not impaired as the fair values of the reporting units substantially exceeded their carrying values
Contractual or separable intangible assets that have finite useful lives are amortized against income using the straight line method over their estimated useful lives which range from 1 to 20 years The straight line method of amortization reflects an appropriate allocation of the costs of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period
The fair values of the Company s financial assets and financial liabilities reflect the amounts that would be received to sell the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date exit price The Company determines fair value based on a three tiered fair value hierarchy The hierarchy consists of
Level 1 fair value measurements represent exchange traded securities which are valued at quoted prices unadjusted in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date
Level 3 fair value measurements are determined using unobservable inputs such as internally developed pricing models for the asset or liability due to little or no market activity for the asset or liability
The Company recognizes all derivative instruments on the consolidated balance sheets at fair value The impact on earnings from recognizing the fair values of these instruments depends on their intended use their hedge designation and their effectiveness in offsetting changes in the fair values of the exposures they are hedging Derivatives not designated as hedging instruments are adjusted to fair value through income Depending on the nature of derivatives designated as hedging instruments changes in the fair value are either offset against the change in fair value of the hedged assets liabilities or firm commitments through earnings or recognized in shareholders equity through other comprehensive income loss until the hedged item is recognized Gains or losses if any related to the ineffective portion of any hedge are recognized through earnings over the life of the hedging relationship
See Note 11 Derivative Instruments for more information regarding specific derivative instruments included on the Company s consolidated balance sheets such as forward foreign currency exchange contracts currency swap contracts and interest rate swap arrangements among other derivative instruments
The Company sponsors various defined contribution plans to which it makes contributions on behalf of employees The expense under such plans was 91 million 87 million and 79 million for the fiscal years ended June 30 2024 2023 and 2022 respectively
The Company also sponsors a number of defined benefit plans that provide benefits to current and former employees For the Company sponsored plans the relevant accounting guidance requires management to make certain assumptions relating to the long term rate of return on plan assets discount rates used to determine the present value of future obligations and expenses salary inflation rates mortality rates and other assumptions The Company believes that the accounting estimates related to its pension plans are critical accounting estimates because they are highly susceptible to change from period to period based on the performance of plan assets actuarial valuations market conditions and contracted benefit changes The selection of assumptions is based on historical trends known economic and market conditions at the time of valuation and independent studies of trends performed by the Company s actuaries However actual results may differ substantially from the estimates that were based on the critical assumptions
The Company recognizes the funded status of each defined benefit pension plan in the consolidated balance sheets Each overfunded plan is recognized as an asset in employee benefit assets and each underfunded plan is recognized as a liability
in employee benefit obligations Pension plan liabilities are revalued annually or when an event occurs that requires remeasurement based on updated assumptions and information about the individuals covered by the plan Accumulated actuarial gains and losses in excess of a 10 percent corridor and the prior service cost are amortized on a straight line basis from the date recognized over the average remaining service period of active participants or over the average life expectancy for plans with significant inactive participants The service costs related to defined benefits are included in operating income The other components of net benefit cost other than service cost are recorded within other non operating income net in the consolidated statements of income
Investments in ordinary shares of companies in which the Company believes it exercises significant influence over operating and financial policies are accounted for using the equity method of accounting Investments in limited partnerships or limited liability companies that maintain separate ownership accounts are also accounted for under the equity method unless the Company s interest is so minor that it has virtually no influence over the investee s operating and financial policies Under this method the investment is carried at cost and is adjusted to recognize the investor s share of earnings or losses of the investee after the date of acquisition and is adjusted for impairment whenever it is determined that a decline in the fair value below the cost basis is other than temporary The fair value of the investment then becomes the new cost basis of the investment and it is not adjusted for subsequent recoveries in fair value The Company reviews its investments accounted for under the equity method for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable
All equity investments that do not result in consolidation and are not accounted for under the equity method are measured at fair value with unrealized gains and losses related to mark to market adjustments included in net income The Company utilizes the measurement alternative for equity investments that do not have readily determinable fair values and measures these investments at cost adjusted for impairments and observable price changes in orderly transactions See Note 7 Equity Method and Other Investments for more information on the Company s equity method and other investments
The Company is subject to numerous contingencies arising in the ordinary course of business such as legal and administrative proceedings environmental claims and proceedings workers compensation and other claims Accruals for estimated losses are recorded by the Company at the time information becomes available indicating that losses are probable and the amounts can be reasonably estimated When management can reasonably estimate a range of losses that it may incur it records an accrual for the amount within the range that constitutes its best estimate If no amount within a range appears to be a better estimate than any other the low end of the range is accrued The Company records anticipated recoveries under existing insurance contracts when recovery is probable
The Company has a variety of equity incentive plans For employee awards with a service or market condition compensation expense is recognized over the vesting period on a straight line basis using the grant date fair value of the award and the estimated number of awards that are expected to vest For awards with a performance condition the Company reassesses the probability of vesting at each reporting period and adjusts compensation cost based on its probability assessment The Company also has immaterial cash settled share based compensation plans which are accounted for as liabilities Such share based awards are remeasured to fair value at each reporting date The Company estimates forfeitures based on employee level time remaining to vest and historical forfeiture experience
The Company uses the asset and liability method to account for income taxes Deferred income taxes reflect the future tax consequences of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts at each balance sheet date based upon enacted income tax laws and tax rates Income tax expense or benefit is provided based on earnings reported in the consolidated financial statements The provision for income tax expense or benefit differs from the amounts of income taxes currently payable because certain items of income and expense included in the consolidated financial statements are recognized in different time periods by taxing authorities
Deferred tax assets including operating losses capital losses and tax credit carryforwards are reduced by a valuation allowance when it is more likely than not that any portion of these tax attributes will not be realized In addition from time to time management assesses the need to accrue or disclose uncertain tax positions In making these assessments management must often analyze complex tax laws of multiple jurisdictions Accounting guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return The Company records the related interest expense and penalties if any as tax expense in the tax provision See Note 16 Income Taxes for more information on the Company s income taxes
In September 2022 the Financial Accounting Standards Board FASB issued ASU 2022 04 that adds certain disclosure requirements for entities that use supplier finance programs in connection with the purchase of goods and services The Company adopted the disclosure requirements in ASU 2022 04 on July 1 2023 except for the amendment on roll forward information which is effective in fiscal year 2025
The Company facilitates several regional voluntary supply chain financing SCF programs with financial institutions all of which have similar characteristics The Company establishes these SCF programs to provide its suppliers with a potential source of liquidity and to enable a more efficient payment process Under these SCF programs qualifying suppliers may elect but are not obligated to sell their receivables due from Amcor to these financial institutions in advance of the agreed payment due date The Company is not involved in negotiations between the suppliers and the financial institutions and its rights and obligations to its suppliers are not impacted by its suppliers decisions to sell amounts to the financial institutions Under these SCF programs the Company agrees to pay the financial institution the stated invoice amounts from its participating suppliers on the original maturity dates of the invoices The range of payment terms negotiated with suppliers under these arrangements are consistent with industry norms and short term in nature regardless of whether a supplier participates in the program The Company s SCF programs do not include any guarantees to the financial institutions or any assets pledged as securities
