Amcor Ltd.
Annual Report 2022

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Amcor Annual Report 2022 Contents 3 Strength. Innovation. Growth. With multiple, strategic initiatives working in tandem across the globe, Amcor continues to deliver consistently strong financial performance. We follow a clear, proven strategy built on a solid foundation that has allowed us to invest in future growth opportunities and lead the industry on game-changing sustainability innovations. Contents Message from the Chairman of the Board and the CEO Amcor at a glance Our strategy Sustainability and innovation 3 5 7 9 Amcor fiscal 2022 operating review 13 Form 10-K Other information Reconciliation of non-GAAP measures Contact 1-114 17 20 23 Amcor Annual Report 2022 Welcome message 4 Message from the Chairman of the Board and the CEO Dear shareholders, Outstanding year of execution and growth Fiscal 2022 was another outstanding year for Amcor. Our co-workers have continued to demonstrate remarkable perseverance and agility, executing well in a challenging operating environment that remains impacted by the lingering effects of the COVID-19 pandemic, severe disruptions to global supply chains, persistent and rising inflation, and the Russia-Ukraine conflict. In the fiscal year ended June 30, 2022 (FY22), Amcor delivered another year of strong results. Organic sales growth of 4% marked the third consecutive year of accelerating top line growth, which translated into earnings per share growth of 11% on a comparable constant currency basis. The business picked up momentum through the year, with the fourth quarter being the strongest from both a sales and a profit-growth standpoint. During the year, we were also successful in passing through $1.5 billion in costs related to higher raw materials pricing, as well as other inflationary costs. As we enter our 2023 fiscal year, we are well positioned to maintain this momentum. Strong free cash flow of $1.1 billion was another highlight of our financial 2022 year. This enabled us to increase our cash returns to shareholders to more than $1.3 billion dollars via $600 million of share repurchases and a compelling and growing annual dividend. A winning strategy Our dedicated employees are central to our success, and we believe that having the best talent and capabilities in the industry will ensure we prosper now and in the future. For many years we have made the well-being and development of our 44,000 global employees our number one objective, and this will continue to be a critical part of our overall strategy. Our financial performance continues to reflect Amcor’s strong foundation and the ability of our teams to consistently deliver against our strategy. Amcor has leadership positions in most of our chosen primary packaging segments and over 95% of our sales are in consumer staples and healthcare end markets. We have absolute and relative scale advantages in all key regions, industry-leading commercial and innovation capabilities and a proven track record through multiple economic cycles of delivering margin expansion, earnings growth, and significant free cash flow. A key driver of value for shareholders will always be the underlying organic growth of the business. We have continually strengthened the base business and have built sustainable organic sales and profit growth momentum over the last several years. The drivers of this growth include high-growth, high-value priority segments, a leading and well diversified emerging markets portfolio and the ability to leverage our strength in innovation. We are excited by the broad range of opportunities we see in these areas and, to help maintain the momentum we have built, we are stepping up our investments for growth. For example, during FY22 we opened a state- of-the-art healthcare packaging facility in Singapore to serve accelerating demand in the Asia-Pacific region and also commenced a multimillion-dollar investment in new thermoforming capabilities for medical packaging in our existing plant in Ireland. In recent years, we have invested in establishing best- in-class research and development (R&D) capabilities. We now offer customers a global network of world-class innovation centers with unique features and services that enable customers to collaborate with our packaging experts and make innovative and value-creating ideas a reality. But we remain hungry and open minded in our search for disruptive innovative ideas beyond our own in-house R&D. In FY22, we deployed seed capital into promising start-up players ePac and PragmatIC Semiconductor, which has enabled us to gather further insights and traction into new technologies and business models. Amcor Annual Report 2022 4 Welcome message 5 Our efforts on sustainability are embedded in everything we do, from the way we manage our operations and greenhouse gas emissions to our vendor partnerships. In January 2022, Amcor further increased its sustainability efforts by joining the Science-Based Targets Initiative to ensure we achieve net zero emissions by 2050. Our proven track record of performance, unique industry- differentiated capabilities, defensive end market exposure, and strong investment grade balance sheet make the investment case for Amcor stronger than ever before - and particularly compelling in the current context of continued macroeconomic challenges. We are guided by the belief that three key dimensions – package design, infrastructure development and consumer participation – working together, hold the key to a more sustainable, circular economy for packaging. We are proud of what our company and our employees around the world have achieved, collectively and individually, and we thank you, our shareholders, for your continued support. In FY22, we expanded on our sustainability leadership by launching proprietary innovations such as our AmFiber™ family of paper-based products, the recycle-ready PVC-free AmSky™ blister system for healthcare applications and the new generation of recycle-ready AmPrima™ films. These global product platforms represent a clear opportunity for us to leverage our unique reach, scale and differentiated innovation for multi-national customers. With approximately 75% of Amcor offerings already recycle-ready, the consistent launch of new products with better sustainability features underscores our steady progress towards developing every product Amcor makes to be recyclable or reusable by 2025. Compelling investment case With multiple, strategic initiatives working in tandem across the globe, Amcor continues to deliver consistently strong financial performance. We follow a clear, proven strategy built on a solid foundation that has allowed us to invest in future growth opportunities and lead the industry on game-changing sustainability innovations. We are delivering on our commitments, accelerating earnings growth and generating significant annual cash flow, increasing investments in high growth end markets and geographies as well as delivering value to shareholders through share repurchase and a compelling, growing dividend. Graeme Liebelt Chairman Ron Delia CEO Amcor Annual Report 2022 Amcor at a glance 6 Amcor at a glance - Fiscal 2022 Global sales USD ~15 billion 77% Flexibles 23% Rigid packaging Employees ~44,000 43 Countries ~220 Sites Global sales by region 48% North America 22% Western Europe 27% Emerging markets 3% Australia & New Zealand Flexibles Rigid packaging Amcor’s Flexibles business has a global presence and is one of the world’s largest developers and suppliers of flexible packaging and specialty folding cartons. Amcor’s Rigid Packaging business is one of the world’s largest suppliers of plastic containers and closures. Overview 2022 Overview 2022 Sales USD11.2 billion • Number of plants ~170 Countries 39 • Employees ~38,0001 Sales USD3.4 billion • Number of plants ~50 Countries 11 • Employees ~6,000 End markets End markets The business develops and produces flexible packaging for food, beverage, pharmaceutical, medical, home and personal care, and other products. The business develops and produces rigid containers and closures for food, beverage, spirits, home and personal care, and healthcare products. (1) Includes employees in corporate functions Amcor Annual Report 2022 6 Amcor at a glance 7 Amcor winning strategy Winning aspiration Focused portfolio To be THE leading global packaging company The Amcor Way Differentiated capabilities that enable us to win: Flexible packaging Flexible packaging Rigid packaging Rigid packaging Specialty cartons Specialty cartons Closures Closures Talent Commercial Excellence Operational Leadership Innovation Cash and Capital Discipline Resilient investment case: strong foundation for growth & value creation Attractive and growing dividend Attractive and growing dividend Attractive and growing dividend Attractive and growing dividend primary packaging for consumer staples and healthcare Global leader in primary packaging for consumer staples and healthcare primary packaging for consumer staples and healthcare primary packaging for consumer staples and healthcare Global leader in primary packaging for consumer staples and healthcare Global leader in primary packaging for consumer staples and healthcare with current yield >4% with current yield >4% Global leader in Attractive and growing dividend Attractive and growing dividend Attractive and growing dividend Attractive and growing dividend Consistent growth from priority segments, emerging markets and innovation Consistent growth from priority segments, emerging markets and innovation Consistent growth Consistent growth from priority segments, emerging markets and innovation from priority segments, emerging markets and innovation from priority segments, emerging markets and innovation from priority segments, emerging markets and innovation with current yield >4% with current yield >4% Attractive and growing dividend Attractive and growing dividend with current yield >4% Strong cash flow and balance sheet provide ongoing capacity to invest Attractive and growing dividend Attractive and growing dividend with current yield >4% Increasing investment for growth and building momentum Compelling and growing dividend with current yield ~4% Attractive and growing dividend with current yield >4% Attractive and growing dividend EPS growth + Dividend yield = 10-15% per year Amcor Annual Report 2022 Our strategy 8 Our Strategy Amcor Annual Report 2022 8 Our strategy 9 - Multiple paths for us to win through our leadership position, scale and ability to differentiate our product offering through innovation. These criteria have led us to the focused portfolio of strong businesses we have today across: flexibles 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. 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. The nature of our consumer and healthcare end markets mean that year-to-year volatility should be relatively low, measured on a constant currency basis. Over time value creation has been strong and consistent and has reflected a combination of organic growth in the base business, dividends and the use of free cash flow to pursue targeted acquisitions or return cash to shareholders via share buybacks. Amcor is a global leader in developing and producing responsible packaging solutions for food, beverage, pharmaceutical, medical, home and personal care, and other products. Amcor works 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. The company is focused on making packaging that is increasingly light-weighted, recyclable and reusable, and made using an increasing amount of recycled content. In fiscal year 2022, 44,000 Amcor people generated $15 billion in annual sales from operations that span 220 sites in 43 countries. Strategy Our business strategy consists of three components: a focused portfolio, differentiated capabilities, and our aspiration to be THE leading global packaging company. To fulfil our aspiration, we are determined to win for our people, our customers, our investors and the environment. Focused portfolio Our business portfolio shares certain important characteristics: - A focus on primary packaging for fast-moving consumer goods. - Good industry structure. - Attractive relative growth. Summary Amcor has maintained a consistent strategy and business model. We have a unique combination of talented people, differentiated capabilities, scale and global reach. Our innovation excellence and packaging expertise enables us to solve packaging challenges around the world every day, producing packaging that is more functional, appealing, and cost effective. These powerful competitive advantages enable us to better serve our customers and their consumers, and importantly, to develop and deliver packaging that best protects the environment. By remaining focused on our strategy and our unique value proposition for customers, the company expects to continue to grow and drive strong returns for shareholders and other stakeholders. (cid:5) (cid:44)n fiscal (cid:92)ear 2022(cid:15) (cid:23)(cid:23)(cid:15)000 Amcor people generated $15 billion in annual sales from operations that span 220 sites in (cid:23)(cid:22) co(cid:88)ntries(cid:17)(cid:5) Amcor Annual Report 2022 Sustainability and innovation (cid:20)0 Sustainability & Innovation Amcor Annual Report 2022 Sustainability remains Amcor’s most exciting opportunity for growth. We are leveraging our unique scale, reach and expertise to meet customers’ growing s(cid:88)staina(cid:69)ilit(cid:92) e(cid:91)pectations(cid:17) (cid:44)n (cid:41)(cid:60)22(cid:15) we saw a (cid:73)(cid:88)rt(cid:75)er acceleration o(cid:73) o(cid:88)r e(cid:871)orts in responsi(cid:69)le packaging, delivering a variety of packaging innovations alongside key partnerships to support improvements in waste management infrastructure and consumer participation to improve collection and recycling of Amcor’s products. We also saw great traction on the launch of our new paper- based platform, AmFiber™. This new platform delivers an oxygen and moisture barrier to protect products and demonstrates Amcor’s consumer-centric and adaptable approach to innovation, providing customers the best in packaging technology using the materials most suited to their needs. We are also working hard to secure more recycled raw materials to use in our products and are proud to be the first company to purchase certified circular polyethylene material using ExxonMobil’s Exxtend™ technology for advanced recycling. This new technology will result in more sustainable flexible polyethylene packaging, allowing us to provide customers in the healthcare and food industries with circular content of equal quality and performance to those made with virgin raw materials. We have also continued to be the partner of choice for many of the world’s leading brands as they look to us for expertise and support in meeting growing consumer demand for more sustainable products. Product innovation We are on a journey of continuous improvement to use less materials, incorporate more recycled content and ensure that our products have a better end-of-life profile, and are committed to partnering with our customers to ensure that they get the best solution to meet their unique needs. In the past year, we have brought to market many new products for customers, with particular success in products that are designed to be recyclable. Just one example of this was the launch of a label-less bottle for Danone’s Villavicencio water brand. Made from 100% recycled content, the recyclable bottle also has a reduced carbon footprint of 21% compared to the previous bottle. Another example is a breakthrough innovation for the food industry with the first heat- resistant, recycle-ready solution for liquid pouches that allows for a 49% reduction in carbon footprint compared to a three-ply foil solution when recycled. Sustainability and innovation 11 Amcor Annual Report 2022 End Plastic Waste and our joint endeavor with Delterra’s Rethinking Recycling program, an initiative that aims to empower communities to build inclusive and efficient waste- management and recycling systems. Twelve months in, and the initiative has quickly scaled to over 6,500 residents and 350 businesses, with active participation from almost 50% of homes. A laser focus on sustainability We continue to drive down the environmental impact of our operations and products and we are proud to build on our progress to date with a commitment to science-based targets, including a new mission to achieve net zero emissions by 2050. We also unveiled a rebrand of our global product portfolio, which is designed to give customers a clearer, holistic view of our growing portfolio of more sustainable packaging solutions. The redesign of our product portfolio included the launch of the new Amcor EcoGuard™ brand, which allows customers to quickly identify packaging options that offer sustainable features. New technology The development of new technologies and approaches is critical to maintaining our unique capabilities in product innovation. We announced an additional investment in ePac, a company designed to bring connected packaging technology to small- and medium-sized consumer goods companies. This joins Amcor’s strategic investment into PragmatIC Semiconductor, a world leader in ultra, low-cost electronics that will enable smart packaging applications across the entire product lifecycle. We also launched the Amcor Lift-Off program - an open-call initiative aimed at supporting seed stage start-ups focused on innovative solutions and related technologies for more sustainable packaging. Powerful partnerships We know that no matter how much innovation, material science and genuine hard work we put into making our products recyclable, this must be backed up with the infrastructure to ensure that our products are collected and recycled in practice and at scale. We continue to make progress to improve waste management and consumer education to keep our products out of the environment, including key initiatives with partners, including the non-governmental- organization community. Examples of this include our partnership with the Alliance to Sustainability and innovation (cid:20)2 Amcor Annual Report 2022 (cid:20)2 Sustainability and innovation 13 Amcor Annual Report 2022 Amcor fiscal 2022 operating review 14 Amcor fiscal 2022 operating review Highlights - Net sales of $14,544 million, up 13%; - GAAP Net Income of $805 million; GAAP earnings per share (EPS) of 52.9 cps; - Adjusted EPS of 80.5 cps, up 11% on a comparable constant currency basis, at the top end of guidance range; - Adjusted EBIT of $1,701 million, up 7% on a comparable constant currency basis; - Adjusted Free Cash Flow of $1,066 million in line with guidance; - Significant increase in cash returns to shareholders: annual dividend increased to 48.0 cents per share; $600 million of shares repurchased (approximately 3% of outstanding shares); and - Fiscal 2023 outlook: Adjusted EPS growth on a comparable constant currency basis of 3-8% including an adverse impact of approximately 4% from higher interest expense (adjusted EPS of 80-84 cents per share on a reported basis). Adjusted Free Cash Flow of $1.0-$1.1 billion and approximately $400 million of share repurchases. Key Financials1 GAAP results Net sales Net income EPS (diluted US cents) Twelve months ended June 30 2021 $ million 2022 $ million (cid:20)2(cid:15)(cid:27)(cid:25)(cid:20) 939 (cid:25)0(cid:17)2 14,544 (cid:27)0(cid:24) (cid:24)2(cid:17)(cid:28) Adjusted non-GAAP results 2021 $ million 2022 $ million Reported (cid:31)% Comparable constant currency (cid:31)% Twelve months ended June 30 Net sales2 EBITDA EBIT Net income EPS (diluted US cents) Free Cash Flow (cid:20)2(cid:15)(cid:27)(cid:25)(cid:20) 2(cid:15)02(cid:27) (cid:20)(cid:15)(cid:25)2(cid:20) 1,158 74.4 (cid:20)(cid:15)0(cid:28)(cid:28) 14,544 2(cid:15)(cid:20)(cid:20)(cid:26) (cid:20)(cid:15)(cid:26)0(cid:20) (cid:20)(cid:15)22(cid:23) (cid:27)0(cid:17)(cid:24) (cid:20)(cid:15)0(cid:25)(cid:25) 13 4 5 6 8 4 7 7 8 11 (1) Adjusted non-GAAP results exclude items which are not considered representative of ongoing operations. Comparable constant currency (cid:31)% excludes the impact of movements in foreign exchange rates and items affecting comparability. Further details related to non-GAAP measures and reconciliations to GAAP measures can be found under "Presentation of non-GAAP information” in this release. (2) Comparable constant currency (cid:31)% for net sales excludes a 12% impact from the pass through of raw material costs, a 2% unfavorable currency impact and a 1% unfavorable impact from items affecting comparability. Note: All amounts referenced throughout this document are in US dollars unless otherwise indicated and numbers may not add up precisely to the totals provided due to rounding. Amcor Annual Report 2022 14 Amcor fiscal 2022 operating review 15 Cash returns to shareholders Amcor generates significant cash flow, maintains strong credit metrics and is committed to an investment grade credit rating. This annual cash flow provides substantial capacity to simultaneously reinvest in the business for organic growth, pursue acquisitions and return cash to shareholders through a compelling and growing dividend as well as regular share repurchases. Share repurchases $600 million was used to repurchase shares in fiscal 2022, which reduced the total number of shares issued and outstanding by approximately 3%. Amcor expects to allocate approximately $400 million of cash towards share repurchases in the 2023 fiscal year. Update on businesses in Russia and Ukraine We are all witnessing a tragic situation in Ukraine. Amcor has one plant in Ukraine, which was closed at the onset of the conflict, and three plants in Russia. After a thorough review of all strategic options, we made the decision to sell our three plants in Russia, and we are working towards finalizing a sale during the second half of the 2023 fiscal year. Until completion, Amcor remains committed to supporting our employees and customers, while preserving value for shareholders as we progress an orderly sale process. 2022 Financial Results Segment Information Twelve months ended June 30, 2021 Twelve months ended June 30, 2022 Adjusted non-GAAP results Net sales $ million EBIT $ million EBIT / Sales % EBIT / Average funds employed %1 Net sales $ million EBIT $ million EBIT / Sales % EBIT / Average funds employed %1 Flexibles Rigid Packaging Other Total Amcor (cid:20)0(cid:15)0(cid:23)0 2(cid:15)(cid:27)2(cid:22) (cid:11)2(cid:12) 12,861 (cid:20)(cid:15)(cid:23)2(cid:26) 2(cid:28)(cid:28) (cid:11)(cid:20)0(cid:24)(cid:12) 1,621 (cid:20)(cid:23)(cid:17)2 (cid:20)0(cid:17)(cid:25) 12.6 11,151 3,393 – 15.4 14,544 1,517 2(cid:27)(cid:28) (cid:11)(cid:20)0(cid:24)(cid:12) 1,701 13.6 8.5 11.7 16.3 (1) Return on average funds employed includes shareholders equity and net debt, calculated using a four quarter average and Last Twelve Months adjusted EBIT. Full year net sales for the Amcor Group increased by 13% on a reported basis, which includes price increases of approximately $1,530 million (representing 12% growth) related to the pass through of higher raw material costs and a combined unfavorable impact of 3% related to items affecting comparability and currency. Full year net sales were 4% higher than the same period last year on a comparable constant currency basis largely reflecting favorable price/mix. Full year volumes were also higher than the prior year. Full year adjusted EBIT of $1,701 million was 7% higher than last year on a comparable constant currency basis. Adjusted EBIT margins of 11.7% remained strong despite an adverse impact of 140 basis points related to pass through of higher raw material costs and return on average funds employed expanded by 90 basis points to 16.3%. Amcor Annual Report 2022 Amcor fiscal 2022 operating review 16 Flexibles Net sales Adjusted EBIT Adjusted EBIT / Sales % Twelve months ended June 30 2021 $ million 2022 $ million Reported (cid:31)% Comparable constant currency (cid:31)% (cid:20)0(cid:15)0(cid:23)0 (cid:20)(cid:15)(cid:23)2(cid:26) (cid:20)(cid:23)(cid:17)2 11,151 1,517 13.6 11 6 4 9 On a reported basis, full year net sales of $11,151 million were 11% higher, which includes price increases of approximately $1,091 million (representing 11% growth) related to the pass through of higher raw material costs and a combined unfavorable impact of 4% related to items affecting comparability and currency. Full year net sales were 4% higher than the prior period on a comparable constant currency basis reflecting favorable price/mix. Amcor continues to successfully execute its long-term strategy of driving growth in priority high value segments and end markets which has driven strong mix benefits in each quarter of fiscal 2022. Persistent supply chain disruptions had a dampening effect on volume growth in some categories through the year, and in parts of the business actions were taken to direct constrained materials to their highest value use, which also had a favorable impact on mix. As a result, overall volumes for the full year were broadly in line with the same period last year. In North America, full year net sales grew in the mid single digit range driven by a balance of favorable mix and higher volumes. Volumes were higher in the medical, condiments, liquid beverage and confectionary end markets, partly offset by lower coffee and frozen food volumes. In Europe, full year net sales grew in the mid single digit range driven by strong mix. Higher volumes across a broad range of end markets including pet food, healthcare, premium coffee, meat and confectionary were more than offset by lower film and foil rollstock volumes. Full year net sales and volumes grew at mid single digit rates across the Asian emerging markets. In Latin America, net sales grew at mid single digit rates and while volumes were lower than the same period last year, this was more than offset by price/mix which continued to strengthen through the year. Full year adjusted EBIT of $1,517 million was 9% higher than in the prior period on a comparable constant currency basis reflecting growth in priority high value segments, inflation recovery and strong cost performance. Adjusted EBIT margins of 13.6% remained strong despite an adverse impact of 150 basis points related the pass through of higher raw material costs. Rigid Packaging Net sales Adjusted EBIT Adjusted EBIT / Sales % Twelve months ended June 30 2021 $ million 2022 $ million Reported (cid:31)% Comparable constant currency (cid:31)% 2(cid:15)(cid:27)2(cid:22) 2(cid:28)(cid:28) (cid:20)0(cid:17)(cid:25) 3,393 2(cid:27)(cid:28) 8.5 20 (cid:11)(cid:22)(cid:12) 5 (cid:11)(cid:23)(cid:12) Amcor Annual Report 2022 16 Amcor fiscal 2022 operating review 17 On a reported basis, full year net sales of $3,393 million were 20% higher than the prior year, which includes price increases of approximately $439 million (representing 16% growth) related to the pass through of higher raw material costs. Full year net sales were 5% higher than the prior period on a comparable constant currency basis reflecting volume growth of 3% and a favorable price/ mix benefit of 2%. In North America, full year beverage volumes were 1% higher than the prior year. Full year hot fill container volumes were up 2% against a strong prior year of 13% growth reflecting continued growth in key categories. Specialty container volumes continued to improve sequentially but on a full year basis volumes were lower than last year which benefited from a strong first half in the home and personal care category. In Latin America, full year volumes grew at a double digit rate with higher volumes in Argentina, Colombia, Mexico, and Peru. The business achieved its strongest volume growth for the year in the June quarter, led in part by strength in Brazil. Full year adjusted EBIT of $289 million reflects lower earnings in North America, partly offset by higher earnings in Latin America. Through the first half of the year, the business in North America was adversely impacted by industry wide supply chain disruptions and shortages of key raw materials. Operating conditions and financial performance improved sequentially with adjusted EBIT for the June 2022 quarter increasing by 5% compared to the prior year period, building on 4% adjusted EBIT growth delivered in the March 2022 quarter. Amcor Annual Report 2022 Indicate by chec(cid:64) mar(cid:64) if the (cid:45)egistrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. (cid:52)es ☐ (cid:41)o ☒ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant(cid:25) (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities E(cid:77)change Act of 1(cid:24)34 during the preceding 12 months (or for such shorter period that the registrant (cid:76)as required to file such reports)(cid:11) and (2) has been sub(cid:63)ect to such filing requirements for the past (cid:24)0 days. (cid:52)es ☒ (cid:41)o ☐ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant has submitted electronically every Interactive (cid:31)ata File required to be submitted pursuant to (cid:45)ule 405 of (cid:45)egulation S(cid:12)(cid:47) ((cid:81)232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant (cid:76)as required to submit such files). (cid:52)es ☒ (cid:41)o ☐ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant is a large accelerated filer(cid:11) an accelerated filer(cid:11) a non(cid:12)accelerated filer(cid:11) a smaller reporting company(cid:11) or an emerging gro(cid:76)th company. See the definitions of "large accelerated filer(cid:11)" "accelerated filer(cid:11)" "smaller reporting company(cid:11)" and "emerging gro(cid:76)th company" in (cid:45)ule 12b(cid:12)2 of the E(cid:77)change Act. (Chec(cid:64) one)(cid:25) Large Accelerated Filer Accelerated Filer (cid:41)on(cid:12)Accelerated Filer ☒ ☐ ☐ Smaller (cid:45)eporting Company Emerging (cid:34)ro(cid:76)th Company ☐ ☐ If an emerging gro(cid:76)th company(cid:11) indicate by chec(cid:64) mar(cid:64) if the registrant has elected not to use the e(cid:77)tended transition period for complying (cid:76)ith any ne(cid:76) or revised financial accounting standards provided pursuant to Section 13(a) of the E(cid:77)change Act. ☐ ☐ (cid:41)o ☒ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant has filed a report on and attestation to its management(cid:89)s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes(cid:12)O(cid:77)ley Act (15 (cid:48).S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant is a shell company (as defined in (cid:45)ule 12b(cid:12)2 of the E(cid:77)change Act). (cid:52)es (cid:47)he aggregate mar(cid:64)et value of the ordinary shares held by non(cid:12)affiliates of the registrant(cid:11) computed by reference to the closing price of such shares as of the last business day of the registrant(cid:89)s most recently completed second quarter(cid:11) (cid:76)as As of August 16(cid:11) 2022(cid:11) the (cid:45)egistrant had 1(cid:11)48(cid:24)(cid:11)01(cid:24)(cid:11)556 shares issued and outstanding. DOC(cid:45)(cid:37)E(cid:38)(cid:44)S I(cid:38)CORPORA(cid:44)ED BY REFERE(cid:38)CE Form 10-K 1 (cid:45)(cid:38)I(cid:44)ED S(cid:44)A(cid:44)ES SEC(cid:45)RI(cid:44)IES A(cid:38)D E(cid:48)C(cid:32)A(cid:38)(cid:31)E CO(cid:37)(cid:37)ISSIO(cid:38) Washington, D(cid:12)C(cid:12) 20(cid:19)(cid:18)(cid:23) FOR(cid:37) 10-(cid:35) ☒ A(cid:38)(cid:38)(cid:45)AL REPOR(cid:44) P(cid:45)RS(cid:45)A(cid:38)(cid:44) (cid:44)O SEC(cid:44)IO(cid:38) 13 OR 1(cid:19)(d) OF (cid:44)(cid:32)E SEC(cid:45)RI(cid:44)IES E(cid:48)C(cid:32)A(cid:38)(cid:31)E AC(cid:44) OF 1(cid:23)3(cid:18) For the fiscal year ended June 30, 2022 or ☐ (cid:44)RA(cid:38)SI(cid:44)IO(cid:38) REPOR(cid:44) P(cid:45)RS(cid:45)A(cid:38)(cid:44) (cid:44)O SEC(cid:44)IO(cid:38) 13 OR 1(cid:19)(d) OF (cid:44)(cid:32)E SEC(cid:45)RI(cid:44)IES E(cid:48)C(cid:32)A(cid:38)(cid:31)E AC(cid:44) OF 1(cid:23)3(cid:18) For the transition period from (cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50) to (cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50) Commission File (cid:38)umber 001-3(cid:22)(cid:23)32 A(cid:37)COR PLC (E(cid:77)act name of registrant as specified in its charter) (State or other (cid:63)urisdiction of incorporation or organi(cid:79)ation) (I.