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Amcor

AmcorAMCREarnings & Financial Report

NYSE · Materials · Packaging & Containers

Amcor plc develops, produces, and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions. The company operates through two segments, Flexibles and Rigid Packaging. The Flexibles segment provides flexible and film packaging products in the food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries. The Rigid Packaging segment offers rigid containers for a range of beverage and food products, incl...

What changed in Amcor's 10-K — 2023 vs 2024

Top changes in Amcor's 2024 10-K

324 paragraphs added · 303 removed · 243 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

43 edited+20 added−15 removed23 unchanged
Research and Development Refer to section "Sustainability and Innovation" within "Item 1. - Business" of this Annual Report on Form 10-K, and to Note 2, "Significant Accounting Policies," of the notes to consolidated financial statements, for further information about our research and development activities, expenditures, and policies. 10 Human Capital Management Overview Amcor’s aspiration is to be ‘THE leading global packaging company'.
Research and Development Refer to section "Sustainability and Innovation" within "Item 1. - Business" of this Annual Report on Form 10-K, and to Note 2, "Significant Accounting Policies," of the notes to consolidated financial statements, for further information about our research and development activities, expenditures, and policies. 8 Human Capital Management Overview Amcor’s aspiration is to be ‘THE leading global packaging company'.
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. 13
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. 11
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.
These partnerships enable us to learn, experience other perspectives, share our expertise, and expand our innovation. With our 7 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.
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 growth opportunities for Amcor.
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.
These laws and regulations pertain to employee health 9 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.
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.
For more information, see "Item 1A. 7 - Raw Materials — Price fluctuations or shortages in the availability of raw materials, energy and other inputs could adversely affect our business.” 8 Intellectual Property 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.
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.” Intellectual Property 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 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. 12 Information about our Executive Officers The following sets forth the name, age, and business experience for at least the last five years of our executive officers.
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. 10 Information about our Executive Officers The following sets forth the name, age, and business experience for at least the last five years of our executive officers.
Rigid Packaging Segment Our Rigid Packaging Segment manufactures rigid packaging containers and related products in the Americas. As of June 30, 2023, the Rigid Packaging Segment employed approximately 5,000 employees at 52 significant manufacturing and support facilities in 11 countries. In fiscal year 2023, Rigid Packaging accounted for approximately 24% of consolidated net sales.
Rigid Packaging Segment 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.
In addition, these laws and regulations are constantly changing, and we cannot always anticipate these changes. Refer to Note 20, "Contingencies and Legal Proceedings," of the notes to consolidated financial statements for information about legal proceedings.
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.
Increases in the price of raw materials are generally able to be passed on to customers through contractual price mechanisms over time and other means. 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.
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.
(f/k/a Alcoa Inc.) 2006 to 2018 Fred Stephan (58) President, Amcor Flexibles North America 2019 to present President, Bemis North America 2017 to 2019 Senior VP and General Manager of the Insulation Systems - Johns Manville 2011 to 2017 Ian Wilson (65) Executive VP, Strategy and Development 2000 to present Michael Zacka (56) President, Amcor Flexibles Europe, Middle East and Africa 2021 to present President, Amcor Flexibles Asia Pacific and Chief Commercial Officer 2017 to 2021 Tetra Pak Global Leadership Team 1996 to 2017 Available Information 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.
(f/k/a Alcoa Inc.) 2006 to 2018 Fred Stephan (59) President, Amcor Flexibles North America 2019 to present President, Bemis North America 2017 to 2019 Senior VP and General Manager of the Insulation Systems - Johns Manville 2011 to 2017 Ian Wilson (66) Executive VP, Strategy and Development 2000 to present Michael Zacka (57) President, Amcor Flexibles Europe, Middle East and Africa 2021 to present President, Amcor Flexibles Asia Pacific and Chief Commercial Officer 2017 to 2021 Tetra Pak Global Leadership Team 1996 to 2017 Available Information 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.
Marketing, Distribution, and Competition Our sales are made through a variety of distribution channels, but primarily through our direct sales force. Sales offices and plants are located throughout Europe, North America, Latin America, Africa, and Asia-Pacific regions to provide prompt and economical service to thousands of customers.
Marketing, Distribution, and Competition 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.
We are highly regarded for our innovation capabilities and have more than 1,000 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 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.
Refer to Note 21, "Segments," of the notes to consolidated financial statements for financial information about reportable segments. Flexibles Segment Our Flexibles Segment develops and supplies flexible packaging globally.
Refer to Note 20, "Segments," of the notes to consolidated financial statements for financial information about reportable segments. Flexibles Segment Our Flexibles Segment develops and supplies flexible packaging globally.
Over time, 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. 6 Segment Information Accounting Standards Codification ("ASC") 280, "Segment Reporting," establishes the standards for reporting information about segments in financial statements.
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. Segment Information Accounting Standards Codification ("ASC") 280, "Segment Reporting," establishes the standards for reporting information about segments in financial statements.
Item 1. - Business The Company 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 USA.
Item 1. - Business The Company 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.
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 working capital management and the timing of certain cash payments made in the first half of the year, including incentive compensation.
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.
Today, we are a global leader in developing and producing responsible packaging for food, beverage, pharmaceutical, medical, home and personal-care, and other products.
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.
With approximately 35,000 employees at 166 significant manufacturing and support facilities in 37 countries as of June 30, 2023, the Flexibles Segment is one of the world's largest suppliers of plastic, aluminum, and fiber based flexible packaging. In fiscal year 2023, Flexibles accounted for approximately 76% of consolidated net sales.
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.
We solve packaging challenges, developing differentiated products, services, and processes to protect our customers' products and fulfil the needs of the consumers who rely on them. Drawing on unrivaled heritage in design, science, and manufacturing, our more than 1,000 R&D professionals and engineers are constantly innovating across new materials, formats, functions, and technologies.
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 are delivering against these commitments and continue to lead 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 infrastructure development.
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.
As of June 30, 2023, we had approximately 41,000 employees, including part-time and temporary workers, worldwide, with approximately 30% located in North America, 30% located in Europe, 20% located in Latin America, and 20% located in the Asia Pacific region. Collective bargaining agreements cover approximately 45% of our workforce.
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.
We believe that our environmental footprint goes well beyond the products we create. We also strive to continuously reduce the environmental impacts of our operations. For more than a decade, our EnviroAction program has helped us significantly improve how we manage energy, water, and waste in every one of our manufacturing locations.
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 2018, we became the world’s first packaging company to pledge that all our packaging would be designed to be recycled, compostable, or reusable by 2025 and also committed to increasing the amount of recycled content we use.
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.
Expertise across Packaging Materials We believe that we are uniquely positioned to offer a variety of packaging solutions with a wide, differentiated portfolio of products. Our packaging expertise covers all main packaging materials including paper, metal, plastic, recycled, and bio-based materials and the sustainable use of recyclable plastics.
Expertise across Packaging Materials 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.
Focused portfolio Our portfolio of businesses share certain important characteristics: • A focus on primary packaging for fast-moving consumer goods, • good industry structure, • attractive relative growth, and • multiple paths for us to win through our leadership position, scale, and ability to differentiate our product offering through innovation. 5 These criteria have led us to the focused portfolio of strong businesses we have today across: flexible and rigid packaging, specialty cartons, and closures.
Focused portfolio Our portfolio of businesses share certain important characteristics: • A focus on primary packaging for fast-moving consumer goods and industrial applications, • good industry structure, • attractive relative growth, and 5 • multiple paths for us to win through our leadership position, scale, and ability to differentiate our product offering through innovation.
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. Learning & Development We have implemented training and education programs to help our employees progress across functions and experience levels.
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.
Name (Age) Positions Held Period the Position was Held Ronald Delia (52) Managing Director and Chief Executive Officer 2015 to present Executive VP, Finance and Chief Financial Officer 2011 to 2015 VP and General Manager, Amcor Rigid Packaging Latin America 2008 to 2011 Michael Casamento (52) Executive VP, Finance and Chief Financial Officer 2015 to present VP, Corporate Finance 2014 to 2015 Susana Suarez Gonzalez (54) Executive VP and Chief Human Resources Officer 2022 to present Executive VP, Chief Human Resources and Diversity & Inclusion Officer, International Flavors and Fragrances 2016 to 2022 Deborah Rasin (56) Executive VP and General Counsel 2022 to present Senior VP, Chief Legal Officer and Secretary, Hill-Rom Holdings 2016 to 2022 Eric Roegner (53) President, Amcor Rigid Packaging 2018 to present Executive Leadership Roles, Arconic, Inc.
Name (Age) Positions Held Period the Position was Held Peter Konieczny (59) Interim Chief Executive Officer 2024 to present Chief Commercial Officer 2021 to 2024 President, Amcor Flexibles Europe, Middle East and Africa 2015 to 2021 Michael Casamento (53) Executive VP, Finance and Chief Financial Officer 2015 to present VP, Corporate Finance 2014 to 2015 Susana Suarez Gonzalez (55) Executive VP and Chief Human Resources Officer 2022 to present Executive VP, Chief Human Resources and Diversity & Inclusion Officer, International Flavors and Fragrances 2016 to 2022 Deborah Rasin (57) Executive VP and General Counsel 2022 to present Senior VP, Chief Legal Officer and Secretary, Hill-Rom Holdings 2016 to 2022 Eric Roegner (54) President, Amcor Rigid Packaging 2018 to present Executive Leadership Roles, Arconic, Inc.