All outstanding amounts related to suppliers participating in the SCF programs are reflected in trade payables in the Company s consolidated balance sheets and associated payments are included in operating activities within the Company s consolidated statements of cash flows As of June 30 2024 and June 30 2023 the amounts due to suppliers participating in the Company s SCF programs amounted to 1 1 billion
In November 2023 the FASB issued Accounting Standards Update ASU 2023 07 that adds new reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit or loss The standard s amendments are effective for the Company for annual periods beginning July 1 2024 and interim periods beginning July 1 2025 with early adoption permitted and will be applied retrospectively to all periods in the financial statements The Company will adopt this guidance in fiscal year 2025 The Company is currently evaluating the impact that this guidance will have on its disclosures
In December 2023 the FASB issued ASU 2023 09 that adds new income tax disclosure requirements primarily related to existing income tax rate reconciliation and income taxes paid information The standard s amendments are effective for the Company for annual periods beginning July 1 2025 with early adoption permitted and can be applied either prospectively or retrospectively The Company is currently evaluating the impact that this guidance will have on its disclosures
The Company considers the applicability and impact of all ASUs issued by the FASB The Company determined at this time that all other ASUs not yet adopted are either not applicable or are expected to have minimal impact on the Company s consolidated financial statements
A pre tax net gain on disposal of the Company s three manufacturing facilities in Russia Russian business of 215 million was recognized during fiscal year 2023 The carrying value of the Russian business had previously been impaired by 90 million in the fourth quarter of fiscal year 2022 following the Company s approved plan to sell its Russian business For further information refer to Note 5 Acquisitions and Divestitures
Impairment expenses of 138 million were incurred in the fourth quarter of fiscal year 2022 as a result of the Russia Ukraine conflict In addition to the impairment charge on the Russian business mentioned above the Company recognized other impairment expenses of 48 million given the expectation that certain assets not held for sale in the conflict region were not recoverable The Company s manufacturing plant in Ukraine ceased operations in February 2022 and has not resumed operations given the ongoing conflict in the region has displaced the Company s employees destroyed nearby manufacturing facilities and impaired the region s supporting infrastructure
On September 27 2023 the Company completed the acquisition of a small manufacturer of flexible packaging for food home care and personal care applications in India for a purchase consideration of 14 million plus the assumption of debt of 10 million The acquisition is part of the Company s Flexibles reportable segment and the Company aims to complete the purcha
On August 1 2022 the Company completed the acquisition of 100 equity interest in a Czech Republic company that operates a world class flexible packaging manufacturing plant The purchase consideration of 59 million included a deferred portion of 5 million that was paid in the first quarter of fiscal year 2024 The acquisition is part of the Company s Flexibles reportable segment and resulted in the recognition of acquired identifiable net assets of 36 million and goodwill of 23 million Goodwill is not deductible for tax purposes
On March 17 2023 the Company completed the acquisition of 100 equity interest in a medical device packaging manufacturing site in Shanghai China The purchase consideration of 61 million included contingent consideration of 20 million to be earned and paid in cash over the three years following the acquisition date subject to meeting certain performance targets The acquisition is part of the Company s Flexibles reportable segment and resulted in the recognition of acquired identifiable net assets of 21 million and goodwill of 40 million Goodwill is not deductible for tax purposes
On May 31 2023 the Company completed the acquisition of a New Zealand based leading manufacturer of state of the art automated protein packaging machines The purchase consideration of 45 million was subject to customary post closing adjustments The consideration includes contingent consideration of 13 million to be earned and paid in cash over the two years following the acquisition date subject to meeting certain performance targets The acquisition is part of the Company s Flexibles reportable segment and resulted in the recognition of acquired identifiable net assets of 21 million and goodwill of 24 million Goodwill is deductible for tax purposes
The fair value estimates for all four acquisitions in fiscal years 2024 and 2023 were based on income market and cost valuation methods Pro forma information related to these acquisitions has not been presented as the effect of the acquisitions on the Company s consolidated financial statements was not material The fair values of the identifiable net assets acquired and goodwill are based on the Company s best estimates using information available as of the respective acquisition date
On December 23 2022 the Company completed the sale of its Russian business after receiving all necessary regulatory approvals and cash proceeds including receipt of closing cash balances The sale followed the Company s previously announced plan to pursue the orderly sale of its Russian business The total net cash consideration received excluding disposed cash and items settled net was 365 million and resulted in a pre tax net gain of 215 million The carrying value of the Russian business had previously been impaired by 90 million in the quarter ended June 30 2022 The impairment charge was based on the Company s best estimate of the fair value of its Russian business which considered the wide range of indicative bids received and uncertain regulatory environment The net pre tax gain on disposal of the Russian business was recorded as restructuring impairment and other related activities net within the consolidated statements of income The Russian business had a net carrying value of 252 million including allocated goodwill of 46 million and accumulated other comprehensive losses of 73 million primarily attributed to foreign currency translation adjustments
During the third quarter of fiscal year 2022 the Company completed the disposal of non core assets in the Flexibles reportable segment The Company recorded an expense of 10 million during the fiscal year ended June 30 2022 to adjust the long lived assets to their fair value less cost to sell
Restructuring and related expenses net were 97 million 111 million and 96 million for the fiscal years ended June 30 2024 2023 and 2022 respectively The net expenses related to restructuring activities have been presented on the consolidated statements of income as part of restructuring impairment and other related activities net The Company s restructuring activities for the fiscal years ended June 30 2024 and 2023 were primarily comprised of restructuring activities related to the 2023 Restructuring Plan as defined below The Company s restructuring activities for the fiscal year ended June 30 2022 included expenses triggered by the Russia Ukraine conflict to help mitigate the impact of the Russian sale and expenses related to the Company s 2019 plan from the integration of the acquired Bemis operations 2019 Bemis Integration Plan which was substantially completed at the end of fiscal year 2022
Restructuring related expenses are directly attributable to restructuring activities however they do not qualify for special accounting treatment as exit or disposal activities The Company believes the disclosure of restructuring related costs provides more information on its restructuring activities
On February 7 2023 the Company announced that it will allocate approximately 110 million to 130 million of the sale proceeds from the Russian business to various cost saving initiatives to partly offset divested earnings from the Russian business the 2023 Restructuring Plan or the Plan The Company expects total Plan cash and non cash net expenses of approximately 220 million of which 85 million relates to employee related expenses 33 million to fixed asset related expenses net of expected gains on asset disposals 62 million to other restructuring expenses and 40 million to restructuring related expenses The Plan initiatives are expected to result in approximately 130 million of net cash expenditures The Plan includes both the Flexibles and Rigid Packaging reportable segments and is expected to be largely completed by the end of calendar year 2024
From the initiation of the Plan through June 30 2024 the Company has incurred 82 million in employee related expenses 31 million in fixed asset related expenses 47 million in other restructuring and 21 million in restructuring related expenses with 156 million incurred in the Flexibles reportable segment and 25 million incurred in the Rigid Packaging reportable segment The Plan has resulted in cumulative net cash outflows of approximately 70 million
The 2019 Bemis Integration Plan was completed by June 30 2022 with a final pre tax integration cost amounting to 253 million The total 2019 Bemis Integration Plan cost included 213 million of restructuring and related expenses net and 40 million of general integration expenses The net cash expenditures for the plan including disposal proceeds were 170 million of which 40 million related to general integration expenses As part of this Plan the Company incurred 144 million in employee related expenses 36 million in fixed asset related expenses 39 million in other restructuring and 45 million in restructuring related expenses partially offset by a gain on disposal of a business of 51 million