(cid:45).S. Employer Identification (cid:41)o.) Jersey (cid:23)(cid:22)-1(cid:18)(cid:19)(cid:19)3(cid:20)(cid:21) $18.1 billion. (cid:22)3 (cid:44)ower Road (cid:38)orth Warmley, Bristol (cid:45)nited (cid:35)ingdom (Address of principal e(cid:77)ecutive offices) BS30 (cid:22)(cid:48)P ((cid:53)ip Code) Certain information required for (cid:43)art III of this Annual (cid:45)eport on Form 10(cid:12)(cid:38) is incorporated by reference to the Amcor plc definitive (cid:43)ro(cid:77)y Statement for its 2022 Annual Shareholder (cid:40)eeting(cid:11) (cid:76)hich (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A of the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended(cid:11) (cid:76)ithin 120 days of Amcor plc(cid:89)s fiscal year end. (cid:45)egistrant(cid:89)s telephone number(cid:11) including area code(cid:25) (cid:9)(cid:18)(cid:18) 11(cid:21) (cid:23)(cid:21)(cid:19)3200 Securities registered pursuant to Section 12(b) of the Act(cid:25) (cid:44)itle of each class (cid:44)rading symbol(s) Ordinary Shares(cid:11) par value $0.01 per share 1.125(cid:4) (cid:34)uaranteed Senior (cid:41)otes (cid:31)ue 2027 A(cid:40)C(cid:45) A(cid:48)(cid:38)F(cid:14)27 (cid:38)ame of each e(cid:74)change on which registered (cid:41)e(cid:76) (cid:52)or(cid:64) Stoc(cid:64) E(cid:77)change (cid:41)e(cid:76) (cid:52)or(cid:64) Stoc(cid:64) E(cid:77)change Securities registered pursuant to section 12(g) of the Act(cid:25) (cid:38)one Indicate by chec(cid:64) mar(cid:64) if the (cid:45)egistrant is a (cid:76)ell(cid:12)(cid:64)no(cid:76)n seasoned issuer(cid:11) as defined in (cid:45)ule 405 of the Securities Act. (cid:52)es ☒ (cid:41)o ☐ Amcor Annual Report 2022 1 Form 10-K 2 Indicate by chec(cid:64) mar(cid:64) if the (cid:45)egistrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. (cid:52)es ☐ (cid:41)o ☒ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant(cid:25) (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities E(cid:77)change Act of 1(cid:24)34 during the preceding 12 months (or for such shorter period that the registrant (cid:76)as required to file such reports)(cid:11) and (2) has been sub(cid:63)ect to such filing requirements for the past (cid:24)0 days. (cid:52)es ☒ (cid:41)o ☐ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant has submitted electronically every Interactive (cid:31)ata File required to be submitted pursuant to (cid:45)ule 405 of (cid:45)egulation S(cid:12)(cid:47) ((cid:81)232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant (cid:76)as required to submit such files). (cid:52)es ☒ (cid:41)o ☐ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant is a large accelerated filer(cid:11) an accelerated filer(cid:11) a non(cid:12)accelerated filer(cid:11) a smaller reporting company(cid:11) or an emerging gro(cid:76)th company. See the definitions of "large accelerated filer(cid:11)" "accelerated filer(cid:11)" "smaller reporting company(cid:11)" and "emerging gro(cid:76)th company" in (cid:45)ule 12b(cid:12)2 of the E(cid:77)change Act. (Chec(cid:64) one)(cid:25) Large Accelerated Filer Accelerated Filer (cid:41)on(cid:12)Accelerated Filer ☒ ☐ ☐ Smaller (cid:45)eporting Company Emerging (cid:34)ro(cid:76)th Company ☐ ☐ If an emerging gro(cid:76)th company(cid:11) indicate by chec(cid:64) mar(cid:64) if the registrant has elected not to use the e(cid:77)tended transition period for complying (cid:76)ith any ne(cid:76) or revised financial accounting standards provided pursuant to Section 13(a) of the E(cid:77)change Act. ☐ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant has filed a report on and attestation to its management(cid:89)s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes(cid:12)O(cid:77)ley Act (15 (cid:48).S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by chec(cid:64) mar(cid:64) (cid:76)hether the registrant is a shell company (as defined in (cid:45)ule 12b(cid:12)2 of the E(cid:77)change Act). (cid:52)es ☐ (cid:41)o ☒ (cid:47)he aggregate mar(cid:64)et value of the ordinary shares held by non(cid:12)affiliates of the registrant(cid:11) computed by reference to the closing price of such shares as of the last business day of the registrant(cid:89)s most recently completed second quarter(cid:11) (cid:76)as $18.1 billion. As of August 16(cid:11) 2022(cid:11) the (cid:45)egistrant had 1(cid:11)48(cid:24)(cid:11)01(cid:24)(cid:11)556 shares issued and outstanding. DOC(cid:45)(cid:37)E(cid:38)(cid:44)S I(cid:38)CORPORA(cid:44)ED BY REFERE(cid:38)CE BS30 (cid:22)(cid:48)P ((cid:53)ip Code) Certain information required for (cid:43)art III of this Annual (cid:45)eport on Form 10(cid:12)(cid:38) is incorporated by reference to the Amcor plc definitive (cid:43)ro(cid:77)y Statement for its 2022 Annual Shareholder (cid:40)eeting(cid:11) (cid:76)hich (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A of the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended(cid:11) (cid:76)ithin 120 days of Amcor plc(cid:89)s fiscal year end. SEC(cid:45)RI(cid:44)IES A(cid:38)D E(cid:48)C(cid:32)A(cid:38)(cid:31)E CO(cid:37)(cid:37)ISSIO(cid:38) (cid:45)(cid:38)I(cid:44)ED S(cid:44)A(cid:44)ES Washington, D(cid:12)C(cid:12) 20(cid:19)(cid:18)(cid:23) FOR(cid:37) 10-(cid:35) For the fiscal year ended June 30, 2022 or ☒ A(cid:38)(cid:38)(cid:45)AL REPOR(cid:44) P(cid:45)RS(cid:45)A(cid:38)(cid:44) (cid:44)O SEC(cid:44)IO(cid:38) 13 OR 1(cid:19)(d) OF (cid:44)(cid:32)E SEC(cid:45)RI(cid:44)IES E(cid:48)C(cid:32)A(cid:38)(cid:31)E AC(cid:44) OF 1(cid:23)3(cid:18) ☐ (cid:44)RA(cid:38)SI(cid:44)IO(cid:38) REPOR(cid:44) P(cid:45)RS(cid:45)A(cid:38)(cid:44) (cid:44)O SEC(cid:44)IO(cid:38) 13 OR 1(cid:19)(d) OF (cid:44)(cid:32)E SEC(cid:45)RI(cid:44)IES E(cid:48)C(cid:32)A(cid:38)(cid:31)E AC(cid:44) OF 1(cid:23)3(cid:18) For the transition period from (cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50) to (cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50)(cid:50) Commission File (cid:38)umber 001-3(cid:22)(cid:23)32 A(cid:37)COR PLC (E(cid:77)act name of registrant as specified in its charter) (State or other (cid:63)urisdiction of incorporation or organi(cid:79)ation) (I.(cid:45).S. Employer Identification (cid:41)o.) Jersey (cid:23)(cid:22)-1(cid:18)(cid:19)(cid:19)3(cid:20)(cid:21) (cid:22)3 (cid:44)ower Road (cid:38)orth Warmley, Bristol (cid:45)nited (cid:35)ingdom (Address of principal e(cid:77)ecutive offices) (cid:45)egistrant(cid:89)s telephone number(cid:11) including area code(cid:25) (cid:9)(cid:18)(cid:18) 11(cid:21) (cid:23)(cid:21)(cid:19)3200 Securities registered pursuant to Section 12(b) of the Act(cid:25) (cid:44)itle of each class (cid:44)rading symbol(s) Ordinary Shares(cid:11) par value $0.01 per share 1.125(cid:4) (cid:34)uaranteed Senior (cid:41)otes (cid:31)ue 2027 A(cid:40)C(cid:45) A(cid:48)(cid:38)F(cid:14)27 (cid:38)ame of each e(cid:74)change on which registered (cid:41)e(cid:76) (cid:52)or(cid:64) Stoc(cid:64) E(cid:77)change (cid:41)e(cid:76) (cid:52)or(cid:64) Stoc(cid:64) E(cid:77)change Securities registered pursuant to section 12(g) of the Act(cid:25) (cid:38)one Indicate by chec(cid:64) mar(cid:64) if the (cid:45)egistrant is a (cid:76)ell(cid:12)(cid:64)no(cid:76)n seasoned issuer(cid:11) as defined in (cid:45)ule 405 of the Securities Act. (cid:52)es ☒ (cid:41)o ☐ Amcor Annual Report 2022 Form 10-K 3 5 13 24 24 24 24 25 ........................................................................................................................................................ .................................................................................................................................................. ......................................................................................................................... ...................................................................................................................................................... ......................................................................................................................................... ............................................................................................................................... ....................................................................................................................................................... ................................................................................................................................ ....................... ...................................................................... ............................................................................................ .......................................... ............................................................................................................. ................................................................................... ........................................................................................................................ ....................................................................................................... ............................................................................................................... ................................................................................................ 28 45 47 47 49 50 51 52 53 54 ...................... 107 ............................................................................................................................... 107 ......................................................................................................................................... 107 .......................................................... 107 ........................................................................... 108 .............................................................................................................................. 109 .... 109 ............................................. 109 ....................................................................................................... 109 ................................................................................................ 110 ................................................................................................................................................. 110 ................................................................................................................... 112 ...................................................................................................................................................... 113 / Amcor Annual Report 2022 4 Forward-Loo(cid:61)ing Statements (cid:48)nless other(cid:76)ise indicated(cid:11) references to "Amcor(cid:11)" the "Company(cid:11)" "(cid:76)e(cid:11)" "our(cid:11)" and "us" in this Annual (cid:45)eport on Form 10(cid:12)(cid:38) refer to Amcor plc and its consolidated subsidiaries. (cid:47)his Annual (cid:45)eport on Form 10(cid:12)(cid:38) contains certain statements that are "for(cid:76)ard(cid:12)loo(cid:64)ing statements" (cid:76)ithin the meaning of the safe harbor provisions of the (cid:48).S. (cid:43)rivate Securities Litigation (cid:45)eform Act of 1(cid:24)(cid:24)5. For(cid:76)ard(cid:12)loo(cid:64)ing statements are generally identified (cid:76)ith (cid:76)ords li(cid:64)e "believe(cid:11)" "e(cid:77)pect(cid:11)" "target(cid:11)" "pro(cid:63)ect(cid:11)" "may(cid:11)" "could(cid:11)" "(cid:76)ould(cid:11)" "appro(cid:77)imately(cid:11)" "possible(cid:11)" "(cid:76)ill(cid:11)" "should(cid:11)" "intend(cid:11)" "plan(cid:11)" "anticipate(cid:11)" "commit(cid:11)" "estimate(cid:11)" "potential(cid:11)" "ambitions(cid:11)" "outloo(cid:64)(cid:11)" or "continue(cid:11)" the negative of these (cid:76)ords(cid:11) other terms of similar meaning(cid:11) or the use of future dates. Such statements are based on the current e(cid:77)pectations of the management of Amcor and are qualified by the inherent ris(cid:64)s and uncertainties surrounding future e(cid:77)pectations generally. Actual results could differ materially from those currently anticipated due to a number of ris(cid:64)s and uncertainties. (cid:41)one of Amcor or any of its respective directors(cid:11) e(cid:77)ecutive officers(cid:11) or advisors(cid:11) provide any representation(cid:11) assurance(cid:11) or guarantee that the occurrence of the events e(cid:77)pressed or implied in any for(cid:76)ard(cid:12)loo(cid:64)ing statements (cid:76)ill actually occur. (cid:45)is(cid:64)s and uncertainties that could cause actual results to differ from e(cid:77)pectations include(cid:11) but are not limited to(cid:25) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) or acquisitions(cid:26) affect our business(cid:26) of economic volatility(cid:26) Changes in consumer demand patterns and customer requirements in numerous industries(cid:26) the loss of (cid:64)ey customers(cid:11) a reduction in their production requirements(cid:11) or consolidation among (cid:64)ey customers(cid:26) significant competition in the industries and regions in (cid:76)hich (cid:76)e operate(cid:26) the inability to e(cid:77)pand our current business effectively through either organic gro(cid:76)th(cid:11) including by product innovation(cid:11) challenging current and future global economic conditions(cid:11) including inflation and supply chain disruptions(cid:26) impact of operating internationally(cid:11) including negative impacts from the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:26) price fluctuations or shortages in the availability of ra(cid:76) materials(cid:11) energy and other inputs(cid:11) (cid:76)hich could adversely production(cid:11) supply(cid:11) and other commercial ris(cid:64)s(cid:11) including counterparty credit ris(cid:64)s(cid:11) (cid:76)hich may be e(cid:77)acerbated in times global health outbrea(cid:64)s(cid:11) including the Coronavirus pandemic ("CO(cid:49)I(cid:31)(cid:12)1(cid:24)")(cid:26) an inability to attract and retain (cid:64)ey personnel(cid:26) costs and liabilities related to current and future environment(cid:11) health and safety la(cid:76)s and regulations(cid:26) labor disputes(cid:26) ris(cid:64)s related to climate change(cid:26) failures or disruptions in information technology systems(cid:26) cybersecurity ris(cid:64)s(cid:11) (cid:76)hich could disrupt our operations or ris(cid:64) of loss of our sensitive business information(cid:26) a significant increase in our indebtedness or a do(cid:76)ngrade in our credit rating could reduce our operating fle(cid:77)ibility and increase our borro(cid:76)ing costs and negatively affect our financial condition and results of operations(cid:26) rising interest rates that increase our borro(cid:76)ing costs on our variable rate indebtedness and could have other negative foreign e(cid:77)change rate ris(cid:64)(cid:26) impacts(cid:26) a significant (cid:76)rite(cid:12)do(cid:76)n of good(cid:76)ill and(cid:14)or other intangible assets(cid:26) failure to maintain an effective system of internal control over financial reporting(cid:26) an inability of our insurance policies(cid:11) including our use of a captive insurance company(cid:11) to provide adequate protection against all of the ris(cid:64)s (cid:76)e face(cid:26) an inability to defend our intellectual property rights or intellectual property infringement claims against us(cid:26) litigation(cid:11) including product liability claims(cid:11) or regulatory developments(cid:26) increasing scrutiny and changing e(cid:77)pectations (cid:76)ith respect to our Environmental(cid:11) Social(cid:11) and (cid:34)overnance ("ES(cid:34)") practices resulting in additional costs or e(cid:77)posure to additional ris(cid:64)s(cid:26) changing government regulations in environmental(cid:11) health(cid:11) and safety matters(cid:26) and changes in ta(cid:77) la(cid:76)s or changes in our geographic mi(cid:77) of earnings. Additional factors that could cause actual results to differ from those e(cid:77)pected are discussed in this Annual (cid:45)eport on Form 10(cid:12)(cid:38)(cid:11) including in the sections entitled "Item 1A (cid:12) (cid:45)is(cid:64) Factors" and "Item 7 (cid:12) (cid:40)anagement(cid:89)s (cid:31)iscussion and Analysis of Financial Condition and (cid:45)esults of Operations(cid:11)" and in Amcor(cid:89)s subsequent filings (cid:76)ith the Securities and E(cid:77)change For(cid:76)ard(cid:12)loo(cid:64)ing statements made in this Annual (cid:45)eport on Form 10(cid:12)(cid:38) relate only to events as of the date on (cid:76)hich the statements are made. Amcor assumes no obligation(cid:11) and disclaims any obligation(cid:11) to update the information contained in this report. All for(cid:76)ard(cid:12)loo(cid:64)ing statements in this Annual (cid:45)eport on Form 10(cid:12)(cid:38) are qualified in their entirety by this cautionary Commission. statement. 5 13 24 24 24 24 25 28 45 47 47 49 50 51 52 53 54 ........................................................................................................................................................ .................................................................................................................................................. ......................................................................................................................... ...................................................................................................................................................... ......................................................................................................................................... ............................................................................................................................... ....................................................................................................................................................... ................................................................................................................................ ...................................................................... ............................................................................................ .......................................... ....................... ............................................................................................................. ................................................................................... ........................................................................................................................ ....................................................................................................... ............................................................................................................... ................................................................................................ ............................................................................................................................... 107 ......................................................................................................................................... 107 .......................................................... 107 ...................... 107 .............................................................................................................................. 109 ........................................................................... 108 ....................................................................................................... 109 ............................................. 109 .... 109 ................................................................................................ 110 ................................................................................................................................................. 110 ................................................................................................................... 112 ...................................................................................................................................................... 113 3 Form 10-K 4 Forward-Loo(cid:61)ing Statements (cid:48)nless other(cid:76)ise indicated(cid:11) references to "Amcor(cid:11)" the "Company(cid:11)" "(cid:76)e(cid:11)" "our(cid:11)" and "us" in this Annual (cid:45)eport on Form 10(cid:12)(cid:38) refer to Amcor plc and its consolidated subsidiaries. (cid:47)his Annual (cid:45)eport on Form 10(cid:12)(cid:38) contains certain statements that are "for(cid:76)ard(cid:12)loo(cid:64)ing statements" (cid:76)ithin the meaning of the safe harbor provisions of the (cid:48).S. (cid:43)rivate Securities Litigation (cid:45)eform Act of 1(cid:24)(cid:24)5. For(cid:76)ard(cid:12)loo(cid:64)ing statements are generally identified (cid:76)ith (cid:76)ords li(cid:64)e "believe(cid:11)" "e(cid:77)pect(cid:11)" "target(cid:11)" "pro(cid:63)ect(cid:11)" "may(cid:11)" "could(cid:11)" "(cid:76)ould(cid:11)" "appro(cid:77)imately(cid:11)" "possible(cid:11)" "(cid:76)ill(cid:11)" "should(cid:11)" "intend(cid:11)" "plan(cid:11)" "anticipate(cid:11)" "commit(cid:11)" "estimate(cid:11)" "potential(cid:11)" "ambitions(cid:11)" "outloo(cid:64)(cid:11)" or "continue(cid:11)" the negative of these (cid:76)ords(cid:11) other terms of similar meaning(cid:11) or the use of future dates. Such statements are based on the current e(cid:77)pectations of the management of Amcor and are qualified by the inherent ris(cid:64)s and uncertainties surrounding future e(cid:77)pectations generally. Actual results could differ materially from those currently anticipated due to a number of ris(cid:64)s and uncertainties. (cid:41)one of Amcor or any of its respective directors(cid:11) e(cid:77)ecutive officers(cid:11) or advisors(cid:11) provide any representation(cid:11) assurance(cid:11) or guarantee that the occurrence of the events e(cid:77)pressed or implied in any for(cid:76)ard(cid:12)loo(cid:64)ing statements (cid:76)ill actually occur. (cid:45)is(cid:64)s and uncertainties that could cause actual results to differ from e(cid:77)pectations include(cid:11) but are not limited to(cid:25) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) Changes in consumer demand patterns and customer requirements in numerous industries(cid:26) the loss of (cid:64)ey customers(cid:11) a reduction in their production requirements(cid:11) or consolidation among (cid:64)ey customers(cid:26) significant competition in the industries and regions in (cid:76)hich (cid:76)e operate(cid:26) the inability to e(cid:77)pand our current business effectively through either organic gro(cid:76)th(cid:11) including by product innovation(cid:11) or acquisitions(cid:26) challenging current and future global economic conditions(cid:11) including inflation and supply chain disruptions(cid:26) impact of operating internationally(cid:11) including negative impacts from the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:26) price fluctuations or shortages in the availability of ra(cid:76) materials(cid:11) energy and other inputs(cid:11) (cid:76)hich could adversely affect our business(cid:26) production(cid:11) supply(cid:11) and other commercial ris(cid:64)s(cid:11) including counterparty credit ris(cid:64)s(cid:11) (cid:76)hich may be e(cid:77)acerbated in times of economic volatility(cid:26) global health outbrea(cid:64)s(cid:11) including the Coronavirus pandemic ("CO(cid:49)I(cid:31)(cid:12)1(cid:24)")(cid:26) an inability to attract and retain (cid:64)ey personnel(cid:26) costs and liabilities related to current and future environment(cid:11) health and safety la(cid:76)s and regulations(cid:26) labor disputes(cid:26) ris(cid:64)s related to climate change(cid:26) failures or disruptions in information technology systems(cid:26) cybersecurity ris(cid:64)s(cid:11) (cid:76)hich could disrupt our operations or ris(cid:64) of loss of our sensitive business information(cid:26) a significant increase in our indebtedness or a do(cid:76)ngrade in our credit rating could reduce our operating fle(cid:77)ibility and increase our borro(cid:76)ing costs and negatively affect our financial condition and results of operations(cid:26) foreign e(cid:77)change rate ris(cid:64)(cid:26) rising interest rates that increase our borro(cid:76)ing costs on our variable rate indebtedness and could have other negative impacts(cid:26) a significant (cid:76)rite(cid:12)do(cid:76)n of good(cid:76)ill and(cid:14)or other intangible assets(cid:26) failure to maintain an effective system of internal control over financial reporting(cid:26) an inability of our insurance policies(cid:11) including our use of a captive insurance company(cid:11) to provide adequate protection against all of the ris(cid:64)s (cid:76)e face(cid:26) an inability to defend our intellectual property rights or intellectual property infringement claims against us(cid:26) litigation(cid:11) including product liability claims(cid:11) or regulatory developments(cid:26) increasing scrutiny and changing e(cid:77)pectations (cid:76)ith respect to our Environmental(cid:11) Social(cid:11) and (cid:34)overnance ("ES(cid:34)") practices resulting in additional costs or e(cid:77)posure to additional ris(cid:64)s(cid:26) changing government regulations in environmental(cid:11) health(cid:11) and safety matters(cid:26) and changes in ta(cid:77) la(cid:76)s or changes in our geographic mi(cid:77) of earnings. Additional factors that could cause actual results to differ from those e(cid:77)pected are discussed in this Annual (cid:45)eport on Form 10(cid:12)(cid:38)(cid:11) including in the sections entitled "Item 1A (cid:12) (cid:45)is(cid:64) Factors" and "Item 7 (cid:12) (cid:40)anagement(cid:89)s (cid:31)iscussion and Analysis of Financial Condition and (cid:45)esults of Operations(cid:11)" and in Amcor(cid:89)s subsequent filings (cid:76)ith the Securities and E(cid:77)change Commission. For(cid:76)ard(cid:12)loo(cid:64)ing statements made in this Annual (cid:45)eport on Form 10(cid:12)(cid:38) relate only to events as of the date on (cid:76)hich the statements are made. Amcor assumes no obligation(cid:11) and disclaims any obligation(cid:11) to update the information contained in this report. All for(cid:76)ard(cid:12)loo(cid:64)ing statements in this Annual (cid:45)eport on Form 10(cid:12)(cid:38) are qualified in their entirety by this cautionary statement. / 4 Amcor Annual Report 2022 (cid:47)hese criteria have led us to the focused portfolio of strong businesses (cid:76)e have today across(cid:25) fle(cid:77)ible and rigid pac(cid:64)aging(cid:11) specialty cartons(cid:11) and closures. (cid:18)iffere(cid:50)(cid:56)ia(cid:56)e(cid:40) (cid:39)a(cid:52)a(cid:38)i(cid:48)i(cid:56)ies (cid:2)(cid:47)he Amcor (cid:50)ay" describes the capabilities deployed consistently across Amcor that enable us to get leverage across our portfolio(cid:25) (cid:47)alent(cid:11) Commercial E(cid:77)cellence(cid:11) Operational Leadership(cid:11) Innovation(cid:11) and Cash and Capital (cid:31)iscipline. Our values of Safety(cid:11) Integrity(cid:11) Collaboration(cid:11) Accountability(cid:11) and (cid:45)esults and Outperformance guide our behavior(cid:11) driving our (cid:76)inning aspiration to be (cid:47)(cid:35)E leading global pac(cid:64)aging company. S(cid:44)are(cid:44)o(cid:48)(cid:40)er (cid:58)a(cid:48)(cid:57)e (cid:39)rea(cid:56)io(cid:50) (cid:47)hrough our portfolio of focused businesses and differentiated capabilities(cid:11) (cid:76)e generate strong cash flo(cid:76) and redeploy cash to consistently create superior value for shareholders. (cid:47)he nature of our consumer and healthcare end mar(cid:64)ets means that year(cid:12)to(cid:12)year volatility should be relatively lo(cid:76)(cid:11) measured on a constant currency basis. Over time(cid:11) value creation has been strong and consistent and has reflected a combination of dividends(cid:11) organic gro(cid:76)th in the base business(cid:11) and using free cash flo(cid:76) to pursue targeted acquisitions and(cid:14)or returning cash to shareholders via share buybac(cid:64)s. Form 10-K 5 PAR(cid:44) I Item 1(cid:12) - Business (cid:44)he Company Amcor plc (A(cid:45)B(cid:41) 630 385 278) is a public limited company incorporated under the La(cid:76)s of the Baili(cid:76)ic(cid:64) of (cid:37)ersey. Our history dates bac(cid:64) more than 150 years(cid:11) (cid:76)ith origins in both Australia and the (cid:48)SA. (cid:47)oday(cid:11) (cid:76)e are a global leader in developing and producing responsible pac(cid:64)aging for food(cid:11) beverage(cid:11) pharmaceutical(cid:11) medical(cid:11) home and personal(cid:12)care(cid:11) and other products. Our innovation e(cid:77)cellence and global pac(cid:64)aging e(cid:77)pertise enables us to solve pac(cid:64)aging challenges around the (cid:76)orld every day(cid:11) producing pac(cid:64)aging that is more functional(cid:11) appealing(cid:11) and cost effective for our customers and their consumers and importantly(cid:11) more sustainable for the environment. S(cid:57)s(cid:56)ai(cid:50)a(cid:38)i(cid:48)i(cid:56)(cid:61) Sustainability is central to our business and one of our most e(cid:77)citing opportunities for gro(cid:76)th. (cid:50)or(cid:64)ing daily to embed sustainability deeper into everything (cid:76)e do(cid:11) Amcor has been a leader in the industry in promoting sustainability. (cid:50)e aspire to improve the quality of lives(cid:11) protect ecosystems(cid:11) and preserve natural resources for future generations by offering a unique range of responsible pac(cid:64)aging solutions(cid:11) leveraging our global scale(cid:11) reach(cid:11) and e(cid:77)pertise to meet our customers(cid:89) gro(cid:76)ing sustainability e(cid:77)pectations. In (cid:37)anuary 2018(cid:11) (cid:76)e became the (cid:76)orld(cid:89)s first pac(cid:64)aging company to pledge that all our pac(cid:64)aging (cid:76)ould be designed to be recycled(cid:11) compostable(cid:11) or reusable by 2025 and also committed to increasing the amount of recycled content (cid:76)e use. (cid:50)e are delivering against these commitments and continue to lead in the development of a responsible pac(cid:64)aging value chain through our innovations and partnerships. (cid:50)e have identified a clear path to meeting our sustainability ambitions and those of our customers by focusing on the three elements of responsible pac(cid:64)aging (cid:84) product innovation(cid:11) consumer participation(cid:11) and infrastructure development. (cid:18)iffere(cid:50)(cid:56)ia(cid:56)e(cid:40) So(cid:48)(cid:57)(cid:56)io(cid:50)s Our product portfolio is diverse and dynamic due to our constant innovation and close partnerships (cid:76)ith our customers. Behind every one of our products stands a unique combination of technical (cid:64)no(cid:76)(cid:12)ho(cid:76)(cid:11) business e(cid:77)perience(cid:11) and e(cid:77)pertise. (cid:50)e (cid:76)or(cid:64) closely (cid:76)ith our customers to identify feasible(cid:11) high(cid:12)performance(cid:11) responsible pac(cid:64)aging solutions based on their unique needs. (cid:50)here solutions do not currently e(cid:77)ist(cid:11) (cid:76)e (cid:76)or(cid:64) to innovate ne(cid:76) ones. (cid:50)e invest appro(cid:77)imately $100 million every year in our industry(cid:12)leading research and development capabilities(cid:11) bringing together the best in pac(cid:64)aging design(cid:11) science(cid:11) manufacturing(cid:11) and people. (cid:19)x(cid:52)er(cid:56)ise a(cid:39)ross (cid:30)a(cid:39)(cid:47)a(cid:43)i(cid:50)(cid:43) (cid:27)a(cid:56)eria(cid:48)s (cid:50)e believe that (cid:76)e are uniquely positioned to offer a variety of pac(cid:64)aging solutions (cid:76)ith a (cid:76)ide(cid:11) differentiated portfolio of products. Our pac(cid:64)aging e(cid:77)pertise covers all main pac(cid:64)aging materials including paper(cid:11) metal(cid:11) plastic(cid:11) recycled(cid:11) and bio(cid:12)based materials and the sustainable use of recyclable plastics. Our e(cid:77)pertise and trac(cid:64) record translate across many innovative solutions that customers can e(cid:77)plore (cid:76)ith ease and convenience to meet their gro(cid:76)ing pac(cid:64)aging needs(cid:11) (cid:76)hile improving environmental impact. Business Strategy S(cid:56)ra(cid:56)e(cid:43)(cid:61) Our business strategy consists of three components(cid:25) a focused portfolio(cid:11) differentiated capabilities(cid:11) and our aspiration to be (cid:47)(cid:35)E leading global pac(cid:64)aging company. (cid:47)o fulfill our aspiration(cid:11) (cid:76)e are determined to (cid:76)in for our customers(cid:11) employees(cid:11) shareholders(cid:11) and the environment. (cid:20)o(cid:39)(cid:57)se(cid:40) (cid:52)or(cid:56)fo(cid:48)io Our portfolio of businesses share certain important characteristics(cid:25) • A focus on primary pac(cid:64)aging for fast(cid:12)moving consumer goods(cid:11) • • • multiple paths for us to (cid:76)in through our leadership position(cid:11) scale(cid:11) and ability to differentiate our product offering good industry structure(cid:11) attractive relative gro(cid:76)th(cid:11) and through innovation. 