Differentiated Solutions Our product portfolio is diverse and dynamic due to our constant innovation and close partnerships with our customers. 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.
Differentiated, Responsible Packaging Solutions 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.
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.
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.
Becoming THE leading global packaging company requires us to create a culture in which everyone feels encouraged to speak and compelled to listen. Amcor values the diverse experience, strengths, styles, nationalities, and cultures of all our people.
Diversity, Equity & Inclusion ("DE&I") 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. 9 Amcor values the diverse experience, strengths, styles, nationalities, and cultures of all our people.
Areas of competition include service, sustainability, innovation, quality, and price. 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., Sonoco Products Company, and WestRock Company, and a variety of privately held companies.
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. 6 Backlog Working capital fluctuates throughout the year in relation to business volume and other marketplace conditions.
Our innovation excellence and global packaging expertise enables us to solve packaging challenges around the world every day, producing packaging that is more functional, appealing, and cost effective for our customers and their consumers and importantly, more sustainable for the environment. Sustainability Sustainability is central to our business and one of our most exciting opportunities for growth.
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.
As of June 30, 2023, approximately 3% of our employees were working under expired contracts and approximately 17% were covered under collective bargaining agreements that expire within one year. Health and Safety Safety is a core value at Amcor. We take care of ourselves and each other, so everyone returns home safely every day.
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. Health and Safety Safety is a core value at Amcor, as well as an integral component in our global Health and Safety programs.
During fiscal year 2023, we reduced the number of injuri es by 31% and 69% o f our sites were injury free. Developing Talent 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.
Talent Management and Development 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.
For a more detailed description of the various laws and regulations that affect our business, see "Item 1A. - Risk Factors." Seasonal Factors Our business and operations of each of the reportable segments is not seasonal to any material extent.
For a more detailed description of the various laws and regulations that affect our business, see "Item 1A. - Risk Factors." Seasonal 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.
Differentiated capabilities " 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.
These criteria have led us to the focused portfolio of strong businesses we have today across: flexible and rigid packaging, specialty cartons, and closures. Differentiated capabilities "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.
Shareholder value creation 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 year-to-year volatility should be relatively low, measured on a constant currency basis.
The nature of our consumer and healthcare end markets means that, over time, volatility should be relatively low, measured on a constant currency basis.
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 diversity, equity, and inclusion efforts.
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.
We have a range of executive development, leadership training, education, and awareness programs to help employees progress across all functions and experience levels. We deploy systems and processes to ensure our people have clear goals and are empowered to achieve them.
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.
In January 2022, we further increased our efforts by committing to set science-based targets to reduce greenhouse gas emissions and achieve net zero emissions by 2050. These new commitments have been recognized by the Science Based Targets initiative (SBTi) and build on years of progress under our EnviroAction program.
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.
Across every level of our organization, we role model and recognize safe and responsible behavior as we strive to achieve an injury-free Amcor. All our facilities abide by global Environment, Health, and Safety ("EHS") standards for safety and environmental management. Our Board of Directors receives monthly reports on safety performance and compliance with our global EHS standards.
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.
To fulfill our aspiration, we are determined to win for our customers, employees, shareholders, and the environment.
For more information, see "Sustainability and Innovation” in this section. Business Strategy Strategy 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.
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Working daily to embed sustainability deeper into everything we do, Amcor has been a leader in the industry in promoting sustainability.
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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.
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Where solutions do not currently exist, we work to innovate new ones. We invest approximately $100 million every year in our industry-leading research and development capabilities, bringing together the best in packaging design, science, manufacturing, and people.
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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. Shareholder value creation Through our portfolio of focused businesses and differentiated capabilities, we generate strong cash flow and redeploy cash to consistently create superior value for shareholders.
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Our expertise and track record translate across many innovative solutions that customers can explore with ease and convenience to meet their growing packaging needs, while improving environmental impact. Business Strategy Strategy Our business strategy consists of three components: a focused portfolio, differentiated capabilities, and our aspiration to be THE leading global packaging company.
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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.
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We consider ourselves to be a significant participant in the markets in which we operate; however, due to the diversity of our business, our precise competitive position in these markets is not reasonably determinable. Backlog Working capital fluctuates throughout the year in relation to business volume and other marketplace conditions.
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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.
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In June 2023, we took the next step forward in our science-based targets journey by submitting our proposed targets to the SBTi for review .
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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.
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Our approach to talent is guided by the understanding that by creating a truly differentiated, industry-leading pool of talent which can be deployed consistently across our business, we will better enable Amcor’s success. Amcor is dedicated to attracting, developing, engaging, and retaining the best talent and strengthening our succession pipeline for the future.
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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.
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Examples of these programs include a Leading to Outperform program ("LTO") to further advance high-potential talent, a Senior Leader Development program ("SLDP") focusing on developing strategic management skills and inclusive leadership. In fiscal year 2023, we introduced a new aspect to our Executive Development program ("EDP").
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During fiscal year 2024, we reduced the number of injuries by 12% and 73% of our sites were injury-free.
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This annual program targets our most senior leaders and provides them an immersive experience in Strategy Development and leading Talent. For fiscal year 2023, we selected a handful of the organization's most high potential leaders and kicked off our EDP 2.0 experience where we seek to expand the participants' capabilities.
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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.
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In each of these programs, we partner with leading academic and executive education institutions from around the world. Recognizing the importance of the learning journey, our employees can also access our "Masterclass" program which delivers an annual series of executive education briefings on topics of functional excellence and business initiatives.
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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.
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Our focus 11 this year has been on Accelerating Growth with showcase presentations from Marketing, R&D, Product Branding, and Innovation Leaders. Diversity, Equity & Inclusion At Amcor, we’re committed to providing an inclusive environment that empowers us to achieve our full potential.
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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.
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Our diversity, equity and inclusion strategy is focused on three main areas: (1) building awareness through training and education to help our leaders be more inclusive, (2) diversifying our global talent pool by removing bias from talent attraction and development, and (3) by sharing best practices and learning across the organization.
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Our diversity, equity, and inclusion strategy is based on four key pillars: Talent - Supporting the growth and diversification of our talent through mentoring and our hiring practices. Under the Talent Pillar, the Amcor Leadership Mentoring Program is ongoing for the second year.
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Amcor believes that with different perspectives come different solutions that enable us to win for our stakeholders. We are one global team in which everyone has a voice and can make a difference.
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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. Community - Promoting our employee resource groups and local grassroots plant initiatives.
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With this in mind, we work to create a team environment that develops inclusive leaders, where we learn from our people, and where listening, trust, and respect are key behaviors that form the foundation of our interactions and foster mutual understanding. We focus on strengthening 'talent through diversity' and progress is reported to our Board annually.
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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.
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Engagement At Amcor, we believe strongly in Engagement being a key driver of performance and so we track the engagement of our employees in every region and across multiple dimensions, including against other global manufacturing companies through engagement surveys.
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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. Awareness and Training - Providing more coordination and information around training opportunities.
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Our engagement surveys provide employees with an opportunity to share anonymous and confidential feedback on a variety of topics and provide management with insight on areas we can focus on to improve our employees' experience and effect positive change. Ethics Good corporate governance and transparency are fundamental to achieving our aspirations.
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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.
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Participants also receive supporting materials to better enable post-training reinforcement of learnings, including tips and reflection checks. Data and Reporting - Communicating our work and progress accurately and effectively to internal and external stakeholders.
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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.
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The Board receives an annual report on our progress towards its DE&I efforts. As of June 30, 2024, 44% of our Board and 27% of our Global Management Team is composed of women. Engagement At Amcor, we believe strongly in engagement being a key driver of performance and we prioritize engagement through various initiatives.
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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.
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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. Ethics Good corporate governance and transparency are fundamental to achieving our aspirations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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.
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 17 destruction, or catastrophic events.
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.
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. 19 We have been subject to the requirements of Section 404 of the Sarbanes-Oxley Act ("SOX") since fiscal year 2020.
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.
We may not prevail in any such litigation, and if we are unsuccessful, we may not be able to obtain any necessary 20 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.
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 adverse effect on our operations, loss of investor confidence, and a negative impact on the trading price of our common stock.
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.
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 our results of operations. Additionally, climate change may result in higher insurance premiums or the inability to insure certain risks.
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 16 our results of operations. Additionally, climate change may result in higher insurance premiums or the inability to insure certain risks.
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 developing legal, regulatory, or political systems, that are dynamic and subject to change.
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.
Risks Relating to Being a Jersey, Channel Islands Company Listing Ordinary Shares 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 other U.S. corporations.
Risks Relating to Being a Jersey, Channel Islands Company Listing Ordinary Shares 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.
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 impact of inflation. International Operations — Our international operations subject us to various risks that could adversely affect our business operations and financial results.
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. International Operations — Our international operations subject us to various risks that could adversely affect our business operations and financial results.
Health crises have 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.
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.
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 18 currently provisioned amount.
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.
We have identified the valuation of goodwill and other intangible assets as a critical accounting estimate. Refer to 21 "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.