During fiscal year 2024 the Company recorded 10 million in restructuring and related expenses classified within Other Restructuring Plans of which 1 million related to employee related expenses 2 million to fixed asset related expenses 3 million to other restructuring expenses and 4 million to restructuring related expenses During fiscal year 2023 the Company recorded 17 million in restructuring and related expenses classified within Other Restructuring Plans of which 3 million related to employee related expenses 5 million to fixed asset related expenses 5 million to other restructuring expenses and 4 million to restructuring related expenses During fiscal year 2022 the Company recorded 57 million in restructuring and related expenses classified within Other Restructuring Plans triggered by the Russia Ukraine conflict to help mitigate the impact of disposed earnings from the Russian sale
Includes restructuring related costs of 15 million and 6 million for fiscal years 2024 and 2023 respectively In fiscal years 2024 and 2023 respectively 69 million and 86 million of restructuring and related expenses net were incurred in the Flexibles reportable segment and 18 million and 8 million in the Rigid Packaging reportable segment
Includes restructuring related costs of 4 million in both fiscal years 2024 and 2023 Fiscal year 2022 includes 55 million in restructuring expenses and 2 million of restructuring related expenses that pertain to the Russia Ukraine conflict as discussed above in section Other Restructuring Plans
The Company expects the majority of the liability for employee fixed assets related and other costs as of June 30 2024 to be paid within the next twelve months The accruals related to restructuring activities have been recorded on the consolidated balance sheets under other current liabilities and other non current liabilities
As of June 30 2024 and 2023 the Company has investments of 87 million and 89 million respectively in multiple equity and other investments All of the investments are individually immaterial with the Company s largest equity investment of 38 million and 33 million as of June 30 2024 and 2023 respectively in ePac Holdings LLC ePac representing an ownership of 21 5 and 18 9 respectively The Company s investment in ePac has been accounted for under the equity method since fiscal year 2023 All investments are included in other non current assets in the Company s consolidated balance sheets The Company accounts for its share in ePac s net loss in equity in loss of affiliated companies net of tax in the consolidated statements of income with a three month lag due to the availability of financial information
Depreciation expense amounted to 402 million 395 million and 398 million for fiscal years 2024 2023 and 2022 respectively Amortization of assets under finance leases is included in depreciation expense
2 As of June 30 2022 16 million of goodwill attributable to the Russian business was classified as assets held for sale net When the business was disposed on December 23 2022 an additional 30 million of goodwill was allocated and disposed of For further information refer to Note 5 Acquisitions and Divestitures
Amortization expenses for intangible assets were 181 million 174 million and 180 million during the fiscal years 2024 2023 and 2022 respectively During the last three fiscal years there were no impairment charges recorded on intangible assets
The fair values of the Company s financial assets and financial liabilities listed below reflect the amounts that would be received to sell the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date exit price
The Company s non derivative financial instruments primarily include cash and cash equivalents trade receivables trade payables short term debt and long term debt At June 30 2024 and 2023 the carrying value of these financial instruments excluding long term debt approximated fair value because of the short term nature of these instruments
The carrying value of long term debt with variable interest rates approximates its fair value The fair value of the Company s long term debt with fixed interest rates is based on market prices if available or expected future cash flows discounted at the current interest rate for financial liabilities with similar risk profiles
As of June 30 2023 the Company had entered into interest rate swap contracts for a total notional amount of commercial paper equal to 1 2 billion maturing on June 30 2024 These contracts were considered to be economic hedges and the related 1 2 billion notional amount of commercial paper was also excluded from the total long term debt with fixed interest rates
Additionally the Company measures and records certain assets and liabilities including derivative instruments and contingent purchase consideration liabilities at fair value The following tables summarize the fair values of these instruments which are measured at fair value on a recurring basis by level within the fair value hierarchy
The fair value of the commodity contracts was determined using a discounted cash flow analysis based on the terms of the contracts and observed market forward prices discounted at a currency specific rate Forward exchange contract fair values were determined based on quoted prices for similar assets and liabilities in active markets using inputs such as currency rates and forward points The fair value of the interest rate swaps was determined using a discounted cash flow method based on market based swap yield curves taking into account current interest rates
ities arise from business acquisitions and other investments As of June 30 2024 the Company had contingent purchase consideration liabilities of 36 million consisting of 26 million of contingent purchase consideration predominantly relating to fiscal year 2023 acquisitions refer to Note 5 Acquisitions and Divestitures and a 10 million liability that is contingent on future royalty income generated by Discma AG a subsidiary acquired in March 2017 The fair values of the contingent purchase consideration liabilities were determined for each arrangement individually The fair values were determined using an income approach with significant inputs that are not observable in the market Key assumptions include the selection of discount rates consistent with the level of risk of achievement and probability adjusted financial projections The expected outcomes are recorded at net present value which require adjustment over the life for changes in risks and probabilities Changes arising from modifications in forecasts related to contingent consideration are not expected to be material During the fiscal year ended June 30 2024 income of 9 million was recorded in other income expenses net from remeasuring the fair value of the Company s contingent purchase consideration liability
In addition to assets and liabilities that are recorded at fair value on a recurring basis the Company records certain assets at fair value on a nonrecurring basis generally when events or changes in circumstances indicate the carrying value may not be recoverable or when they are deemed to be other than temporarily impaired These assets include goodwill and other intangible assets equity method and other investments long lived assets and disposal groups held for sale and other long lived assets The fair values of these assets are determined when applicable based on valuation techniques using the best information
available and may include quoted market prices market comparables and discounted cash flow projections These nonrecurring fair value measurements are considered to be Level 3 in the fair value hierarchy
During the fiscal years ended June 30 2024 and 2023 there were no impairment charges recorded on indefinite lived intangibles including goodwill During the fourth quarter of fiscal year 2022 the Company met the criteria to recognize the related assets and liabilities of its Russian operations as held for sale which resulted in the Company remeasuring the disposal group at its fair value less cost to sell which is considered a Level 3 fair value measurement As a result the Company recorded an impairment of 90 million For information on long lived asset impairments refer to Note 2 Significant Accounting Policies
In addition resulting from the effective disposal of non core businesses during the fiscal year ended June 30 2022 the Company recorded a total loss of 34 million predominantly to adjust the long lived assets to their fair value less cost to sell Of these losses 24 million are included within restructuring impairment and other related activities net as relating to the Russia Ukraine conflict with the balance recorded in other income net in the consolidated statements of income During the fiscal year ended June 30 2022 further long lived assets with a carrying value of 12 million were written down to a fair value of zero as the Company s Durban South Africa manufacturing facility was destroyed in a fire as the result of general civil unrest In addition during the fiscal year ended June 30 2022 other long lived assets in South Africa with a carrying amount of 8 million were written down to their estimated fair value of 4 million using level 3 inputs These expenses are included within other income net in the consolidated statements of income
The Company periodically uses derivatives and other financial instruments to hedge exposures to interest rate commodity price and currency risks The Company does not hold or issue derivative instruments for speculative or trading purposes For hedges that meet the hedge accounting criteria the Company at inception formally designates and documents the instruments as a fair value hedge or a cash flow hedge of a specific underlying exposure On an ongoing basis the Company assesses and documents that its hedges have been and are expected to continue to be highly effective
The Company s policy is to manage exposure to interest rate risk by maintaining a mixture of fixed rate and variable rate debt monitoring global interest rates and where appropriate hedging floating interest rate exposure or debt at fixed interest rates through various interest rate derivative instruments including but not limited to interest rate swaps and interest rate locks For interest rate swaps that are accounted for as fair value hedges the gains and losses related to the changes in the fair value of the interest rate swaps are included in interest expense and offset changes in the fair value of the hedged portion of the underlying debt that are attributable to the changes in market interest rates Changes in the fair value of interest rate swaps that have not been designated as hedging instruments are reported in the accompanying consolidated statements of income in other income expenses net