5 Amcor Annual Report 2022 6 5 Form 10-K 6 (cid:47)hese criteria have led us to the focused portfolio of strong businesses (cid:76)e have today across(cid:25) fle(cid:77)ible and rigid pac(cid:64)aging(cid:11) specialty cartons(cid:11) and closures. (cid:18)iffere(cid:50)(cid:56)ia(cid:56)e(cid:40) (cid:39)a(cid:52)a(cid:38)i(cid:48)i(cid:56)ies (cid:2)(cid:47)he Amcor (cid:50)ay" describes the capabilities deployed consistently across Amcor that enable us to get leverage across our portfolio(cid:25) (cid:47)alent(cid:11) Commercial E(cid:77)cellence(cid:11) Operational Leadership(cid:11) Innovation(cid:11) and Cash and Capital (cid:31)iscipline. Our values of Safety(cid:11) Integrity(cid:11) Collaboration(cid:11) Accountability(cid:11) and (cid:45)esults and Outperformance guide our behavior(cid:11) driving our (cid:76)inning aspiration to be (cid:47)(cid:35)E leading global pac(cid:64)aging company. S(cid:44)are(cid:44)o(cid:48)(cid:40)er (cid:58)a(cid:48)(cid:57)e (cid:39)rea(cid:56)io(cid:50) (cid:47)hrough our portfolio of focused businesses and differentiated capabilities(cid:11) (cid:76)e generate strong cash flo(cid:76) and redeploy cash to consistently create superior value for shareholders. (cid:47)he nature of our consumer and healthcare end mar(cid:64)ets means that year(cid:12)to(cid:12)year volatility should be relatively lo(cid:76)(cid:11) measured on a constant currency basis. Over time(cid:11) value creation has been strong and consistent and has reflected a combination of dividends(cid:11) organic gro(cid:76)th in the base business(cid:11) and using free cash flo(cid:76) to pursue targeted acquisitions and(cid:14)or returning cash to shareholders via share buybac(cid:64)s. PAR(cid:44) I Item 1(cid:12) - Business (cid:44)he Company Amcor plc (A(cid:45)B(cid:41) 630 385 278) is a public limited company incorporated under the La(cid:76)s of the Baili(cid:76)ic(cid:64) of (cid:37)ersey. Our history dates bac(cid:64) more than 150 years(cid:11) (cid:76)ith origins in both Australia and the (cid:48)SA. (cid:47)oday(cid:11) (cid:76)e are a global leader in developing and producing responsible pac(cid:64)aging for food(cid:11) beverage(cid:11) pharmaceutical(cid:11) medical(cid:11) home and personal(cid:12)care(cid:11) and other products. Our innovation e(cid:77)cellence and global pac(cid:64)aging e(cid:77)pertise enables us to solve pac(cid:64)aging challenges around the (cid:76)orld every day(cid:11) producing pac(cid:64)aging that is more functional(cid:11) appealing(cid:11) and cost effective for our customers and their consumers and importantly(cid:11) more sustainable for the environment. S(cid:57)s(cid:56)ai(cid:50)a(cid:38)i(cid:48)i(cid:56)(cid:61) Sustainability is central to our business and one of our most e(cid:77)citing opportunities for gro(cid:76)th. (cid:50)or(cid:64)ing daily to embed sustainability deeper into everything (cid:76)e do(cid:11) Amcor has been a leader in the industry in promoting sustainability. (cid:50)e aspire to improve the quality of lives(cid:11) protect ecosystems(cid:11) and preserve natural resources for future generations by offering a unique range of responsible pac(cid:64)aging solutions(cid:11) leveraging our global scale(cid:11) reach(cid:11) and e(cid:77)pertise to meet our customers(cid:89) gro(cid:76)ing sustainability e(cid:77)pectations. In (cid:37)anuary 2018(cid:11) (cid:76)e became the (cid:76)orld(cid:89)s first pac(cid:64)aging company to pledge that all our pac(cid:64)aging (cid:76)ould be designed to be recycled(cid:11) compostable(cid:11) or reusable by 2025 and also committed to increasing the amount of recycled content (cid:76)e use. (cid:50)e are delivering against these commitments and continue to lead in the development of a responsible pac(cid:64)aging value chain through our innovations and partnerships. (cid:50)e have identified a clear path to meeting our sustainability ambitions and those of our customers by focusing on the three elements of responsible pac(cid:64)aging (cid:84) product innovation(cid:11) consumer participation(cid:11) and infrastructure development. (cid:18)iffere(cid:50)(cid:56)ia(cid:56)e(cid:40) So(cid:48)(cid:57)(cid:56)io(cid:50)s Our product portfolio is diverse and dynamic due to our constant innovation and close partnerships (cid:76)ith our customers. Behind every one of our products stands a unique combination of technical (cid:64)no(cid:76)(cid:12)ho(cid:76)(cid:11) business e(cid:77)perience(cid:11) and e(cid:77)pertise. (cid:50)e (cid:76)or(cid:64) closely (cid:76)ith our customers to identify feasible(cid:11) high(cid:12)performance(cid:11) responsible pac(cid:64)aging solutions based on their unique needs. (cid:50)here solutions do not currently e(cid:77)ist(cid:11) (cid:76)e (cid:76)or(cid:64) to innovate ne(cid:76) ones. (cid:50)e invest appro(cid:77)imately $100 million every year in our industry(cid:12)leading research and development capabilities(cid:11) bringing together the best in pac(cid:64)aging design(cid:11) science(cid:11) manufacturing(cid:11) and people. (cid:19)x(cid:52)er(cid:56)ise a(cid:39)ross (cid:30)a(cid:39)(cid:47)a(cid:43)i(cid:50)(cid:43) (cid:27)a(cid:56)eria(cid:48)s (cid:50)e believe that (cid:76)e are uniquely positioned to offer a variety of pac(cid:64)aging solutions (cid:76)ith a (cid:76)ide(cid:11) differentiated portfolio of products. Our pac(cid:64)aging e(cid:77)pertise covers all main pac(cid:64)aging materials including paper(cid:11) metal(cid:11) plastic(cid:11) recycled(cid:11) and bio(cid:12)based materials and the sustainable use of recyclable plastics. Our e(cid:77)pertise and trac(cid:64) record translate across many innovative solutions that customers can e(cid:77)plore (cid:76)ith ease and convenience to meet their gro(cid:76)ing pac(cid:64)aging needs(cid:11) (cid:76)hile improving environmental impact. Business Strategy S(cid:56)ra(cid:56)e(cid:43)(cid:61) shareholders(cid:11) and the environment. (cid:20)o(cid:39)(cid:57)se(cid:40) (cid:52)or(cid:56)fo(cid:48)io Our business strategy consists of three components(cid:25) a focused portfolio(cid:11) differentiated capabilities(cid:11) and our aspiration to be (cid:47)(cid:35)E leading global pac(cid:64)aging company. (cid:47)o fulfill our aspiration(cid:11) (cid:76)e are determined to (cid:76)in for our customers(cid:11) employees(cid:11) Our portfolio of businesses share certain important characteristics(cid:25) • A focus on primary pac(cid:64)aging for fast(cid:12)moving consumer goods(cid:11) • • good industry structure(cid:11) attractive relative gro(cid:76)th(cid:11) and through innovation. • multiple paths for us to (cid:76)in through our leadership position(cid:11) scale(cid:11) and ability to differentiate our product offering 5 6 Amcor Annual Report 2022 Form 10-K 7 Segment Information Intellectual Property Accounting Standards Codification ("ASC") 280(cid:11) "Segment (cid:45)eporting(cid:11)" establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280(cid:11) (cid:76)e have determined (cid:76)e have t(cid:76)o reportable segments(cid:11) Fle(cid:77)ibles and (cid:45)igid (cid:43)ac(cid:64)aging. (cid:47)he reportable segments produce fle(cid:77)ible pac(cid:64)aging(cid:11) rigid pac(cid:64)aging(cid:11) specialty cartons(cid:11) and closure products(cid:11) (cid:76)hich are sold to customers participating in a range of attractive end use areas throughout Europe(cid:11) (cid:41)orth America(cid:11) Latin America(cid:11) Africa(cid:11) and the Asia (cid:43)acific regions. (cid:45)efer to (cid:41)ote 21(cid:11) "Segments(cid:11)" of the notes to consolidated financial statements for financial information about reportable segments. (cid:50)e are the o(cid:76)ner or licensee of more than a thousand (cid:48)nited States and other country patents and patent applications that relate to our products(cid:11) manufacturing processes(cid:11) and equipment. (cid:50)e have a number of trademar(cid:64)s and trademar(cid:64) registrations in the (cid:48)nited States and in other countries. (cid:50)e also (cid:64)eep certain technology and processes as trade secrets. Our patents(cid:11) licenses(cid:11) and trademar(cid:64)s collectively provide a competitive advantage. (cid:35)o(cid:76)ever(cid:11) the loss of any single patent or license alone (cid:76)ould not have a material adverse effect on our results of operations as a (cid:76)hole or those of our reportable segments. (cid:43)atents(cid:11) patent applications(cid:11) and license agreements (cid:76)ill e(cid:77)pire or terminate over time by operation of la(cid:76)(cid:11) in accordance (cid:76)ith (cid:20)(cid:48)exi(cid:38)(cid:48)es Se(cid:43)me(cid:50)(cid:56) Our Fle(cid:77)ibles Segment develops and supplies fle(cid:77)ible pac(cid:64)aging globally. (cid:50)ith appro(cid:77)imately 37(cid:11)000 employees at 16(cid:24) significant manufacturing and support facilities in 3(cid:24) countries as of (cid:37)une 30(cid:11) 2022(cid:11) the Fle(cid:77)ibles Segment is one of the (cid:76)orld(cid:6)s largest suppliers of plastic(cid:11) aluminum(cid:11) and fiber based fle(cid:77)ible pac(cid:64)aging. In fiscal year 2022(cid:11) Fle(cid:77)ibles accounted for appro(cid:77)imately 77(cid:4) of consolidated net sales. Ri(cid:43)i(cid:40) (cid:30)a(cid:39)(cid:47)a(cid:43)i(cid:50)(cid:43) Se(cid:43)me(cid:50)(cid:56) Our (cid:45)igid (cid:43)ac(cid:64)aging Segment manufactures rigid pac(cid:64)aging containers and related products in the Americas. As of (cid:37)une 30(cid:11) 2022(cid:11) the (cid:45)igid (cid:43)ac(cid:64)aging Segment employed appro(cid:77)imately 6(cid:11)000 employees at 52 significant manufacturing and support facilities in 11 countries. In fiscal year 2022(cid:11) (cid:45)igid (cid:43)ac(cid:64)aging accounted for appro(cid:77)imately 23(cid:4) of consolidated net sales. (cid:37)ar(cid:61)eting, Distribution, and Competition Our sales are made through a variety of distribution channels(cid:11) but primarily through our direct sales force. Sales offices and plants are located throughout Europe(cid:11) (cid:41)orth America(cid:11) Latin America(cid:11) Africa(cid:11) and Asia(cid:12)(cid:43)acific regions to provide prompt and economical service to thousands of customers. Our technically trained sales force is supported by product development engineers(cid:11) design technicians(cid:11) field service technicians(cid:11) and customer service teams. (cid:50)e did not have sales to a single customer that e(cid:77)ceeded 10(cid:4) of consolidated net sales in the last three fiscal years. (cid:47)he ma(cid:63)or mar(cid:64)ets in (cid:76)hich (cid:76)e sell our products historically have been(cid:11) and continue to be(cid:11) highly competitive. Areas of competition include service(cid:11) innovation(cid:11) quality(cid:11) and price. Competitors include Aptar(cid:34)roup(cid:11) Inc.(cid:11) Ball Corporation(cid:11) Berry (cid:34)lobal (cid:34)roup(cid:11) Inc(cid:11) CCL Industries Inc.(cid:11) Cro(cid:76)n (cid:35)oldings(cid:11) Inc.(cid:11) (cid:34)raphic (cid:43)ac(cid:64)aging (cid:35)olding Company(cid:11) (cid:35)uhtama(cid:64)i Oy(cid:63)(cid:11) International (cid:43)aper Company(cid:11) (cid:40)ayr(cid:12)(cid:40)elnhof (cid:38)arton A(cid:34)(cid:11) O(cid:12)I (cid:34)lass(cid:11) Inc.(cid:11) Sealed Air Corporation(cid:11) Silgan (cid:35)oldings Inc.(cid:11) Sonoco (cid:43)roducts Company(cid:11) and (cid:50)est(cid:45)oc(cid:64) Company(cid:11) and a variety of privately held companies. (cid:50)e consider ourselves to be a significant participant in the mar(cid:64)ets in (cid:76)hich (cid:76)e operate(cid:26) ho(cid:76)ever(cid:11) due to the diversity of our business(cid:11) our precise competitive position in these mar(cid:64)ets is not reasonably determinable. Bac(cid:61)log (cid:50)or(cid:64)ing capital fluctuates throughout the year in relation to business volume and other mar(cid:64)etplace conditions. (cid:50)e maintain inventory levels that provide a reasonable balance bet(cid:76)een obtaining ra(cid:76) materials at favorable prices and maintaining adequate inventory levels to enable us to fulfill our commitment to promptly fill customer orders. (cid:40)anufacturing bac(cid:64)logs are not a significant factor in the mar(cid:64)ets in (cid:76)hich (cid:76)e operate. Raw (cid:37)aterials (cid:43)olymer resins and films(cid:11) paper(cid:11) in(cid:64)s(cid:11) adhesives(cid:11) aluminum(cid:11) and chemicals constitute the ma(cid:63)or ra(cid:76) materials (cid:76)e use. (cid:47)hese are purchased from a variety of global industry sources(cid:11) and (cid:76)e are not significantly dependent on any one supplier for our ra(cid:76) materials. (cid:50)hile persistent industry(cid:12)(cid:76)ide shortages of certain ra(cid:76) materials have continued to occur since the second half of fiscal 2021(cid:11) (cid:76)e have been able to manage supply disruptions (cid:76)ith no material impact by (cid:76)or(cid:64)ing closely (cid:76)ith our suppliers and customers. Supply shortages can lead and have in the past led to increased ra(cid:76) material price volatility. Increases in the price of ra(cid:76) materials are generally able to be passed on to customers through contractual price mechanisms over time and other means. (cid:50)e e(cid:77)pect supply disruption and price volatility to continue into fiscal year 2023 and (cid:76)ill continue to (cid:76)or(cid:64) closely (cid:76)ith our suppliers and customers in an effort to minimi(cid:79)e the impact on our operations. their terms(cid:11) or other(cid:76)ise. Sustainability and Innovation (cid:50)e believe there (cid:76)ill al(cid:76)ays be a role for the primary pac(cid:64)aging (cid:76)e produce to preserve food(cid:11) beverages(cid:11) and healthcare products(cid:11) protect consumers(cid:11) and promote brands. Consumers also (cid:76)ant cost effective(cid:11) convenient(cid:11) and easy to use pac(cid:64)aging (cid:76)ith a reduced environmental footprint and a responsible end of life solution. (cid:50)e have identified a clear path to provide food(cid:11) beverages(cid:11) and healthcare products to people around the (cid:76)orld in a more sustainable (cid:76)ay(cid:11) and meet our sustainability ambitions(cid:11) and those of our customers by focusing on (cid:76)hat (cid:76)e believe are the three elements of responsible pac(cid:64)aging(cid:25) product innovation(cid:11) consumer participation(cid:11) and infrastructure development. (cid:50)e believe our commitment to responsible pac(cid:64)aging is integral to our success. Our responsible pac(cid:64)aging solutions address both ho(cid:76) the product is made(cid:11) as (cid:76)ell as (cid:76)hat happens after the consumer uses it(cid:11) offering a (cid:76)ide variety of options to advance sustainability (cid:76)hile meeting our customers(cid:89) specific pac(cid:64)aging needs. Sustainability is comprehensively embedded across our business(cid:11) from the investments (cid:76)e are ma(cid:64)ing in sustainable pac(cid:64)aging innovation and design(cid:11) to the partnerships (cid:76)e enter(cid:11) and to ho(cid:76) (cid:76)e run our manufacturing operations more efficiently. Innovation is central to Amcor(cid:89)s approach to sustainability and (cid:76)e spend appro(cid:77)imately $100 million a year on research and development. (cid:50)e are highly regarded for our innovation capabilities and have more than a thousand active patents. (cid:50)e solve pac(cid:64)aging challenges(cid:11) developing differentiated products(cid:11) services(cid:11) and processes to protect our customers products and fulfil the needs of the consumers (cid:76)ho rely on them around the globe. (cid:31)ra(cid:76)ing on unrivaled heritage in design(cid:11) science and manufacturing(cid:11) our more than 1(cid:11)000 research and development ("(cid:45)(cid:5)(cid:31)") professionals and engineers are constantly innovating ne(cid:76) materials(cid:11) formats(cid:11) and technologies. (cid:50)e collaborate (cid:76)ith li(cid:64)e(cid:12)minded partners(cid:11) including customers and suppliers(cid:11) in pursuit of innovative solutions to address some of the (cid:76)orld(cid:89)s most urgent challenges(cid:11) including increasing recycling and reuse and protecting our planet. (cid:50)e also partner (cid:76)ith non(cid:12)governmental organi(cid:79)ations(cid:11) promising startups(cid:11) and cross(cid:12)industry initiatives and bodies. (cid:47)hese partnerships enable us to learn(cid:11) e(cid:77)perience other perspectives(cid:11) share our e(cid:77)pertise(cid:11) and e(cid:77)pand our innovation. (cid:50)ith our partners(cid:11) (cid:76)e advocate for sound global standards(cid:11) better (cid:76)aste management infrastructure(cid:11) and more consumer participation. (cid:50)e consider our overall environmental footprint to go (cid:76)ell beyond the products (cid:76)e create. (cid:50)e also strive to continuously reduce the environmental impacts of our operations and(cid:11) for more than a decade(cid:11) our EnviroAction program has helped us significantly improve ho(cid:76) (cid:76)e manage energy(cid:11) (cid:76)ater(cid:11) and (cid:76)aste in every one of our locations. In (cid:37)anuary 2022(cid:11) (cid:76)e further increased our efforts by committing to science(cid:12)based targets to reduce greenhouse gas emissions and achieve net (cid:79)ero emissions by 2050. (cid:47)hese ne(cid:76) commitments have been recogni(cid:79)ed by the Science Based (cid:47)argets initiative (SB(cid:47)i) and build on years of progress under our EnviroAction program. (cid:47)hrough our unique material science and innovation capabilities(cid:11) (cid:76)e also advise our customers on the best solutions for their specific needs and those of their consumers (cid:84) (cid:76)ith broad fle(cid:77)ibility across pac(cid:64)aging functionality(cid:11) formats(cid:11) and materials. (cid:50)ith our global scale(cid:11) deep industry e(cid:77)perience(cid:11) and strong capabilities(cid:11) (cid:76)e believe that (cid:76)e are uniquely positioned to lead the (cid:76)ay in the design and development of more sustainable pac(cid:64)aging(cid:11) and this is one of the most important gro(cid:76)th opportunities for Amcor. (cid:31)overnmental Laws and Regulations Our operations and the real property (cid:76)e o(cid:76)n(cid:11) or lease(cid:11) are sub(cid:63)ect to broad governmental la(cid:76)s and regulations(cid:11) including environmental la(cid:76)s and regulations by multiple (cid:63)urisdictions. (cid:47)hese la(cid:76)s and regulations pertain to employee health and safety(cid:11) the discharge of certain materials into the environment(cid:11) handling and disposition of (cid:76)aste(cid:11) cleanup of contaminated soil and ground (cid:76)ater(cid:11) other rules to control pollution and manage natural resources(cid:11) and other government regulations. (cid:50)e believe that (cid:76)e are in substantial compliance (cid:76)ith applicable health and safety la(cid:76)s(cid:11) environmental la(cid:76)s and regulations based on the e(cid:77)ecution of our Environmental(cid:11) (cid:35)ealth(cid:11) and Safety (cid:40)anagement System and regular audits of those processes and systems. (cid:35)o(cid:76)ever(cid:11) (cid:76)e cannot predict (cid:76)ith certainty that (cid:76)e (cid:76)ill not(cid:11) in the future(cid:11) incur liability (cid:76)ith respect to noncompliance (cid:76)ith health and safety la(cid:76)s(cid:11) environmental la(cid:76)s and regulations due to contamination of sites formerly or currently o(cid:76)ned or 7 Amcor Annual Report 2022 8 Segment Information Intellectual Property 7 Form 10-K 8 Accounting Standards Codification ("ASC") 280(cid:11) "Segment (cid:45)eporting(cid:11)" establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280(cid:11) (cid:76)e have determined (cid:76)e have t(cid:76)o reportable segments(cid:11) Fle(cid:77)ibles and (cid:45)igid (cid:43)ac(cid:64)aging. (cid:47)he reportable segments produce fle(cid:77)ible pac(cid:64)aging(cid:11) rigid pac(cid:64)aging(cid:11) specialty cartons(cid:11) and closure products(cid:11) (cid:76)hich are sold to customers participating in a range of attractive end use areas throughout Europe(cid:11) (cid:41)orth America(cid:11) Latin America(cid:11) Africa(cid:11) and the Asia (cid:43)acific regions. (cid:45)efer to (cid:41)ote 21(cid:11) "Segments(cid:11)" of the notes to consolidated financial statements for financial information about reportable segments. Our Fle(cid:77)ibles Segment develops and supplies fle(cid:77)ible pac(cid:64)aging globally. (cid:50)ith appro(cid:77)imately 37(cid:11)000 employees at 16(cid:24) significant manufacturing and support facilities in 3(cid:24) countries as of (cid:37)une 30(cid:11) 2022(cid:11) the Fle(cid:77)ibles Segment is one of the (cid:76)orld(cid:6)s largest suppliers of plastic(cid:11) aluminum(cid:11) and fiber based fle(cid:77)ible pac(cid:64)aging. In fiscal year 2022(cid:11) Fle(cid:77)ibles accounted for Our (cid:45)igid (cid:43)ac(cid:64)aging Segment manufactures rigid pac(cid:64)aging containers and related products in the Americas. As of (cid:37)une 30(cid:11) 2022(cid:11) the (cid:45)igid (cid:43)ac(cid:64)aging Segment employed appro(cid:77)imately 6(cid:11)000 employees at 52 significant manufacturing and support facilities in 11 countries. In fiscal year 2022(cid:11) (cid:45)igid (cid:43)ac(cid:64)aging accounted for appro(cid:77)imately 23(cid:4) of consolidated net (cid:20)(cid:48)exi(cid:38)(cid:48)es Se(cid:43)me(cid:50)(cid:56) appro(cid:77)imately 77(cid:4) of consolidated net sales. Ri(cid:43)i(cid:40) (cid:30)a(cid:39)(cid:47)a(cid:43)i(cid:50)(cid:43) Se(cid:43)me(cid:50)(cid:56) sales. (cid:37)ar(cid:61)eting, Distribution, and Competition Our sales are made through a variety of distribution channels(cid:11) but primarily through our direct sales force. Sales offices and plants are located throughout Europe(cid:11) (cid:41)orth America(cid:11) Latin America(cid:11) Africa(cid:11) and Asia(cid:12)(cid:43)acific regions to provide prompt and economical service to thousands of customers. Our technically trained sales force is supported by product development engineers(cid:11) design technicians(cid:11) field service technicians(cid:11) and customer service teams. (cid:50)e did not have sales to a single customer that e(cid:77)ceeded 10(cid:4) of consolidated net sales in the last three fiscal years. (cid:47)he ma(cid:63)or mar(cid:64)ets in (cid:76)hich (cid:76)e sell our products historically have been(cid:11) and continue to be(cid:11) highly competitive. Areas of competition include service(cid:11) innovation(cid:11) quality(cid:11) and price. Competitors include Aptar(cid:34)roup(cid:11) Inc.(cid:11) Ball Corporation(cid:11) Berry (cid:34)lobal (cid:34)roup(cid:11) Inc(cid:11) CCL Industries Inc.(cid:11) Cro(cid:76)n (cid:35)oldings(cid:11) Inc.(cid:11) (cid:34)raphic (cid:43)ac(cid:64)aging (cid:35)olding Company(cid:11) (cid:35)uhtama(cid:64)i Oy(cid:63)(cid:11) International (cid:43)aper Company(cid:11) (cid:40)ayr(cid:12)(cid:40)elnhof (cid:38)arton A(cid:34)(cid:11) O(cid:12)I (cid:34)lass(cid:11) Inc.(cid:11) Sealed Air Corporation(cid:11) Silgan (cid:35)oldings Inc.