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.
Our ability to pay interest and repay the principal of our indebtedness is dependent on our ability to generate sufficient cash flows, which is 20 dependent, in part, on prevailing economic and competitive conditions and certain legislative, regulatory, and other factors beyond our control.
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.
The profitability of our operations may be adversely impacted by, among other things: • changes in applicable fiscal or regulatory regimes; • changes in, or difficulties in interpreting and complying with, local laws, sanctions, and regulations, including tax, labor, foreign investment, and foreign exchange control laws; • nullification, modification, or renegotiation of, or difficulties or delays in enforcing contracts with clients or joint venture partners that are subject to local law; • 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; • trade restrictions, and quotas; • wars, acts of terrorism, social and ethnic unrest, and geopolitical events; • pandemics and other health crises impacting different regions of the world unequally; • difficulties associated with expatriating or repatriating cash generated or held abroad; and • changes in exchange rates and inflation, including hyperinflation.
The profitability of our operations may be adversely impacted by, among other things: • changes in applicable fiscal or regulatory regimes; • changes in, or difficulties in interpreting and complying with, local laws, sanctions, and regulations, including tax, labor, foreign investment, and foreign exchange control laws; • nullification, modification, or renegotiation of, or difficulties or delays in enforcing contracts with clients or joint venture partners that are subject to local law; • 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; • trade restrictions, sanctions, and quotas; • wars, acts of terrorism, social and ethnic unrest, and geopolitical events; • pandemics and other health crises impacting different regions of the world unequally; • difficulties associated with nationalization or expropriation of assets, or expatriating or repatriating cash generated or held abroad; and • changes in exchange rates and inflation, including hyperinflation.
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 program.
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.
Despite our efforts to protect such information and to comply with privacy and data protection laws and 19 regulations, our facilities and systems and those of our customers 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.
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.
Indebtedness and Credit Rating — 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.
Financial Risks 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.
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 facility, or an increase in the credit spread incurred when issuing debt in the capital markets.
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 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. 14 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.
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. 12 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.
Federal, state, provincial, and local laws and requirements pertaining to workplace health and safety conditions are significant factors in our business to assure 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.
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.
Expanding Our Current Business — We may be unable to expand our current business effectively through either organic growth, including product innovation, investments, or acquisitions.
Expanding Our Current Business — We may be unable to expand our current business effectively through organic growth, including product innovation, investments, or acquisitions.
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, adhesive, aluminum, and chemicals.
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.
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 flow.
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.
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, and climate change are also significant factors in our business, and changes to such requirements generally result in an increase to our costs of operations.
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.
Any such breach could result in sanctions (including fines and penalties) and could have a material adverse effect on our financial condition and reputation. 16 Raw Materials — Price fluctuations or shortages in the availability of raw materials, energy and other inputs could adversely affect our business.
Any such breach could result in sanctions (including fines and penalties) and could have a material adverse effect on our financial condition and reputation. 14 Raw Materials — Price fluctuations or shortages in the availability of raw materials, energy, and other inputs could adversely affect our business.
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. 24 Item 1B. - Unresolved Staff Comments None.
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. 23 Item 1B. - Unresolved Staff Comments None.
Additionally, changes in international trade policy 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.
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.
In addition, continued increases in rising 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 14, "Debt," of the notes to consolidated financial statements for information about our variable rate borrowings.
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.
Although we have been largely successful in retaining 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.
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.
Climate Change - Our business is subject to risks related to climate change which could negatively impact our business operations and financial results. Climate change may have a progressively adverse impact on our business and those of our customers, suppliers, and partners.
Physical Impacts of Climate Change - Our business is subject to physical risks related to climate change which could negatively impact our business operations and financial results. Climate change may have a progressively adverse impact on our business and those of our customers, suppliers, and partners.
Additionally, over the past decade, 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.
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.
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. Competition — We face significant competition in the industries and regions in which we operate, which could adversely affect our business.
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. Competition — We face significant competition in the industries and regions in which we operate, which could adversely affect our business.
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 expenditure.
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.
If we were held liable for a claim of infringement, we could be required to pay damages, obtain licenses, or cease making or selling certain products.
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.
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.
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.
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 is 17 likely to be more expensive.
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 15 replacement to fulfill that party’s obligations or, alternatively, fulfill those obligations ourselves, which may be more expensive.
Longer-term climate change patterns could significantly alter customer demand which is especially true for customers who rely on supply chains routinely impacted by weather. For example, agricultural supply chains would be impacted by increased levels of drought or flooding and customers in coastal regions would be impacted by frequent flooding.
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.
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.
"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.
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 war, natural disasters, or health crises, 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.
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.
While we have largely been able to successfully manage through these supply disruptions and related price volatility, there is no assurance that we will be able to successfully navigate ongoing and future disruptions. Increases in costs and disruptions in supply can have a material adverse effect on our business and financial results.
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.
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, 2023, we had $6.9 billion of goodwill and other intangible assets.
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.
Continued escalation of geopolitical tensions related to the conflict could result in the loss of property, supply chain disruptions, significant inflationary pressure on raw material prices and cost and supply of 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.
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.
Future unrest in other regions where we operate, and political developments could have a material impact on our financial condition. 15 When challenging economic conditions exist, our customers may delay, decrease, or cancel purchases from us, and may also delay payment or fail to pay us altogether.
Current and future unrest in regions where we operate, and political developments, could have a material impact on our financial condition. 13 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.
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 Trade and other applicable national and supranational organizations (collectively, "Sanctions").
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.
Customers with operations subject to physical risks, including those caused by 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.
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.
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 cost, increased energy and freight costs, and new taxes on packaging products or result in reduced demand.
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.
We have also invested in companies which we do not control through our corporate venturing function. Our investment partners or other parties that hold the remaining ownership interests in companies we do not control may not have interests that are aligned with our goals.
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.
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.
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.
Litigation — Litigation, including product liability claims, 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 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.
Additionally, 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.
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.
Furthermore, if we make changes to our business strategy or if external conditions, such as the interest rates due to higher inflation, 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.
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.
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 war such as the Russia-Ukraine conflict), pandemics and other health crises, an increase in the demand for products manufactured from recycled materials, weather conditions and natural disasters, greenhouse gas emissions and other sustainability related regulations, and other factors impacting supply and demand pressures.
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.
Our business and financial results may be negatively impacted by outbreaks of contagious diseases, including COVID-19.
Our business and financial results may be negatively impacted by outbreaks of contagious diseases.
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, c ould reduce our sales revenue and net profit. In addition, acts of war and terrorism can impact local demand for our products.
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.
We have operations throughout the world, including facilities in emerging markets. In fiscal year 2023, approximately 74% of our sales revenue came from developed markets and 26% came from emerging markets. We expect to continue to expand our operations in the future, including in the emerging markets.
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.
We are also impacted by regional labor shortages, inflationary pressures on wages, a competitive labor market, and changing demographics.
We are also impacted by regional labor shortages, inflationary pressures on wages, a competitive labor market, changing demographics, and changing work-life balance expectations.
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 operation. We may also be unable to renegotiate collective bargaining agreements at acceptable terms.
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.
We face a number of commercial risks, including (i) operational disruption, such as mechanical or technological failures or forced closures due to war (such as the Russia-Ukraine conflict) 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).
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).
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. Exchange Rates — We are exposed to foreign exchange rate risk.
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.
Also refer to "Item 7A. - Quantitative and Qualitative Disclosures About Market Risk," including interest rate risk, in this Annual Report on Form 10-K.
Also refer to "Item 7A. - Quantitative and Qualitative Disclosures About Market Risk," including interest rate risk, in this Annual Report on Form 10-K. Exchange Rates — We are exposed to foreign exchange rate risk.
Environmental, Social and Governance ("ESG") Practices — Increasing scrutiny and changing expectations from investors, customers, and governments with respect to our ESG practices and commitments may impose additional costs on us or expose us to additional risks. There is an increased scrutiny from shareholders, customers, and governments on corporate ESG practices.
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.
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.
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.
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.
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.
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. We could also incur additional compliance costs for monitoring and reporting emissions and for maintaining permits.
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.
Given our global footprint, we are exposed to more uncertainty regarding the regulatory environment. The timing of the final resolutions to lawsuits, regulatory 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.
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.
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.
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.
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.
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.
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).
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).
We also operate in certain countries that are occasionally subject to Sanctions, which require us to maintain internal processes and control procedures.
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.
The costs associated with protecting our intellectual property rights could also adversely impact our business. 22 Similarly, while we have not received any significant claims from third parties suggesting that we may be infringing on their intellectual property rights, there can be no assurance that we will not receive such claims in the future.
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.
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.
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.
Our commitment to sustainability and ESG practices remains at the core of our business, and we have established related goals and targets. For example, we have announced our commitment to science-based targets initiative (“SBTi”) and to achieve net zero GHG emissions by 2050.
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").
Additionally, many of our products come into contact with healthcare products and food and beverages they package and 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.
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.
Attracting and Retaining Skilled Workforce — If we are unable to attract and retain our global executive management team and our skilled workforce, we may be adversely affected. Our continued success depends on our ability to identify, attract, develop, and retain skilled and diverse personnel in our global executive management team and our operations.