In October 2022 the Company entered into interest rate swap contracts for a total notional amount of 1 25 billion Under the terms of the contracts the Company paid a weighted average fixed rate of interest of 4 53 and received a variable rate of interest based on compound overnight Secured Overnight Financing Rate SOFR for the period from November 2022 through June 2023 settled monthly In March 2023 the Company entered into interest rate swap contracts for a total notional amount of 1 2 billion Under the terms of the contracts the Company paid a weighted average fixed interest rate of 3 88 and received a variable rate of interest based on 1 month Term SOFR from July 2023 through June 2024 settled monthly As of June 30 2024 the Company had no receive variable pay fixed interest rate swaps outstanding As of June 30 2023 the Company had no other receive variable pay fixed interest rate swaps than those listed above The Company did not apply hedge accounting on these economic hedging instruments
The Company manufactures and sells its products and finances operations in a number of countries throughout the world and as a result is exposed to movements in foreign currency exchange rates The purpose of the Company s foreign currency hedging program is to manage the volatility associated with the changes in exchange rates To manage this exchange rate risk the Company utilizes forward contracts and cross currency swaps
Forward contracts that qualify for hedge accounting are designated as cash flow hedges of certain forecasted transactions denominated in foreign currencies The effective portion of the changes in fair value of these instruments is reported in accumulated other comprehensive loss AOCI and reclassified into earnings in the same financial statement line item and in the same period or periods during which the related hedged transactions affect earnings The ineffective portion is recognized in earnings over the life of the hedging relationship in the same consolidated statements of income line item as the underlying hedged item Changes in the fair value of forward contracts that have not been designated as hedging instruments are reported in the accompanying consolidated statements of income
In May 2024 the Company entered into cross currency swap contracts for a total notional amount of 500 million Under the terms of the contracts the Company swapped the notional and periodic interest payments to Swiss francs to manage the foreign currency risk and receives a fixed U S dollar rate of interest of 5 450 and pays a fixed weighted average Swiss franc rate of interest of 2 218 The Company has designated these cross currency swap contracts as a fair value hedge of 500 million notes and recognizes the components excluded from the hedging relationship in accumulated other comprehensive loss AOCI and reclassifies into earnings through the accrual of the periodic interest settlements on the swaps
Certain raw materials used in the Company s production processes are subject to price volatility caused by weather supply conditions political and economic variables and other unpredictable factors The Company s policy is to minimize exposure to price volatility by passing through the commodity price risk to customers including through the use of fixed price swaps
In some cases the Company purchases on behalf of customers fixed price commodity swaps to offset the exposure of price volatility on the underlying sales contracts These instruments are cash closed out on maturity and the related cost or benefit is passed through to customers Information about commodity price exposure is derived from supply forecasts submitted by customers and these exposures are hedged by central treasury units Changes in the fair value of commodity hedges are recognized in AOCI The cumulative amount of the hedge is recognized in the consolidated statements of income when the forecasted transaction is realized
Certain derivative financial instruments are subject to netting arrangements and are eligible for offset The Company has made an accounting policy election not to offset the fair values of these instruments within the consolidated balance sheets
The Company sponsors both funded and unfunded defined benefit pension plans that include a statutory and mandated benefit provision in various countries as well as voluntary plans with both types of plans generally closed to new joiners The Company s principal defined benefit plans are in the United States Switzerland United Kingdom and Germany The United States plans are closed to new entrants and mostly closed to future accruals and are funded The Switzerland plan is open to new entrants and is funded The United Kingdom benefit plans are closed to new entrants and future accruals and are funded The Germany plans are closed to new entrants and mostly closed to future accruals and are unfunded
During the fourth quarter of fiscal year 2023 Amcor announced a plan termination date of July 31 2023 for one of the Company s closed principal funded defined benefit plans in the United States the U S Plan The U S Plan s benefit obligations as of June 30 2023 were determined on a plan termination basis assuming that a portion of eligible active and deferred vested participants would elect lump sum payments In June 2024 the Company exercised its right to rescind its decision to terminate the U S Plan due to a change in market conditions Benefit obligations related to the U S Plan of 236 million as of June 30 2024 were determined on an ongoing plan basis
During the second quarter of fiscal year 2022 the Company contracted with Pacific Life Insurance Company to purchase a group annuity contract and transfer 186 million of its pension plan assets and related benefit obligations related to three principal defined benefit plans in the United States This transaction required a remeasurement of the pension plan assets and obligations and resulted in the recognition of a 3 million non cash pension settlement loss in fiscal year 2022
Actuarial losses resulting in an increase of the benefit obligation were primarily due to lower than expected asset returns mainly in the U S UK Switzerland and Ireland Liability assumption losses for fiscal year 2024 were caused by a reduction in discount rates in the majority of territories and an increase in the inflation assumption for the UK and Switzerland The weighted average decrease in discount rates for the Company s pension plans was 0 1 for the fiscal year ended June 30 2024 and a weighted average increase of 0 5 for the fiscal year ended June 30 2023 The losses were partially offset by the lower inflation rate assumption in the European Union in fiscal year 2024
Where funded the Company and in some countries the employees make cash contributions into the pension funds In the case of unfunded plans the Company is responsible for benefit payments as they fall due Plan funding requirements are generally determined by local regulation and or best practice and differ between countries The local statutory funding positions are not necessarily consistent with the funded status disclosed on the consolidated balance sheets For any funded plans in deficit as measured under local country guidelines the Company agrees with the trustees and plan fiduciaries to undertake suitable funding programs to provide additional contributions over time in accordance with local country requirements Contributions to the Company s defined benefit pension plans not including unfunded plans are expected to be 32 million over the next fiscal year
The ERISA Benefit Plan Committee in the United States the Pension Plan Committee in Switzerland and the Trustees of the pension plans in UK establish investment policies investment strategies allocation strategies and investment risk profiles for the Company s pension plan assets and are required to consult with the Company on changes to their investment policy In developing the expected long term rate of return on plan assets at each measurement date the Company considers the plan assets historical returns asset allocations and the anticipated future economic environment and long term performance of the asset classes While appropriate consideration is given to recent and historical investment performance the assumption represents management s best estimate of the long term prospective return
Valued primarily at the closing prices reported in the active market in which the individual securities are traded Level 1 or based on significant observable inputs such as fund values provided by the independent fund administrators Level 2
Consists of government and corporate debt securities valued at the closing prices reported in the active market in which the individual securities are traded Level 1 or based on observable inputs such as fund values provided by independent fund administrators pricing of similar agency issues reported trades broker dealer quotes issuer spread live trading feeds from several vendors and benchmark yields Level 2 Inputs may be prioritized differently at certain times based on market conditions
Valued at the closing prices reported in the active market in which the individual securities are traded Level 1 or based on observable inputs such as fund values provided by independent fund administrators Level 2
Consists of cash on deposit with brokers and short term money market funds shown net of receivables and payables for securities traded at period end but not yet settled Level 1 and cash indirectly held across investment funds Level 2 All cash and cash equivalents are stated at cost which approximates fair value
Assets held in diversified growth funds pooled funds financing funds and derivatives where the values of the assets are determined by the investment managers or other independent third parties based on observable inputs
Indemnified plan assets and pooled funds equity credit macro orientated multi strategy cash and other The values of indemnified plan assets are determined based on the value of the liabilities that the assets cover The value of the pooled funds is calculated by the investment managers based on the net asset values of the underlying portfolios
On May 21 2024 the Company issued U S dollar notes with an aggregate principal amount of 500 million and a contractual maturity in May 2029 The notes pay a coupon of 5 45 per annum payable semi annually in arrears The notes are unsecured senior obligations of the Company and are fully and unconditionally guaranteed by the Company and certain of its subsidiaries