(cid:11) Sonoco (cid:43)roducts Company(cid:11) and (cid:50)est(cid:45)oc(cid:64) Company(cid:11) and a variety of privately held companies. (cid:50)e consider ourselves to be a significant participant in the mar(cid:64)ets in (cid:76)hich (cid:76)e operate(cid:26) ho(cid:76)ever(cid:11) due to the diversity of our business(cid:11) our precise competitive position in these mar(cid:64)ets is not reasonably determinable. Bac(cid:61)log Raw (cid:37)aterials (cid:50)or(cid:64)ing capital fluctuates throughout the year in relation to business volume and other mar(cid:64)etplace conditions. (cid:50)e maintain inventory levels that provide a reasonable balance bet(cid:76)een obtaining ra(cid:76) materials at favorable prices and maintaining adequate inventory levels to enable us to fulfill our commitment to promptly fill customer orders. (cid:40)anufacturing bac(cid:64)logs are not a significant factor in the mar(cid:64)ets in (cid:76)hich (cid:76)e operate. (cid:43)olymer resins and films(cid:11) paper(cid:11) in(cid:64)s(cid:11) adhesives(cid:11) aluminum(cid:11) and chemicals constitute the ma(cid:63)or ra(cid:76) materials (cid:76)e use. (cid:47)hese are purchased from a variety of global industry sources(cid:11) and (cid:76)e are not significantly dependent on any one supplier for our ra(cid:76) materials. (cid:50)hile persistent industry(cid:12)(cid:76)ide shortages of certain ra(cid:76) materials have continued to occur since the second half of fiscal 2021(cid:11) (cid:76)e have been able to manage supply disruptions (cid:76)ith no material impact by (cid:76)or(cid:64)ing closely (cid:76)ith our suppliers and customers. Supply shortages can lead and have in the past led to increased ra(cid:76) material price volatility. Increases in the price of ra(cid:76) materials are generally able to be passed on to customers through contractual price mechanisms over time and other means. (cid:50)e e(cid:77)pect supply disruption and price volatility to continue into fiscal year 2023 and (cid:76)ill continue to (cid:76)or(cid:64) closely (cid:76)ith our suppliers and customers in an effort to minimi(cid:79)e the impact on our operations. (cid:50)e are the o(cid:76)ner or licensee of more than a thousand (cid:48)nited States and other country patents and patent applications that relate to our products(cid:11) manufacturing processes(cid:11) and equipment. (cid:50)e have a number of trademar(cid:64)s and trademar(cid:64) registrations in the (cid:48)nited States and in other countries. (cid:50)e also (cid:64)eep certain technology and processes as trade secrets. Our patents(cid:11) licenses(cid:11) and trademar(cid:64)s collectively provide a competitive advantage. (cid:35)o(cid:76)ever(cid:11) the loss of any single patent or license alone (cid:76)ould not have a material adverse effect on our results of operations as a (cid:76)hole or those of our reportable segments. (cid:43)atents(cid:11) patent applications(cid:11) and license agreements (cid:76)ill e(cid:77)pire or terminate over time by operation of la(cid:76)(cid:11) in accordance (cid:76)ith their terms(cid:11) or other(cid:76)ise. Sustainability and Innovation (cid:50)e believe there (cid:76)ill al(cid:76)ays be a role for the primary pac(cid:64)aging (cid:76)e produce to preserve food(cid:11) beverages(cid:11) and healthcare products(cid:11) protect consumers(cid:11) and promote brands. Consumers also (cid:76)ant cost effective(cid:11) convenient(cid:11) and easy to use pac(cid:64)aging (cid:76)ith a reduced environmental footprint and a responsible end of life solution. (cid:50)e have identified a clear path to provide food(cid:11) beverages(cid:11) and healthcare products to people around the (cid:76)orld in a more sustainable (cid:76)ay(cid:11) and meet our sustainability ambitions(cid:11) and those of our customers by focusing on (cid:76)hat (cid:76)e believe are the three elements of responsible pac(cid:64)aging(cid:25) product innovation(cid:11) consumer participation(cid:11) and infrastructure development. (cid:50)e believe our commitment to responsible pac(cid:64)aging is integral to our success. Our responsible pac(cid:64)aging solutions address both ho(cid:76) the product is made(cid:11) as (cid:76)ell as (cid:76)hat happens after the consumer uses it(cid:11) offering a (cid:76)ide variety of options to advance sustainability (cid:76)hile meeting our customers(cid:89) specific pac(cid:64)aging needs. Sustainability is comprehensively embedded across our business(cid:11) from the investments (cid:76)e are ma(cid:64)ing in sustainable pac(cid:64)aging innovation and design(cid:11) to the partnerships (cid:76)e enter(cid:11) and to ho(cid:76) (cid:76)e run our manufacturing operations more efficiently. Innovation is central to Amcor(cid:89)s approach to sustainability and (cid:76)e spend appro(cid:77)imately $100 million a year on research and development. (cid:50)e are highly regarded for our innovation capabilities and have more than a thousand active patents. (cid:50)e solve pac(cid:64)aging challenges(cid:11) developing differentiated products(cid:11) services(cid:11) and processes to protect our customers products and fulfil the needs of the consumers (cid:76)ho rely on them around the globe. (cid:31)ra(cid:76)ing on unrivaled heritage in design(cid:11) science and manufacturing(cid:11) our more than 1(cid:11)000 research and development ("(cid:45)(cid:5)(cid:31)") professionals and engineers are constantly innovating ne(cid:76) materials(cid:11) formats(cid:11) and technologies. (cid:50)e collaborate (cid:76)ith li(cid:64)e(cid:12)minded partners(cid:11) including customers and suppliers(cid:11) in pursuit of innovative solutions to address some of the (cid:76)orld(cid:89)s most urgent challenges(cid:11) including increasing recycling and reuse and protecting our planet. (cid:50)e also partner (cid:76)ith non(cid:12)governmental organi(cid:79)ations(cid:11) promising startups(cid:11) and cross(cid:12)industry initiatives and bodies. (cid:47)hese partnerships enable us to learn(cid:11) e(cid:77)perience other perspectives(cid:11) share our e(cid:77)pertise(cid:11) and e(cid:77)pand our innovation. (cid:50)ith our partners(cid:11) (cid:76)e advocate for sound global standards(cid:11) better (cid:76)aste management infrastructure(cid:11) and more consumer participation. (cid:50)e consider our overall environmental footprint to go (cid:76)ell beyond the products (cid:76)e create. (cid:50)e also strive to continuously reduce the environmental impacts of our operations and(cid:11) for more than a decade(cid:11) our EnviroAction program has helped us significantly improve ho(cid:76) (cid:76)e manage energy(cid:11) (cid:76)ater(cid:11) and (cid:76)aste in every one of our locations. In (cid:37)anuary 2022(cid:11) (cid:76)e further increased our efforts by committing to science(cid:12)based targets to reduce greenhouse gas emissions and achieve net (cid:79)ero emissions by 2050. (cid:47)hese ne(cid:76) commitments have been recogni(cid:79)ed by the Science Based (cid:47)argets initiative (SB(cid:47)i) and build on years of progress under our EnviroAction program. (cid:47)hrough our unique material science and innovation capabilities(cid:11) (cid:76)e also advise our customers on the best solutions for their specific needs and those of their consumers (cid:84) (cid:76)ith broad fle(cid:77)ibility across pac(cid:64)aging functionality(cid:11) formats(cid:11) and materials. (cid:50)ith our global scale(cid:11) deep industry e(cid:77)perience(cid:11) and strong capabilities(cid:11) (cid:76)e believe that (cid:76)e are uniquely positioned to lead the (cid:76)ay in the design and development of more sustainable pac(cid:64)aging(cid:11) and this is one of the most important gro(cid:76)th opportunities for Amcor. (cid:31)overnmental Laws and Regulations Our operations and the real property (cid:76)e o(cid:76)n(cid:11) or lease(cid:11) are sub(cid:63)ect to broad governmental la(cid:76)s and regulations(cid:11) including environmental la(cid:76)s and regulations by multiple (cid:63)urisdictions. (cid:47)hese la(cid:76)s and regulations pertain to employee health and safety(cid:11) the discharge of certain materials into the environment(cid:11) handling and disposition of (cid:76)aste(cid:11) cleanup of contaminated soil and ground (cid:76)ater(cid:11) other rules to control pollution and manage natural resources(cid:11) and other government regulations. (cid:50)e believe that (cid:76)e are in substantial compliance (cid:76)ith applicable health and safety la(cid:76)s(cid:11) environmental la(cid:76)s and regulations based on the e(cid:77)ecution of our Environmental(cid:11) (cid:35)ealth(cid:11) and Safety (cid:40)anagement System and regular audits of those processes and systems. (cid:35)o(cid:76)ever(cid:11) (cid:76)e cannot predict (cid:76)ith certainty that (cid:76)e (cid:76)ill not(cid:11) in the future(cid:11) incur liability (cid:76)ith respect to noncompliance (cid:76)ith health and safety la(cid:76)s(cid:11) environmental la(cid:76)s and regulations due to contamination of sites formerly or currently o(cid:76)ned or 7 8 Amcor Annual Report 2022 Form 10-K 9 operated by us (including contamination caused by prior o(cid:76)ners and operators of such sites) or the off(cid:12)site disposal of regulated materials(cid:11) or other broad government regulations (cid:76)hich could be significant. In addition(cid:11) these la(cid:76)s and regulations are constantly changing(cid:11) and (cid:76)e cannot al(cid:76)ays anticipate these changes. (cid:45)efer to (cid:41)ote 20(cid:11) "Contingencies and Legal (cid:43)roceedings(cid:11)" of the notes to consolidated financial statements for information about legal proceedings. For a more detailed description of the various la(cid:76)s and regulations that affect our business(cid:11) see Item 1A. "(cid:45)is(cid:64) Factors." (cid:32)uman Capital (cid:37)anagement (cid:29)(cid:58)er(cid:58)iew Seasonal Factors (cid:47)he business of each of the reportable segments is not seasonal to any material e(cid:77)tent. Research and Development (cid:45)efer to (cid:41)ote 2(cid:11) "Significant Accounting (cid:43)olicies(cid:11)" of the notes to consolidated financial statements for information about our research and development e(cid:77)penditures and policies. Amcor(cid:89)s aspiration is to be (cid:88)(cid:47)(cid:35)E leading global pac(cid:64)aging company(cid:6). Our people are core to the achievement of our aspiration. (cid:50)e believe (cid:76)e are (cid:76)inning for our people (cid:76)hen they feel safe(cid:11) engaged(cid:11) and are developing as part of a high(cid:12) performing(cid:11) global team. (cid:50)e strive to build an outperformance culture in (cid:76)hich (cid:76)e consistently deliver results and strive to surpass e(cid:77)pectations. At Amcor(cid:11) (cid:76)e are stronger because of the diverse strengths(cid:11) styles(cid:11) cultures(cid:11) and e(cid:77)periences of our people. (cid:50)e aim to create inclusive (cid:76)or(cid:64)ing environments to ensure each colleague feels valued(cid:11) treated (cid:76)ith respect(cid:11) encouraged to spea(cid:64)(cid:11) and empo(cid:76)ered to be their best. As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had appro(cid:77)imately 44(cid:11)000 employees(cid:11) including part(cid:12)time and temporary (cid:76)or(cid:64)ers(cid:11) (cid:76)orld(cid:76)ide(cid:11) (cid:76)ith appro(cid:77)imately 30(cid:4) located in (cid:41)orth America(cid:11) 30(cid:4) located in Europe(cid:11) 20(cid:4) located in Latin America(cid:11) and 20(cid:4) located in the Asia (cid:43)acific region. Collective bargaining agreements cover appro(cid:77)imately 46(cid:4) of our (cid:76)or(cid:64)force. As of (cid:37)une 30(cid:11) 2022(cid:11) appro(cid:77)imately 6(cid:4) of our employees (cid:76)ere (cid:76)or(cid:64)ing under e(cid:77)pired contracts and appro(cid:77)imately 21(cid:4) (cid:76)ere covered under collective bargaining agreements that e(cid:77)pire (cid:76)ithin one year. (cid:22)ea(cid:48)(cid:56)(cid:44) a(cid:50)(cid:40) Safe(cid:56)(cid:61) Safety is a core value at Amcor. (cid:50)e ta(cid:64)e care of ourselves and each other(cid:11) so everyone returns home safely every day. Across every level of our organi(cid:79)ation(cid:11) (cid:76)e role model and recogni(cid:79)e safe and responsible behavior as (cid:76)e strive to achieve an in(cid:63)ury(cid:12)free Amcor. All our facilities abide by global Environment(cid:11) (cid:35)ealth(cid:11) and Safety ("E(cid:35)S") standards for safety and environmental management. Our Board of (cid:31)irectors receives monthly reports on safety performance and compliance (cid:76)ith our global E(cid:35)S standards. (cid:31)uring fiscal year 2022(cid:11) (cid:76)e reduced the number of in(cid:63)uries by 3(cid:4) and 57(cid:4) of our sites (cid:76)ere in(cid:63)ury free. Our response to the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic illustrates our commitment to the health and safety of our employees and the communities in (cid:76)hich (cid:76)e (cid:76)or(cid:64). (cid:50)e implemented rigorous protocols supported by precautionary measures in each of our manufacturing and office locations globally to help ensure the health and safety of our people. As (cid:76)e emerge from the pandemic and continue to focus on the health of our employees(cid:11) (cid:76)e have (cid:76)or(cid:64)ed diligently to provide a compelling (cid:76)or(cid:64)place for them to return to (cid:76)hile recogni(cid:79)ing and accommodating the need for fle(cid:77)ibility. (cid:18)e(cid:58)e(cid:48)o(cid:52)i(cid:50)(cid:43) Ta(cid:48)e(cid:50)(cid:56) At Amcor(cid:11) (cid:76)e are dedicated to attracting(cid:11) developing(cid:11) engaging(cid:11) and retaining the best talent to deliver our (cid:6)(cid:50)inning Aspiration(cid:6) and ensure a strong succession pipeline for the future. Our approach to talent is guided by the understanding that differentiated(cid:11) industry(cid:12)leading talent deployed consistently across our business (cid:76)ill enable Amcor(cid:89)s success. (cid:50)e deploy systems and processes to ensure our people have clear goals and are empo(cid:76)ered to achieve them. (cid:47)hrough performance management(cid:11) (cid:76)e align these goals to business targets(cid:11) providing line of sight so each employee understands ho(cid:76) they contribute to our success. (cid:47)hrough formal revie(cid:76)s(cid:11) performance coaching(cid:11) and feedbac(cid:64)(cid:11) our leaders implement a rigorous cycle to foster talent. (cid:26)ear(cid:50)i(cid:50)(cid:43) (cid:3) (cid:18)e(cid:58)e(cid:48)o(cid:52)me(cid:50)(cid:56) (cid:50)e have implemented training and education programs to help our employees progress across functions and e(cid:77)perience levels. E(cid:77)amples of these programs include a Leading to Outperform program ("L(cid:47)O") to further advance high(cid:12) potential talent(cid:11) a Senior Leader (cid:31)evelopment program ("SL(cid:31)(cid:43)") focusing on developing strategic management s(cid:64)ills and inclusive leadership(cid:11) and an E(cid:77)ecutive (cid:31)evelopment program ("E(cid:31)(cid:43)") for our most senior leaders. In each of these programs (cid:76)e partner (cid:76)ith leading academic and e(cid:77)ecutive education institutions from around the (cid:76)orld. (cid:45)ecogni(cid:79)ing the importance of the learning (cid:63)ourney(cid:11) our employees can also access our "(cid:40)asterclass" program (cid:76)hich delivers an annual series of e(cid:77)ecutive education briefings on topics of functional e(cid:77)cellence and business initiatives. Our focus this year has been on Accelerating (cid:34)ro(cid:76)th (cid:76)ith sho(cid:76)case presentations from (cid:40)ar(cid:64)eting(cid:11) (cid:45)(cid:5)(cid:31)(cid:11) (cid:43)roduct Branding(cid:11) and Innovation Leaders. Our "(cid:37)umpStart(cid:27)Amcor" global program accelerates onboarding of ne(cid:76) employees and provides an avenue for cross(cid:12) functional learning. (cid:50)e also run an Accelerated Career (cid:31)evelopment program ("AC(cid:31)(cid:43)") (cid:76)hich provides a global inta(cid:64)e on ne(cid:76) talent (cid:76)ith a structured rotation to develop commercial capabilities and an enhanced global commercial talent pipeline. (cid:24) Amcor Annual Report 2022 10 operated by us (including contamination caused by prior o(cid:76)ners and operators of such sites) or the off(cid:12)site disposal of regulated (cid:32)uman Capital (cid:37)anagement 9 Form 10-K (cid:20)0 materials(cid:11) or other broad government regulations (cid:76)hich could be significant. In addition(cid:11) these la(cid:76)s and regulations are constantly changing(cid:11) and (cid:76)e cannot al(cid:76)ays anticipate these changes. (cid:45)efer to (cid:41)ote 20(cid:11) "Contingencies and Legal (cid:43)roceedings(cid:11)" of the notes to consolidated financial statements for information about legal proceedings. For a more detailed description of the various la(cid:76)s and regulations that affect our business(cid:11) see Item 1A. "(cid:45)is(cid:64) Factors." Seasonal Factors Research and Development (cid:47)he business of each of the reportable segments is not seasonal to any material e(cid:77)tent. (cid:45)efer to (cid:41)ote 2(cid:11) "Significant Accounting (cid:43)olicies(cid:11)" of the notes to consolidated financial statements for information about our research and development e(cid:77)penditures and policies. (cid:29)(cid:58)er(cid:58)iew Amcor(cid:89)s aspiration is to be (cid:88)(cid:47)(cid:35)E leading global pac(cid:64)aging company(cid:6). Our people are core to the achievement of our aspiration. (cid:50)e believe (cid:76)e are (cid:76)inning for our people (cid:76)hen they feel safe(cid:11) engaged(cid:11) and are developing as part of a high(cid:12) performing(cid:11) global team. (cid:50)e strive to build an outperformance culture in (cid:76)hich (cid:76)e consistently deliver results and strive to surpass e(cid:77)pectations. At Amcor(cid:11) (cid:76)e are stronger because of the diverse strengths(cid:11) styles(cid:11) cultures(cid:11) and e(cid:77)periences of our people. (cid:50)e aim to create inclusive (cid:76)or(cid:64)ing environments to ensure each colleague feels valued(cid:11) treated (cid:76)ith respect(cid:11) encouraged to spea(cid:64)(cid:11) and empo(cid:76)ered to be their best. As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had appro(cid:77)imately 44(cid:11)000 employees(cid:11) including part(cid:12)time and temporary (cid:76)or(cid:64)ers(cid:11) (cid:76)orld(cid:76)ide(cid:11) (cid:76)ith appro(cid:77)imately 30(cid:4) located in (cid:41)orth America(cid:11) 30(cid:4) located in Europe(cid:11) 20(cid:4) located in Latin America(cid:11) and 20(cid:4) located in the Asia (cid:43)acific region. Collective bargaining agreements cover appro(cid:77)imately 46(cid:4) of our (cid:76)or(cid:64)force. As of (cid:37)une 30(cid:11) 2022(cid:11) appro(cid:77)imately 6(cid:4) of our employees (cid:76)ere (cid:76)or(cid:64)ing under e(cid:77)pired contracts and appro(cid:77)imately 21(cid:4) (cid:76)ere covered under collective bargaining agreements that e(cid:77)pire (cid:76)ithin one year. (cid:22)ea(cid:48)(cid:56)(cid:44) a(cid:50)(cid:40) Safe(cid:56)(cid:61) Safety is a core value at Amcor. (cid:50)e ta(cid:64)e care of ourselves and each other(cid:11) so everyone returns home safely every day. Across every level of our organi(cid:79)ation(cid:11) (cid:76)e role model and recogni(cid:79)e safe and responsible behavior as (cid:76)e strive to achieve an in(cid:63)ury(cid:12)free Amcor. All our facilities abide by global Environment(cid:11) (cid:35)ealth(cid:11) and Safety ("E(cid:35)S") standards for safety and environmental management. Our Board of (cid:31)irectors receives monthly reports on safety performance and compliance (cid:76)ith our global E(cid:35)S standards. (cid:31)uring fiscal year 2022(cid:11) (cid:76)e reduced the number of in(cid:63)uries by 3(cid:4) and 57(cid:4) of our sites (cid:76)ere in(cid:63)ury free. Our response to the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic illustrates our commitment to the health and safety of our employees and the communities in (cid:76)hich (cid:76)e (cid:76)or(cid:64). (cid:50)e implemented rigorous protocols supported by precautionary measures in each of our manufacturing and office locations globally to help ensure the health and safety of our people. As (cid:76)e emerge from the pandemic and continue to focus on the health of our employees(cid:11) (cid:76)e have (cid:76)or(cid:64)ed diligently to provide a compelling (cid:76)or(cid:64)place for them to return to (cid:76)hile recogni(cid:79)ing and accommodating the need for fle(cid:77)ibility. (cid:18)e(cid:58)e(cid:48)o(cid:52)i(cid:50)(cid:43) Ta(cid:48)e(cid:50)(cid:56) At Amcor(cid:11) (cid:76)e are dedicated to attracting(cid:11) developing(cid:11) engaging(cid:11) and retaining the best talent to deliver our (cid:6)(cid:50)inning Aspiration(cid:6) and ensure a strong succession pipeline for the future. Our approach to talent is guided by the understanding that differentiated(cid:11) industry(cid:12)leading talent deployed consistently across our business (cid:76)ill enable Amcor(cid:89)s success. (cid:50)e deploy systems and processes to ensure our people have clear goals and are empo(cid:76)ered to achieve them. (cid:47)hrough performance management(cid:11) (cid:76)e align these goals to business targets(cid:11) providing line of sight so each employee understands ho(cid:76) they contribute to our success. (cid:47)hrough formal revie(cid:76)s(cid:11) performance coaching(cid:11) and feedbac(cid:64)(cid:11) our leaders implement a rigorous cycle to foster talent. (cid:26)ear(cid:50)i(cid:50)(cid:43) (cid:3) (cid:18)e(cid:58)e(cid:48)o(cid:52)me(cid:50)(cid:56) (cid:50)e have implemented training and education programs to help our employees progress across functions and e(cid:77)perience levels. E(cid:77)amples of these programs include a Leading to Outperform program ("L(cid:47)O") to further advance high(cid:12) potential talent(cid:11) a Senior Leader (cid:31)evelopment program ("SL(cid:31)(cid:43)") focusing on developing strategic management s(cid:64)ills and inclusive leadership(cid:11) and an E(cid:77)ecutive (cid:31)evelopment program ("E(cid:31)(cid:43)") for our most senior leaders. In each of these programs (cid:76)e partner (cid:76)ith leading academic and e(cid:77)ecutive education institutions from around the (cid:76)orld. (cid:45)ecogni(cid:79)ing the importance of the learning (cid:63)ourney(cid:11) our employees can also access our "(cid:40)asterclass" program (cid:76)hich delivers an annual series of e(cid:77)ecutive education briefings on topics of functional e(cid:77)cellence and business initiatives. Our focus this year has been on Accelerating (cid:34)ro(cid:76)th (cid:76)ith sho(cid:76)case presentations from (cid:40)ar(cid:64)eting(cid:11) (cid:45)(cid:5)(cid:31)(cid:11) (cid:43)roduct Branding(cid:11) and Innovation Leaders. Our "(cid:37)umpStart(cid:27)Amcor" global program accelerates onboarding of ne(cid:76) employees and provides an avenue for cross(cid:12) functional learning. (cid:50)e also run an Accelerated Career (cid:31)evelopment program ("AC(cid:31)(cid:43)") (cid:76)hich provides a global inta(cid:64)e on ne(cid:76) talent (cid:76)ith a structured rotation to develop commercial capabilities and an enhanced global commercial talent pipeline. (cid:24) 10 Amcor Annual Report 2022 (cid:18)i(cid:58)ersi(cid:56)(cid:61) (cid:3) (cid:23)(cid:50)(cid:39)(cid:48)(cid:57)sio(cid:50) Information about our E(cid:74)ecutive Officers Form 10-K 11 At Amcor(cid:11) (cid:76)e(cid:89)re committed to providing an inclusive environment that empo(cid:76)ers us to achieve our full potential. Becoming (cid:47)(cid:35)E leading global pac(cid:64)aging company requires us to create a culture in (cid:76)hich everyone feels encouraged to spea(cid:64) and compelled to listen. Amcor is stronger as a result of the diverse talents(cid:11) styles(cid:11) cultures(cid:11) and e(cid:77)periences of our people. (cid:50)ith different perspectives come different solutions that enable us to (cid:76)in for our sta(cid:64)eholders. (cid:50)e are one global team in (cid:76)hich everyone has a voice and can ma(cid:64)e a difference. (cid:50)ith this in mind(cid:11) (cid:76)e (cid:76)or(cid:64) to create a team environment that develops inclusive leaders(cid:11) (cid:76)here (cid:76)e learn from our people(cid:11) and (cid:76)here listening(cid:11) trust(cid:11) and respect are (cid:64)ey behaviors that form the foundation of our interactions and foster mutual understanding. (cid:50)e focus on strengthening (cid:6)talent through diversity(cid:6) and progress is reported to our Board annually. (cid:50)e continually revie(cid:76) opportunities to strengthen our diversity transparency practices (cid:76)hile adhering to privacy legislation in certain regions (cid:76)here (cid:76)e operate. (cid:19)(cid:50)(cid:43)a(cid:43)eme(cid:50)(cid:56) (cid:31)uring fiscal year 2022(cid:11) (cid:76)e completed our fifth global engagement survey. (cid:47)itled "Our(cid:49)oice(cid:27)Amcor"(cid:11) the survey trac(cid:64)s the engagement of our employees across multiple dimensions and provides a benchmar(cid:64) against other global manufacturing companies. In the recent 2022 survey(cid:11) (cid:76)e received feedbac(cid:64) from over 30(cid:11)000 Amcor employees from every country and business group. (cid:47)he dominant feedbac(cid:64) (cid:76)as that colleagues feel Amcor is a great place to (cid:76)or(cid:64) and that they (cid:76)ant more communication (cid:76)ith leadership about the direction and future strategies of the Company. Action plans are under(cid:76)ay across the organi(cid:79)ation to provide feedbac(cid:64) loops and implement action plans. (cid:19)(cid:56)(cid:44)i(cid:39)s (cid:34)ood corporate governance and transparency are fundamental to achieving our aspirations. Our employees are e(cid:77)pected to act (cid:76)ith integrity and ob(cid:63)ectivity and to al(cid:76)ays strive to enhance our reputation and performance. (cid:50)e maintain a Code of Business Conduct and Ethics (cid:43)olicy (cid:76)hich is signed by every Amcor employee and provides the Company(cid:6)s frame(cid:76)or(cid:64) for ma(cid:64)ing ethical business decisions. (cid:50)e provide targeted training across the globe to reinforce our commitment to ethics and drive adherence to the national la(cid:76)s in each country in (cid:76)hich (cid:76)e operate. (cid:47)he follo(cid:76)ing sets forth the name(cid:11) age(cid:11) and business e(cid:77)perience for at least the last five years of our e(cid:77)ecutive officers. (cid:48)nless other(cid:76)ise indicated(cid:11) positions sho(cid:76)n are (cid:76)ith Amcor. Period the Position was (cid:32)eld 2015 to present 2011 to 2015 2008 to 2011 2015 to present 2014 to 2015 2022 to present 2016 to 2022 2022 to present 2016 to 2022 2018 to present 201(cid:24) to present 2017 to 201(cid:24) 2011 to 2017 (cid:38)ame (Age) Positions (cid:32)eld (cid:45)onald (cid:31)elia (51) (cid:40)anaging (cid:31)irector and Chief E(cid:77)ecutive Officer E(cid:77)ecutive (cid:49)(cid:43)(cid:11) Finance and Chief Financial Officer (cid:49)(cid:43) and (cid:34)eneral (cid:40)anager(cid:11) Amcor (cid:45)igid (cid:43)ac(cid:64)aging Latin America (cid:40)ichael Casamento (51) E(cid:77)ecutive (cid:49)(cid:43)(cid:11) Finance and Chief Financial Officer (cid:49)(cid:43)(cid:11) Corporate Finance Susana Suare(cid:79) (cid:34)on(cid:79)ale(cid:79) (53) E(cid:77)ecutive (cid:49)(cid:43) and Chief (cid:35)uman (cid:45)esources Officer (cid:31)eborah (cid:45)asin (55) E(cid:77)ecutive (cid:49)(cid:43) and (cid:34)eneral Counsel E(cid:77)ecutive (cid:49)(cid:43)(cid:11) Chief (cid:35)uman (cid:45)esources and (cid:31)iversity (cid:5) Inclusion Officer(cid:11) International Flavors and Fragrances Senior (cid:49)(cid:43)(cid:11) Chief Legal Officer and Secretary(cid:11) (cid:35)ill(cid:12)(cid:45)om (cid:35)oldings Eric (cid:45)oegner (52) (cid:43)resident(cid:11) Amcor (cid:45)igid (cid:43)ac(cid:64)aging E(cid:77)ecutive Leadership (cid:45)oles(cid:11) Arconic(cid:11) Inc. (f(cid:14)(cid:64)(cid:14)a Alcoa Inc.) 2006 to 2018 Fred Stephan (57) (cid:43)resident(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America (cid:43)resident(cid:11) Bemis (cid:41)orth America Senior (cid:49)(cid:43) and (cid:34)eneral (cid:40)anager of the Insulation Systems (cid:12) (cid:37)ohns (cid:40)anville Ian (cid:50)ilson (64) E(cid:77)ecutive (cid:49)(cid:43)(cid:11) Strategy and (cid:31)evelopment 2000 to present (cid:40)ichael (cid:53)ac(cid:64)a (55) (cid:43)resident(cid:11) Amcor Fle(cid:77)ibles Europe(cid:11) (cid:40)iddle East and Africa 2021 to present (cid:43)resident(cid:11) Amcor Fle(cid:77)ibles Asia (cid:43)acific and Chief Commercial 2017 to 2021 Officer (cid:47)etra (cid:43)a(cid:64) (cid:34)lobal Leadership (cid:47)eam 1(cid:24)(cid:24)6 to 2017 Available Information (cid:50)e are a large accelerated filer (as defined in the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended (the (cid:86)E(cid:77)change Act(cid:87)) (cid:45)ule 12b(cid:12)2) and (cid:76)e are also an electronic filer. Electronically filed reports (Forms 4(cid:11) 8(cid:12)(cid:38)(cid:11) 10(cid:12)(cid:38)(cid:11) 10(cid:12)(cid:44)(cid:11) S(cid:12)3(cid:11) S(cid:12)8(cid:11) etc.) can be accessed at the SEC(cid:6)s (cid:76)ebsite (http(cid:25)(cid:14)(cid:14)(cid:76)(cid:76)(cid:76).sec.gov). (cid:50)e ma(cid:64)e available free of charge (other than an investor(cid:89)s o(cid:76)n Internet access charges) through the Investor (cid:45)elations section of our (cid:76)ebsite (http(cid:25)(cid:14)(cid:14)(cid:76)(cid:76)(cid:76).amcor.com(cid:14)investors)(cid:11) under "SEC Filings(cid:11)" our Annual (cid:45)eport on Form 10(cid:12)(cid:38)(cid:11) (cid:44)uarterly (cid:45)eports on Form 10(cid:12)(cid:44)(cid:11) Current (cid:45)eports on Form 8(cid:12)(cid:38)(cid:11) and if applicable(cid:11) amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the E(cid:77)change Act as soon as reasonably practicable after (cid:76)e electronically file such material (cid:76)ith(cid:11) or furnish it to(cid:11) the SEC. (cid:52)ou may also obtain these reports by (cid:76)riting to us(cid:11) Attention(cid:25) Investor (cid:45)elations(cid:11) Amcor plc(cid:11) Level 11(cid:11) 60 City (cid:45)oad(cid:11) Southban(cid:64)(cid:11) (cid:49)IC(cid:11) 3006(cid:11) Australia. (cid:50)e are not including the information contained on our (cid:76)ebsite as part of(cid:11) or incorporating it by reference into(cid:11) this Annual (cid:45)eport on Form 10(cid:12)(cid:38). 