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.
However, any failure to successfully transition key new hires and retain our skilled personnel in our global executive management team and in any of our operations could impact our ability to execute on our strategic plans, make it difficult to meet our performance objectives, and be disruptive to our business.
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.
Approximate ly 45% 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.
Labor Disputes — Our business could be adversely affected by labor disputes and an inability to renew collective bargaining agreements at acceptable terms. 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.
As of June 30, 2023, we ha d $6.7 billion of debt outstanding and a $1.3 billion of a $3.8 billion revolving credit facility undrawn and we are not restricted in incurring, and may incur, additional indebtedness in the future.
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.
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.
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.
Other factors not presently known to us or that we presently believe are not material could also affect our business operations and financial results. Strategic Risks Changes in Consumer Demand — We are exposed to changes in consumer demand patterns and customer requirements in numerous industries.
Other factors not presently known to us or that we presently believe are not material could also affect our business operations and financial results. Strategic Risks Changes in Consumer Demand — Demand for our products could be affected by a variety of factors, including changes in economic environment and regulations.
In particular, our translational exposure may be impacted by movements in the exchange rate between the Euro, the United Kingdom Pound Sterling, the Swiss Franc, the Australian Dollar, the Chinese Yuan, and the Brazilian Real against the U.S. dollar.
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.
Furthermore, sustained or continued increases in interest rates could increase the costs of obtaining new debt and refinancing existing fixed rate as well as variable rate indebtedness. 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.
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.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. - Properties 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 utilization depending on the type of operation and market conditions.
Item 2. - Properties 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 24 utilization depending on the type of operation and market conditions.
Initial building lease terms typically provide for minimum terms in a range of two to 36 years and have one or more renewal options. Rigid Packaging Segment This segment has 52 significant manufacturing and support facilities located in 11 countr ies, 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 36 years and have one or more renewal options. Rigid Packaging Segment 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.
Item 3. - Legal Proceedings Refer to Note 20, "Contingencies and Legal Proceedings," of the notes to consolidated financial statements for information about legal proceedings. Item 4. - Mine Safety Disclosures Not applicable. 25 PART II
Item 3. - Legal Proceedings Refer to Note 19, "Contingencies and Legal Proceedings," of the notes to consolidated financial statements for information about legal proceedings. Item 4. - Mine Safety Disclosures Not applicable. 25 PART II
The breakdown of our significant manufacturing and support facilities at June 30, 2023, were as follows: Flexibles Segment This segment has 166 significant manufact uring and support facilities located in 37 countries, of which 114 are owned directly by us and 52 are leased from outside parties.
The breakdown of our significant manufacturing and support facilities at June 30, 2024, was as follows: Flexibles Segment 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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 11, 2019.
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 11, 2019, and that all dividends were reinvested.
The graph assumes $100 was invested on June 30, 2019, and that all dividends were reinvested.
June 11, 2019 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 Amcor plc $ 100.00 $ 102.77 $ 95.68 $ 111.82 $ 126.13 $ 105.72 S&P 500 $ 100.00 $ 107.05 $ 115.08 $ 162.03 $ 144.83 $ 173.21 S&P 500 Materials $ 100.00 $ 111.71 $ 110.47 $ 164.06 $ 149.75 $ 172.39 S&P/ASX 200 $ 100.00 $ 102.08 $ 93.59 $ 131.41 $ 114.86 $ 129.24 Peer Group $ 100.00 $ 100.12 $ 104.54 $ 124.79 $ 126.34 $ 133.70 27 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 Co, Huhtamaki 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. 28
June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024 Amcor plc $ 100.00 $ 93.10 $ 108.81 $ 122.73 $ 102.87 $ 106.27 S&P 500 $ 100.00 $ 107.51 $ 151.36 $ 135.29 $ 161.80 $ 201.54 S&P 500 Materials $ 100.00 $ 98.89 $ 146.87 $ 134.05 $ 154.32 $ 167.73 S&P/ASX 200 $ 100.00 $ 91.97 $ 129.13 $ 112.88 $ 127.00 $ 144.25 Peer Group $ 100.00 $ 104.41 $ 124.63 $ 126.19 $ 133.53 $ 130.59 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. 27 Item 6. [Reserved]
Further, on February 7, 2023, our Board of Directors approved an additional buyback of up to $100 million of ordinary shares and CDIs during the next 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.
Share Repurchases Share repurchase activity during the three months ended June 30, 2023, was as follows (in millions, except number of shares, which are reflected in thousands, and per share amounts, which are expressed in U.S. dollars): Period Total Number of Shares Purchased (1) Average Price Paid Per Share (1)(2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (3) April 1 - 30, 2023 — $ — — $ 300 May 1 - 31, 2023 13,356 10.21 13,356 164 June 1 - 30, 2023 9,641 9.89 9,594 69 Total 22,997 $ 10.08 22,950 (1) Includes shares purchased on the open market to satisfy the vesting and exercises of share-based compensation awards.
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: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (1) April 1 - 30, 2024 — $ — — $ 39 May 1 - 31, 2024 — — — 39 June 1 - 30, 2024 — — — 39 Total — $ — — (1) 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.
As of June 30, 2023, there were 104,752 registered holders of record of our ordinary shares and CDIs.
As of June 30, 2024, there were 96,121 registered holders of record of our ordinary shares and CDIs. Share Repurchases We did not repurchase shares during the three months ended June 30, 2024.
Removed
(2) Average price paid per share excludes costs associated with the repurchases. (3) On August 17, 2022, our Board of Directors approved a buyback of $400 million of ordinary shares and/or CHESS Depositary Instruments ("CDIs") during the following twelve months.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Financial Statements and Supplementary Data 48 Report of Independent Registered Public Accounting Firm (PCAOB ID 1358 ) 48 Consolidated Statements of Income 50 Consolidated Statements of Comprehensive Income 51 Consolidated Balance Sheets 52 Consolidated Statements of Cash Flows 53 Consolidated Statements of Equity 54 Notes to Consolidated Financial Statements 55
Financial Statements and Supplementary Data 47 Report of Independent Registered Public Accounting Firm (PCAOB ID 1358 ) 47 Consolidated Statements of Income 49 Consolidated Statements of Comprehensive Income 50 Consolidated Balance Sheets 51 Consolidated Statements of Cash Flows 52 Consolidated Statements of Equity 53 Notes to Consolidated Financial Statements 54
Item 6. Removed and Reserved Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 46 Item 8.
Item 6. [ Reserved] 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 45 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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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, and Amcor Finance (USA), Inc.
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.
The following guidelines are used to manage our liquidity risk: • maintaining minimum undrawn committed liquidity of at least $200 million that can be drawn at short notice; • regularly performing a comprehensive analysis of all cash inflows and outflows in relation to operational, investing, and financing activities; • generally using tradable instruments only in highly liquid markets; • maintaining a senior credit investment grade rating with a reputable independent rating agency; • managing credit risk related to financial assets; • monitoring the duration of long-term debt; • only investing surplus cash with major financial institutions or well diversified money market funds; and • to the extent practicable, spreading the maturity dates of long-term debt facilities.
The following guidelines are used to manage our liquidity risk: • maintaining minimum undrawn committed liquidity of at least $200 million that can be drawn at short notice; • regularly performing a comprehensive analysis of all cash inflows and outflows in relation to operational, investing, and financing activities; • generally using tradable instruments only in highly liquid markets; • maintaining a credit investment grade rating with a reputable independent rating agency; • managing credit risk related to financial assets; • monitoring the duration of long-term debt; • only investing surplus cash with major financial institutions or well diversified money market funds; and • to the extent practicable, spreading the maturity dates of long-term debt facilities.
Amcor Flexibles North America, Inc. is incorporated in Missouri in the United States, Amcor UK Finance plc is 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.
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.
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 39 extend the debt beyond 12 months.
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.
(6) 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.
(5) 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.
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., and Amcor UK 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.
(as subsidiary issuers of the notes and guarantors of each other’s notes), and Amcor Pty Ltd (as the remaining subsidiary guarantor). 37 Basis of Preparation 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.
(as subsidiary issuers of the notes and guarantors of each other’s notes), and Amcor Pty Ltd (as the remaining subsidiary guarantor). 36 Basis of Preparation 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.
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, 2023, we were in compliance with all applicable covenants under our bank debt facilities.
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.
Our long-term access to liquidity depends on both our results of operations and on the availability of funding in financial markets. 42 Critical Accounting Estimates and Judgments 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.
Our long-term access to liquidity depends on both our results of operations and on the availability of funding in financial markets. 41 Critical Accounting Estimates and Judgments 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.
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 contracted benefit changes.
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.
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 deferred acquisition payments and economic hedging instruments on commercial paper, and impacts related to the Russia-Ukraine conflict.
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.
The note issued by Amcor UK Finance plc is guaranteed by its parent entity, Amcor plc, and the subsidiary guarantors Amcor Pty Ltd, Amcor Flexibles North America, Inc., and Amcor Finance (USA), Inc.
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.
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 2023 was $11 million, compared to net periodic pension cost of $12 million in fiscal year 2022 and $15 million in fiscal year 2021.
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.
Refer to Note 7, "Restructuring," for more information. 35 (2) Amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from past acquisitions. (3) Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina where the functional currency was the Argentine Peso.