On May 22 2024 the Company issued Euro notes with an aggregate principal amount of 500 million and a contractual maturity in May 2032 The notes pay a coupon of 3 95 per annum payable annually in arrears The notes are unsecured senior obligations of the Company and are fully and unconditionally guaranteed by the Company and certain of its subsidiaries
Fiscal year 2023 includes other loans of 12 million which were classified as long term liabilities in accordance with the Company s ability and intent to refinance such obligations on a long term basis
The following table summarizes the contractual maturities of the Company s long term debt including current maturities excluding payments for finance leases as of June 30 2024 for the succeeding five fiscal years
1 Commercial paper denominated in U S dollars is classified as maturing in 2026 supported by the 3 year syndicated facility with one 12 month option available to the Company to extend the maturity date
The Company has entered into syndicated and bilateral multi currency credit facilities with financial institutions On April 26 2022 the Company entered into three and five year syndicated facility agreements that each provided a revolving credit facility of 1 9 billion or 3 8 billion in total On April 23 2024 the Company extended the maturity of its three year facility by one year until April 2026 The three year syndicated facility agreement will be reduced from 1 9 billion to 1 7 billion effective April 2025 The Company s five year syndicated credit facility matures in April 2027 and provides a revolving credit facility of 1 9 billion The three year facility has one 12 month option available to the Company to extend the maturity date and the five year facility has two 12 month options available to the Company to extend the maturity date
Interest charged on borrowings under the credit facilities is based on the applicable market rate plus the applicable margin As of June 30 2024 and 2023 the Company s credit facilities amounted to 3 8 billion
As of June 30 2024 and 2023 the Company had 2 4 billion and 1 3 billion of undrawn commitments respectively The Company incurs facility fees of 0 125 on the undrawn commitments Such facility fees incurred were immaterial in the fiscal years ended June 30 2024 2023 and 2022 respectively
The Company may redeem its long term debt in whole or in part at any time or from time to time prior to its maturity The redemption prices typically represent 100 of the principal amount of the relevant debt plus any accrued and unpaid interest In addition for notes that are redeemed by the Company before their stated permitted redemption date a make whole premium is payable
All the notes are general unsecured senior obligations of the Company and are fully and unconditionally guaranteed on a joint and several basis by certain existing subsidiaries that guarantee its other indebtedness
The Company s primary bank debt facilities and notes are unsecured and subject to negative pledge arrangements limiting the amount of secured indebtedness the Company can incur to 10 0 of total tangible assets subject to some exceptions and variations by facility The Company is required to satisfy certain financial covenants pursuant to its bank debt facilities which are tested as of the last day of each quarterly and annual financial period The covenants require the Company to maintain a leverage ratio of not higher than 3 9 times which is calculated as total net debt divided by Adjusted EBITDA As of June 30 2024 and 2023 the Company was in compliance with all debt covenants
Short term debt is generally used to fund working capital requirements The Company has classified commercial paper as long term as of June 30 2024 in accordance with the Company s ability and intent to refinance such obligations on a long term basis
As of June 30 2024 the Company paid a weighted average interest rate of 5 39 per annum on short term debt payable at maturity As of June 30 2023 the Company paid a weighted average interest rate of 3 98 per annum payable at maturity
The Company s leases do not contain any material residual value guarantees or material restrictive covenants As of June 30 2024 the Company does not have material lease commitments that have not commenced
During the fiscal year ended June 30 2023 the Company disposed of its Russian business and certain non core operations and transferred 73 million and 5 million respectively of accumulated foreign currency translation from accumulated other comprehensive loss to earnings During the fiscal year ended June 30 2022 the Company effectively disposed of a non core business and transferred 19 million of accumulated foreign currency translation from accumulated other comprehensive loss to earnings Refer to Note 5 Acquisitions and Divestitures for further information
The Company s employee share plans require the delivery of shares to employees in the future when rights vest or vested options are exercised The Company currently acquires shares on the open market to deliver shares to employees to satisfy vesting or exercising commitments which exposes the Company to market price risk
To protect the Company from share price volatility the Company has entered into forward contracts for the purchase of its ordinary shares As of June 30 2024 the Company had forward contracts outstanding that were entered into in September 2022 and mature in September 2024 to purchase 6 million shares at a weighted average price of 12 11 As of June 30 2023 the Company had forward contracts outstanding that were entered into in May 2022 and September 2022 that matured between September 2023 and November 2023 to purchase 9 million shares at a weighted average price of 12 39 During the fiscal year ended June 30 2024 the Company s forward contracts related to 3 million shares were settled which were outstanding as of June 30 2023
The forward contracts to purchase the Company s own shares have been included in other current liabilities in the consolidated balance sheets Equity is reduced by an amount equal to the fair value of the shares at inception The carrying value of the forward contracts at each reporting period was determined based on the present value of the cost required to settle the contracts
In fiscal year 2024 Other is comprised of adjustments to prior year provisions movement in deferred tax positions including a 15 million benefit from the Swiss Tax Reform effects of foreign currency exchange rates including a 14 million benefit from inflation adjustment in Argentina partially offset by changes in tax rates and other individually immaterial items In fiscal year 2023 Other is comprised of effects of foreign currency exchange of 25 million adjustments to prior year movement in deferred tax positions changes in tax rate and other individually immaterial items In fiscal year 2022 Other is comprised of adjustments to prior year movements in deferred tax positions of 13 million changes in tax rates and other individually immaterial items
Amcor operates in over forty different jurisdictions with a wide range of statutory tax rates The tax expense from operating in non UK jurisdictions in excess of the UK statutory tax rate is included in the line Foreign tax rate differential in the above tax rate reconciliation table For fiscal year 2024 the Company s effective tax rate was 18 0 as compared to the effective tax rates of 15 4 and 26 9 for fiscal years 2023 and 2022 respectively The higher effective tax rate for fiscal year 2024 versus fiscal year 2023 is largely attributable to the non taxable gain on the disposal of the Russian business in the comparative period The decrease in effective tax rate in fiscal year 2023 compared to fiscal year 2022 was predominantly attributable to the non taxable gain on the disposal of the Russian business and the release of provisions for uncertain tax positions related to the disposed Russian business
The Company maintains a valuation allowance on net operating losses and other deferred tax assets in jurisdictions for which it does not believe it is more likely than not to realize those deferred tax assets based upon all available positive and negative evidence including historical operating performance carry back periods reversal of taxable temporary differences tax planning strategies and earnings expectations The Company s valuation allowance increased by 3 million decreased by 7 million and increased by 4 million for fiscal years 2024 2023 and 2022 respectively
As of June 30 2024 and 2023 the Company had total net operating loss carry forwards including capital losses in the amount of 1 4 billion and 1 3 billion respectively and tax credits of 31 million and 37 million respectively The vast majority of the net operating loss carry forwards and tax credits do not expire
The Company considers the following factors among others in evaluating its plans for indefinite reinvestment of its subsidiaries earnings i the forecasts budgets and financial requirements of the Company and its subsidiaries both for the long term and for the short term and ii the tax consequences of any decision to repatriate or reinvest earnings of any subsidiary As of June 30 2024 the Company has not provided deferred taxes on approximately 1 7 billion of earnings in certain foreign subsidiaries because such earnings are indefinitely reinvested in its international operations Upon distribution of such earnings in the form of dividends or otherwise the Company may be subject to incremental foreign tax It is not practicable to estimate the amount of foreign tax that might be payable As of June 30 2024 a cumulative deferred tax liability of 23 million has been recorded attributable to undistributed earnings that the Company has deemed are not indefinitely reinvested The remaining undistributed earnings of the Company s subsidiaries are not deemed to be indefinitely reinvested and can be repatriated at no tax cost Accordingly there is no provision for income or withholding taxes on these earnings
The Company accounts for its uncertain tax positions in accordance with ASC 740 Income Taxes At June 30 2024 and 2023 unrecognized tax benefits totaled 104 million and 155 million respectively all of which would favorably impact the effective tax rate if recognized
The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense As of June 30 2024 2023 and 2022 the Company s accrual for interest and penalties for these uncertain tax positions was 17