11 Amcor Annual Report 2022 12 (cid:18)i(cid:58)ersi(cid:56)(cid:61) (cid:3) (cid:23)(cid:50)(cid:39)(cid:48)(cid:57)sio(cid:50) and compelled to listen. (cid:76)here (cid:76)e operate. (cid:19)(cid:50)(cid:43)a(cid:43)eme(cid:50)(cid:56) (cid:19)(cid:56)(cid:44)i(cid:39)s Amcor is stronger as a result of the diverse talents(cid:11) styles(cid:11) cultures(cid:11) and e(cid:77)periences of our people. (cid:50)ith different perspectives come different solutions that enable us to (cid:76)in for our sta(cid:64)eholders. (cid:50)e are one global team in (cid:76)hich everyone has a voice and can ma(cid:64)e a difference. (cid:50)ith this in mind(cid:11) (cid:76)e (cid:76)or(cid:64) to create a team environment that develops inclusive leaders(cid:11) (cid:76)here (cid:76)e learn from our people(cid:11) and (cid:76)here listening(cid:11) trust(cid:11) and respect are (cid:64)ey behaviors that form the foundation of our interactions and foster mutual understanding. (cid:50)e focus on strengthening (cid:6)talent through diversity(cid:6) and progress is reported to our Board annually. (cid:50)e continually revie(cid:76) opportunities to strengthen our diversity transparency practices (cid:76)hile adhering to privacy legislation in certain regions (cid:31)uring fiscal year 2022(cid:11) (cid:76)e completed our fifth global engagement survey. (cid:47)itled "Our(cid:49)oice(cid:27)Amcor"(cid:11) the survey trac(cid:64)s the engagement of our employees across multiple dimensions and provides a benchmar(cid:64) against other global manufacturing companies. In the recent 2022 survey(cid:11) (cid:76)e received feedbac(cid:64) from over 30(cid:11)000 Amcor employees from every country and business group. (cid:47)he dominant feedbac(cid:64) (cid:76)as that colleagues feel Amcor is a great place to (cid:76)or(cid:64) and that they (cid:76)ant more communication (cid:76)ith leadership about the direction and future strategies of the Company. Action plans are under(cid:76)ay across the organi(cid:79)ation to provide feedbac(cid:64) loops and implement action plans. At Amcor(cid:11) (cid:76)e(cid:89)re committed to providing an inclusive environment that empo(cid:76)ers us to achieve our full potential. Becoming (cid:47)(cid:35)E leading global pac(cid:64)aging company requires us to create a culture in (cid:76)hich everyone feels encouraged to spea(cid:64) (cid:47)he follo(cid:76)ing sets forth the name(cid:11) age(cid:11) and business e(cid:77)perience for at least the last five years of our e(cid:77)ecutive officers. (cid:48)nless other(cid:76)ise indicated(cid:11) positions sho(cid:76)n are (cid:76)ith Amcor. Information about our E(cid:74)ecutive Officers 11 Form 10-K (cid:20)2 (cid:38)ame (Age) Positions (cid:32)eld (cid:45)onald (cid:31)elia (51) (cid:40)anaging (cid:31)irector and Chief E(cid:77)ecutive Officer E(cid:77)ecutive (cid:49)(cid:43)(cid:11) Finance and Chief Financial Officer (cid:49)(cid:43) and (cid:34)eneral (cid:40)anager(cid:11) Amcor (cid:45)igid (cid:43)ac(cid:64)aging Latin America (cid:40)ichael Casamento (51) E(cid:77)ecutive (cid:49)(cid:43)(cid:11) Finance and Chief Financial Officer (cid:49)(cid:43)(cid:11) Corporate Finance Susana Suare(cid:79) (cid:34)on(cid:79)ale(cid:79) (53) E(cid:77)ecutive (cid:49)(cid:43) and Chief (cid:35)uman (cid:45)esources Officer (cid:31)eborah (cid:45)asin (55) E(cid:77)ecutive (cid:49)(cid:43)(cid:11) Chief (cid:35)uman (cid:45)esources and (cid:31)iversity (cid:5) Inclusion Officer(cid:11) International Flavors and Fragrances E(cid:77)ecutive (cid:49)(cid:43) and (cid:34)eneral Counsel Senior (cid:49)(cid:43)(cid:11) Chief Legal Officer and Secretary(cid:11) (cid:35)ill(cid:12)(cid:45)om (cid:35)oldings Eric (cid:45)oegner (52) (cid:43)resident(cid:11) Amcor (cid:45)igid (cid:43)ac(cid:64)aging Period the Position was (cid:32)eld 2015 to present 2011 to 2015 2008 to 2011 2015 to present 2014 to 2015 2022 to present 2016 to 2022 2022 to present 2016 to 2022 2018 to present E(cid:77)ecutive Leadership (cid:45)oles(cid:11) Arconic(cid:11) Inc. (f(cid:14)(cid:64)(cid:14)a Alcoa Inc.) 2006 to 2018 (cid:34)ood corporate governance and transparency are fundamental to achieving our aspirations. Our employees are e(cid:77)pected to act (cid:76)ith integrity and ob(cid:63)ectivity and to al(cid:76)ays strive to enhance our reputation and performance. (cid:50)e maintain a Code of Business Conduct and Ethics (cid:43)olicy (cid:76)hich is signed by every Amcor employee and provides the Company(cid:6)s frame(cid:76)or(cid:64) for ma(cid:64)ing ethical business decisions. (cid:50)e provide targeted training across the globe to reinforce our commitment to ethics and drive adherence to the national la(cid:76)s in each country in (cid:76)hich (cid:76)e operate. Fred Stephan (57) (cid:43)resident(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America (cid:43)resident(cid:11) Bemis (cid:41)orth America Senior (cid:49)(cid:43) and (cid:34)eneral (cid:40)anager of the Insulation Systems (cid:12) (cid:37)ohns (cid:40)anville Ian (cid:50)ilson (64) E(cid:77)ecutive (cid:49)(cid:43)(cid:11) Strategy and (cid:31)evelopment (cid:40)ichael (cid:53)ac(cid:64)a (55) Available Information (cid:43)resident(cid:11) Amcor Fle(cid:77)ibles Europe(cid:11) (cid:40)iddle East and Africa (cid:43)resident(cid:11) Amcor Fle(cid:77)ibles Asia (cid:43)acific and Chief Commercial Officer (cid:47)etra (cid:43)a(cid:64) (cid:34)lobal Leadership (cid:47)eam 201(cid:24) to present 2017 to 201(cid:24) 2011 to 2017 2000 to present 2021 to present 2017 to 2021 1(cid:24)(cid:24)6 to 2017 (cid:50)e are a large accelerated filer (as defined in the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended (the (cid:86)E(cid:77)change Act(cid:87)) (cid:45)ule 12b(cid:12)2) and (cid:76)e are also an electronic filer. Electronically filed reports (Forms 4(cid:11) 8(cid:12)(cid:38)(cid:11) 10(cid:12)(cid:38)(cid:11) 10(cid:12)(cid:44)(cid:11) S(cid:12)3(cid:11) S(cid:12)8(cid:11) etc.) can be accessed at the SEC(cid:6)s (cid:76)ebsite (http(cid:25)(cid:14)(cid:14)(cid:76)(cid:76)(cid:76).sec.gov). (cid:50)e ma(cid:64)e available free of charge (other than an investor(cid:89)s o(cid:76)n Internet access charges) through the Investor (cid:45)elations section of our (cid:76)ebsite (http(cid:25)(cid:14)(cid:14)(cid:76)(cid:76)(cid:76).amcor.com(cid:14)investors)(cid:11) under "SEC Filings(cid:11)" our Annual (cid:45)eport on Form 10(cid:12)(cid:38)(cid:11) (cid:44)uarterly (cid:45)eports on Form 10(cid:12)(cid:44)(cid:11) Current (cid:45)eports on Form 8(cid:12)(cid:38)(cid:11) and if applicable(cid:11) amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the E(cid:77)change Act as soon as reasonably practicable after (cid:76)e electronically file such material (cid:76)ith(cid:11) or furnish it to(cid:11) the SEC. (cid:52)ou may also obtain these reports by (cid:76)riting to us(cid:11) Attention(cid:25) Investor (cid:45)elations(cid:11) Amcor plc(cid:11) Level 11(cid:11) 60 City (cid:45)oad(cid:11) Southban(cid:64)(cid:11) (cid:49)IC(cid:11) 3006(cid:11) Australia. (cid:50)e are not including the information contained on our (cid:76)ebsite as part of(cid:11) or incorporating it by reference into(cid:11) this Annual (cid:45)eport on Form 10(cid:12)(cid:38). 11 12 Amcor Annual Report 2022 Item 1A(cid:12) - Ris(cid:61) Factors (cid:47)he follo(cid:76)ing factors(cid:11) as (cid:76)ell as factors described else(cid:76)here in this Annual (cid:45)eport on Form 10(cid:12)(cid:38)(cid:11) or in other filings (cid:43)row(cid:56)(cid:44)(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) (cid:52)ro(cid:40)(cid:57)(cid:39)(cid:56) i(cid:50)(cid:50)o(cid:58)a(cid:56)io(cid:50)(cid:6) or a(cid:39)(cid:53)(cid:57)isi(cid:56)io(cid:50)s(cid:8) (cid:19)x(cid:52)a(cid:50)(cid:40)i(cid:50)(cid:43) (cid:29)(cid:57)r (cid:17)(cid:57)rre(cid:50)(cid:56) (cid:16)(cid:57)si(cid:50)ess (cid:62) (cid:36)e ma(cid:61) (cid:38)e (cid:57)(cid:50)a(cid:38)(cid:48)e (cid:56)o ex(cid:52)a(cid:50)(cid:40) o(cid:57)r (cid:39)(cid:57)rre(cid:50)(cid:56) (cid:38)(cid:57)si(cid:50)ess effe(cid:39)(cid:56)i(cid:58)e(cid:48)(cid:61) (cid:56)(cid:44)ro(cid:57)(cid:43)(cid:44) ei(cid:56)(cid:44)er or(cid:43)a(cid:50)i(cid:39) Form 10-K 13 by us (cid:76)ith the Securities and E(cid:77)change Commission(cid:11) could adversely affect our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. Other factors not presently (cid:64)no(cid:76)n to us or(cid:11) that (cid:76)e presently believe are not material(cid:11) could also affect our business operations and financial results. Strategic Ris(cid:61)s (cid:17)(cid:44)a(cid:50)(cid:43)es i(cid:50) (cid:17)o(cid:50)s(cid:57)mer (cid:18)ema(cid:50)(cid:40) (cid:62) (cid:36)e are ex(cid:52)ose(cid:40) (cid:56)o (cid:39)(cid:44)a(cid:50)(cid:43)es i(cid:50) (cid:39)o(cid:50)s(cid:57)mer (cid:40)ema(cid:50)(cid:40) (cid:52)a(cid:56)(cid:56)er(cid:50)s a(cid:50)(cid:40) (cid:39)(cid:57)s(cid:56)omer re(cid:53)(cid:57)ireme(cid:50)(cid:56)s i(cid:50) (cid:50)(cid:57)mero(cid:57)s i(cid:50)(cid:40)(cid:57)s(cid:56)ries(cid:8) Sales of our products and services depend heavily on the volume of sales made by our customers to consumers. Alternative consumer preferences for products in the industries that (cid:76)e serve or the pac(cid:64)aging formats in (cid:76)hich such products are delivered(cid:11) (cid:76)hether as a result of changes in cost(cid:11) convenience or health(cid:11) environmental and social concerns and perceptions(cid:11) may result in a decline in the demand for certain of our products or the obsolescence of some of our e(cid:77)isting products. Any ne(cid:76) products that (cid:76)e produce may not meet sales or margin e(cid:77)pectations due to many factors(cid:11) including our or our customers(cid:6) inability to accurately predict customer demand(cid:11) end user preferences or movements in industry standards(cid:11) or to develop products that meet consumer demand in a timely and cost(cid:12)effective manner. Changing preferences for products and pac(cid:64)aging formats may result in increased demand for other products (cid:76)e produce. (cid:35)o(cid:76)ever(cid:11) to the e(cid:77)tent changing preferences are not offset by demand for ne(cid:76) or alternative products(cid:11) changes to consumer preferences could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. (cid:25)e(cid:61) (cid:17)(cid:57)s(cid:56)omers a(cid:50)(cid:40) (cid:17)(cid:57)s(cid:56)omer (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)io(cid:50) (cid:62) T(cid:44)e (cid:48)oss of (cid:47)e(cid:61) (cid:39)(cid:57)s(cid:56)omers(cid:6) a re(cid:40)(cid:57)(cid:39)(cid:56)io(cid:50) i(cid:50) (cid:56)(cid:44)eir (cid:52)ro(cid:40)(cid:57)(cid:39)(cid:56)io(cid:50) re(cid:53)(cid:57)ireme(cid:50)(cid:56)s or (cid:39)o(cid:50)so(cid:48)i(cid:40)a(cid:56)io(cid:50) amo(cid:50)(cid:43) (cid:47)e(cid:61) (cid:39)(cid:57)s(cid:56)omers (cid:39)o(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e a si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) a(cid:40)(cid:58)erse im(cid:52)a(cid:39)(cid:56) o(cid:50) o(cid:57)r sa(cid:48)es re(cid:58)e(cid:50)(cid:57)e a(cid:50)(cid:40) (cid:52)rofi(cid:56)a(cid:38)i(cid:48)i(cid:56)(cid:61)(cid:8) (cid:45)elationships (cid:76)ith our customers are fundamental to our success(cid:11) particularly given the nature of the pac(cid:64)aging industry and the other supply choices available to customers. (cid:50)hile (cid:76)e do not have a single customer accounting for more than ten percent of our net sales(cid:11) customer concentration can be more pronounced (cid:76)ithin certain businesses. Consequently(cid:11) the loss of any of our (cid:64)ey customers or any significant reduction in their production requirements(cid:11) or an adverse change in the terms of our supply agreements (cid:76)ith them(cid:11) could reduce our sales revenue and net profit. (cid:47)here is no assurance that e(cid:77)isting customer relationships (cid:76)ill be rene(cid:76)ed at e(cid:77)isting volume or price levels(cid:11) or at all. Customers (cid:76)ith operations sub(cid:63)ect to physical ris(cid:64)s(cid:11) including due to climate change(cid:11) may relocate production to areas that are less impacted and such areas may be out of range of Amcor(cid:6)s production sites or supplying such relocated facilities may lead to additional costs. Any loss(cid:11) change(cid:11) or other adverse event related to our (cid:64)ey customer relationships could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s(cid:11) (cid:76)hich effect may be material. In addition(cid:11) over recent years certain of our customers have acquired companies (cid:76)ith similar or complementary product lines. (cid:47)his consolidation has increased the concentration of our business (cid:76)ith these customers. Such consolidation may be accompanied by pressure from customers for lo(cid:76)er prices(cid:11) reflecting the increase in the total volume of products purchased or the elimination of a price differential bet(cid:76)een the acquiring customer and the company acquired. (cid:50)hile (cid:76)e have generally been successful at managing customer consolidations(cid:11) increased pricing pressures from our customers could have a material adverse effect on our results of operations. (cid:17)om(cid:52)e(cid:56)i(cid:56)io(cid:50) (cid:62) (cid:36)e fa(cid:39)e si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) (cid:39)om(cid:52)e(cid:56)i(cid:56)io(cid:50) i(cid:50) (cid:56)(cid:44)e i(cid:50)(cid:40)(cid:57)s(cid:56)ries a(cid:50)(cid:40) re(cid:43)io(cid:50)s i(cid:50) w(cid:44)i(cid:39)(cid:44) we o(cid:52)era(cid:56)e(cid:6) w(cid:44)i(cid:39)(cid:44) (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) impact of inflation. (cid:50)e operate in highly competitive geographies and end use areas(cid:11) each (cid:76)ith varying barriers to entry(cid:11) industry structures(cid:11) and competitive behavior. (cid:50)e regularly bid for ne(cid:76) and continuing business in the industries and regions in (cid:76)hich (cid:76)e operate and (cid:76)e continue to change in response to consumer demand. (cid:50)e cannot predict (cid:76)ith certainty the changes that may affect our competitiveness. (cid:47)he loss of business from our larger customers(cid:11) or the rene(cid:76)al of business on less favorable terms(cid:11) may have a significant impact on our operating results. In addition(cid:11) our competitors may develop a disruptive technology or other technological innovations that could increase their ability to compete for our current or potential customers. (cid:41)o assurance can be given that the actions of established or potential competitors (cid:76)ill not have an adverse effect on our ability to implement our plans and on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. 13 Amcor Annual Report 2022 14 Our business strategy includes both organic e(cid:77)pansion of our e(cid:77)isting operations(cid:11) particularly through efforts to strengthen and e(cid:77)pand relationships (cid:76)ith customers in emerging mar(cid:64)ets(cid:11) product innovation(cid:11) including to address changes in the industry or regulatory environments(cid:11) and e(cid:77)pansion through acquisitions. (cid:35)o(cid:76)ever(cid:11) (cid:76)e may not be able to e(cid:77)ecute our strategy effectively for reasons (cid:76)ithin and outside our control. Our ability to gro(cid:76) organically may be limited by(cid:11) among other things(cid:11) e(cid:77)tensive saturation in the locations in (cid:76)hich (cid:76)e operate or a change or reduction in our customers(cid:89) gro(cid:76)th plans due to changing economic conditions(cid:11) strategic priorities(cid:11) or other(cid:76)ise. For many of our businesses(cid:11) organic gro(cid:76)th depends on product innovation(cid:11) ne(cid:76) product development(cid:11) and timely responses to changing consumer demands and preferences. Consequently(cid:11) failure to develop ne(cid:76) or improved products in response to changing consumer preferences in a timely manner may hinder our gro(cid:76)th potential(cid:11) affect our competitive position(cid:11) and adversely affect our business and results of operations. Additionally(cid:11) over the past decade(cid:11) (cid:76)e have pursued gro(cid:76)th through acquisitions(cid:11) and there can be no assurance that (cid:76)e (cid:76)ill be able to identify suitable acquisition targets in the right geographic regions and (cid:76)ith the right participation strategy in the future(cid:11) or to complete such acquisitions on acceptable terms or at all. If (cid:76)e are unable to identify acquisition targets that meet our investment criteria and close such transactions on acceptable terms(cid:11) our potential for gro(cid:76)th by (cid:76)ay of acquisition may be restricted(cid:11) (cid:76)hich could have an adverse effect on achievement of our strategy and the resulting e(cid:77)pected financial benefits. (cid:50)e also may face challenges in integrating our acquisitions (cid:76)ith our e(cid:77)isting operations. (cid:47)hese challenges could include difficulty in integrating or consolidating business processes and systems and challenges (cid:76)ith integrating the business cultures (cid:76)hich may lead to anticipated benefits of acquisitions not being reali(cid:79)ed fully(cid:11) or at all(cid:11) or may ta(cid:64)e longer to reali(cid:79)e than e(cid:77)pected or involve more costs to do so. In addition(cid:11) the process of integrating operations could result in an interruption of normal business operations. Operational Ris(cid:61)s (cid:21)(cid:48)o(cid:38)a(cid:48) (cid:19)(cid:39)o(cid:50)omi(cid:39) (cid:17)o(cid:50)(cid:40)i(cid:56)io(cid:50)s (cid:62) (cid:17)(cid:44)a(cid:48)(cid:48)e(cid:50)(cid:43)i(cid:50)(cid:43) (cid:39)(cid:57)rre(cid:50)(cid:56) a(cid:50)(cid:40) f(cid:57)(cid:56)(cid:57)re (cid:43)(cid:48)o(cid:38)a(cid:48) e(cid:39)o(cid:50)omi(cid:39) (cid:39)o(cid:50)(cid:40)i(cid:56)io(cid:50)s(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) i(cid:50)f(cid:48)a(cid:56)io(cid:50) a(cid:50)(cid:40) s(cid:57)(cid:52)(cid:52)(cid:48)(cid:61) (cid:39)(cid:44)ai(cid:50) (cid:40)isr(cid:57)(cid:52)(cid:56)io(cid:50)s(cid:6) (cid:44)a(cid:58)e (cid:44)a(cid:40)(cid:6) a(cid:50)(cid:40) ma(cid:61) (cid:39)o(cid:50)(cid:56)i(cid:50)(cid:57)e (cid:56)o (cid:44)a(cid:58)e(cid:6) a (cid:50)e(cid:43)a(cid:56)i(cid:58)e im(cid:52)a(cid:39)(cid:56) o(cid:50) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess o(cid:52)era(cid:56)io(cid:50)s a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) res(cid:57)(cid:48)(cid:56)s(cid:8) (cid:31)emand for our products and services is dependent on consumer demand for our pac(cid:64)aging products(cid:11) including pac(cid:64)aged food(cid:11) beverage(cid:11) healthcare(cid:11) personal care(cid:11) agribusiness(cid:11) industrial(cid:11) and other consumer goods. As a result(cid:11) general economic do(cid:76)nturns in our (cid:64)ey geographic regions and globally can adversely affect our business operations and financial results. (cid:47)he CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic and (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict have increased volatility in (cid:76)orld economies. Current global economic challenges(cid:11) including relatively high inflation and supply chain constraints in (cid:64)ey regions in (cid:76)hich (cid:76)e operate(cid:11) are li(cid:64)ely to continue to put pressure on our business. (cid:50)hen challenging economic conditions e(cid:77)ist(cid:11) our customers may delay(cid:11) decrease or cancel purchases from us(cid:11) and may also delay payment or fail to pay us altogether. Suppliers may have difficulty filling our orders and distributors may have difficulty getting our products to customers(cid:11) (cid:76)hich may affect our ability to meet customer demands(cid:11) and result in a loss of business. (cid:50)ea(cid:64)ened global economic conditions may also result in unfavorable changes in our product prices and product mi(cid:77) and lo(cid:76)er profit margins. Although (cid:76)e ta(cid:64)e measures to mitigate the impact of inflation(cid:11) including through pricing actions and productivity programs(cid:11) if these actions are not effective our cash flo(cid:76)(cid:11) financial condition(cid:11) and results of operations could materially and adversely be impacted. In addition(cid:11) there could be a time lag bet(cid:76)een recogni(cid:79)ing the benefit of our mitigating actions and (cid:76)hen the inflation occurs and there is no assurance that our mitigating measures (cid:76)ill be able to fully mitigate the (cid:43)olitical uncertainty may also contribute to the general economic conditions in one or more mar(cid:64)ets in (cid:76)hich (cid:76)e operate. For e(cid:77)ample(cid:11) in fiscal year 2022(cid:11) political developments and general civil unrest in South Africa and the (cid:45)ussia(cid:12) (cid:48)(cid:64)raine conflict resulted in net e(cid:77)penses of $213 million(cid:11) including impairment and restructuring e(cid:77)penses. Future unrest in other regions in (cid:76)hich (cid:76)e operate could result in a material impact to our financial condition. (cid:43)olitical developments can also disrupt the mar(cid:64)ets (cid:76)e serve and the ta(cid:77) (cid:63)urisdictions in (cid:76)hich (cid:76)e operate(cid:11) and may cause us to lose customers(cid:11) suppliers(cid:11) and employees(cid:11) and adversely impact profitability. 13 Form 10-K 14 Item 1A(cid:12) - Ris(cid:61) Factors Strategic Ris(cid:61)s (cid:50)(cid:57)mero(cid:57)s i(cid:50)(cid:40)(cid:57)s(cid:56)ries(cid:8) (cid:47)he follo(cid:76)ing factors(cid:11) as (cid:76)ell as factors described else(cid:76)here in this Annual (cid:45)eport on Form 10(cid:12)(cid:38)(cid:11) or in other filings by us (cid:76)ith the Securities and E(cid:77)change Commission(cid:11) could adversely affect our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. Other factors not presently (cid:64)no(cid:76)n to us or(cid:11) that (cid:76)e presently believe are not material(cid:11) could also affect our business operations and financial results. (cid:17)(cid:44)a(cid:50)(cid:43)es i(cid:50) (cid:17)o(cid:50)s(cid:57)mer (cid:18)ema(cid:50)(cid:40) (cid:62) (cid:36)e are ex(cid:52)ose(cid:40) (cid:56)o (cid:39)(cid:44)a(cid:50)(cid:43)es i(cid:50) (cid:39)o(cid:50)s(cid:57)mer (cid:40)ema(cid:50)(cid:40) (cid:52)a(cid:56)(cid:56)er(cid:50)s a(cid:50)(cid:40) (cid:39)(cid:57)s(cid:56)omer re(cid:53)(cid:57)ireme(cid:50)(cid:56)s i(cid:50) Sales of our products and services depend heavily on the volume of sales made by our customers to consumers. Alternative consumer preferences for products in the industries that (cid:76)e serve or the pac(cid:64)aging formats in (cid:76)hich such products are delivered(cid:11) (cid:76)hether as a result of changes in cost(cid:11) convenience or health(cid:11) environmental and social concerns and perceptions(cid:11) may result in a decline in the demand for certain of our products or the obsolescence of some of our e(cid:77)isting products. Any ne(cid:76) products that (cid:76)e produce may not meet sales or margin e(cid:77)pectations due to many factors(cid:11) including our or our customers(cid:6) inability to accurately predict customer demand(cid:11) end user preferences or movements in industry standards(cid:11) or to develop products that meet consumer demand in a timely and cost(cid:12)effective manner. Changing preferences for products and pac(cid:64)aging formats may result in increased demand for other products (cid:76)e produce. (cid:35)o(cid:76)ever(cid:11) to the e(cid:77)tent changing preferences are not offset by demand for ne(cid:76) or alternative products(cid:11) changes to consumer preferences could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. (cid:25)e(cid:61) (cid:17)(cid:57)s(cid:56)omers a(cid:50)(cid:40) (cid:17)(cid:57)s(cid:56)omer (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)io(cid:50) (cid:62) T(cid:44)e (cid:48)oss of (cid:47)e(cid:61) (cid:39)(cid:57)s(cid:56)omers(cid:6) a re(cid:40)(cid:57)(cid:39)(cid:56)io(cid:50) i(cid:50) (cid:56)(cid:44)eir (cid:52)ro(cid:40)(cid:57)(cid:39)(cid:56)io(cid:50) re(cid:53)(cid:57)ireme(cid:50)(cid:56)s or (cid:39)o(cid:50)so(cid:48)i(cid:40)a(cid:56)io(cid:50) amo(cid:50)(cid:43) (cid:47)e(cid:61) (cid:39)(cid:57)s(cid:56)omers (cid:39)o(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e a si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) a(cid:40)(cid:58)erse im(cid:52)a(cid:39)(cid:56) o(cid:50) o(cid:57)r sa(cid:48)es re(cid:58)e(cid:50)(cid:57)e a(cid:50)(cid:40) (cid:52)rofi(cid:56)a(cid:38)i(cid:48)i(cid:56)(cid:61)(cid:8) (cid:45)elationships (cid:76)ith our customers are fundamental to our success(cid:11) particularly given the nature of the pac(cid:64)aging industry and the other supply choices available to customers. (cid:50)hile (cid:76)e do not have a single customer accounting for more than ten percent of our net sales(cid:11) customer concentration can be more pronounced (cid:76)ithin certain businesses. Consequently(cid:11) the loss of any of our (cid:64)ey customers or any significant reduction in their production requirements(cid:11) or an adverse change in the terms of our supply agreements (cid:76)ith them(cid:11) could reduce our sales revenue and net profit. (cid:47)here is no assurance that e(cid:77)isting customer relationships (cid:76)ill be rene(cid:76)ed at e(cid:77)isting volume or price levels(cid:11) or at all. Customers (cid:76)ith operations sub(cid:63)ect to physical ris(cid:64)s(cid:11) including due to climate change(cid:11) may relocate production to areas that are less impacted and such areas may be out of range of Amcor(cid:6)s production sites or supplying such relocated facilities may lead to additional costs. Any loss(cid:11) change(cid:11) or other adverse event related to our (cid:64)ey customer relationships could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s(cid:11) (cid:76)hich effect may be material. In addition(cid:11) over recent years certain of our customers have acquired companies (cid:76)ith similar or complementary product lines. (cid:47)his consolidation has increased the concentration of our business (cid:76)ith these customers. Such consolidation may be accompanied by pressure from customers for lo(cid:76)er prices(cid:11) reflecting the increase in the total volume of products purchased or the elimination of a price differential bet(cid:76)een the acquiring customer and the company acquired. (cid:50)hile (cid:76)e have generally been successful at managing customer consolidations(cid:11) increased pricing pressures from our customers could have a material adverse effect on our results of operations. (cid:17)om(cid:52)e(cid:56)i(cid:56)io(cid:50) (cid:62) (cid:36)e fa(cid:39)e si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) (cid:39)om(cid:52)e(cid:56)i(cid:56)io(cid:50) i(cid:50) (cid:56)(cid:44)e i(cid:50)(cid:40)(cid:57)s(cid:56)ries a(cid:50)(cid:40) re(cid:43)io(cid:50)s i(cid:50) w(cid:44)i(cid:39)(cid:44) we o(cid:52)era(cid:56)e(cid:6) w(cid:44)i(cid:39)(cid:44) (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) (cid:50)e operate in highly competitive geographies and end use areas(cid:11) each (cid:76)ith varying barriers to entry(cid:11) industry structures(cid:11) and competitive behavior. (cid:50)e regularly bid for ne(cid:76) and continuing business in the industries and regions in (cid:76)hich (cid:76)e operate and (cid:76)e continue to change in response to consumer demand. (cid:50)e cannot predict (cid:76)ith certainty the changes that may affect our competitiveness. (cid:47)he loss of business from our larger customers(cid:11) or the rene(cid:76)al of business on less favorable terms(cid:11) may have a significant impact on our operating results. In addition(cid:11) our competitors may develop a disruptive technology or other technological innovations that could increase their ability to compete for our current or potential customers. (cid:41)o assurance can be given that the actions of established or potential competitors (cid:76)ill not have an adverse effect on our ability to implement our plans and on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. (cid:19)x(cid:52)a(cid:50)(cid:40)i(cid:50)(cid:43) (cid:29)(cid:57)r (cid:17)(cid:57)rre(cid:50)(cid:56) (cid:16)(cid:57)si(cid:50)ess (cid:62) (cid:36)e ma(cid:61) (cid:38)e (cid:57)(cid:50)a(cid:38)(cid:48)e (cid:56)o ex(cid:52)a(cid:50)(cid:40) o(cid:57)r (cid:39)(cid:57)rre(cid:50)(cid:56) (cid:38)(cid:57)si(cid:50)ess effe(cid:39)(cid:56)i(cid:58)e(cid:48)(cid:61) (cid:56)(cid:44)ro(cid:57)(cid:43)(cid:44) ei(cid:56)(cid:44)er or(cid:43)a(cid:50)i(cid:39) (cid:43)row(cid:56)(cid:44)(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) (cid:52)ro(cid:40)(cid:57)(cid:39)(cid:56) i(cid:50)(cid:50)o(cid:58)a(cid:56)io(cid:50)(cid:6) or a(cid:39)(cid:53)(cid:57)isi(cid:56)io(cid:50)s(cid:8) Our business strategy includes both organic e(cid:77)pansion of our e(cid:77)isting operations(cid:11) particularly through efforts to strengthen and e(cid:77)pand relationships (cid:76)ith customers in emerging mar(cid:64)ets(cid:11) product innovation(cid:11) including to address changes in the industry or regulatory environments(cid:11) and e(cid:77)pansion through acquisitions. (cid:35)o(cid:76)ever(cid:11) (cid:76)e may not be able to e(cid:77)ecute our strategy effectively for reasons (cid:76)ithin and outside our control. Our ability to gro(cid:76) organically may be limited by(cid:11) among other things(cid:11) e(cid:77)tensive saturation in the locations in (cid:76)hich (cid:76)e operate or a change or reduction in our customers(cid:89) gro(cid:76)th plans due to changing economic conditions(cid:11) strategic priorities(cid:11) or other(cid:76)ise. For many of our businesses(cid:11) organic gro(cid:76)th depends on product innovation(cid:11) ne(cid:76) product development(cid:11) and timely responses to changing consumer demands and preferences. Consequently(cid:11) failure to develop ne(cid:76) or improved products in response to changing consumer preferences in a timely manner may hinder our gro(cid:76)th potential(cid:11) affect our competitive position(cid:11) and adversely affect our business and results of operations. Additionally(cid:11) over the past decade(cid:11) (cid:76)e have pursued gro(cid:76)th through acquisitions(cid:11) and there can be no assurance that (cid:76)e (cid:76)ill be able to identify suitable acquisition targets in the right geographic regions and (cid:76)ith the right participation strategy in the future(cid:11) or to complete such acquisitions on acceptable terms or at all. If (cid:76)e are unable to identify acquisition targets that meet our investment criteria and close such transactions on acceptable terms(cid:11) our potential for gro(cid:76)th by (cid:76)ay of acquisition may be restricted(cid:11) (cid:76)hich could have an adverse effect on achievement of our strategy and the resulting e(cid:77)pected financial benefits. (cid:50)e also may face challenges in integrating our acquisitions (cid:76)ith our e(cid:77)isting operations. (cid:47)hese challenges could include difficulty in integrating or consolidating business processes and systems and challenges (cid:76)ith integrating the business cultures (cid:76)hich may lead to anticipated benefits of acquisitions not being reali(cid:79)ed fully(cid:11) or at all(cid:11) or may ta(cid:64)e longer to reali(cid:79)e than e(cid:77)pected or involve more costs to do so. In addition(cid:11) the process of integrating operations could result in an interruption of normal business operations. Operational Ris(cid:61)s (cid:21)(cid:48)o(cid:38)a(cid:48) (cid:19)(cid:39)o(cid:50)omi(cid:39) (cid:17)o(cid:50)(cid:40)i(cid:56)io(cid:50)s (cid:62) (cid:17)(cid:44)a(cid:48)(cid:48)e(cid:50)(cid:43)i(cid:50)(cid:43) (cid:39)(cid:57)rre(cid:50)(cid:56) a(cid:50)(cid:40) f(cid:57)(cid:56)(cid:57)re (cid:43)(cid:48)o(cid:38)a(cid:48) e(cid:39)o(cid:50)omi(cid:39) (cid:39)o(cid:50)(cid:40)i(cid:56)io(cid:50)s(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) i(cid:50)f(cid:48)a(cid:56)io(cid:50) a(cid:50)(cid:40) s(cid:57)(cid:52)(cid:52)(cid:48)(cid:61) (cid:39)(cid:44)ai(cid:50) (cid:40)isr(cid:57)(cid:52)(cid:56)io(cid:50)s(cid:6) (cid:44)a(cid:58)e (cid:44)a(cid:40)(cid:6) a(cid:50)(cid:40) ma(cid:61) (cid:39)o(cid:50)(cid:56)i(cid:50)(cid:57)e (cid:56)o (cid:44)a(cid:58)e(cid:6) a (cid:50)e(cid:43)a(cid:56)i(cid:58)e im(cid:52)a(cid:39)(cid:56) o(cid:50) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess o(cid:52)era(cid:56)io(cid:50)s a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) res(cid:57)(cid:48)(cid:56)s(cid:8) (cid:31)emand for our products and services is dependent on consumer demand for our pac(cid:64)aging products(cid:11) including pac(cid:64)aged food(cid:11) beverage(cid:11) healthcare(cid:11) personal care(cid:11) agribusiness(cid:11) industrial(cid:11) and other consumer goods. As a result(cid:11) general economic do(cid:76)nturns in our (cid:64)ey geographic regions and globally can adversely affect our business operations and financial results. (cid:47)he CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic and (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict have increased volatility in (cid:76)orld economies. Current global economic challenges(cid:11) including relatively high inflation and supply chain constraints in (cid:64)ey regions in (cid:76)hich (cid:76)e operate(cid:11) are li(cid:64)ely to continue to put pressure on our business. (cid:50)hen challenging economic conditions e(cid:77)ist(cid:11) our customers may delay(cid:11) decrease or cancel purchases from us(cid:11) and may also delay payment or fail to pay us altogether. Suppliers may have difficulty filling our orders and distributors may have difficulty getting our products to customers(cid:11) (cid:76)hich may affect our ability to meet customer demands(cid:11) and result in a loss of business. (cid:50)ea(cid:64)ened global economic conditions may also result in unfavorable changes in our product prices and product mi(cid:77) and lo(cid:76)er profit margins. Although (cid:76)e ta(cid:64)e measures to mitigate the impact of inflation(cid:11) including through pricing actions and productivity programs(cid:11) if these actions are not effective our cash flo(cid:76)(cid:11) financial condition(cid:11) and results of operations could materially and adversely be impacted. In addition(cid:11) there could be a time lag bet(cid:76)een recogni(cid:79)ing the benefit of our mitigating actions and (cid:76)hen the inflation occurs and there is no assurance that our mitigating measures (cid:76)ill be able to fully mitigate the impact of inflation. (cid:43)olitical uncertainty may also contribute to the general economic conditions in one or more mar(cid:64)ets in (cid:76)hich (cid:76)e operate. For e(cid:77)ample(cid:11) in fiscal year 2022(cid:11) political developments and general civil unrest in South Africa and the (cid:45)ussia(cid:12) (cid:48)(cid:64)raine conflict resulted in net e(cid:77)penses of $213 million(cid:11) including impairment and restructuring e(cid:77)penses. Future unrest in other regions in (cid:76)hich (cid:76)e operate could result in a material impact to our financial condition. (cid:43)olitical developments can also disrupt the mar(cid:64)ets (cid:76)e serve and the ta(cid:77) (cid:63)urisdictions in (cid:76)hich (cid:76)e operate(cid:11) and may cause us to lose customers(cid:11) suppliers(cid:11) and employees(cid:11) and adversely impact profitability. 