Refer to Note 6, "Restructuring," for more information. 34 (2) Amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from past acquisitions. (3) Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina where the functional currency was the Argentine Peso.
The decrease in the diluted weighted-average number of shares outstanding was due to the repurchase of shares under announced share buyback programs.
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.
The following is a discussion and analysis of changes in the results of operations for fiscal year 2023 compared to fiscal year 2022.
The following is a discussion and analysis of changes in the results of operations for fiscal year 2024 compared to fiscal year 2023.
These amounts reflect material cash requirements for which we are contractually committed. • Debt obligations: Refer to Note 14, “Debt” of the notes to consolidated financial statements for additional information about our debt obligations and the related timing of these expected payments. • Interest payments: Refer to Note 14, “Debt” of the notes to consolidated financial statements for additional information about our interest payments and the related timing of the expected payments. • Operating and finance leases: Refer to Note 15, “Leases” of the notes to consolidated financial statements for information about our lease obligations and the related timing of the expected payments. • Employee benefit plan obligations: Refer to Note 13, “Pension 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. • Capital expenditures: As of June 30, 2023, we have $249 million in committed capital expenditures for the fiscal year 2024. • 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 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. • Operating and finance leases: Refer to Note 14, “Leases” of the notes to consolidated financial statements for information about our lease obligations and the related timing of the 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. • Capital expenditures: As of June 30, 2024, we have $266 million in committed capital expenditures for fiscal year 2025. • 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.
(5) Net (gain)/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 11, "Fair Value Measurements," for more information.
(4) 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.
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., 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 estimated future cash outlays are approximatel y $1.1 billion, $450 million, $250 million, $100 million, and $100 million in fiscal years 2024, 2025, 2026, 2027, and 2028, respectively. Off-Balance Sheet Arrangements Other than as described under "Material Cash Requirements" as of June 30, 2023, we had no significant off-balance sheet contractual obligations or other commitments.
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. Off-Balance Sheet Arrangements Other than as described under "Material Cash Requirements", we had no significant off-balance sheet contractual obligations or other commitments as of June 30, 2024.
Pension Assumptions Sensitivity Analysis The following chart depicts the sensitivity of estimated fiscal year 2024 pension expense to incremental changes in the weighted average discount rate and expected long-term rate of return on assets. 43 Discount Rate Total Increase/(Decrease) to Pension Expense from Current Assumption Rate of Return on Plan Assets Total Increase/ (Decrease) to Pension Expense from Current Assumption (in $ millions) (in $ millions) +25 basis points 1 +25 basis points (3) 4.26 percent (current assumption) — 5.47 percent (current assumption) — -25 basis points (1) -25 basis points 3 Goodwill and Other Intangible Assets Goodwill represents the excess of the aggregate purchase price over the fair value of net assets acquired, including intangible assets.
Pension Assumptions Sensitivity Analysis The following chart depicts the sensitivity of estimated fiscal year 2025 pension expense to incremental changes in the weighted average discount rate and expected long-term rate of return on assets. 42 Discount Rate Total Increase/(Decrease) to Net Periodic Pension Cost from Current Assumption Rate of Return on Plan Assets Total Increase/ (Decrease) to Net Periodic Pension Cost from Current Assumption (in $ millions) (in $ millions) +25 basis points 1 +25 basis points (3) 4.22 percent (current assumption) — 5.16 percent (current assumption) — -25 basis points (1) -25 basis points 3 Goodwill and Other Intangible Assets Goodwill represents the excess of the aggregate purchase price over the fair value of net assets acquired, including intangible assets.
As of June 30, 2023, the revolving senior bank debt facilities had an aggregate limit of $3.8 billion, of which $2.5 billion had been drawn (inclusive of amounts drawn under commercial paper programs reducing the overall balance of available senior facilities).
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).
A discussion and analysis regarding our results of operations for fiscal year 2022, compared to fiscal year 2021 that are not included in this Annual Report on Form 10-K can be fo und in Part II, Item 7 of ou r Annual Report on Form 10-K for the fiscal year ended June 30, 2022, filed with the SEC on August 18, 2022 and incorporated by reference.
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.
As of June 30, 2023, 2022, and 2021, we held treasury shares at cost of $12 million, $18 million, and $29 million, representing 1 million, 2 million, and 3 million shares, respectively. 40 Material Cash Requirements Our material cash requirements for future periods from known contractual obligations are included below.
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. 39 Material Cash Requirements Our material cash requirements for future periods from known contractual obligations are included below.
Share Repurchases On August 17, 2022, our Board of Directors approved a $400 million buyback of ordinary shares and/or CHESS Depositary Instruments ("CDIs") and this program has been completed in fiscal year 2023.
Share Repurchases On August 17, 2022, our Board of Directors approved a $400 million buyback of ordinary shares and/or CHESS Depositary Instruments ("CDIs") and this program has been completed in fiscal year 2023. On February 7, 2023, our Board of Directors approved a $100 million buyback of ordinary shares and/or CDIs in the following twelve months.
Goodwill is not amortized but is instead tested for impairment annually in the fourth quarter 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.
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.
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 14, "Debt." On May 26, 2023, we issued U.S. dollar notes with a principal amount of $500 million and a contractual maturity in May 2033.
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.
Refer to Note 5, "Acquisitions and Divestitures," and Note 6, " Held for Sale." New Accounting Pronouncements Refer to Note 3, "New Accounting Guidance," of the notes to consolidated financial statements for information about new accounting pronouncements. 45
Refer to Note 5, "Acquisitions and Divestitures." New Accounting Pronouncements Refer to Note 3, "New Accounting Guidance," of the notes to consolidated financial statements for information about new accounting pronouncements. 44
However, such programs are backstopped by committed bank syndicated loan facilities with maturities in April 2025 ($1.9 billion), and April 2027 ($1.9 billion), with an option to extend, under which we had $1.3 billion in unused capacity remaining as of June 30, 2023. 41 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.
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. 40 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.
In addition, higher inflation, especially in Europe and the United States, has led central banks to rapidly raise interest rates to dampen inflation which results in higher interest expense on our variable rate debt particularly U.S. dollar and Euro denominated debt.
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.
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 of $200 million to $220 million.
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 net periodic pension cost before the effect of income taxes for fiscal year 2024 to be approximately $11 million.
We expect our net periodic pension cost before the effect of income taxes for fiscal year 2025 to be approximately $16 million.
We work with leading companies around the world to protect their products and the people who rely on them, differentiate brands, and improve supply chains through a range of flexible and rigid packaging, specialty cartons, closures, and services. We are focused on making packaging that is increasingly light-weighted, recyclable and reusable, and made using an increasing amount of recycled content.
We work with leading companies around the world to protect products, differentiate brands, and improve supply chains. We offer a range of innovative, differentiating flexible and rigid packaging, specialty cartons, closures and services. We are focused on making packaging that is increasingly recyclable, reusable, lighter weight, and made using an increasing amount of recycled content.
Reconciliation of Net Debt A reconciliation of total debt to net debt at June 30, 2023 and 2022 is as follows: ($ in millions) June 30, 2023 June 30, 2022 Current portion of long-term debt $ 13 $ 14 Short-term debt 80 136 Long-term debt, less current portion 6,653 6,340 Total debt 6,746 6,490 Less cash and cash equivalents 689 775 Net debt $ 6,057 $ 5,715 36 Supplemental Guarantor Information 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, and Amcor Finance (USA), Inc. • $500 million, 4.000% Guaranteed Senior Notes due 2025 of Amcor Flexibles North America, Inc. • $300 million, 3.100% Guaranteed Senior Notes due 2026 of Amcor Flexibles North America, Inc. • $600 million, 3.625% Guaranteed Senior Notes due 2026 of Amcor Flexibles North America, Inc. • $500 million, 4.500% Guaranteed Senior Notes due 2028 of Amcor Flexibles North America, Inc. • $500 million, 2.630% Guaranteed Senior Notes due 2030 of Amcor Flexibles North America, Inc. • $800 million, 2.690% Guaranteed Senior Notes due 2031 of Amcor Flexibles North America, Inc. • €500 million, 1.125% Guaranteed Senior Notes due 2027 of Amcor UK Finance plc • $500 million, 5.625% Guaranteed Senior Notes due 2033 of Amcor Finance (USA), Inc.
Reconciliation of Net Debt A reconciliation of total debt to net debt at June 30, 2024 and 2023 is as follows: ($ in millions) June 30, 2024 June 30, 2023 Current portion of long-term debt $ 12 $ 13 Short-term debt 84 80 Long-term debt, less current portion 6,603 6,653 Total debt 6,699 6,746 Less cash and cash equivalents (588) (689) Net debt $ 6,111 $ 6,057 35 Supplemental Guarantor Information 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. • $500 million, 4.000% Guaranteed Senior Notes due 2025 of Amcor Flexibles North America, Inc. • $300 million, 3.100% Guaranteed Senior Notes due 2026 of Amcor Flexibles North America, Inc. • $600 million, 3.625% Guaranteed Senior Notes due 2026 of Amcor Flexibles North America, Inc. • $500 million, 4.500% Guaranteed Senior Notes due 2028 of Amcor Flexibles North America, Inc. • $500 million, 2.630% Guaranteed Senior Notes due 2030 of Amcor Flexibles North America, Inc. • $800 million, 2.690% Guaranteed Senior Notes due 2031 of Amcor Flexibles North America, Inc. • €500 million, 1.125% Guaranteed Senior Notes due 2027 of Amcor UK Finance plc • €500 million, 3.950% Guaranteed Senior Notes due 2032 of Amcor UK Finance plc • $500 million, 5.625% Guaranteed Senior Notes due 2033 of Amcor Finance (USA), Inc. • $500 million, 5.450% Guaranteed Senior Notes due 2029 of 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.