million 13 million and 12 million respectively The Company does not currently anticipate that the total amount of unrecognized tax benefits will result in material changes to its financial position within the next 12 months
The Company conducts business in a number of tax jurisdictions and as such is required to file income tax returns in multiple jurisdictions globally The fiscal years 2020 through 2023 remain open for examination by the United States Internal Revenue Service IRS the fiscal year 2022 remains open for examination by His Majesty s Revenue Customs HMRC and the fiscal years 2011 through 2023 are currently subject to audit or remain open for examination in various tax jurisdictions
The Company believes that its income tax reserves are adequately maintained taking into consideration both the technical merits of its tax return positions and ongoing developments in its income tax audits However the final determination of the Company s tax return positions if audited is uncertain and therefore there is a possibility that final resolution of these matters could have a material impact on the Company s results of operations or cash flows
In fiscal years 2024 2023 and 2022 share options and performance rights or performance shares awarded to U S participants in place of performance rights were granted to officers and employees The exercise price for share options was set at the time of grant The requisite service period for outstanding share options performance rights or performance shares ranges from two to three years The awards are also subject to performance and market conditions At vesting share options can be exercised and converted to ordinary shares on a one for one basis subject to payment of the exercise price The contractual terms of the share options range from five to ten years from the grant date At vesting performance rights can be exercised and converted to ordinary shares on a one for one basis Performance shares vest automatically and convert to ordinary shares on a one for one basis
Restricted share units may be granted to directors officers and employees of the Company and vest on terms as described in the award The restrictions prevent the participant from disposing of the restricted share units during the vesting period The fair value of restricted share units is determined based on the closing price of the Company s shares on the grant date
Share rights may be granted to directors officers and employees of the Company and vest on terms as described in the award The restrictions prevent the participant from disposing of the share rights during the vesting period The fair value of share rights is determined based on the closing price of the Company s shares on the grant date adjusted for dividend yield
As of June 30 2024 34 million shares were available for future grants under shareholder approved equity incentive plans The Company uses treasury shares to settle share based compensation obligations Treasury shares were acquired through market purchases throughout the fiscal year for the required number of shares
Share based compensation expense was primarily recorded in selling general and administrative expenses in the consolidated statements of income The total share based compensation expense settled in equity in fiscal years 2024 2023 and 2022 amounted to 32 million 54 million and 63 million respectively
As of June 30 2024 there was 70 million of total unrecognized compensation cost related to all unvested share options and other equity incentive plans That cost is expected to be recognized over a weighted average period of 1 8 years
The fair value of share options was determined using the Black Scholes option pricing model and or Monte Carlo simulations The following key assumptions were used for the fiscal years ended June 30 2024 2023
As of June 30 2024 the share options outstanding have an intrinsic value of 3 million and a remaining weighted average contractual life of 4 1 years As of June 30 2024 the share options that have vested and are exercisable have an intrinsic value of nil and a remaining weighted average contractual life of 1 7 years
The Company received nil 134 million and 114 million on the exercise of stock options during the fiscal years ended June 30 2024 2023 and 2022 respectively During the fiscal years ended June 30 2024 2023 and 2022 the intrinsic value associated with the exercise of share options was nil 31 million and 15 million respectively The grant date fair value of share options vested was 5 million 15 million and 13 million for fiscal years ended June 30 2024 2023 and 2022 respectively
The Company applies the two class method when computing its earnings per share EPS which requires that net income per share for each class of share be calculated assuming all of the Company s net income is distributed as dividends to each class of share based on their contractual rights
Basic EPS is computed by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding after excluding the ordinary shares to be repurchased using forward contracts Diluted EPS includes the effects of share options restricted share units performance rights performance shares and share rights if dilutive
Certain stock awards outstanding were not included in the computation of diluted earnings per share above because they would not have had a dilutive effect The excluded stock awards represented an aggregate of 29 million 16 million and 7 million shares for the years ended June 30 2024 2023 and 2022 respectively Basic and diluted weighted average ordinary shares outstanding have decreased in fiscal years 2024 2023 and 2022 due to share repurchases
The Company s operations in Brazil are involved in various governmental assessments and litigation principally related to claims for excise and income taxes The Company vigorously defends its positions and believes it will prevail on most if not all of these matters The Company does not believe that the ultimate resolution of these matters will materially impact the Company s consolidated results of operations financial position or cash flows Under customary local regulations the Company s Brazilian subsidiaries may need to post cash or other collateral if a challenge to any administrative assessment proceeds to the Brazilian court system however the level of cash or collateral already pledged or potentially required to be pledged would not significantly impact the Company s liquidity As of June 30 2024 the Company has recorded accruals of 12 million included in other non current liabilities in the consolidated balance sheets The Company has estimated a reasonably possible loss exposure in excess of the accrual of 23 million as of June 30 2024 The litigation process is subject to many uncertainties and the outcome of individual matters cannot be accurately predicted The Company routinely assesses these matters as to the probability of ultimately incurring a liability and records the best estimate of the ultimate loss in situations where the likelihood of an ultimate loss is probable The Company s assessments are based on its knowledge and experience but the ultimate outcome of any of these matters may differ from the Company s estimates
As of June 30 2024 the Company provided letters of credit of 16 million judicial insurance of 1 million and deposited cash of 12 million with the courts to continue to defend the cases referenced above
The Company along with others has been identified as a potentially responsible party PRP at several waste disposal sites under U S federal and related state environmental statutes and regulations and may face potentially material environmental remediation obligations While the Company benefits from various forms of insurance policies actual coverage may not or only partially cover the total potential exposures As of June 30 2024 the Company has recorded aggregate accruals of 9 million for its share of estimated future remediation costs at these sites
In addition to the matters described above as of June 30 2024 the Company has also recorded aggregate accruals of 44 million for potential liabilities for remediation obligations at various worldwide locations that are owned or operated by the Company or were formerly owned or operated
The SEC requires the Company to disclose certain information about proceedings arising under federal state or local environmental provisions if the Company reasonably believes that such proceeding may result in monetary sanctions above a stated threshold Pursuant to SEC regulations the Company uses a threshold of 1 million or more for purposes of determining whether disclosure of any such proceedings is required Applying this threshold there are no environmental matters required to be disclosed for the fiscal year ended June 30 2024
While the Company believes that its accruals are adequate to cover its future obligations there can be no assurance that the ultimate payments will not exceed the accrued amounts Nevertheless based on the available information the Company does not believe that its potential environmental obligations will have a material adverse effect upon its liquidity results of operations or financial condition
In the normal course of business the Company is subject to legal proceedings lawsuits and other claims While the potential financial impact with respect to these ordinary course matters is subject to many factors and uncertainties management believes that any financial impact to the Company from these matters individually and in the aggregate would not have a material adverse effect on the Company s financial position or results of operation
Consists of operations that manufacture flexible and film packaging in the food and beverage medical and pharmaceutical fresh produce snack food personal care and other industries The Russian business results through the date of disposal December 23 2022 are included in the Flexibles reportable segment
Consists of operations that manufacture rigid containers for a broad range of predominantly beverage and food products including carbonated soft drinks water juices sports drinks milk based beverages spirits and beer sauces dressings spreads and personal care items and plastic caps for a wide variety of applications
Other consists of the Company s undistributed corporate expenses including executive and functional compensation costs equity method and other investments intercompany eliminations and other business activities