13 14 Amcor Annual Report 2022 Form 10-K 15 (cid:23)(cid:50)(cid:56)er(cid:50)a(cid:56)io(cid:50)a(cid:48) (cid:29)(cid:52)era(cid:56)io(cid:50)s (cid:62) (cid:29)(cid:57)r i(cid:50)(cid:56)er(cid:50)a(cid:56)io(cid:50)a(cid:48) o(cid:52)era(cid:56)io(cid:50)s s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:57)s (cid:56)o (cid:58)ario(cid:57)s ris(cid:47)s (cid:56)(cid:44)a(cid:56) (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess o(cid:52)era(cid:56)io(cid:50)s a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) res(cid:57)(cid:48)(cid:56)s(cid:8) (cid:50)e have operations throughout the (cid:76)orld(cid:11) including facilities located in emerging mar(cid:64)ets. In fiscal year 2022(cid:11) appro(cid:77)imately 73(cid:4) of our sales revenue came from developed mar(cid:64)ets and 27(cid:4) came from emerging mar(cid:64)ets. (cid:50)e e(cid:77)pect to continue to e(cid:77)pand our operations in the future(cid:11) particularly in the emerging mar(cid:64)ets. (cid:40)anagement of global operations is comple(cid:77)(cid:11) particularly given the often substantial differences in the cultural(cid:11) political(cid:11) and regulatory environments of the countries in (cid:76)hich (cid:76)e operate. In addition(cid:11) many of the countries in (cid:76)hich (cid:76)e have operations(cid:11) including Argentina(cid:11) Bra(cid:79)il(cid:11) China(cid:11) Colombia(cid:11) India(cid:11) (cid:43)eru(cid:11) (cid:45)ussia(cid:11) South Africa(cid:11) and (cid:48)(cid:64)raine(cid:11) have underdeveloped or developing legal(cid:11) regulatory(cid:11) or political systems(cid:11) (cid:76)hich are sub(cid:63)ect to dynamic change(cid:11) including civil unrest. (cid:47)he profitability of our operations may be adversely impacted by(cid:11) among other things(cid:25) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) changes in applicable fiscal or regulatory regimes(cid:26) changes in(cid:11) or difficulties in interpreting and complying (cid:76)ith(cid:11) local la(cid:76)s(cid:11) sanctions(cid:11) and regulations(cid:11) including ta(cid:77)(cid:11) labor(cid:11) foreign investment and foreign e(cid:77)change control la(cid:76)s(cid:26) nullification(cid:11) modification(cid:11) or renegotiation of(cid:11) or difficulties or delays in enforcing(cid:11) contracts (cid:76)ith clients or (cid:63)oint venture partners that are sub(cid:63)ect to local la(cid:76)(cid:26) reversal of current political(cid:11) (cid:63)udicial(cid:11) or administrative policies encouraging foreign investment or foreign trade(cid:11) or relating to the use of local agents(cid:11) representatives(cid:11) or partners in the relevant (cid:63)urisdictions(cid:26) pandemics(cid:11) such as CO(cid:49)I(cid:31)(cid:12)1(cid:24)(cid:11) impacting various regions of the (cid:76)orld unequally(cid:26) or changes in e(cid:77)change rates and inflation(cid:11) including hyperinflation(cid:11) (cid:76)hich may be further e(cid:77)acerbated by the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic. Further(cid:11) sustained periods of legal(cid:11) regulatory(cid:11) or political instability in the emerging mar(cid:64)ets in (cid:76)hich (cid:76)e operate could have an adverse effect on our business(cid:11) cash flo(cid:76)(cid:11) financial condition(cid:11) and results of operations(cid:11) (cid:76)hich effect may be material. (cid:47)he recent conflict bet(cid:76)een (cid:45)ussia and (cid:48)(cid:64)raine has negatively impacted the global economy and led to various economic sanctions being imposed by the (cid:48).S.(cid:11) (cid:48)nited (cid:38)ingdom(cid:11) European (cid:48)nion(cid:11) and other countries against (cid:45)ussia. In advance of the conflict(cid:11) (cid:76)e proactively suspended operations at our manufacturing site in (cid:48)(cid:64)raine. (cid:50)e also operate three manufacturing facilities in (cid:45)ussia (cid:76)hich (cid:76)e have classified as held for sale at (cid:37)une 30(cid:11) 2022. (cid:50)e have recorded impairment charges related to our operations in (cid:48)(cid:64)raine and (cid:45)ussia of $138 million in fiscal year 2022. It is not possible to predict the broader or longer(cid:12)term consequences of this conflict. Further sanctions as (cid:76)ell as steps ta(cid:64)en by our customers(cid:11) suppliers(cid:11) or other sta(cid:64)eholders may disrupt our ability to sell our assets in (cid:45)ussia. Continued escalation of geopolitical tensions related to the conflict could result in the loss of property(cid:11) supply chain disruptions(cid:11) significant inflationary pressure on ra(cid:76) material prices and cost and supply of other resources (such as energy and natural gas)(cid:11) fluctuations in our customers(cid:89) buying patterns given regional shortages of food ingredients and other factors(cid:11) credit and capital mar(cid:64)et disruption (cid:76)hich could impact our ability to obtain financing(cid:11) increase in interest rates(cid:11) and adverse foreign e(cid:77)change impacts. (cid:47)hese broader consequences could have a material adverse effect on our business(cid:11) cash flo(cid:76)(cid:11) financial condition(cid:11) and results of operations. (cid:47)he international scope of our operations(cid:11) (cid:76)hich includes limited sales of our products to entities located in countries sub(cid:63)ect to certain economic sanctions administered by the (cid:48).S. Office of Foreign Assets Control(cid:11) and the (cid:48).S. (cid:31)epartment of State(cid:11) and (cid:47)rade and other applicable national and supranational organi(cid:79)ations (collectively(cid:11) "Sanctions")(cid:11) and operations in certain countries that are from time to time sub(cid:63)ect to Sanctions(cid:11) including those enacted as a result of the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) also requires us to maintain internal processes and control procedures. Failure to do so could result in breach by our employees of various la(cid:76)s and regulations(cid:11) including those relating to money laundering(cid:11) corruption(cid:11) e(cid:77)port control(cid:11) fraud(cid:11) bribery(cid:11) insider trading(cid:11) antitrust(cid:11) competition(cid:11) and economic sanctions(cid:11) (cid:76)hether due to a lac(cid:64) of integrity or a(cid:76)areness or other(cid:76)ise. Any such breach could have an adverse effect on our financial condition and result in reputational damage to our business(cid:11) (cid:76)hich effect may be material. instability(cid:11) and other factors impacting supply and demand pressures. For e(cid:77)ample(cid:11) (cid:76)e have seen disruptions in the supply of certain ra(cid:76) materials(cid:11) such as specialty resins(cid:11) and increased price volatility of certain ra(cid:76) materials across many of the regions in (cid:76)hich (cid:76)e operate since the second half of fiscal year 2021. Additionally(cid:11) changes in international trade policy in the countries in (cid:76)hich (cid:76)e operate could materially impact the cost and supply of ra(cid:76) materials as duties are assessed on ra(cid:76) materials used in our production process and global supply of (cid:64)ey ra(cid:76) materials is disrupted. For e(cid:77)ample(cid:11) in 2018(cid:11) the (cid:48).S. government imposed a 10(cid:4) tariff on all aluminum imports into the (cid:48)nited States from China and in (cid:37)uly 2022(cid:11) the (cid:48).S. (cid:31)epartment of Commerce announced an investigation to determine (cid:76)hether imports of aluminum from (cid:47)hailand and South (cid:38)orea circumvented the duties on Chinese aluminum. (cid:50)hile (cid:76)e have largely been able to successfully manage through these supply disruptions and related price volatility(cid:11) there is no assurance (cid:76)e (cid:76)ill be able to successfully navigate through any ongoing and future disruptions. Increases in costs and disruptions in supply can have an adverse effect on our business and financial results. Although (cid:76)e see(cid:64) to mitigate these ris(cid:64)s through various strategies(cid:11) including by entering into contracts (cid:76)ith certain customers (cid:76)hich permit certain price ad(cid:63)ustments to reflect increased ra(cid:76) material costs or by other(cid:76)ise see(cid:64)ing to increase our prices to offset increases in ra(cid:76) material costs and see(cid:64)ing alternative sources of supply for (cid:64)ey ra(cid:76) materials(cid:11) there is no guarantee that (cid:76)e (cid:76)ill be able to anticipate or mitigate commodity and input price movements or mitigate supply disruptions. In addition(cid:11) there may be delays in ad(cid:63)usting prices to correspond (cid:76)ith underlying ra(cid:76) material costs and corresponding impacts on our (cid:76)or(cid:64)ing capital and level of indebtedness and any failure to anticipate or mitigate against such movements could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s(cid:11) (cid:76)hich effect may be material. (cid:17)ommer(cid:39)ia(cid:48) Ris(cid:47)s (cid:62) (cid:36)e are s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:56)o (cid:52)ro(cid:40)(cid:57)(cid:39)(cid:56)io(cid:50)(cid:6) s(cid:57)(cid:52)(cid:52)(cid:48)(cid:61)(cid:6) a(cid:50)(cid:40) o(cid:56)(cid:44)er (cid:39)ommer(cid:39)ia(cid:48) ris(cid:47)s(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) (cid:39)o(cid:57)(cid:50)(cid:56)er(cid:52)ar(cid:56)(cid:61) (cid:39)re(cid:40)i(cid:56) ris(cid:47)s(cid:6) w(cid:44)i(cid:39)(cid:44) ma(cid:61) (cid:38)e exa(cid:39)er(cid:38)a(cid:56)e(cid:40) i(cid:50) (cid:56)imes of e(cid:39)o(cid:50)omi(cid:39) (cid:58)o(cid:48)a(cid:56)i(cid:48)i(cid:56)(cid:61)(cid:8) (cid:50)e face a number of commercial ris(cid:64)s(cid:11) including (i) operational disruption(cid:11) such as mechanical or technological failures or forced closures due to pandemics or (cid:76)ar (such as CO(cid:49)I(cid:31)(cid:12)1(cid:24) or the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict)(cid:11) each of (cid:76)hich could(cid:11) in turn(cid:11) lead to production loss and(cid:14)or increased costs(cid:11) (ii) shortages in manufacturing inputs due to the loss of (cid:64)ey suppliers or their inability to supply inputs and (iii) ris(cid:64)s associated (cid:76)ith development pro(cid:63)ects (such as cost overruns and delays). Supply shortages(cid:11) fluctuations in freight costs(cid:11) limitations on shipping capacity(cid:11) or other disruptions in our supply chain(cid:11) including as a result of sourcing materials from a single supplier or those that may occur related to CO(cid:49)I(cid:31)(cid:12)1(cid:24) or other natural disasters(cid:11) or (cid:76)ar(cid:11) could affect our ability to obtain timely delivery of ra(cid:76) materials(cid:11) equipment and other supplies(cid:11) and in turn(cid:11) adversely impact our ability to supply products to our customers. Such disruptions could have an adverse effect on our business and financial results. In response to the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic(cid:11) (cid:76)e have implemented employee safety measures across all our supply chain facilities(cid:11) including proper hygiene(cid:11) social distancing and temporary screening (cid:76)hich at a minimum are in compliance (cid:76)ith local government regulations. (cid:47)hese measures may not be sufficient to prevent the spread of CO(cid:49)I(cid:31)(cid:12)1(cid:24) among our employees. Illness(cid:11) travel restrictions(cid:11) absenteeism(cid:11) or other (cid:76)or(cid:64)force disruptions could negatively impact our supply chain(cid:11) manufacturing(cid:11) distribution(cid:11) or other business activities. Additionally(cid:11) the insolvency of(cid:11) or contractual default by(cid:11) any of our customers(cid:11) suppliers(cid:11) and financial institutions(cid:11) such as ban(cid:64)s and insurance providers(cid:11) may have a significant adverse effect on our operations and financial condition. Such ris(cid:64)s are e(cid:77)acerbated in times of economic volatility (such as economic volatility caused by CO(cid:49)I(cid:31)(cid:12)1(cid:24) and the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict)(cid:11) either globally or in the geographies and industries in (cid:76)hich our customers operate. If a counterparty defaults on a payment obligation to us(cid:11) (cid:76)e may be unable to collect the amounts o(cid:76)ed and some or all of these outstanding amounts may need to be (cid:76)ritten off. If a counterparty becomes insolvent or is other(cid:76)ise unable to meet its obligations in connection (cid:76)ith a particular pro(cid:63)ect(cid:11) (cid:76)e may need to find a replacement to fulfill that party(cid:89)s obligations or(cid:11) alternatively(cid:11) fulfill those obligations ourselves(cid:11) (cid:76)hich is li(cid:64)ely to be more e(cid:77)pensive. (cid:47)he occurrence of any of these ris(cid:64)s(cid:11) including any default by our counterparties(cid:11) could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s(cid:11) (cid:76)hich effect may be material and result in a competitive disadvantage. Raw (cid:27)a(cid:56)eria(cid:48)s (cid:62) (cid:30)ri(cid:39)e f(cid:48)(cid:57)(cid:39)(cid:56)(cid:57)a(cid:56)io(cid:50)s or s(cid:44)or(cid:56)a(cid:43)es i(cid:50) (cid:56)(cid:44)e a(cid:58)ai(cid:48)a(cid:38)i(cid:48)i(cid:56)(cid:61) of raw ma(cid:56)eria(cid:48)s(cid:6) e(cid:50)er(cid:43)(cid:61) a(cid:50)(cid:40) o(cid:56)(cid:44)er i(cid:50)(cid:52)(cid:57)(cid:56)s (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) (cid:21)(cid:48)o(cid:38)a(cid:48) (cid:22)ea(cid:48)(cid:56)(cid:44) (cid:29)(cid:57)(cid:56)(cid:38)rea(cid:47)s (cid:62) (cid:29)(cid:57)r (cid:38)(cid:57)si(cid:50)ess a(cid:50)(cid:40) o(cid:52)era(cid:56)io(cid:50)s ma(cid:61) (cid:38)e a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56)e(cid:40) (cid:38)(cid:61) (cid:56)(cid:44)e o(cid:50)(cid:43)oi(cid:50)(cid:43) (cid:17)oro(cid:50)a(cid:58)ir(cid:57)s (cid:52)a(cid:50)(cid:40)emi(cid:39) (cid:4)(cid:2)(cid:17)(cid:29)(cid:35)(cid:23)(cid:18)(cid:7)(cid:11)(cid:14)(cid:2)(cid:5) or o(cid:56)(cid:44)er simi(cid:48)ar (cid:52)a(cid:50)(cid:40)emi(cid:39)s(cid:8) As a manufacturer of pac(cid:64)aging products(cid:11) our sales and profitability are dependent on the availability and cost of ra(cid:76) materials and labor and other inputs(cid:11) including energy. All of the ra(cid:76) materials (cid:76)e use are purchased from third parties and our primary inputs include polymer resins and films(cid:11) in(cid:64)s and solvents(cid:11) aluminum(cid:11) and fiber(cid:12)based carton board. (cid:43)rices for these ra(cid:76) materials are sub(cid:63)ect to substantial fluctuations that are beyond our control due to factors such as changing economic conditions(cid:11) pandemics(cid:11) such as CO(cid:49)I(cid:31)(cid:12)1(cid:24)(cid:11) currency and commodity price fluctuations(cid:11) resource availability(cid:11) transportation costs(cid:11) (cid:76)eather conditions and natural disasters(cid:11) geopolitical ris(cid:64)s(cid:11) including (cid:76)ar (such as the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict) and Our business and financial results may be negatively impacted by outbrea(cid:64)s of contagious diseases(cid:11) including CO(cid:49)I(cid:31)(cid:12)1(cid:24). As a result of CO(cid:49)I(cid:31)(cid:12)1(cid:24)(cid:11) governmental authorities have implemented and(cid:11) in certain regions(cid:11) are continuing to implement numerous measures to try to contain the virus(cid:11) such as travel bans and restrictions(cid:11) limitations on gatherings(cid:11) quarantines(cid:11) shelter(cid:12)in(cid:12)place orders(cid:11) and business shutdo(cid:76)ns. (cid:40)easures providing for business shutdo(cid:76)ns generally e(cid:77)clude essential services and the critical infrastructure supporting the essential services. (cid:50)e have e(cid:77)perienced minimal disruptions to our operations to date as (cid:76)e have largely been deemed as providing essential services. 15 Amcor Annual Report 2022 16 15 Form 10-K 16 (cid:23)(cid:50)(cid:56)er(cid:50)a(cid:56)io(cid:50)a(cid:48) (cid:29)(cid:52)era(cid:56)io(cid:50)s (cid:62) (cid:29)(cid:57)r i(cid:50)(cid:56)er(cid:50)a(cid:56)io(cid:50)a(cid:48) o(cid:52)era(cid:56)io(cid:50)s s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:57)s (cid:56)o (cid:58)ario(cid:57)s ris(cid:47)s (cid:56)(cid:44)a(cid:56) (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess o(cid:52)era(cid:56)io(cid:50)s a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) res(cid:57)(cid:48)(cid:56)s(cid:8) (cid:50)e have operations throughout the (cid:76)orld(cid:11) including facilities located in emerging mar(cid:64)ets. In fiscal year 2022(cid:11) appro(cid:77)imately 73(cid:4) of our sales revenue came from developed mar(cid:64)ets and 27(cid:4) came from emerging mar(cid:64)ets. (cid:50)e e(cid:77)pect to continue to e(cid:77)pand our operations in the future(cid:11) particularly in the emerging mar(cid:64)ets. (cid:40)anagement of global operations is comple(cid:77)(cid:11) particularly given the often substantial differences in the cultural(cid:11) political(cid:11) and regulatory environments of the countries in (cid:76)hich (cid:76)e operate. In addition(cid:11) many of the countries in (cid:76)hich (cid:76)e have operations(cid:11) including Argentina(cid:11) Bra(cid:79)il(cid:11) China(cid:11) Colombia(cid:11) India(cid:11) (cid:43)eru(cid:11) (cid:45)ussia(cid:11) South Africa(cid:11) and (cid:48)(cid:64)raine(cid:11) have underdeveloped or developing legal(cid:11) regulatory(cid:11) or political systems(cid:11) (cid:76)hich are sub(cid:63)ect to dynamic change(cid:11) including civil unrest. (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) material. (cid:47)he profitability of our operations may be adversely impacted by(cid:11) among other things(cid:25) changes in applicable fiscal or regulatory regimes(cid:26) changes in(cid:11) or difficulties in interpreting and complying (cid:76)ith(cid:11) local la(cid:76)s(cid:11) sanctions(cid:11) and regulations(cid:11) including ta(cid:77)(cid:11) labor(cid:11) foreign investment and foreign e(cid:77)change control la(cid:76)s(cid:26) nullification(cid:11) modification(cid:11) or renegotiation of(cid:11) or difficulties or delays in enforcing(cid:11) contracts (cid:76)ith clients or (cid:63)oint venture partners that are sub(cid:63)ect to local la(cid:76)(cid:26) reversal of current political(cid:11) (cid:63)udicial(cid:11) or administrative policies encouraging foreign investment or foreign trade(cid:11) or relating to the use of local agents(cid:11) representatives(cid:11) or partners in the relevant (cid:63)urisdictions(cid:26) pandemics(cid:11) such as CO(cid:49)I(cid:31)(cid:12)1(cid:24)(cid:11) impacting various regions of the (cid:76)orld unequally(cid:26) or changes in e(cid:77)change rates and inflation(cid:11) including hyperinflation(cid:11) (cid:76)hich may be further e(cid:77)acerbated by the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic. Further(cid:11) sustained periods of legal(cid:11) regulatory(cid:11) or political instability in the emerging mar(cid:64)ets in (cid:76)hich (cid:76)e operate could have an adverse effect on our business(cid:11) cash flo(cid:76)(cid:11) financial condition(cid:11) and results of operations(cid:11) (cid:76)hich effect may be (cid:47)he recent conflict bet(cid:76)een (cid:45)ussia and (cid:48)(cid:64)raine has negatively impacted the global economy and led to various economic sanctions being imposed by the (cid:48).S.(cid:11) (cid:48)nited (cid:38)ingdom(cid:11) European (cid:48)nion(cid:11) and other countries against (cid:45)ussia. In advance of the conflict(cid:11) (cid:76)e proactively suspended operations at our manufacturing site in (cid:48)(cid:64)raine. (cid:50)e also operate three manufacturing facilities in (cid:45)ussia (cid:76)hich (cid:76)e have classified as held for sale at (cid:37)une 30(cid:11) 2022. (cid:50)e have recorded impairment charges related to our operations in (cid:48)(cid:64)raine and (cid:45)ussia of $138 million in fiscal year 2022. It is not possible to predict the broader or longer(cid:12)term consequences of this conflict. Further sanctions as (cid:76)ell as steps ta(cid:64)en by our customers(cid:11) suppliers(cid:11) or other sta(cid:64)eholders may disrupt our ability to sell our assets in (cid:45)ussia. Continued escalation of geopolitical tensions related to the conflict could result in the loss of property(cid:11) supply chain disruptions(cid:11) significant inflationary pressure on ra(cid:76) material prices and cost and supply of other resources (such as energy and natural gas)(cid:11) fluctuations in our customers(cid:89) buying patterns given regional shortages of food ingredients and other factors(cid:11) credit and capital mar(cid:64)et disruption (cid:76)hich could impact our ability to obtain financing(cid:11) increase in interest rates(cid:11) and adverse foreign e(cid:77)change impacts. (cid:47)hese broader consequences could have a material adverse effect on our business(cid:11) cash flo(cid:76)(cid:11) financial condition(cid:11) and results of operations. (cid:47)he international scope of our operations(cid:11) (cid:76)hich includes limited sales of our products to entities located in countries sub(cid:63)ect to certain economic sanctions administered by the (cid:48).S. Office of Foreign Assets Control(cid:11) and the (cid:48).S. (cid:31)epartment of State(cid:11) and (cid:47)rade and other applicable national and supranational organi(cid:79)ations (collectively(cid:11) "Sanctions")(cid:11) and operations in certain countries that are from time to time sub(cid:63)ect to Sanctions(cid:11) including those enacted as a result of the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) also requires us to maintain internal processes and control procedures. Failure to do so could result in breach by our employees of various la(cid:76)s and regulations(cid:11) including those relating to money laundering(cid:11) corruption(cid:11) e(cid:77)port control(cid:11) fraud(cid:11) bribery(cid:11) insider trading(cid:11) antitrust(cid:11) competition(cid:11) and economic sanctions(cid:11) (cid:76)hether due to a lac(cid:64) of integrity or a(cid:76)areness or other(cid:76)ise. Any such breach could have an adverse effect on our financial condition and result in reputational damage to our business(cid:11) (cid:76)hich effect may be material. instability(cid:11) and other factors impacting supply and demand pressures. For e(cid:77)ample(cid:11) (cid:76)e have seen disruptions in the supply of certain ra(cid:76) materials(cid:11) such as specialty resins(cid:11) and increased price volatility of certain ra(cid:76) materials across many of the regions in (cid:76)hich (cid:76)e operate since the second half of fiscal year 2021. Additionally(cid:11) changes in international trade policy in the countries in (cid:76)hich (cid:76)e operate could materially impact the cost and supply of ra(cid:76) materials as duties are assessed on ra(cid:76) materials used in our production process and global supply of (cid:64)ey ra(cid:76) materials is disrupted. For e(cid:77)ample(cid:11) in 2018(cid:11) the (cid:48).S. government imposed a 10(cid:4) tariff on all aluminum imports into the (cid:48)nited States from China and in (cid:37)uly 2022(cid:11) the (cid:48).S. (cid:31)epartment of Commerce announced an investigation to determine (cid:76)hether imports of aluminum from (cid:47)hailand and South (cid:38)orea circumvented the duties on Chinese aluminum. (cid:50)hile (cid:76)e have largely been able to successfully manage through these supply disruptions and related price volatility(cid:11) there is no assurance (cid:76)e (cid:76)ill be able to successfully navigate through any ongoing and future disruptions. Increases in costs and disruptions in supply can have an adverse effect on our business and financial results. Although (cid:76)e see(cid:64) to mitigate these ris(cid:64)s through various strategies(cid:11) including by entering into contracts (cid:76)ith certain customers (cid:76)hich permit certain price ad(cid:63)ustments to reflect increased ra(cid:76) material costs or by other(cid:76)ise see(cid:64)ing to increase our prices to offset increases in ra(cid:76) material costs and see(cid:64)ing alternative sources of supply for (cid:64)ey ra(cid:76) materials(cid:11) there is no guarantee that (cid:76)e (cid:76)ill be able to anticipate or mitigate commodity and input price movements or mitigate supply disruptions. In addition(cid:11) there may be delays in ad(cid:63)usting prices to correspond (cid:76)ith underlying ra(cid:76) material costs and corresponding impacts on our (cid:76)or(cid:64)ing capital and level of indebtedness and any failure to anticipate or mitigate against such movements could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s(cid:11) (cid:76)hich effect may be material. (cid:17)ommer(cid:39)ia(cid:48) Ris(cid:47)s (cid:62) (cid:36)e are s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:56)o (cid:52)ro(cid:40)(cid:57)(cid:39)(cid:56)io(cid:50)(cid:6) s(cid:57)(cid:52)(cid:52)(cid:48)(cid:61)(cid:6) a(cid:50)(cid:40) o(cid:56)(cid:44)er (cid:39)ommer(cid:39)ia(cid:48) ris(cid:47)s(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) (cid:39)o(cid:57)(cid:50)(cid:56)er(cid:52)ar(cid:56)(cid:61) (cid:39)re(cid:40)i(cid:56) ris(cid:47)s(cid:6) w(cid:44)i(cid:39)(cid:44) ma(cid:61) (cid:38)e exa(cid:39)er(cid:38)a(cid:56)e(cid:40) i(cid:50) (cid:56)imes of e(cid:39)o(cid:50)omi(cid:39) (cid:58)o(cid:48)a(cid:56)i(cid:48)i(cid:56)(cid:61)(cid:8) (cid:50)e face a number of commercial ris(cid:64)s(cid:11) including (i) operational disruption(cid:11) such as mechanical or technological failures or forced closures due to pandemics or (cid:76)ar (such as CO(cid:49)I(cid:31)(cid:12)1(cid:24) or the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict)(cid:11) each of (cid:76)hich could(cid:11) in turn(cid:11) lead to production loss and(cid:14)or increased costs(cid:11) (ii) shortages in manufacturing inputs due to the loss of (cid:64)ey suppliers or their inability to supply inputs and (iii) ris(cid:64)s associated (cid:76)ith development pro(cid:63)ects (such as cost overruns and delays). Supply shortages(cid:11) fluctuations in freight costs(cid:11) limitations on shipping capacity(cid:11) or other disruptions in our supply chain(cid:11) including as a result of sourcing materials from a single supplier or those that may occur related to CO(cid:49)I(cid:31)(cid:12)1(cid:24) or other natural disasters(cid:11) or (cid:76)ar(cid:11) could affect our ability to obtain timely delivery of ra(cid:76) materials(cid:11) equipment and other supplies(cid:11) and in turn(cid:11) adversely impact our ability to supply products to our customers. Such disruptions could have an adverse effect on our business and financial results. In response to the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic(cid:11) (cid:76)e have implemented employee safety measures across all our supply chain facilities(cid:11) including proper hygiene(cid:11) social distancing and temporary screening (cid:76)hich at a minimum are in compliance (cid:76)ith local government regulations. (cid:47)hese measures may not be sufficient to prevent the spread of CO(cid:49)I(cid:31)(cid:12)1(cid:24) among our employees. Illness(cid:11) travel restrictions(cid:11) absenteeism(cid:11) or other (cid:76)or(cid:64)force disruptions could negatively impact our supply chain(cid:11) manufacturing(cid:11) distribution(cid:11) or other business activities. Additionally(cid:11) the insolvency of(cid:11) or contractual default by(cid:11) any of our customers(cid:11) suppliers(cid:11) and financial institutions(cid:11) such as ban(cid:64)s and insurance providers(cid:11) may have a significant adverse effect on our operations and financial condition. Such ris(cid:64)s are e(cid:77)acerbated in times of economic volatility (such as economic volatility caused by CO(cid:49)I(cid:31)(cid:12)1(cid:24) and the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict)(cid:11) either globally or in the geographies and industries in (cid:76)hich our customers operate. If a counterparty defaults on a payment obligation to us(cid:11) (cid:76)e may be unable to collect the amounts o(cid:76)ed and some or all of these outstanding amounts may need to be (cid:76)ritten off. If a counterparty becomes insolvent or is other(cid:76)ise unable to meet its obligations in connection (cid:76)ith a particular pro(cid:63)ect(cid:11) (cid:76)e may need to find a replacement to fulfill that party(cid:89)s obligations or(cid:11) alternatively(cid:11) fulfill those obligations ourselves(cid:11) (cid:76)hich is li(cid:64)ely to be more e(cid:77)pensive. (cid:47)he occurrence of any of these ris(cid:64)s(cid:11) including any default by our counterparties(cid:11) could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s(cid:11) (cid:76)hich effect may be material and result in a competitive disadvantage. Raw (cid:27)a(cid:56)eria(cid:48)s (cid:62) (cid:30)ri(cid:39)e f(cid:48)(cid:57)(cid:39)(cid:56)(cid:57)a(cid:56)io(cid:50)s or s(cid:44)or(cid:56)a(cid:43)es i(cid:50) (cid:56)(cid:44)e a(cid:58)ai(cid:48)a(cid:38)i(cid:48)i(cid:56)(cid:61) of raw ma(cid:56)eria(cid:48)s(cid:6) e(cid:50)er(cid:43)(cid:61) a(cid:50)(cid:40) o(cid:56)(cid:44)er i(cid:50)(cid:52)(cid:57)(cid:56)s (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) (cid:21)(cid:48)o(cid:38)a(cid:48) (cid:22)ea(cid:48)(cid:56)(cid:44) (cid:29)(cid:57)(cid:56)(cid:38)rea(cid:47)s (cid:62) (cid:29)(cid:57)r (cid:38)(cid:57)si(cid:50)ess a(cid:50)(cid:40) o(cid:52)era(cid:56)io(cid:50)s ma(cid:61) (cid:38)e a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56)e(cid:40) (cid:38)(cid:61) (cid:56)(cid:44)e o(cid:50)(cid:43)oi(cid:50)(cid:43) (cid:17)oro(cid:50)a(cid:58)ir(cid:57)s (cid:52)a(cid:50)(cid:40)emi(cid:39) (cid:4)(cid:2)(cid:17)(cid:29)(cid:35)(cid:23)(cid:18)(cid:7)(cid:11)(cid:14)(cid:2)(cid:5) or o(cid:56)(cid:44)er simi(cid:48)ar (cid:52)a(cid:50)(cid:40)emi(cid:39)s(cid:8) As a manufacturer of pac(cid:64)aging products(cid:11) our sales and profitability are dependent on the availability and cost of ra(cid:76) materials and labor and other inputs(cid:11) including energy. All of the ra(cid:76) materials (cid:76)e use are purchased from third parties and our primary inputs include polymer resins and films(cid:11) in(cid:64)s and solvents(cid:11) aluminum(cid:11) and fiber(cid:12)based carton board. (cid:43)rices for these ra(cid:76) materials are sub(cid:63)ect to substantial fluctuations that are beyond our control due to factors such as changing economic conditions(cid:11) pandemics(cid:11) such as CO(cid:49)I(cid:31)(cid:12)1(cid:24)(cid:11) currency and commodity price fluctuations(cid:11) resource availability(cid:11) transportation costs(cid:11) (cid:76)eather conditions and natural disasters(cid:11) geopolitical ris(cid:64)s(cid:11) including (cid:76)ar (such as the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict) and Our business and financial results may be negatively impacted by outbrea(cid:64)s of contagious diseases(cid:11) including CO(cid:49)I(cid:31)(cid:12)1(cid:24). As a result of CO(cid:49)I(cid:31)(cid:12)1(cid:24)(cid:11) governmental authorities have implemented and(cid:11) in certain regions(cid:11) are continuing to implement numerous measures to try to contain the virus(cid:11) such as travel bans and restrictions(cid:11) limitations on gatherings(cid:11) quarantines(cid:11) shelter(cid:12)in(cid:12)place orders(cid:11) and business shutdo(cid:76)ns. (cid:40)easures providing for business shutdo(cid:76)ns generally e(cid:77)clude essential services and the critical infrastructure supporting the essential services. (cid:50)e have e(cid:77)perienced minimal disruptions to our operations to date as (cid:76)e have largely been deemed as providing essential services. 