(7) Russia-Ukraine conflict impacts in 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 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.
We had cash outflows of $221 million, $143 million, and $8 million for the purchase of our shares in the open market during fiscal years 2023, 2022, and 2021, respectively, as treasury shares to satisfy the vesting and exercises of share-based compensation awards.
The shares repurchased as part of the above programs were canceled upon repurchase. 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.
Statement of Income for Obligor Group (in millions) For the year ended June 30, 2023 Net sales - external $ 1,065 Net sales - to subsidiaries outside the Obligor Group 6 Total net sales $ 1,071 Gross profit 187 Net income (1) $ 1,583 Net income attributable to non-controlling interests — Net income attributable to Obligor Group $ 1,583 (1) Includes $1,993 million net intercompany income from Amcor entities from outside the Obligor Group, mainly attributable to intercompany dividends and intercompany interest income.
Statement of Income for Obligor Group (in millions) For the year ended June 30, 2024 Net sales - external $ 992 Net sales - to subsidiaries outside the Obligor Group 7 Total net sales $ 999 Gross profit 214 Net income (1) $ 741 Net income attributable to non-controlling interests — Net income attributable to Obligor Group $ 741 (1) Includes $1,247 million net intercompany income from Amcor entities from outside the Obligor Group, mainly attributable to intercompany dividends and intercompany interest income.
A reconciliation of reported net income attributable to Amcor plc to Adjusted EBIT and adjusted net income for fiscal years 2023, 2022, and 2021 is as follows: Years ended June 30, ($ in millions) 2023 2022 2021 Net income attributable to Amcor plc, as reported $ 1,048 $ 805 $ 939 Add: Net income attributable to non-controlling interests 10 10 12 Net income 1,058 815 951 Add: Income tax expense 193 300 261 Add: Interest expense 290 159 153 Less: Interest income (31) (24) (14) EBIT 1,510 1,250 1,351 Add: 2018/2019 Restructuring programs (1) — 37 88 Add: Amortization of acquired intangible assets from business combinations (2) 160 163 165 Add: Impact of hyperinflation (3) 24 16 19 Add: Pension settlements (4) 5 8 — Add/(Less): Net (gain)/loss on disposals (5) — 10 (9) Add: Property and other losses, net (6) 2 13 — Add/(Less): Russia-Ukraine conflict impacts (7) (90) 200 — Add/(Less): Other (8) (3) 4 7 Adjusted EBIT 1,608 1,701 1,621 Less: Income tax expense (193) (300) (261) Less: Adjustments to income tax expense (9) (57) (32) (51) Less: Interest expense (290) (159) (153) Add: Interest income 31 24 14 Less: Net income attributable to non-controlling interests (10) (10) (12) Adjusted net income $ 1,089 $ 1,224 $ 1,158 (1) 2018/2019 Restructuring programs include restructuring and related expenses for the 2019 Bemis Integration Plan for fiscal year 2022, and 2018 Rigid Packaging Restructuring Plan and the 2019 Bemis Integration Plan for fiscal year 2021.
A reconciliation of reported net income attributable to Amcor plc to Adjusted EBIT and adjusted net income for fiscal years 2024, 2023, and 2022 is as follows: Years ended June 30, ($ in millions) 2024 2023 2022 Net income attributable to Amcor plc, as reported $ 730 $ 1,048 $ 805 Add: Net income attributable to non-controlling interests 10 10 10 Net income 740 1,058 815 Add: Income tax expense 163 193 300 Add: Interest expense 348 290 159 Less: Interest income (38) (31) (24) EBIT 1,213 1,510 1,250 Add: 2018/2019 Restructuring programs (1) — — 37 Add: Amortization of acquired intangible assets from business combinations (2) 167 160 163 Add: Impact of hyperinflation (3) 53 24 16 Add: Net loss on disposals (4) — — 10 Add: Property and other losses, net (5) — 2 13 Add/(Less): Restructuring and other related activities, net (6) 97 (90) 200 Add: CEO transition costs (7) 8 — — Add: Other (8) 22 2 12 Adjusted EBIT 1,560 1,608 1,701 Less: Income tax expense (163) (193) (300) Less: Adjustments to income tax expense (9) (62) (57) (32) Less: Interest expense (348) (290) (159) Add: Interest income 38 31 24 Less: Net income attributable to non-controlling interests (10) (10) (10) Adjusted net income $ 1,015 $ 1,089 $ 1,224 (1) 2018/2019 Restructuring programs include restructuring and related expenses for the 2019 Bemis Integration Plan for fiscal year 2022.
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.
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. (6) Restructuring and other related activities, net in fiscal year 2024 primarily includes costs incurred in connection with the 2023 Restructuring Plan.
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. 44 Valuation of Assets and Liabilities Held for Sale Disposal groups held for sale are assessed for impairment by comparing their fair values, less cost to sell, to their carrying values.
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.
Consolidated Restructuring, Impairment and Other Related Activities, Net ($ in millions) 2023 2022 Restructuring, impairment, and other related activities, net $ 104 $ (234) Restructuring, impairment, and other related activities, net, as a percentage of net sales 0.7 % (1.6) % Restructuring, impairment, and other related activities, net decreased by $338 million, or 144%, in fiscal year 2023, compared to fiscal year 2022.
Consolidated Restructuring, Impairment and Other Related Activities, Net ($ in millions) 2024 2023 Restructuring, impairment, and other related activities, net $ (97) $ 104 Restructuring, impairment, and other related activities, net, as a percentage of net sales (0.7) % 0.7 % Restructuring, impairment, and other related activities, net changed by $201 million, or 193%, in fiscal year 2024, compared to fiscal year 2023.
Overview Year Ended June 30, ($ in millions) 2023 2022 Net cash provided by operating activities $ 1,261 $ 1,526 Net cash used in investing activities (309) (527) Net cash used in financing activities (1,025) (891) Cash Flow Overview Net Cash Provided by Operating Activities Net cash provided by operating activities decreased by $265 million in fiscal year 2023, compared to fiscal year 2022.
Overview Year Ended June 30, ($ in millions) 2024 2023 Net cash provided by operating activities $ 1,321 $ 1,261 Net cash used in investing activities (476) (309) Net cash used in financing activities (857) (1,025) Cash Flow Overview Net Cash Provided by Operating Activities Net cash provided by operating activities increased by $60 million in fiscal year 2024, compared to fiscal year 2023.
Two Year Review of Results (in millions) 2023 2022 Net sales $ 14,694 100.0 % $ 14,544 100.0 % Cost of sales (11,969) (81.5) (11,724) (80.6) Gross profit 2,725 18.5 2,820 19.4 Operating expenses: Selling, general, and administrative expenses (1,246) (8.5) (1,284) (8.8) Research and development expenses (101) (0.7) (96) (0.7) Restructuring, impairment, and other related activities, net 104 0.7 (234) (1.6) Other income, net 26 0.2 33 0.2 Operating income 1,508 10.3 1,239 8.5 Interest income 31 0.2 24 0.2 Interest expense (290) (2.0) (159) (1.1) Other non-operating income, net 2 — 11 0.1 Income before income taxes 1,251 8.5 1,115 7.7 Income tax expense (193) (1.3) (300) (2.1) Net income $ 1,058 7.2 % $ 815 5.6 % Net income attributable to non-controlling interests (10) (0.1) (10) (0.1) Net income attributable to Amcor plc $ 1,048 7.1 % $ 805 5.5 % 29 Overview Amcor is a global leader in developing and producing responsible packaging for food, beverage, pharmaceutical, medical, home and personal-care, and other products.
Two Year Review of Results (in millions) 2024 2023 Net sales $ 13,640 100.0 % $ 14,694 100.0 % Cost of sales (10,928) (80.1) (11,969) (81.5) Gross profit 2,712 19.9 2,725 18.5 Operating expenses: Selling, general, and administrative expenses (1,260) (9.2) (1,246) (8.5) Research and development expenses (106) (0.8) (101) (0.7) Restructuring, impairment, and other related activities, net (97) (0.7) 104 0.7 Other income/(expenses), net (35) (0.3) 26 0.2 Operating income 1,214 8.9 1,508 10.3 Interest income 38 0.3 31 0.2 Interest expense (348) (2.6) (290) (2.0) Other non-operating income, net 3 — 2 — Income before income taxes and equity in loss of affiliated companies 907 6.6 1,251 8.5 Income tax expense (163) (1.2) (193) (1.3) Equity in loss of affiliated companies, net of tax (4) — — — Net income $ 740 5.4 % $ 1,058 7.2 % Net income attributable to non-controlling interests (10) (0.1) (10) (0.1) Net income attributable to Amcor plc $ 730 5.4 % $ 1,048 7.1 % 28 Overview 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.