Operating segments are organized along the Company s product lines and geographical areas The Company s five Flexibles operating segments Flexibles Europe Middle East and Africa Flexibles North America Flexibles Latin America Flexibles Asia Pacific and Specialty Cartons have been aggregated in the Flexibles reportable segment as they exhibit similarity in economic characteristics and future prospects similarity in the products they offer their production technologies the customers they serve the nature of their service delivery models and their regulatory environments
The Company evaluates performance and allocates resources based on adjusted earnings before interest and taxes Adjusted EBIT The Company defines Adjusted EBIT as operating income adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing operating performance and to include equity in loss of affiliated companies net of tax
Net loss on disposals excluding the disposal of the Company s Russian business includes an expense of 10 million from the disposal of non core assets in fiscal year 2022 Refer to Note 10 Fair Value Measurements for more information
Property and other losses net in fiscal year 2023 includes property claims and losses of 5 million and 3 million of net insurance recovery related to the closure of the Company s South African business Fiscal year 2022 includes business losses primarily associated with the destruction of the Company s Durban South Africa facility during general civil unrest in July 2021 net of insurance recovery
Restructuring and other related activities net in fiscal year 2024 primarily includes costs incurred in connection with the 2023 Restructuring Plan Fiscal year 2023 includes a pre tax net gain on the sale of the Company s Russian business of 215 million incremental costs of 18 million and restructuring and related expenses of 107 million incurred in connection with the conflict Fiscal year 2022 includes 138 million of impairment charges 57 million of restructuring and related expenses and 5 million of other expenses Refer to Note 4 Restructuring Impairment and Other Related Activities Net and Note 6 Restructuring for further information
CEO transition costs primarily reflect accelerated compensation including share based compensation granted to the Company s former Chief Executive Officer who retired from that role in April 2024 and other transition related expenses
Other in fiscal year 2024 includes fair value losses of 16 million on economic hedges retroactive foil duties certain litigation reserve adjustments and pension settlements partially offset by changes in contingent purchase consideration Fiscal year 2023 includes other restructuring acquisition litigation and integration expenses of 13 million pension settlement expenses of 5 million and fair value gains of 16 million on economic hedges Fiscal year 2022 includes costs associated with the Bemis transaction and pension settlement expenses of 8 million
The following table provides long lived asset information for the major countries in which the Company operates Long lived assets include property plant and equipment net of accumulated depreciation and impairments
The parent entity Amcor plc and its wholly owned subsidiaries listed below are subject to a Deed of Cross Guarantee dated June 24 2019 the Deed under which each company guarantees the debts of the others
The entities above were the only parties to the Deed as of June 30 2024 and comprise the closed group for the purposes of the Deed and also the extended closed group ARP North America Holdco Ltd and ARP LATAM Holdco Ltd were newly incorporated entities and were added to the deed on September 25 2019 By a Revocation Deed dated September 9 2021 the Deed was revoked in respect of Amcor Flexibles Dandenong Pty Ltd Packsys Pty Ltd Packsys Holdings Aus Pty Ltd and Techni Chem Australia Pty Ltd No other parties have been added removed or the subject to a notice of disposal since September 9 2021
By entering into the Deed the wholly owned subsidiaries have been relieved from the requirement to prepare a financial report and directors report under ASIC Corporations Wholly owned Companies Instrument 2016 785
On August 5 2024 the Company entered into an interest rate swap contract for a notional amount of 500 million Under the terms of the contract the Company will pay a fixed rate of interest of 4 30 and receive a variable rate of interest based on compound overnight SOFR effective from August 12 2024 through June 30 2025 with monthly settlements commencing on September 1 2024 The interest rate swap contract will economically hedge the SOFR component of the Company s forecasted commercial paper issuances
On August 15 2024 the Company s Board of Directors declared a quarterly cash dividend of 0 1250 per share to be paid on September 26 2024 to shareholders of record as of September 6 2024 Amcor has received a waiver from the Australian Securities Exchange ASX settlement operating rules which will allow Amcor to defer processing conversions between its ordinary share and CHESS Depositary Instrument CDI registers from September 5 2024 to September 6 2024 inclusive
Our management with the participation of our Interim Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of our disclosure controls and procedures as of June 30 2024 The term disclosure controls and procedures as defined in Rules 13a 15 e and 15d 15 e under the Securities Exchange Act of 1934 as amended the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded processed summarized and reported within the time periods specified in the SEC s rules and forms Disclosure controls and procedures include without limitation controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management including its principal executive and financial officers as appropriate to allow timely decisions regarding required disclosure
Management recognizes that any controls and procedures no matter how well designed and operated can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures Based on this evaluation the Interim Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30 2024
Our management is responsible for establishing and maintaining adequate internal control over financial reporting Internal control over financial reporting is defined in Rules 13a 15 f and 15d 15 f under the Exchange Act Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles Our management evaluated the design and operating effectiveness of our internal control over financial reporting based on the criteria established in the
2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission the COSO framework 2013 All internal control systems no matter how well designed have inherent limitations Accordingly even effective internal controls and procedures can provide only reasonable assurance with respect to financial statement preparation and presentation
Under the supervision and with the participation of our management including our Interim Chief Executive Officer and Chief Financial Officer we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30 2024 Based on this evaluation our management concluded that we maintained effective internal control over financial reporting as of June 30 2024
The effectiveness of our internal control over financial reporting as of June 30 2024 has been audited by PricewaterhouseCoopers AG an independent registered public accounting firm as stated in their report which appears on Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10 K
There were no changes in our internal control over financial reporting as defined in Rules 13a 15 f and 15d 15 f under the Exchange Act that occurred during the fourth quarter of fiscal year 2024 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting
During the three months ended June 30 2024 no director or Section 16 officer of the Company adopted or terminated a Rule 10b5 1 trading arrangement or non Rule 10b5 1 trading arrangement as each term is defined in Item 408 a of Regulation S K
The information required to be submitted in response to this item is omitted because a definitive proxy statement containing such information will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after June 30 2024 and such information is expressly incorporated herein by reference Information with respect to our executive officers appears in Part I of this Annual Report on Form 10 K
Our Board Committee Charters Corporate Governance Guidelines and our Code of Conduct Ethics Policy can be electronically accessed at our website http www amcor com investors under Corporate Governance or free of charge by writing directly to us Attention Corporate Secretary Our Board of Directors has adopted a Code of Conduct that applies to our principal executive officer principal financial officer principal accounting officer and other persons performing similar functions We intend to satisfy the disclosure requirements under Item 5 05 of Form 8 K regarding amendments to or waivers from our Code of Conduct by posting such information on the Investor Relations section of our website promptly following the date of such amendment or waiver
Our Board of Directors has adopted an Insider Trading Policy which governs the purchase sale and or other dispositions of our securities by our directors officers other key employees and covered persons which we believe is reasonably designed to ensure compliance with applicable insider trading rules regulations and listing standards A copy of our Insider Trading Policy is filed as Exhibit 19 to this Annual Report on Form 10 K
Information required to be submitted in response to this item is omitted because a definitive proxy statement containing such information will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after June 30 2024 and such information is expressly incorporated herein by reference
Includes outstanding option awards of 33 196 772 which have a weighted average exercise price of 10 86 11 924 855 awards of ordinary shares issuable upon vesting of performance shares rights 2 445 169 awards of ordinary shares issuable upon vesting of share rights and 2 877 497 restricted shares issued under the share retention plan
The additional information required to be submitted in response to this item is omitted because a definitive proxy statement containing such information will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after June 30 2024 and such information is expressly incorporated herein by reference