Our net debt as of June 30, 2023, and June 30, 2022 was $6.1 billion and $5.7 billion, respectively. Debt Facilities and Refinancing As of June 30, 2023, we had undrawn credit facilities available in the amount of $1.3 billion.
Our net debt at each of June 30, 2024 and June 30, 2023 was $6.1 billion. 38 Debt Facilities and Refinancing As of June 30, 2024, we had undrawn credit facilities available in the amount of $2.4 billion.
Adjusted EBIT decreased by $24 million, or 8%, in fiscal year 2023, compared to fiscal year 2022.
Adjusted EBIT decreased by $6 million, or 2%, in fiscal year 2024, compared to fiscal year 2023.
Segment Results of Operations Flexibles Segment ($ in millions) 2023 2022 Net sales $ 11,154 $ 11,151 Adjusted EBIT 1,429 1,517 Adjusted EBIT as a percentage of net sales 12.8 % 13.6 % Net sales increased by $3 million, or 0%, in fiscal year 2023, compared to fiscal year 2022.
Segment Results of Operations Flexibles Segment ($ in millions) 2024 2023 Net sales $ 10,332 $ 11,154 Adjusted EBIT 1,395 1,429 Adjusted EBIT as a percentage of net sales 13.5 % 12.8 % Net sales decreased by $822 million, or 7%, in fiscal year 2024, compared to fiscal year 2023.
Diluted earnings per share ("Diluted EPS") increased by $0.176, or 33%, in fiscal year 2023, compared to fiscal year 2022, with net income attributable to ordinary shareholders increasing by 30% and the diluted weighted-average number of shares outstanding decreasing by 3%.
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.
Excluding the pass-through of raw material costs of $260 million and negative currency impacts of $22 million, the remaining variation in net sales 32 for the fiscal year 2023 was a decrease of $91 million, or (3%), reflecting price/mix benefits of approximately 1%, offset by unfavorable volumes (4%).
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%.
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.
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.
The decrease in net expense was mainly a result of a pre-tax net gain of $215 million on the disposal of the Russian business in fiscal year 2023, and the non-recurrence of impairment expenses of $138 million related to the Russia-Ukraine conflict in fiscal year 2022, partially offset by an increase in restructuring and related costs of $15 million.
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 $14 million in the current year, primarily related to the 2023 Restructuring Plan.
The decrease was predominantly attributable to a decrease in tax provisions for uncertain tax positions and a non-taxable capital gain on the sale of the Russian business. 34 Presentation of Non-GAAP Information This Annual Report on Form 10-K refers to non-GAAP financial measures: adjusted earnings before interest and taxes ("Adjusted EBIT"), earnings before interest and tax ("EBIT"), adjusted net income, and net debt.
The higher effective tax rate for fiscal year 2024 is largely attributable to the non-taxable gain on the disposal of the Russian business in the comparative period. 33 Presentation of Non-GAAP Information This Annual Report on Form 10-K refers to non-GAAP financial measures: adjusted earnings before interest and taxes ("Adjusted EBIT"), earnings before interest and tax ("EBIT"), adjusted net income, and net debt.
Consolidated Interest Expense ($ in millions) 2023 2022 Interest expense $ (290) $ (159) Interest expense as a percentage of net sales (2.0) % (1.1) % Interest expense increased by $131 million, or 82%, in fiscal year 2023, compared to fiscal year 2022, primarily driven by increased interest rates on U.S. dollar and Euro denominated variable rate debt. 33 Consolidated Income Tax Expense ($ in millions) 2023 2022 Income tax expense $ (193) $ (300) Effective tax rate 15.4 % 26.9 % Income tax expense decreased by $107 million, or 36%, in fiscal year 2023, compared to fiscal year 2022.
Consolidated Interest Expense ($ in millions) 2024 2023 Interest expense $ (348) $ (290) Interest expense as a percentage of net sales (2.6) % (2.0) % Interest expense increased by $58 million, or 20%, in fiscal year 2024, compared to fiscal year 2023, primarily driven by increased interest rates on U.S. dollar and Euro denominated variable rate debt.
As of June 30, 2023, we have incurred $65 million in employee related expenses, $13 million in fixed asset related expenses, $10 million in other restructuring expenses, and $6 million in restructuring related expenses. To date, the Plan has resulted in approximately $25 million of cash outflows.
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 $70 million of net cash outflows.
Consolidated Selling, General, and Administrative ("SG&A") Expenses ($ in millions) 2023 2022 SG&A expenses $ (1,246) $ (1,284) SG&A expenses as a percentage of net sales (8.5) % (8.8) % SG&A decreased by $38 million, or 3%, in fiscal year 2023, compared to fiscal year 2022. The decrease was primarily driven by exchange rate movements.
Consolidated Selling, General, and Administrative ("SG&A") Expenses ($ in millions) 2024 2023 SG&A expenses $ (1,260) $ (1,246) SG&A expenses as a percentage of net sales (9.2) % (8.5) % SG&A increased by $14 million, or 1%, in fiscal year 2024, compared to fiscal year 2023.
Balance Sheet for Obligor Group (in millions) As of June 30, 2023 Assets Current assets - external $ 1,184 Current assets - due from subsidiaries outside the Obligor Group 190 Total current assets 1,374 Non-current assets - external 1,415 Non-current assets - due from subsidiaries outside the Obligor Group 10,992 Total non-current assets 12,407 Total assets $ 13,781 Liabilities Current liabilities - external $ 1,912 Current liabilities - due to subsidiaries outside the Obligor Group 37 Total current liabilities 1,949 Non-current liabilities - external 6,801 Non-current liabilities - due to subsidiaries outside the Obligor Group 9,917 Total non-current liabilities 16,718 Total liabilities $ 18,667 38 Liquidity and Capital Resources We finance our business primarily through cash flows provided by operating activities, borrowings from banks, and proceeds from issuances of debt and equity.
Balance Sheet for Obligor Group (in millions) As of June 30, 2024 Assets Current assets - external $ 1,160 Current assets - due from subsidiaries outside the Obligor Group 165 Total current assets 1,325 Non-current assets - external 1,447 Non-current assets - due from subsidiaries outside the Obligor Group 12,538 Total non-current assets 13,985 Total assets $ 15,310 Liabilities Current liabilities - external $ 2,341 Current liabilities - due to subsidiaries outside the Obligor Group 34 Total current liabilities 2,375 Non-current liabilities - external 6,815 Non-current liabilities - due to subsidiaries outside the Obligor Group 10,822 Total non-current liabilities 17,637 Total liabilities $ 20,012 37 Liquidity and Capital Resources We finance our business primarily through cash flows provided by operating activities, borrowings from banks, and proceeds from issuances of debt and equity.
Of the remaining cash received from the sale of the Russian business, we allocated $100 million to repurchase additional shares and the remainder was used to reduce debt.
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.
Excluding the pass-through of higher raw material costs of $516 million, negative currency impacts of $404 million, and the negative impact of disposed and ceased operations of $207 million, the remaining variation in net sales for the fiscal year 2023 was an increase of $98 million, or 1%, reflecting favorable price/mix of 4%, and unfavorable volumes of (3%).
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 $849 million, or 6%, reflecting 5% lower sales volumes and an unfavorable price/mix impact of 1%.
Consolidated Interest Income ($ in millions) 2023 2022 Interest income $ 31 $ 24 Interest income as a percentage of net sales 0.2 % 0.2 % Interest income increased by $7 million, or 29%, in fiscal year 2023, compared to fiscal year 2022, driven by increased interest rates on cash balances.
Consolidated Other Income/(Expenses), Net ($ in millions) 2024 2023 Other income/(expenses), net $ (35) $ 26 Other income/(expenses), net as a percentage of net sales (0.3) % 0.2 % Other income/(expenses), net changed by $61 million, in fiscal year 2024, compared to fiscal year 2023, primarily from the $53 million adverse impact on monetary balances from highly inflationary accounting in Argentina. 32 Consolidated Interest Income ($ in millions) 2024 2023 Interest income $ 38 $ 31 Interest income as a percentage of net sales 0.3 % 0.2 % Interest income increased by $7 million, or 23%, in fiscal year 2024, compared to fiscal year 2023, driven by increased interest rates on cash balances.
(8) Other in fiscal year 2023 includes other restructuring, acquisition, litigation, and integration expenses of $13 million and fair value gains of $16 million on economic hedges.
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 $8 million. (9) Net tax impact on items (1) through (8) above.
Consolidated Gross Profit ($ in millions) 2023 2022 Gross profit $ 2,725 $ 2,820 Gross profit as a percentage of net sales 18.5 % 19.4 % Gross profit decreased by $95 million, or 3%, in fiscal year 2023, compared to fiscal year 2022.
Consolidated Gross Profit ($ in millions) 2024 2023 Gross profit $ 2,712 $ 2,725 Gross profit as a percentage of net sales 19.9 % 18.5 % 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.
Further, on February 7, 2023, our Board of Directors approved an additional buyback of up to $100 million of ordinary shares and/or CDIs in the following twelve months. During the fiscal year ended June 30, 2023, we repurchased approximately $431 million, excluding transaction costs, or 41 million shares. The shares repurchased were canceled upon repurchase.
On February 6, 2024, our Board of Directors extended the approval for the remaining $39 million of ordinary shares and CDIs of the $100 million buyback for twelve months. During the fiscal year ended June 30, 2024, we repurchased approximately $30 million, including transaction costs, or 3 million shares.
Our three- and five-year syndicated facility agreements each provide a revolving credit facility of $1.9 billion, $3.8 billion in total. The facilities are unsecured and have contractual maturities in April 2025 and April 2027, respectively.
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.
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.
Valuation of Assets and Liabilities Held for Sale 43 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.
Highly inflationary accounting resulted in a negative impact of $24 million and $16 million in foreign currency transaction losses that were reflected in the consolidated statements of income for the fiscal years ended June 30, 2023, and 2022, respectively. 31 Results of Operations Consolidated Results of Operations ($ in millions, except per share data) 2023 2022 Net sales $ 14,694 $ 14,544 Operating income 1,508 1,239 Operating income as a percentage of net sales 10.3 % 8.5 % Net income attributable to Amcor plc $ 1,048 $ 805 Diluted Earnings Per Share $ 0.705 $ 0.529 Net sales increased by $150 million, or 1%, in fiscal year 2023, compared to fiscal year 2022.
Our operations in Argentina represented approximately 2% of our consolidated net sales and annual adjusted earnings before interest and tax in the last two fiscal years. 30 Results of Operations Consolidated Results of Operations ($ in millions, except per share data) 2024 2023 Net sales $ 13,640 $ 14,694 Operating income 1,214 1,508 Operating income as a percentage of net sales 8.9 % 10.3 % Net income attributable to Amcor plc $ 730 $ 1,048 Diluted Earnings Per Share $ 0.505 $ 0.705 Net sales decreased by $1,054 million, or 7%, in fiscal year 2024, compared to fiscal year 2023.
Credit Rating Our capital structure and financial practices have earned us investment grade credit ratings from two internationally recognized credit rating agencies.
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. Credit Rating Our capital structure and financial practices have earned us investment grade credit ratings from two internationally recognized credit rating agencies.
Our senior facilities are available to fund working capital, growth capital expenditures, and refinancing obligations and are provided to us by two bank syndicates. These facilities mature in April 2025 and April 2027, respectively, and the revolving tranches have two 12-month options available to extend the maturity date.
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.
During fiscal year 2023, Amcor generated $14.7 billion in sales from operations that spanned 218 locations in over 40 countries.
In fiscal year 2024, 41,000 Amcor people generated $13.6 billion in annual sales from operations that span 212 locations in 40 countries.
The decrease is mainly driven by the disposal proceeds collected from the sale of the Russian business in the current period, partially offset by business acquisitions and equity method and other investments. Net Cash Used in Financing Activities Net cash used in financing activities increased by $134 million in fiscal year 2023, compared to fiscal year 2022.
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.
Excluding the pass-through of raw material costs of $776 million, negative currency impacts of $426 million, and the negative impact of disposed and ceased operations of $207 million, the remaining variation in net sales for the fiscal year 2023 was an increase of $7 million, or 0%, reflecting price/mix benefits of 3% and unfavorable volumes of (3%).
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%.
Excluding negative currency impacts of $2 million, the remaining variation in adjusted EBIT for the fiscal year 2023 was a decrease of $22 million, or 8%, with favorable price/mix of 20%, more than offset by unfavorable volumes of (12%), unfavorable plant costs of (11%) and unfavorable SG&A and other costs of (5%), all largely impacted by inflationary pressures.
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%.
The agreements include customary terms and conditions for a syndicated facility of this nature, and the revolving tranches have two 12-month options available to extend the maturity date. As of June 30, 2023, and 2022, an aggregate principal amount of $2.5 billion and $2.4 billion, respectively, was drawn under commercial paper programs.
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.
The underlying causes for the continued volatility can be attributed to a variety of factors, such as the Russia-Ukraine conflict and higher inflation in many economies, which has resulted in increased volatility in energy and food markets and impacted global economies. This has led to reduced consumer demand for certain of our products and customer destocking in fiscal year 2023.
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.
Excluding negative currency impacts of $41 million and the negative impact of disposed and ceased operations of $63 million, the remaining variation in adjusted EBIT for the fiscal year 2023 was an increase of $16 million, or 1%, reflecting favorable price/mix of 17%, offset by unfavorable volumes of (7%), unfavorable plant costs of (5%), and unfavorable SG&A and other costs of (4%), all largely impacted by inflationary pressures.
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 $1 million, reflecting the net positive effect of 7% from favorable operating cost performance more than offsetting unfavorable volumes, but largely offset by net negative price/mix of 7%. 31 Rigid Packaging Segment ($ in millions) 2024 2023 Net sales $ 3,308 $ 3,540 Adjusted EBIT 259 265 Adjusted EBIT as a percentage of net sales 7.8 % 7.5 % Net sales decreased by $232 million, or 7%, in fiscal year 2024, compared to fiscal year 2023.
The change is primarily due to lower net debt drawdowns, partially offset by lower share buybacks in the current period as compared to the prior period. Net Debt We borrow from financial institutions and debt investors in the form of bank overdrafts, bank loans, corporate bonds, unsecured notes, and commercial paper.
Net Debt 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.
Net income attributable to Amcor plc increased by $243 million, or 30%, in fiscal year 2023, compared to fiscal year 2022, mainly as a result of a pre-tax net gain of $215 million on the disposal of the Russian business in fiscal year 2023, decreased restructuring, impairment, and other related activities, net of $123 million, and a decrease in income tax expense of $107 million, partially offset by a decrease in gross profit of $95 million and an increase in net interest expense of $124 million.
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.
While we expect customer destocking to abate in the short-term and consumer demand to improve incrementally throughout fiscal year 2024, there is no assurance that demand will rebound. Russia-Ukraine Conflict / 2023 Restructuring Plan Russia's invasion of Ukraine that began in February 2022 continues as of the date of the filing of this annual report.
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-Ukraine Conflict / 2023 Restructuring Plan Russia's invasion of Ukraine that began in February 2022 continues as of the date of the filing of this annual report.
For further information, refer to Note 4, "Restructuring, Impairment, and Other Related Activities, Net," Note 6, "Held for Sale," and Note 7, "Restructuring" of "Part II, Item 8, Notes to Consolidated Financial Statements." 30 Impact of COVID-19 There are currently no significant COVID-19 related restrictions on our business, with China relaxing controls and eliminating lockdowns in December 2022.
For further information, refer to Note 4, "Restructuring, Impairment, and Other Related Activities, Net," and Note 6, "Restructuring" of "Part II, Item 8, Notes to Consolidated Financial Statements." 29 Highly Inflationary Accounting We have subsidiaries in Argentina that historically had a functional currency of the Argentine Peso.
Adjusted earnings before interest and tax ("Adjusted EBIT") decreased by $88 million, or 6% in fiscal year 2023, compared to fiscal year 2022.
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.
Removed
Significant Developments Affecting the Periods Presented Economic and Market Conditions During fiscal year 2023, we have continued to experience intermittent supply shortages and price volatility of certain resins and raw materials as a result of market dynamics, especially in the first half of fiscal year 2023, and higher rates of inflation impacting energy, fuel, and labor costs.
Added
Significant Developments Affecting the Periods Presented Economic and Market Conditions 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Changes in prices of our primary raw materials may result in a temporary or permanent reduction in income before income taxes and equity in income 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.
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.
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 certain other raw materials and energy price risk.
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.
As of June 30, 2023, and 2022, 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. 47
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. 46
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. Raw Material and Commodity Price Risk The primary raw materials for our products are resins, film, chemicals, and aluminum.
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. 45 Raw Material and Commodity Price Risk The primary raw materials for our products are polymer resins and films, inks, solvents, adhesives, aluminum, and chemicals.
An 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, 2023, would have resulted in an adverse impact on income before income taxes and equity in income of affiliated companies of $20 million expense for the fiscal year ended June 30, 2023.
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.
During fiscal year 2023 and 2022, 18% and 17%, respectively, of net sales were generated in Euro functional currency entities with the remaining 30% and 34% of net sales, respectively, being generated in entities with functional currencies other than U.S. dollars and Euros.
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.
For the year ended June 30, 2023, 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 $26 million.
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.
From time to time, we enter into various derivative financial instruments, such as foreign exchange contracts, commodity fixed price swaps (on behalf of customers), 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.
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.
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. 46 A 1% increase on average prices for resins, film, chemicals, and aluminum, 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 income of affiliated companies of $67 million for fiscal year 2023.
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.
During fiscal years 2023 and 2022, 52% and 49% of our net sales, respectively, were effectively generated in U.S. dollar functional currency entities.
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.
There have been no material changes in the risks described below, other than increased volatility in connection with the Russia-Ukraine conflict and the COVID-19 pandemic, for fiscal years 2023 and 2022, related to interest rate risk, foreign exchange risk, raw material and commodity price risk, and credit risk.
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.
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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.
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Although our functional currency in Argentina is the U.S. dollar, we have net assets and transactions in Argentina that are denominated in pesos.
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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.
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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.
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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.
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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.

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