The information required to be submitted in response to this item is omitted because a definitive proxy statement containing such information will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after June 30 2024 and such information is expressly incorporated herein by reference
The information required to be submitted in response to this item is omitted because a definitive proxy statement containing such information will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after June 30 2024 and such information is expressly incorporated herein by reference
Transaction Agreement dated as of August 6 2018 by and among the Amcor plc Amcor Limited Arctic Corp and Bemis Company Inc Bemis incorporated by reference to Annex A to Amcor plc s Registration Statement on Form S 4 filed on March 12 2019
Indenture dated as of April 28 2016 among Amcor Finance USA Inc Amcor Limited Amcor UK Finance PLC and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 7 to Amcor plc s Registration Statement on Form S 4 filed on March 12 2019
Indenture dated as of May 26 2023 among Amcor Finance USA Inc Amcor plc Amcor UK Finance plc Amcor Pty Ltd and Amcor Flexibles North America Inc and Deutsche Bank Trust Company Americas as trustee including the guarantees incorporated by reference to Exhibit 4 1 on Amcor plc s Current Report on Form 8 K filed on May 26 2023
Form of Indenture dated as of June 15 1995 between Bemis and U S Bank Trust National Association formerly known as First Trust National Association as trustee incorporated by reference to Exhibit 4 10 to Amcor plc s Registration Statement on Form S 4 filed on March 12 2019
Supplemental Indenture dated as of June 13 2019 by and between Bemis and U S Bank National Association as trustee incorporated by reference to Exhibit 10 1 on Amcor plc s Current Report on Form 8 K filed on June 17 2019
Indenture dated as of June 13 2019 by and among Bemis as issuer Amcor plc Amcor Limited AFUI Amcor UK Finance plc and Deutsche Bank Trust Company Americas as trustee incorporated by reference to Exhibit 10 3 on Amcor plc s Current Report on Form 8 K filed on June 17 2019
Indenture dated as of June 13 2019 by and among AFUI as issuer Amcor plc Amcor Limited Bemis Amcor UK Finance plc and Deutsche Bank Trust Company Americas as trustee incorporated by reference to Exhibit 10 4 on Amcor plc s Current Report on Form 8 K filed on June 17 2019
First Supplemental Indenture dated as of May 23 2024 among Amcor Flexibles North America Inc Amcor Group Finance plc and Deutsche Bank Trust Company Americas as trustee incorporated by reference to Exhibit 4 4 on Amcor plc s Current Report on Form 8 K filed on May 23 2024
Second Supplemental Indenture dated as of May 23 2024 among Amcor Flexibles North America Inc Amcor Group Finance plc and Deutsche Bank Trust Company Americas as trustee incorporated by reference to Exhibit 4 5 on Amcor plc s Current Report on Form 8 K filed on May 23 2024
First Supplemental Indenture dated as of May 23 2024 among Amcor Flexibles North America Inc Amcor Group Finance plc and Deutsche Bank Trust Company Americas as trustee incorporated by reference to Exhibit 4 6 on Amcor plc s Current Report on Form 8 K filed on May 23 2024
First Supplemental Indenture dated as of May 23 2024 among Amcor UK Finance plc Amcor Group Finance plc and Deutsche Bank Trust Company Americas as trustee incorporated by reference to Exhibit 4 7 on Amcor plc s Current Report on Form 8 K filed on May 23 2024
First Supplemental Indenture dated as of May 23 2024 among Amcor Finance USA Inc Amcor Group Finance plc and Deutsche Bank Trust Company Americas as trustee incorporated by reference to Exhibit 4 8 on Amcor plc s Current Report on Form 8 K filed on May 23 2024
Indenture dated as of May 23 2024 among Amcor Group Finance plc Amcor plc Amcor Finance USA Inc Amcor UK Finance plc Amcor Pty Ltd and Amcor Flexibles North America Inc and Deutsche Bank Trust Company Americas as trustee including the guarantees incorporated by reference to Exhibit 4 1 to Amcor plc s Current Report on Form 8 K filed on May 23 2024
Indenture dated as of May 29 2024 among Amcor UK Finance plc Amcor plc Amcor Finance USA Inc Amcor Group Finance plc Amcor Pty Ltd and Amcor Flexibles North America Inc and Deutsche Bank Trust Company Americas as trustee including the guarantees incorporated by reference to Exhibit 4 1 on Amcor plc s Current Report on Form 8 K filed on May 29 2024
Indenture dated as of June 13 2019 by and among AFUI as issuer Amcor plc Amcor Limited Bemis Amcor UK Finance plc and Deutsche Bank Trust Company Americas as trustee incorporated by reference to Exhibit 10 4 on Amcor plc s Current Report on Form 8 K filed on June 17 2019
Indenture dated as of June 19 2020 by and among Bemis as issuer Amcor plc Amcor Finance USA Inc Amcor UK Finance plc Amcor Pty Ltd and Deutsche Bank Trust Company Americas the trustee incorporated by reference to Exhibit 4 1 on Amcor plc s Current Report on Form 8 K filed on June 19 2020
Indenture dated as of June 23 2020 by and among Amcor UK Finance plc as issuer Amcor plc Amcor Finance USA Inc Amcor Pty Ltd Bemis Company Inc and Deutsche Bank Trust Company Americas the trustee incorporated by reference to Exhibit 4 1 on Amcor plc s Current Report on Form 8 K filed on June 23 2020
Registration Rights Agreement dated as of June 13 2019 by and among Bemis Amcor plc Amcor Limited AFUI Amcor UK Finance plc and the Dealer Managers relating to the Bemis 3 100 2026 Notes incorporated by reference to Exhibit 10 6 on Amcor plc s Current Report on Form 8 K filed on June 17 2019
Registration Rights Agreement dated as of June 13 2019 by and among AFUI Amcor plc Amcor Limited Bemis Amcor UK Finance plc and the Dealer Managers relating to the Amcor s 3 625 2026 Notes incorporated by reference to Exhibit 10 7 on Amcor plc s Current Report on Form 8 K filed on June 17 2019
Registration Rights Agreement dated as of June 13 2019 by and among AFUI Amcor plc Amcor Limited Bemis Amcor UK Finance plc and the Dealer Managers relating to the Amcor s 4 500 2028 Notes incorporated by reference to Exhibit 10 8 on Amcor plc s Current Report on Form 8 K filed on June 17 2019
First Supplemental Indenture dated as of June 30 2022 among Amcor Finance USA Inc Amcor Flexibles North America Inc and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 7 on Amcor plc s Current Report on Form 8 K filed on July 1 2022
Second Supplemental Indenture dated as of June 30 2022 among Amcor Finance USA Inc Amcor Flexibles North America Inc and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 6 on Amcor plc s Current Report on Form 8 K filed on July 1 2022
Amcor Rigid Plastics Deferred Compensation Plan as amended by that certain First Amendment dated December 11 2014 that certain Second Amendment dated December 10 2018 and that certain Third Amendment dated December 16 2019 incorporated by reference to Exhibit 10 8 to Amcor plc s Form 10 K filed on August 27 2020
Employment Agreement between Amcor Limited and Ronald Delia dated as of January 21 2015 incorporated by reference to Exhibit 10 3 to Amcor plc s Registration Statement on Form S 4 filed on March 12 2019
Employment Agreement between Amcor Limited and Michael Casamento dated as of September 23 2015 incorporated by reference to Exhibit 10 4 to Amcor plc s Registration Statement on Form S 4 filed on March 12 2019
Employment Agreement between Amcor Limited and Peter Konieczny dated as of September 17 2009 incorporated by reference to Exhibit 10 6 to Amcor plc s Registration Statement on Form S 4 filed on March 12 2019
Employment Agreement between Amcor Limited and Eric Roegner dated as of August 28 2018 incorporated by reference to Exhibit 10 7 to Amcor plc s Registration Statement on Form S 4 filed on March 12 2019
Supplement No 1 to the Term Loan Agreement Guaranty dated as of June 11 2019 with Bemis and JPMorgan as administrative agent incorporated by reference to Exhibit 10 27 on Amcor plc s Current Report on Form 8 K filed on June 17 2019
Three Year Syndicated Facility Agreement dated as of April 26 2022 by and among Amcor plc Amcor Pty Ltd Amcor Finance USA Inc Amcor UK Finance plc and Amcor Flexibles North America Inc the lenders party thereto and JPMorgan Chase Bank N A as administrative agent and foreign administrative agent incorporated herein by reference to Exhibit 10 1 to Amcor plc s Current Report on Form 8 K filed on April 28 2022
First Amendment to Three Year Syndicated Facility Agreement dated as of April 23 2024 by and among Amcor plc Amcor Finance USA Inc Amcor UK Finance plc Amcor Pty Ltd Amcor Flexibles North America Inc the lenders party thereto and JPMorgan Chase Bank N A as administrative agent and foreign administrative agent incorporated herein by reference to Exhibit 10 1 of Amcor plc s Form 8 K filed on April 25 2024
Guarantee Agreement dated as of April 26 2022 among Amcor plc Amcor Pty Ltd Amcor Finance USA Inc Amcor UK Finance plc Amcor Flexibles North America Inc the other guarantors from time to time party thereto an JPMorgan Chase Bank N A as administrative agent
Guarantee Agreement dated as of April 26 2022 among Amcor plc Amcor Pty Ltd Amcor Finance USA Inc Amcor UK Finance plc Amcor Flexibles North America Inc the other guarantors from time to time party thereto and JPMorgan Chase Bank N A as administrative agent
Supplement No 1 dated as of May 23 2024 to the Guarantee Agreement dated as of April 26 2022 among the Company Amcor Pty Ltd Amcor Finance USA Inc Amcor UK Finance plc Amcor Flexibles North America Inc the other guarantors from time to time party thereto and JPMorgan Chase Bank N A as administrative agent
Supplement No 1 dated as of May 23 2024 to the Guarantee Agreement dated as of April 26 2022 among Amcor plc Amcor Pty Ltd Amcor Finance USA Inc Amcor UK Finance plc Amcor Flexibles North America Inc the other guarantors from time to time party thereto and JPMorgan Chase Bank N A as administrative agent
Five Year Syndicated Facility Agreement dated as of April 26 2022 by and among Amcor plc Amcor Pty Ltd Amcor Finance USA Inc Amcor UK Finance plc and Amcor Flexibles North America Inc the lenders party thereto and JPMorgan Chase Bank N A as administrative agent and foreign administrative agent incorporated herein by reference to Exhibit 10 2 to Amcor plc s Current Report on Form 8 K filed on April 28 2022
Pursuant to the requirements of Section 13 or 15 d 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
Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated

Company Name	Amcor plc Vist SEC web-site
Category	MISCELLANEOUS MANUFACTURING INDUSTRIES
Trading Symbol	AMCR