15 16 Amcor Annual Report 2022 Form 10-K 17 CO(cid:49)I(cid:31)(cid:12)1(cid:24) has in the past(cid:11) and could in the future result in the temporary closure of our facilities(cid:11) the facilities of our (cid:76)hen it is considered probable that (cid:76)e have some liability and the amount can be reasonably estimated. (cid:35)o(cid:76)ever(cid:11) because the suppliers(cid:11) or other suppliers in our supply chain. In limited cases to date(cid:11) certain customers have shut do(cid:76)n their operations temporarily to deal (cid:76)ith the outbrea(cid:64) (cid:76)ithin their facilities(cid:11) (cid:76)hich has impacted their demand(cid:11) and (cid:76)e may continue to e(cid:77)perience volatility in demand from temporary customer shutdo(cid:76)ns. In addition(cid:11) CO(cid:49)I(cid:31)(cid:12)1(cid:24) has significantly impacted and may further impact the economies and financial mar(cid:64)ets of affected countries(cid:11) including negatively impacting economic gro(cid:76)th(cid:11) the proper functioning of capital mar(cid:64)ets(cid:11) supply chains(cid:11) foreign currency e(cid:77)change rates and interest rates. CO(cid:49)I(cid:31)(cid:12)1(cid:24) may result in a prolonged economic do(cid:76)nturn(cid:11) such as increased unemployment(cid:11) decreases in capital spending(cid:11) business shutdo(cid:76)ns(cid:11) or economic recessions(cid:11) (cid:76)hich could negatively affect demand for our customers(cid:89) products. (cid:31)espite our efforts to manage these impacts(cid:11) the e(cid:77)tent to (cid:76)hich CO(cid:49)I(cid:31)(cid:12)1(cid:24) or other pandemics impact our business and operations(cid:11) including our ability to secure financing at attractive rates(cid:11) is un(cid:64)no(cid:76)n and the effect could be material. (cid:15)(cid:56)(cid:56)ra(cid:39)(cid:56)i(cid:50)(cid:43) a(cid:50)(cid:40) Re(cid:56)ai(cid:50)i(cid:50)(cid:43) S(cid:47)i(cid:48)(cid:48)e(cid:40) (cid:36)or(cid:47)for(cid:39)e (cid:62) (cid:23)f we are (cid:57)(cid:50)a(cid:38)(cid:48)e (cid:56)o a(cid:56)(cid:56)ra(cid:39)(cid:56) a(cid:50)(cid:40) re(cid:56)ai(cid:50) o(cid:57)r (cid:43)(cid:48)o(cid:38)a(cid:48) exe(cid:39)(cid:57)(cid:56)i(cid:58)e ma(cid:50)a(cid:43)eme(cid:50)(cid:56) (cid:56)eam a(cid:50)(cid:40) o(cid:57)r s(cid:47)i(cid:48)(cid:48)e(cid:40) wor(cid:47)for(cid:39)e(cid:6) we ma(cid:61) (cid:38)e a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56)e(cid:40)(cid:8) Our continued success depends on our ability to identify(cid:11) attract(cid:11) develop(cid:11) and retain s(cid:64)illed personnel in our global e(cid:77)ecutive management team and our operations. (cid:50)e focus on our talent acquisition processes(cid:11) as (cid:76)ell as our onboarding and talent and leadership programs(cid:11) to ensure our (cid:64)ey ne(cid:76) hires and s(cid:64)illed personnel(cid:89)s efficiency and effectiveness aligns (cid:76)ith Amcor(cid:89)s values and (cid:76)ays of (cid:76)or(cid:64)ing. (cid:35)o(cid:76)ever(cid:11) any failure to successfully transition (cid:64)ey ne(cid:76) hires and retain our s(cid:64)illed personnel in any of our operations and our global e(cid:77)ecutive management team(cid:11) could impact our ability to e(cid:77)ecute on our strategic plans(cid:11) ma(cid:64)e it difficult to meet our performance ob(cid:63)ectives and be disruptive to our business. (cid:50)e are also impacted by regional labor shortages(cid:11) inflationary pressures on (cid:76)ages(cid:11) and an increasingly competitive labor mar(cid:64)et. (cid:50)hile (cid:76)e have been successful to date in responding to regional labor shortages and maintaining plans for continuity of succession(cid:11) there can be no assurance that (cid:76)e (cid:76)ill be able to manage through future labor shortages or recruit(cid:11) develop(cid:11) assimilate(cid:11) motivate(cid:11) and retain employees in the future (cid:76)ho actively promote and meet the standards of our culture. (cid:29)(cid:52)era(cid:56)io(cid:50)a(cid:48) (cid:19)(cid:22)S Ris(cid:47)s (cid:62) (cid:36)e are s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:56)o (cid:39)os(cid:56)s a(cid:50)(cid:40) (cid:48)ia(cid:38)i(cid:48)i(cid:56)ies re(cid:48)a(cid:56)e(cid:40) (cid:56)o (cid:39)(cid:57)rre(cid:50)(cid:56) a(cid:50)(cid:40) f(cid:57)(cid:56)(cid:57)re e(cid:50)(cid:58)iro(cid:50)me(cid:50)(cid:56)(cid:6) (cid:44)ea(cid:48)(cid:56)(cid:44) a(cid:50)(cid:40) safe(cid:56)(cid:61) (cid:4)(cid:2)(cid:19)(cid:22)S(cid:2)(cid:5) (cid:48)aws a(cid:50)(cid:40) re(cid:43)(cid:57)(cid:48)a(cid:56)io(cid:50)s(cid:6) as we(cid:48)(cid:48) as (cid:39)(cid:44)a(cid:50)(cid:43)es i(cid:50) (cid:56)(cid:44)e (cid:43)(cid:48)o(cid:38)a(cid:48) (cid:39)(cid:48)ima(cid:56)e(cid:6) (cid:56)(cid:44)a(cid:56) (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) (cid:50)e are required to comply (cid:76)ith E(cid:35)S la(cid:76)s(cid:11) rules(cid:11) and regulations in each of the countries in (cid:76)hich (cid:76)e operate and do business. Additionally(cid:11) many of our products come into contact (cid:76)ith the healthcare products and food and beverages they pac(cid:64)age and therefore(cid:11) (cid:76)e are also sub(cid:63)ect to certain local and international standards related to such products. Compliance (cid:76)ith these la(cid:76)s and regulations can require significant e(cid:77)penditure of financial and employee resources. In addition(cid:11) changes to such la(cid:76)s(cid:11) regulations and standards are made or proposed regularly(cid:11) and some of the proposals(cid:11) if adopted(cid:11) might(cid:11) directly or indirectly(cid:11) result in a material reduction in the operating results of one or more of our operating units. For instance(cid:11) an increase in legislation (cid:76)ith respect to litter related to plastic pac(cid:64)aging or related recycling programs may cause legislators in some countries and regions in (cid:76)hich our products are sold to consider banning or limiting certain pac(cid:64)aging formats or materials. Additionally(cid:11) increased regulation of emissions lin(cid:64)ed to climate change(cid:11) including greenhouse gas (carbon) emissions and other climate(cid:12)related regulations(cid:11) could potentially increase the cost of our operations due to increased costs of compliance ((cid:76)hich may not be recoverable through ad(cid:63)ustment of prices)(cid:11) increased cost of fossil fuel(cid:12) based inputs and increased cost of energy intensive ra(cid:76) material inputs. (cid:35)o(cid:76)ever(cid:11) any such changes are uncertain(cid:11) and (cid:76)e cannot predict the amount of additional capital e(cid:77)penses or operating e(cid:77)penses that (cid:76)ould be necessary for compliance. Federal(cid:11) state(cid:11) provincial(cid:11) and local la(cid:76)s and requirements pertaining to (cid:76)or(cid:64)place 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 la(cid:76)s and requirements may result in additional costs and actions across the affected country and(cid:14)or region. (cid:49)arious government agencies may promulgate ne(cid:76) or modified legislation(cid:11) and implement special emphasis programs and enforcement actions that could impact specific Company operations covered by the respective program. Federal(cid:11) state(cid:11) provincial(cid:11) foreign(cid:11) and local environmental requirements relating to air(cid:11) soil(cid:11) and (cid:76)ater quality(cid:11) handling(cid:11) discharge(cid:11) storage(cid:11) and disposal of a variety of substances(cid:11) 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. (cid:50)e may be found to have environmental liability for the costs of remediating soil or (cid:76)ater that is(cid:11) or (cid:76)as(cid:11) contaminated by us or a third party at various facilities (cid:76)e o(cid:76)n(cid:11) used(cid:11) or operate (including facilities that may be acquired by us in the future). Legal proceedings may result in the imposition of fines or penalties(cid:11) as (cid:76)ell as mandated remediation programs(cid:11) that require substantial(cid:11) and in some instances(cid:11) unplanned capital e(cid:77)penditure. e(cid:77)tent of potential environmental damage(cid:11) and the e(cid:77)tent of our liability for such damage(cid:11) is usually difficult to assess and may only be ascertained over a long period of time(cid:11) our actual liability in such cases may end up being substantially higher than the currently provisioned amount. Accordingly(cid:11) additional charges could be incurred that (cid:76)ould have an adverse effect on our operating results and financial position(cid:11) (cid:76)hich may be material. (cid:47)he effects of climate change and greenhouse gas effects may adversely affect our business. A number of governmental bodies have introduced(cid:11) or are contemplating introducing(cid:11) regulatory change to address the impacts of climate change(cid:11) (cid:76)hich(cid:11) (cid:76)here implemented(cid:11) may have adverse impacts on our operations or financial results. (cid:26)a(cid:38)or (cid:18)is(cid:52)(cid:57)(cid:56)es (cid:62) (cid:36)e are s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:56)o (cid:56)(cid:44)e ris(cid:47) of (cid:48)a(cid:38)or (cid:40)is(cid:52)(cid:57)(cid:56)es(cid:6) w(cid:44)i(cid:39)(cid:44) (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) Although (cid:76)e have not e(cid:77)perienced any significant labor disputes in recent years(cid:11) there can be no assurance that (cid:76)e (cid:76)ill not e(cid:77)perience labor disputes in the future(cid:11) including protests and stri(cid:64)es(cid:11) (cid:76)hich could disrupt our business operations and have an adverse effect on our business and results of operation. Although (cid:76)e consider our relations (cid:76)ith our employees to be good(cid:11) there can be no assurance that (cid:76)e (cid:76)ill be able to maintain a satisfactory (cid:76)or(cid:64)ing relationship (cid:76)ith our employees in the future. (cid:17)(cid:48)ima(cid:56)e (cid:17)(cid:44)a(cid:50)(cid:43)e (cid:7) (cid:29)(cid:57)r (cid:38)(cid:57)si(cid:50)ess is s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:56)o ris(cid:47)s re(cid:48)a(cid:56)e(cid:40) (cid:56)o (cid:39)(cid:48)ima(cid:56)e (cid:39)(cid:44)a(cid:50)(cid:43)e w(cid:44)i(cid:39)(cid:44) (cid:39)o(cid:57)(cid:48)(cid:40) (cid:50)e(cid:43)a(cid:56)i(cid:58)e(cid:48)(cid:61) im(cid:52)a(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess o(cid:52)era(cid:56)io(cid:50)s a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) res(cid:57)(cid:48)(cid:56)s(cid:8) Climate change may have a progressively adverse impact on our business and those of our customers(cid:11) suppliers(cid:11) and partners. (cid:40)any of the geographic areas (cid:76)here our production is located and (cid:76)here (cid:76)e conduct business may be affected by natural disasters(cid:11) including earthqua(cid:64)es(cid:11) sno(cid:76)storms(cid:11) hurricanes(cid:11) flooding(cid:11) forest fires(cid:11) and drought. Such events may have a physical impact on our facilities(cid:11) inventory(cid:11) suppliers(cid:11) and equipment and any unplanned do(cid:76)ntime at any of our facilities could result in unabsorbed costs that could negatively impact our results of operations for the period in (cid:76)hich it e(cid:77)perienced the do(cid:76)ntime. Longer(cid:12)term climate change patterns could significantly alter customer demand (cid:76)hich is especially true for customers (cid:76)ho rely on supply chains routinely impacted by (cid:76)eather. For e(cid:77)ample(cid:11) agricultural supply chains (cid:76)ould be impacted by increased levels of drought or flooding and customers in coastal regions (cid:76)ould be impacted by frequent flooding. Information (cid:44)echnology and Cybersecurity Ris(cid:61)s (cid:23)(cid:50)forma(cid:56)io(cid:50) Te(cid:39)(cid:44)(cid:50)o(cid:48)o(cid:43)(cid:61) (cid:62) (cid:15) fai(cid:48)(cid:57)re or (cid:40)isr(cid:57)(cid:52)(cid:56)io(cid:50) i(cid:50) o(cid:57)r i(cid:50)forma(cid:56)io(cid:50) (cid:56)e(cid:39)(cid:44)(cid:50)o(cid:48)o(cid:43)(cid:61) s(cid:61)s(cid:56)ems (cid:39)o(cid:57)(cid:48)(cid:40) (cid:40)isr(cid:57)(cid:52)(cid:56) o(cid:57)r o(cid:52)era(cid:56)io(cid:50)s(cid:6) (cid:39)om(cid:52)romise (cid:39)(cid:57)s(cid:56)omer(cid:6) em(cid:52)(cid:48)o(cid:61)ee(cid:6) s(cid:57)(cid:52)(cid:52)(cid:48)ier(cid:6) a(cid:50)(cid:40) o(cid:56)(cid:44)er (cid:40)a(cid:56)a(cid:6) a(cid:50)(cid:40) (cid:39)o(cid:57)(cid:48)(cid:40) (cid:50)e(cid:43)a(cid:56)i(cid:58)e(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) (cid:50)e rely on the successful and uninterrupted functioning of our information technology and control systems to securely manage operations and various business functions(cid:11) and on various technologies to process(cid:11) store(cid:11) and report information about our business(cid:11) and to interact (cid:76)ith customers(cid:11) suppliers(cid:11) and employees around the (cid:76)orld. In addition(cid:11) our information systems increasingly rely on cloud solutions (cid:76)hich require different security measures. (cid:47)hese measures cover technical changes to our net(cid:76)or(cid:64) security(cid:11) organi(cid:79)ation(cid:11) and governance changes as (cid:76)ell as alignment of third(cid:12)party suppliers on mar(cid:64)et standards. As (cid:76)ith all information technology systems(cid:11) our systems may be susceptible to damage(cid:11) disruption(cid:11) information loss or shutdo(cid:76)n due to a variety of factors including po(cid:76)er outages(cid:11) failures during the process of upgrading or replacing soft(cid:76)are(cid:11) hard(cid:76)are failures(cid:11) computer viruses(cid:11) catastrophic events(cid:11) telecommunications failures(cid:11) user errors(cid:11) unauthori(cid:79)ed access(cid:11) and malicious or accidental destruction(cid:11) or theft of information or functionality. (cid:17)(cid:61)(cid:38)erse(cid:39)(cid:57)ri(cid:56)(cid:61) Ris(cid:47) (cid:62) T(cid:44)e (cid:40)isr(cid:57)(cid:52)(cid:56)io(cid:50) of o(cid:57)r o(cid:52)era(cid:56)io(cid:50)s or ris(cid:47) of (cid:48)oss of o(cid:57)r se(cid:50)si(cid:56)i(cid:58)e (cid:38)(cid:57)si(cid:50)ess i(cid:50)forma(cid:56)io(cid:50) (cid:39)o(cid:57)(cid:48)(cid:40) (cid:50)e(cid:43)a(cid:56)i(cid:58)e(cid:48)(cid:61) im(cid:52)a(cid:39)(cid:56) o(cid:57)r fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:39)o(cid:50)(cid:40)i(cid:56)io(cid:50) a(cid:50)(cid:40) res(cid:57)(cid:48)(cid:56)s of o(cid:52)era(cid:56)io(cid:50)s(cid:8) Increased cyber(cid:12)attac(cid:64)s(cid:11) including computer viruses(cid:11) ransom(cid:76)are(cid:11) unauthori(cid:79)ed access attempts(cid:11) phishing(cid:11) hac(cid:64)ing(cid:11) and other types of attac(cid:64)s pose a ris(cid:64) to the security and availability of our information technology systems(cid:11) including those provided by third parties. (cid:50)e have e(cid:77)perienced and e(cid:77)pect to continue to e(cid:77)perience actual and attempted cyber(cid:12)attac(cid:64)s of our information technology systems and net(cid:76)or(cid:64)s. (cid:34)eopolitical turmoil(cid:11) including as a result of the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) heightens the ris(cid:64) of cyber(cid:12)attac(cid:64)s. (cid:50)hile (cid:76)e have operational safeguards in place to detect and prevent cyber(cid:12)attac(cid:64)s and to date have not e(cid:77)perienced any significant impacts(cid:11) our safeguards may not al(cid:76)ays be able to prevent a cyber(cid:12)attac(cid:64) from impacting our systems (cid:76)hich could have a material impact on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. In addition(cid:11) our customers and suppliers are susceptible to cyber(cid:12)attac(cid:64)s and disruption to their information technology systems could result in reduced demand for our products or limit our ability to supply our products. (cid:50)e have incurred in the past(cid:11) and may incur in the future(cid:11) fines(cid:11) penalties(cid:11) and legal costs relating to environmental matters(cid:11) and costs relating to the damage of natural resources(cid:11) lost property values(cid:11) and to(cid:77)ic tort claims. (cid:43)rovisions are raised (cid:50)e also maintain and have access to sensitive(cid:11) confidential or personal data or information that is sub(cid:63)ect to privacy and security la(cid:76)s(cid:11) regulations(cid:11) and customer controls. (cid:31)espite our efforts to protect such information(cid:11) our facilities and systems 17 Amcor Annual Report 2022 18 17 Form 10-K 18 CO(cid:49)I(cid:31)(cid:12)1(cid:24) has in the past(cid:11) and could in the future result in the temporary closure of our facilities(cid:11) the facilities of our suppliers(cid:11) or other suppliers in our supply chain. In limited cases to date(cid:11) certain customers have shut do(cid:76)n their operations temporarily to deal (cid:76)ith the outbrea(cid:64) (cid:76)ithin their facilities(cid:11) (cid:76)hich has impacted their demand(cid:11) and (cid:76)e may continue to e(cid:77)perience volatility in demand from temporary customer shutdo(cid:76)ns. In addition(cid:11) CO(cid:49)I(cid:31)(cid:12)1(cid:24) has significantly impacted and may further impact the economies and financial mar(cid:64)ets of affected countries(cid:11) including negatively impacting economic gro(cid:76)th(cid:11) the proper functioning of capital mar(cid:64)ets(cid:11) supply chains(cid:11) foreign currency e(cid:77)change rates and interest rates. CO(cid:49)I(cid:31)(cid:12)1(cid:24) may result in a prolonged economic do(cid:76)nturn(cid:11) such as increased unemployment(cid:11) decreases in capital spending(cid:11) business shutdo(cid:76)ns(cid:11) or economic recessions(cid:11) (cid:76)hich could negatively affect demand for our customers(cid:89) products. (cid:31)espite our efforts to manage these impacts(cid:11) the e(cid:77)tent to (cid:76)hich CO(cid:49)I(cid:31)(cid:12)1(cid:24) or other pandemics impact our business and operations(cid:11) including our ability to secure financing at attractive rates(cid:11) is un(cid:64)no(cid:76)n and the effect could be material. (cid:15)(cid:56)(cid:56)ra(cid:39)(cid:56)i(cid:50)(cid:43) a(cid:50)(cid:40) Re(cid:56)ai(cid:50)i(cid:50)(cid:43) S(cid:47)i(cid:48)(cid:48)e(cid:40) (cid:36)or(cid:47)for(cid:39)e (cid:62) (cid:23)f we are (cid:57)(cid:50)a(cid:38)(cid:48)e (cid:56)o a(cid:56)(cid:56)ra(cid:39)(cid:56) a(cid:50)(cid:40) re(cid:56)ai(cid:50) o(cid:57)r (cid:43)(cid:48)o(cid:38)a(cid:48) exe(cid:39)(cid:57)(cid:56)i(cid:58)e ma(cid:50)a(cid:43)eme(cid:50)(cid:56) (cid:56)eam a(cid:50)(cid:40) o(cid:57)r s(cid:47)i(cid:48)(cid:48)e(cid:40) wor(cid:47)for(cid:39)e(cid:6) we ma(cid:61) (cid:38)e a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56)e(cid:40)(cid:8) Our continued success depends on our ability to identify(cid:11) attract(cid:11) develop(cid:11) and retain s(cid:64)illed personnel in our global e(cid:77)ecutive management team and our operations. (cid:50)e focus on our talent acquisition processes(cid:11) as (cid:76)ell as our onboarding and talent and leadership programs(cid:11) to ensure our (cid:64)ey ne(cid:76) hires and s(cid:64)illed personnel(cid:89)s efficiency and effectiveness aligns (cid:76)ith Amcor(cid:89)s values and (cid:76)ays of (cid:76)or(cid:64)ing. (cid:35)o(cid:76)ever(cid:11) any failure to successfully transition (cid:64)ey ne(cid:76) hires and retain our s(cid:64)illed personnel in any of our operations and our global e(cid:77)ecutive management team(cid:11) could impact our ability to e(cid:77)ecute on our strategic plans(cid:11) ma(cid:64)e it difficult to meet our performance ob(cid:63)ectives and be disruptive to our business. (cid:50)e are also impacted by regional labor shortages(cid:11) inflationary pressures on (cid:76)ages(cid:11) and an increasingly competitive labor mar(cid:64)et. (cid:50)hile (cid:76)e have been successful to date in responding to regional labor shortages and maintaining plans for continuity of succession(cid:11) there can be no assurance that (cid:76)e (cid:76)ill be able to manage through future labor shortages or recruit(cid:11) develop(cid:11) assimilate(cid:11) motivate(cid:11) and retain employees in the future (cid:76)ho actively promote and meet the standards of our culture. (cid:29)(cid:52)era(cid:56)io(cid:50)a(cid:48) (cid:19)(cid:22)S Ris(cid:47)s (cid:62) (cid:36)e are s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:56)o (cid:39)os(cid:56)s a(cid:50)(cid:40) (cid:48)ia(cid:38)i(cid:48)i(cid:56)ies re(cid:48)a(cid:56)e(cid:40) (cid:56)o (cid:39)(cid:57)rre(cid:50)(cid:56) a(cid:50)(cid:40) f(cid:57)(cid:56)(cid:57)re e(cid:50)(cid:58)iro(cid:50)me(cid:50)(cid:56)(cid:6) (cid:44)ea(cid:48)(cid:56)(cid:44) a(cid:50)(cid:40) safe(cid:56)(cid:61) (cid:4)(cid:2)(cid:19)(cid:22)S(cid:2)(cid:5) (cid:48)aws a(cid:50)(cid:40) re(cid:43)(cid:57)(cid:48)a(cid:56)io(cid:50)s(cid:6) as we(cid:48)(cid:48) as (cid:39)(cid:44)a(cid:50)(cid:43)es i(cid:50) (cid:56)(cid:44)e (cid:43)(cid:48)o(cid:38)a(cid:48) (cid:39)(cid:48)ima(cid:56)e(cid:6) (cid:56)(cid:44)a(cid:56) (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) (cid:50)e are required to comply (cid:76)ith E(cid:35)S la(cid:76)s(cid:11) rules(cid:11) and regulations in each of the countries in (cid:76)hich (cid:76)e operate and do business. Additionally(cid:11) many of our products come into contact (cid:76)ith the healthcare products and food and beverages they pac(cid:64)age and therefore(cid:11) (cid:76)e are also sub(cid:63)ect to certain local and international standards related to such products. Compliance (cid:76)ith these la(cid:76)s and regulations can require significant e(cid:77)penditure of financial and employee resources. In addition(cid:11) changes to such la(cid:76)s(cid:11) regulations and standards are made or proposed regularly(cid:11) and some of the proposals(cid:11) if adopted(cid:11) might(cid:11) directly or indirectly(cid:11) result in a material reduction in the operating results of one or more of our operating units. For instance(cid:11) an increase in legislation (cid:76)ith respect to litter related to plastic pac(cid:64)aging or related recycling programs may cause legislators in some countries and regions in (cid:76)hich our products are sold to consider banning or limiting certain pac(cid:64)aging formats or materials. Additionally(cid:11) increased regulation of emissions lin(cid:64)ed to climate change(cid:11) including greenhouse gas (carbon) emissions and other climate(cid:12)related regulations(cid:11) could potentially increase the cost of our operations due to increased costs of compliance ((cid:76)hich may not be recoverable through ad(cid:63)ustment of prices)(cid:11) increased cost of fossil fuel(cid:12) based inputs and increased cost of energy intensive ra(cid:76) material inputs. (cid:35)o(cid:76)ever(cid:11) any such changes are uncertain(cid:11) and (cid:76)e cannot predict the amount of additional capital e(cid:77)penses or operating e(cid:77)penses that (cid:76)ould be necessary for compliance. Federal(cid:11) state(cid:11) provincial(cid:11) and local la(cid:76)s and requirements pertaining to (cid:76)or(cid:64)place 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 la(cid:76)s and requirements may result in additional costs and actions across the affected country and(cid:14)or region. (cid:49)arious government agencies may promulgate ne(cid:76) or modified legislation(cid:11) and implement special emphasis programs and enforcement actions that could impact specific Company operations covered by the respective program. Federal(cid:11) state(cid:11) provincial(cid:11) foreign(cid:11) and local environmental requirements relating to air(cid:11) soil(cid:11) and (cid:76)ater quality(cid:11) handling(cid:11) discharge(cid:11) storage(cid:11) and disposal of a variety of substances(cid:11) 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. (cid:50)e may be found to have environmental liability for the costs of remediating soil or (cid:76)ater that is(cid:11) or (cid:76)as(cid:11) contaminated by us or a third party at various facilities (cid:76)e o(cid:76)n(cid:11) used(cid:11) or operate (including facilities that may be acquired by us in the future). Legal proceedings may result in the imposition of fines or penalties(cid:11) as (cid:76)ell as mandated remediation programs(cid:11) that require substantial(cid:11) and in some instances(cid:11) unplanned capital e(cid:77)penditure. (cid:76)hen it is considered probable that (cid:76)e have some liability and the amount can be reasonably estimated. (cid:35)o(cid:76)ever(cid:11) because the e(cid:77)tent of potential environmental damage(cid:11) and the e(cid:77)tent of our liability for such damage(cid:11) is usually difficult to assess and may only be ascertained over a long period of time(cid:11) our actual liability in such cases may end up being substantially higher than the currently provisioned amount. Accordingly(cid:11) additional charges could be incurred that (cid:76)ould have an adverse effect on our operating results and financial position(cid:11) (cid:76)hich may be material. (cid:47)he effects of climate change and greenhouse gas effects may adversely affect our business. A number of governmental bodies have introduced(cid:11) or are contemplating introducing(cid:11) regulatory change to address the impacts of climate change(cid:11) (cid:76)hich(cid:11) (cid:76)here implemented(cid:11) may have adverse impacts on our operations or financial results. (cid:26)a(cid:38)or (cid:18)is(cid:52)(cid:57)(cid:56)es (cid:62) (cid:36)e are s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:56)o (cid:56)(cid:44)e ris(cid:47) of (cid:48)a(cid:38)or (cid:40)is(cid:52)(cid:57)(cid:56)es(cid:6) w(cid:44)i(cid:39)(cid:44) (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) Although (cid:76)e have not e(cid:77)perienced any significant labor disputes in recent years(cid:11) there can be no assurance that (cid:76)e (cid:76)ill not e(cid:77)perience labor disputes in the future(cid:11) including protests and stri(cid:64)es(cid:11) (cid:76)hich could disrupt our business operations and have an adverse effect on our business and results of operation. Although (cid:76)e consider our relations (cid:76)ith our employees to be good(cid:11) there can be no assurance that (cid:76)e (cid:76)ill be able to maintain a satisfactory (cid:76)or(cid:64)ing relationship (cid:76)ith our employees in the future. (cid:17)(cid:48)ima(cid:56)e (cid:17)(cid:44)a(cid:50)(cid:43)e (cid:7) (cid:29)(cid:57)r (cid:38)(cid:57)si(cid:50)ess is s(cid:57)(cid:38)(cid:46)e(cid:39)(cid:56) (cid:56)o ris(cid:47)s re(cid:48)a(cid:56)e(cid:40) (cid:56)o (cid:39)(cid:48)ima(cid:56)e (cid:39)(cid:44)a(cid:50)(cid:43)e w(cid:44)i(cid:39)(cid:44) (cid:39)o(cid:57)(cid:48)(cid:40) (cid:50)e(cid:43)a(cid:56)i(cid:58)e(cid:48)(cid:61) im(cid:52)a(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess o(cid:52)era(cid:56)io(cid:50)s a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) res(cid:57)(cid:48)(cid:56)s(cid:8) Climate change may have a progressively adverse impact on our business and those of our customers(cid:11) suppliers(cid:11) and partners. (cid:40)any of the geographic areas (cid:76)here our production is located and (cid:76)here (cid:76)e conduct business may be affected by natural disasters(cid:11) including earthqua(cid:64)es(cid:11) sno(cid:76)storms(cid:11) hurricanes(cid:11) flooding(cid:11) forest fires(cid:11) and drought. Such events may have a physical impact on our facilities(cid:11) inventory(cid:11) suppliers(cid:11) and equipment and any unplanned do(cid:76)ntime at any of our facilities could result in unabsorbed costs that could negatively impact our results of operations for the period in (cid:76)hich it e(cid:77)perienced the do(cid:76)ntime. Longer(cid:12)term climate change patterns could significantly alter customer demand (cid:76)hich is especially true for customers (cid:76)ho rely on supply chains routinely impacted by (cid:76)eather. For e(cid:77)ample(cid:11) agricultural supply chains (cid:76)ould be impacted by increased levels of drought or flooding and customers in coastal regions (cid:76)ould be impacted by frequent flooding. Information (cid:44)echnology and Cybersecurity Ris(cid:61)s (cid:23)(cid:50)forma(cid:56)io(cid:50) Te(cid:39)(cid:44)(cid:50)o(cid:48)o(cid:43)(cid:61) (cid:62) (cid:15) fai(cid:48)(cid:57)re or (cid:40)isr(cid:57)(cid:52)(cid:56)io(cid:50) i(cid:50) o(cid:57)r i(cid:50)forma(cid:56)io(cid:50) (cid:56)e(cid:39)(cid:44)(cid:50)o(cid:48)o(cid:43)(cid:61) s(cid:61)s(cid:56)ems (cid:39)o(cid:57)(cid:48)(cid:40) (cid:40)isr(cid:57)(cid:52)(cid:56) o(cid:57)r o(cid:52)era(cid:56)io(cid:50)s(cid:6) (cid:39)om(cid:52)romise (cid:39)(cid:57)s(cid:56)omer(cid:6) em(cid:52)(cid:48)o(cid:61)ee(cid:6) s(cid:57)(cid:52)(cid:52)(cid:48)ier(cid:6) a(cid:50)(cid:40) o(cid:56)(cid:44)er (cid:40)a(cid:56)a(cid:6) a(cid:50)(cid:40) (cid:39)o(cid:57)(cid:48)(cid:40) (cid:50)e(cid:43)a(cid:56)i(cid:58)e(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess(cid:8) (cid:50)e rely on the successful and uninterrupted functioning of our information technology and control systems to securely manage operations and various business functions(cid:11) and on various technologies to process(cid:11) store(cid:11) and report information about our business(cid:11) and to interact (cid:76)ith customers(cid:11) suppliers(cid:11) and employees around the (cid:76)orld. In addition(cid:11) our information systems increasingly rely on cloud solutions (cid:76)hich require different security measures. (cid:47)hese measures cover technical changes to our net(cid:76)or(cid:64) security(cid:11) organi(cid:79)ation(cid:11) and governance changes as (cid:76)ell as alignment of third(cid:12)party suppliers on mar(cid:64)et standards. As (cid:76)ith all information technology systems(cid:11) our systems may be susceptible to damage(cid:11) disruption(cid:11) information loss or shutdo(cid:76)n due to a variety of factors including po(cid:76)er outages(cid:11) failures during the process of upgrading or replacing soft(cid:76)are(cid:11) hard(cid:76)are failures(cid:11) computer viruses(cid:11) catastrophic events(cid:11) telecommunications failures(cid:11) user errors(cid:11) unauthori(cid:79)ed access(cid:11) and malicious or accidental destruction(cid:11) or theft of information or functionality. (cid:17)(cid:61)(cid:38)erse(cid:39)(cid:57)ri(cid:56)(cid:61) Ris(cid:47) (cid:62) T(cid:44)e (cid:40)isr(cid:57)(cid:52)(cid:56)io(cid:50) of o(cid:57)r o(cid:52)era(cid:56)io(cid:50)s or ris(cid:47) of (cid:48)oss of o(cid:57)r se(cid:50)si(cid:56)i(cid:58)e (cid:38)(cid:57)si(cid:50)ess i(cid:50)forma(cid:56)io(cid:50) (cid:39)o(cid:57)(cid:48)(cid:40) (cid:50)e(cid:43)a(cid:56)i(cid:58)e(cid:48)(cid:61) im(cid:52)a(cid:39)(cid:56) o(cid:57)r fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:39)o(cid:50)(cid:40)i(cid:56)io(cid:50) a(cid:50)(cid:40) res(cid:57)(cid:48)(cid:56)s of o(cid:52)era(cid:56)io(cid:50)s(cid:8) Increased cyber(cid:12)attac(cid:64)s(cid:11) including computer viruses(cid:11) ransom(cid:76)are(cid:11) unauthori(cid:79)ed access attempts(cid:11) phishing(cid:11) hac(cid:64)ing(cid:11) and other types of attac(cid:64)s pose a ris(cid:64) to the security and availability of our information technology systems(cid:11) including those provided by third parties. (cid:50)e have e(cid:77)perienced and e(cid:77)pect to continue to e(cid:77)perience actual and attempted cyber(cid:12)attac(cid:64)s of our information technology systems and net(cid:76)or(cid:64)s. (cid:34)eopolitical turmoil(cid:11) including as a result of the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) heightens the ris(cid:64) of cyber(cid:12)attac(cid:64)s. (cid:50)hile (cid:76)e have operational safeguards in place to detect and prevent cyber(cid:12)attac(cid:64)s and to date have not e(cid:77)perienced any significant impacts(cid:11) our safeguards may not al(cid:76)ays be able to prevent a cyber(cid:12)attac(cid:64) from impacting our systems (cid:76)hich could have a material impact on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. In addition(cid:11) our customers and suppliers are susceptible to cyber(cid:12)attac(cid:64)s and disruption to their information technology systems could result in reduced demand for our products or limit our ability to supply our products. (cid:50)e have incurred in the past(cid:11) and may incur in the future(cid:11) fines(cid:11) penalties(cid:11) and legal costs relating to environmental matters(cid:11) and costs relating to the damage of natural resources(cid:11) lost property values(cid:11) and to(cid:77)ic tort claims. (cid:43)rovisions are raised (cid:50)e also maintain and have access to sensitive(cid:11) confidential or personal data or information that is sub(cid:63)ect to privacy and security la(cid:76)s(cid:11) regulations(cid:11) and customer controls. (cid:31)espite our efforts to protect such information(cid:11) our facilities and systems 17 18 Amcor Annual Report 2022 Form 10-K 19 and those of our customers and third(cid:12)party service providers may be vulnerable to security breaches(cid:11) cyber(cid:12)attac(cid:64)s(cid:11) misplaced or lost data(cid:11) and programming and(cid:14)or user errors that could lead to the compromising of sensitive(cid:11) confidential(cid:11) or personal data or information. Information system damages(cid:11) disruptions(cid:11) shutdo(cid:76)ns(cid:11) or compromises could result in production do(cid:76)ntimes and operational disruptions(cid:11) transaction errors(cid:11) loss of customers(cid:11) and business opportunities(cid:11) violation of privacy la(cid:76)s and legal liability(cid:11) regulatory fines(cid:11) penalties or intervention(cid:11) negative publicity resulting in reputational damage(cid:11) reimbursement or compensatory payments(cid:11) and other costs(cid:11) any of (cid:76)hich could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s(cid:11) (cid:76)hich affect may be material and result in a competitive disadvantage. Although (cid:76)e attempt to mitigate these ris(cid:64)s by employing a number of measures(cid:11) our systems(cid:11) net(cid:76)or(cid:64)s(cid:11) products(cid:11) and services remain potentially vulnerable to advanced and persistent threats. Financial Ris(cid:61)s (cid:23)(cid:50)(cid:40)e(cid:38)(cid:56)e(cid:40)(cid:50)ess a(cid:50)(cid:40) (cid:17)re(cid:40)i(cid:56) Ra(cid:56)i(cid:50)(cid:43) (cid:62) (cid:15) si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) i(cid:50)(cid:39)rease i(cid:50) o(cid:57)r i(cid:50)(cid:40)e(cid:38)(cid:56)e(cid:40)(cid:50)ess or a (cid:40)ow(cid:50)(cid:43)ra(cid:40)e i(cid:50) o(cid:57)r (cid:39)re(cid:40)i(cid:56) ra(cid:56)i(cid:50)(cid:43) (cid:39)o(cid:57)(cid:48)(cid:40) re(cid:40)(cid:57)(cid:39)e o(cid:57)r o(cid:52)era(cid:56)i(cid:50)(cid:43) f(cid:48)exi(cid:38)i(cid:48)i(cid:56)(cid:61) a(cid:50)(cid:40) i(cid:50)(cid:39)rease o(cid:57)r (cid:38)orrowi(cid:50)(cid:43) (cid:39)os(cid:56)s a(cid:50)(cid:40) (cid:50)e(cid:43)a(cid:56)i(cid:58)e(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:39)o(cid:50)(cid:40)i(cid:56)io(cid:50) a(cid:50)(cid:40) res(cid:57)(cid:48)(cid:56)s of o(cid:52)era(cid:56)io(cid:50)s(cid:8) At (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had $6.5 billion of debt outstanding and a $1.4 billion undra(cid:76)n revolving credit facility and (cid:76)e are not restricted in incurring(cid:11) and may incur(cid:11) additional indebtedness in the future. Our ability to pay interest and repay the principal of our indebtedness is dependent on our ability to generate sufficient cash flo(cid:76)s (cid:76)hich is dependent(cid:11) in part(cid:11) on prevailing economic and competitive conditions and certain legislative(cid:11) regulatory(cid:11) and other factors beyond our control. If (cid:76)e are unable to maintain sufficient cash flo(cid:76)s from operations to meet our debt commitments(cid:11) our financial condition and results of operations are li(cid:64)ely to be materially adversely impacted. (cid:50)e use cash provided by operations(cid:11) commercial paper issuances(cid:11) ban(cid:64) term loans(cid:11) committed revolving credit facilities(cid:11) debt issuances(cid:11) and equity issuances to meet our funding needs. Credit rating agencies rate our debt securities on many factors(cid:11) including our financial results(cid:11) their vie(cid:76) of the general outloo(cid:64) for our industry(cid:11) and their vie(cid:76) of the general outloo(cid:64) for the global economy. Any significant additional indebtedness (cid:76)ould li(cid:64)ely negatively affect the credit ratings of our debt. Actions ta(cid:64)en by the rating agencies include maintaining(cid:11) upgrading or do(cid:76)ngrading the current rating or placing us on a (cid:76)atch list for a possible future do(cid:76)ngrade. If rating agencies do(cid:76)ngrade our credit rating(cid:11) place us on a (cid:76)atch list(cid:11) or if there are adverse mar(cid:64)et conditions(cid:11) including disruptions in the commercial paper mar(cid:64)et(cid:11) the impacts could include reduced access to the commercial paper(cid:11) credit and capital mar(cid:64)ets(cid:11) an increase in the cost of our borro(cid:76)ings or the fees associated (cid:76)ith our ban(cid:64) credit facility(cid:11) or an increase in the credit spread incurred (cid:76)hen issuing debt in the capital mar(cid:64)ets. (cid:45)efer to "Item 7 (cid:12) (cid:40)anagement(cid:89)s (cid:31)iscussion and Analysis of Financial Condition and (cid:45)esults of Operations(cid:11)" "Liquidity and Capital (cid:45)esources(cid:11)" of this Annual (cid:45)eport on Form 10(cid:12)(cid:38) for more information on our credit rating profile. In addition(cid:11) a significant number of our operating subsidiaries are not guarantors of our indebtedness. In the event that any non(cid:12)guarantor subsidiary becomes insolvent(cid:11) liquidates(cid:11) reorgani(cid:79)es(cid:11) dissolves(cid:11) or other(cid:76)ise (cid:76)inds up(cid:11) the assets of such subsidiary (cid:76)ill be used to satisfy the claims of its creditors. (cid:47)he non(cid:12)guarantor subsidiaries have no direct obligations in respect of our indebtedness and therefore(cid:11) a direct claim against any non(cid:12)guarantor subsidiary and any claims to enforce payment on our indebtedness (cid:76)ill be structurally subordinated to all of the claims of the creditors of our non(cid:12)guarantor subsidiaries. (cid:19)x(cid:39)(cid:44)a(cid:50)(cid:43)e Ra(cid:56)es (cid:62) (cid:36)e are ex(cid:52)ose(cid:40) (cid:56)o forei(cid:43)(cid:50) ex(cid:39)(cid:44)a(cid:50)(cid:43)e ra(cid:56)e ris(cid:47)(cid:8) (cid:50)e are sub(cid:63)ect to foreign e(cid:77)change rate ris(cid:64)(cid:11) both transactional and translational(cid:11) (cid:76)hich may negatively affect our financial performance. (cid:47)ransactional foreign e(cid:77)change e(cid:77)posures result from e(cid:77)change rate fluctuations(cid:11) including in respect of the (cid:48).S. dollar(cid:11) the Euro(cid:11) the (cid:45)ussian ruble and other currencies(cid:11) including in Latin America(cid:11) in (cid:76)hich our costs are denominated(cid:11) (cid:76)hich may affect our business input costs and proceeds from product sales. (cid:47)ranslational foreign e(cid:77)change e(cid:77)posures result from e(cid:77)change rate fluctuations in the conversion of entity functional currencies to (cid:48).S. dollars(cid:11) our reporting currency(cid:11) and may affect the reported value of our assets and liabilities and our income and e(cid:77)penses. In particular(cid:11) our translational e(cid:77)posure may be impacted by movements in the e(cid:77)change rate bet(cid:76)een the Euro(cid:11) the (cid:48)nited (cid:38)ingdom (cid:43)ound Sterling(cid:11) the Australian (cid:31)ollar(cid:11) the Chinese (cid:52)uan(cid:11) and the Bra(cid:79)ilian (cid:45)eal against the (cid:48).S. dollar. E(cid:77)change rates bet(cid:76)een transactional currencies may change rapidly due to a variety of factors. In addition(cid:11) (cid:76)e have recogni(cid:79)ed foreign e(cid:77)change losses related to the currency devaluation in Argentina and its designation as a highly inflationary economy under (cid:48).S. (cid:34)AA(cid:43). See (cid:41)ote 2(cid:11) "Significant Accounting (cid:43)olicies(cid:11)" of the notes to consolidated financial statements for further information regarding highly inflationary accounting. (cid:47)o the e(cid:77)tent currency devaluation occurs across our business(cid:11) (cid:76)e are li(cid:64)ely to e(cid:77)perience a lag in the timing to pass through (cid:48).S. dollar(cid:12)denominated input costs across our business(cid:11) (cid:76)hich (cid:76)ould adversely impact our margins and profitability. As such(cid:11) (cid:76)e may be e(cid:77)posed to future e(cid:77)change rate fluctuations(cid:11) and such fluctuations could have an adverse effect on our reported cash flo(cid:76)(cid:11) financial condition(cid:11) and results of operations(cid:11) the effect of (cid:76)hich may be material. Our Board of (cid:31)irectors has approved a hedging policy to limit and manage the ris(cid:64) of such foreign e(cid:77)change fluctuations(cid:11) ho(cid:76)ever(cid:11) if our hedges are not effective in mitigating our foreign currency ris(cid:64)s(cid:11) if (cid:76)e are under(cid:12)hedged(cid:11) or if a hedge provider defaults on their obligations under hedging arrangements(cid:11) it could have an adverse impact on our results of operations. (cid:23)(cid:50)(cid:56)eres(cid:56) Ra(cid:56)es (cid:62) Risi(cid:50)(cid:43) i(cid:50)(cid:56)eres(cid:56) ra(cid:56)es i(cid:50)(cid:39)rease o(cid:57)r (cid:38)orrowi(cid:50)(cid:43) (cid:39)os(cid:56)s o(cid:50) o(cid:57)r (cid:58)aria(cid:38)(cid:48)e ra(cid:56)e i(cid:50)(cid:40)e(cid:38)(cid:56)e(cid:40)(cid:50)ess a(cid:50)(cid:40) (cid:39)o(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e o(cid:56)(cid:44)er (cid:50)e(cid:43)a(cid:56)i(cid:58)e im(cid:52)a(cid:39)(cid:56)s(cid:8) As of (cid:37)une 30(cid:11) 2022(cid:11) appro(cid:77)imately fifty percent of our indebtedness (cid:76)as sub(cid:63)ect to variable interest rates. (cid:50)hen interest rates increase(cid:11) our debt service obligations increase on our variable rate indebtedness even though the amount borro(cid:76)ed remains the same. Increases in short(cid:12)term interest rates (cid:76)ill directly impact the amount of interest (cid:76)e pay. (cid:50)e manage e(cid:77)posure to interest rates by maintaining a mi(cid:77)ture of fi(cid:77)ed(cid:12)rate and variable(cid:12)rate debt(cid:11) monitoring global interest rates(cid:11) and(cid:11) (cid:76)here appropriate(cid:11) entering into various derivative instruments. (cid:35)o(cid:76)ever(cid:11) if our derivative instruments are not effective in mitigating our interest rate ris(cid:64)(cid:11) if (cid:76)e are under(cid:12)hedged(cid:11) or if a hedge provider defaults on their obligations under hedging arrangements(cid:11) it could have an adverse impact on our results of operations. In addition(cid:11) rising interest rates could reduce the attractiveness of cash management programs (cid:76)e use(cid:11) such as customer and supply chain finance programs(cid:11) (cid:76)hich could negatively impact our cash and (cid:76)or(cid:64)ing capital and increase our borro(cid:76)ings. (cid:45)efer to (cid:41)ote 14(cid:11) "(cid:31)ebt(cid:11)" of the notes to consolidated financial statements for information about our variable rate borro(cid:76)ings. Also refer to "Item 7A (cid:12) (cid:44)uantitative and (cid:44)ualitative (cid:31)isclosures about (cid:40)ar(cid:64)et (cid:45)is(cid:64)(cid:11)" including interest rate ris(cid:64)(cid:11) in this Annual (cid:45)eport on Form 10(cid:12)(cid:38). (cid:21)oo(cid:40)wi(cid:48)(cid:48) a(cid:50)(cid:40) (cid:29)(cid:56)(cid:44)er (cid:23)(cid:50)(cid:56)a(cid:50)(cid:43)i(cid:38)(cid:48)e (cid:15)sse(cid:56)s (cid:62) (cid:15) si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) wri(cid:56)e(cid:7)(cid:40)ow(cid:50) of (cid:43)oo(cid:40)wi(cid:48)(cid:48) a(cid:50)(cid:40)(cid:9)or o(cid:56)(cid:44)er i(cid:50)(cid:56)a(cid:50)(cid:43)i(cid:38)(cid:48)e asse(cid:56)s wo(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e a ma(cid:56)eria(cid:48) a(cid:40)(cid:58)erse effe(cid:39)(cid:56) o(cid:50) o(cid:57)r re(cid:52)or(cid:56)e(cid:40) res(cid:57)(cid:48)(cid:56)s of o(cid:52)era(cid:56)io(cid:50)s a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:52)osi(cid:56)io(cid:50)(cid:8) As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had $6.(cid:24) billion of good(cid:76)ill and other intangible assets. (cid:50)e revie(cid:76) our good(cid:76)ill balance for impairment at least once a year and (cid:76)henever events or a change in circumstances indicate that an impairment may have occurred using the business valuation methods allo(cid:76)ed in accordance (cid:76)ith current accounting standards. Future changes in the cost of capital(cid:11) e(cid:77)pected cash flo(cid:76)s(cid:11) or other factors may cause our good(cid:76)ill and(cid:14)or other intangible assets to be impaired(cid:11) resulting in a non(cid:12)cash charge against results of operations to (cid:76)rite do(cid:76)n these assets for the amount of the impairment. In addition(cid:11) if (cid:76)e ma(cid:64)e changes in our business strategy or if e(cid:77)ternal conditions(cid:11) such as the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) adversely affect our business operations(cid:11) (cid:76)e may be required to record an impairment charge for good(cid:76)ill or intangibles(cid:11) (cid:76)hich (cid:76)ould lead to decreased assets and reduced net operating results. If a significant (cid:76)rite do(cid:76)n is required(cid:11) the charge (cid:76)ould have a material adverse effect on our reported results of operations and net (cid:76)orth. (cid:50)e have identified the valuation of intangible assets and good(cid:76)ill as a critical accounting estimate. See "Item 7. (cid:12) (cid:40)anagement(cid:89)s (cid:31)iscussion and Analysis of Financial Condition and (cid:45)esults of Operations(cid:11)" "Critical Accounting Estimates and (cid:37)udgments(cid:11)" of this Annual (cid:45)eport on Form 10(cid:12)(cid:38). (cid:23)(cid:50)(cid:56)er(cid:50)a(cid:48) (cid:17)o(cid:50)(cid:56)ro(cid:48)s (cid:62) (cid:23)f we fai(cid:48) (cid:56)o mai(cid:50)(cid:56)ai(cid:50) a(cid:50) effe(cid:39)(cid:56)i(cid:58)e s(cid:61)s(cid:56)em of i(cid:50)(cid:56)er(cid:50)a(cid:48) (cid:39)o(cid:50)(cid:56)ro(cid:48) o(cid:58)er fi(cid:50)a(cid:50)(cid:39)ia(cid:48) re(cid:52)or(cid:56)i(cid:50)(cid:43) we ma(cid:61) (cid:50)o(cid:56) (cid:38)e a(cid:38)(cid:48)e (cid:56)o a(cid:39)(cid:39)(cid:57)ra(cid:56)e(cid:48)(cid:61) re(cid:52)or(cid:56) o(cid:57)r fi(cid:50)a(cid:50)(cid:39)ia(cid:48) res(cid:57)(cid:48)(cid:56)s w(cid:44)i(cid:39)(cid:44) ma(cid:61) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) i(cid:50)(cid:58)es(cid:56)or (cid:39)o(cid:50)fi(cid:40)e(cid:50)(cid:39)e a(cid:50)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) im(cid:52)a(cid:39)(cid:56) o(cid:57)r s(cid:56)o(cid:39)(cid:47) (cid:52)ri(cid:39)e(cid:8) respectively. (cid:50)e have been sub(cid:63)ect to the requirements of Section 404 of the Sarbanes(cid:12)O(cid:77)ley Act ("SO(cid:51)") since fiscal year 2020. (cid:50)hile our internal controls over financial reporting currently meet the standards set forth in SO(cid:51)(cid:11) our internal control over financial reporting may not prevent or detect misstatements as any controls or procedures(cid:11) no matter ho(cid:76) (cid:76)ell designed and operated(cid:11) can provide only reasonable assurance from misstatement. (cid:50)e identified t(cid:76)o material (cid:76)ea(cid:64)nesses in our internal control over financial reporting in connection (cid:76)ith our listing on the (cid:41)(cid:52)SE in 201(cid:24) related to (cid:48).S. (cid:34)AA(cid:43) e(cid:77)pertise and segregation of duties (cid:76)ithin (cid:64)ey information technology systems (cid:76)hich (cid:76)ere remediated in fiscal years 2020 and 2021(cid:11) (cid:47)here can be no assurance that (cid:76)e (cid:76)ill not identify ne(cid:76) material (cid:76)ea(cid:64)nesses in the future. Any ne(cid:76)ly identified material (cid:76)ea(cid:64)nesses could limit our ability to prevent or detect a misstatement of our financial results(cid:11) lead to a loss of investor confidence(cid:11) and have a negative impact on the trading price of our common stoc(cid:64). (cid:23)(cid:50)s(cid:57)ra(cid:50)(cid:39)e (cid:62) (cid:29)(cid:57)r i(cid:50)s(cid:57)ra(cid:50)(cid:39)e (cid:52)o(cid:48)i(cid:39)ies(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) o(cid:57)r (cid:57)se of a (cid:39)a(cid:52)(cid:56)i(cid:58)e i(cid:50)s(cid:57)ra(cid:50)(cid:39)e (cid:39)om(cid:52)a(cid:50)(cid:61)(cid:6) ma(cid:61) (cid:50)o(cid:56) (cid:52)ro(cid:58)i(cid:40)e a(cid:40)e(cid:53)(cid:57)a(cid:56)e (cid:52)ro(cid:56)e(cid:39)(cid:56)io(cid:50) a(cid:43)ai(cid:50)s(cid:56) a(cid:48)(cid:48) of (cid:56)(cid:44)e ris(cid:47)s we fa(cid:39)e(cid:8) (cid:50)e see(cid:64) protection from a number of our (cid:64)ey operational ris(cid:64) e(cid:77)posures through the purchase of insurance. A significant portion of our insurance is placed in the insurance mar(cid:64)et (cid:76)ith third(cid:12)party re(cid:12)insurers. Our policies (cid:76)ith such third(cid:12) party re(cid:12)insurers cover a variety of ris(cid:64) e(cid:77)posures(cid:11) including property damage. Although (cid:76)e believe the coverage provided by such policies is consistent (cid:76)ith industry practice(cid:11) they may not adequately cover certain ris(cid:64)s and there is no guarantee that any 1(cid:24) Amcor Annual Report 2022 20 19 Form 10-K 20 and those of our customers and third(cid:12)party service providers may be vulnerable to security breaches(cid:11) cyber(cid:12)attac(cid:64)s(cid:11) misplaced or lost data(cid:11) and programming and(cid:14)or user errors that could lead to the compromising of sensitive(cid:11) confidential(cid:11) or personal data or information. Information system damages(cid:11) disruptions(cid:11) shutdo(cid:76)ns(cid:11) or compromises could result in production do(cid:76)ntimes and operational disruptions(cid:11) transaction errors(cid:11) loss of customers(cid:11) and business opportunities(cid:11) violation of privacy la(cid:76)s and legal liability(cid:11) regulatory fines(cid:11) penalties or intervention(cid:11) negative publicity resulting in reputational damage(cid:11) reimbursement or compensatory payments(cid:11) and other costs(cid:11) any of (cid:76)hich could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s(cid:11) (cid:76)hich affect may be material and result in a competitive disadvantage. Although (cid:76)e attempt to mitigate these ris(cid:64)s by employing a number of measures(cid:11) our systems(cid:11) net(cid:76)or(cid:64)s(cid:11) products(cid:11) and services remain potentially vulnerable to advanced and persistent threats. Financial Ris(cid:61)s o(cid:52)era(cid:56)io(cid:50)s(cid:8) (cid:23)(cid:50)(cid:40)e(cid:38)(cid:56)e(cid:40)(cid:50)ess a(cid:50)(cid:40) (cid:17)re(cid:40)i(cid:56) Ra(cid:56)i(cid:50)(cid:43) (cid:62) (cid:15) si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) i(cid:50)(cid:39)rease i(cid:50) o(cid:57)r i(cid:50)(cid:40)e(cid:38)(cid:56)e(cid:40)(cid:50)ess or a (cid:40)ow(cid:50)(cid:43)ra(cid:40)e i(cid:50) o(cid:57)r (cid:39)re(cid:40)i(cid:56) ra(cid:56)i(cid:50)(cid:43) (cid:39)o(cid:57)(cid:48)(cid:40) re(cid:40)(cid:57)(cid:39)e o(cid:57)r o(cid:52)era(cid:56)i(cid:50)(cid:43) f(cid:48)exi(cid:38)i(cid:48)i(cid:56)(cid:61) a(cid:50)(cid:40) i(cid:50)(cid:39)rease o(cid:57)r (cid:38)orrowi(cid:50)(cid:43) (cid:39)os(cid:56)s a(cid:50)(cid:40) (cid:50)e(cid:43)a(cid:56)i(cid:58)e(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:39)o(cid:50)(cid:40)i(cid:56)io(cid:50) a(cid:50)(cid:40) res(cid:57)(cid:48)(cid:56)s of At (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had $6.5 billion of debt outstanding and a $1.4 billion undra(cid:76)n revolving credit facility and (cid:76)e are not restricted in incurring(cid:11) and may incur(cid:11) additional indebtedness in the future. Our ability to pay interest and repay the principal of our indebtedness is dependent on our ability to generate sufficient cash flo(cid:76)s (cid:76)hich is dependent(cid:11) in part(cid:11) on prevailing economic and competitive conditions and certain legislative(cid:11) regulatory(cid:11) and other factors beyond our control. If (cid:76)e are unable to maintain sufficient cash flo(cid:76)s from operations to meet our debt commitments(cid:11) our financial condition and results of operations are li(cid:64)ely to be materially adversely impacted. (cid:50)e use cash provided by operations(cid:11) commercial paper issuances(cid:11) ban(cid:64) term loans(cid:11) committed revolving credit facilities(cid:11) debt issuances(cid:11) and equity issuances to meet our funding needs. Credit rating agencies rate our debt securities on many factors(cid:11) including our financial results(cid:11) their vie(cid:76) of the general outloo(cid:64) for our industry(cid:11) and their vie(cid:76) of the general outloo(cid:64) for the global economy. Any significant additional indebtedness (cid:76)ould li(cid:64)ely negatively affect the credit ratings of our debt. Actions ta(cid:64)en by the rating agencies include maintaining(cid:11) upgrading or do(cid:76)ngrading the current rating or placing us on a (cid:76)atch list for a possible future do(cid:76)ngrade. If rating agencies do(cid:76)ngrade our credit rating(cid:11) place us on a (cid:76)atch list(cid:11) or if there are adverse mar(cid:64)et conditions(cid:11) including disruptions in the commercial paper mar(cid:64)et(cid:11) the impacts could include reduced access to the commercial paper(cid:11) credit and capital mar(cid:64)ets(cid:11) an increase in the cost of our borro(cid:76)ings or the fees associated (cid:76)ith our ban(cid:64) credit facility(cid:11) or an increase in the credit spread incurred (cid:76)hen issuing debt in the capital mar(cid:64)ets. (cid:45)efer to "Item 7 (cid:12) (cid:40)anagement(cid:89)s (cid:31)iscussion and Analysis of Financial Condition and (cid:45)esults of Operations(cid:11)" "Liquidity and Capital (cid:45)esources(cid:11)" of this Annual (cid:45)eport on Form 10(cid:12)(cid:38) for more information on our credit rating profile. In addition(cid:11) a significant number of our operating subsidiaries are not guarantors of our indebtedness. In the event that any non(cid:12)guarantor subsidiary becomes insolvent(cid:11) liquidates(cid:11) reorgani(cid:79)es(cid:11) dissolves(cid:11) or other(cid:76)ise (cid:76)inds up(cid:11) the assets of such subsidiary (cid:76)ill be used to satisfy the claims of its creditors. (cid:47)he non(cid:12)guarantor subsidiaries have no direct obligations in respect of our indebtedness and therefore(cid:11) a direct claim against any non(cid:12)guarantor subsidiary and any claims to enforce payment on our indebtedness (cid:76)ill be structurally subordinated to all of the claims of the creditors of our non(cid:12)guarantor subsidiaries. (cid:19)x(cid:39)(cid:44)a(cid:50)(cid:43)e Ra(cid:56)es (cid:62) (cid:36)e are ex(cid:52)ose(cid:40) (cid:56)o forei(cid:43)(cid:50) ex(cid:39)(cid:44)a(cid:50)(cid:43)e ra(cid:56)e ris(cid:47)(cid:8) (cid:50)e are sub(cid:63)ect to foreign e(cid:77)change rate ris(cid:64)(cid:11) both transactional and translational(cid:11) (cid:76)hich may negatively affect our financial performance. (cid:47)ransactional foreign e(cid:77)change e(cid:77)posures result from e(cid:77)change rate fluctuations(cid:11) including in respect of the (cid:48).S. dollar(cid:11) the Euro(cid:11) the (cid:45)ussian ruble and other currencies(cid:11) including in Latin America(cid:11) in (cid:76)hich our costs are denominated(cid:11) (cid:76)hich may affect our business input costs and proceeds from product sales. (cid:47)ranslational foreign e(cid:77)change e(cid:77)posures result from e(cid:77)change rate fluctuations in the conversion of entity functional currencies to (cid:48).S. dollars(cid:11) our reporting currency(cid:11) and may affect the reported value of our assets and liabilities and our income and e(cid:77)penses. In particular(cid:11) our translational e(cid:77)posure may be impacted by movements in the e(cid:77)change rate bet(cid:76)een the Euro(cid:11) the (cid:48)nited (cid:38)ingdom (cid:43)ound Sterling(cid:11) the Australian (cid:31)ollar(cid:11) the Chinese (cid:52)uan(cid:11) and the Bra(cid:79)ilian (cid:45)eal against the (cid:48).S. dollar. E(cid:77)change rates bet(cid:76)een transactional currencies may change rapidly due to a variety of factors. In addition(cid:11) (cid:76)e have recogni(cid:79)ed foreign e(cid:77)change losses related to the currency devaluation in Argentina and its designation as a highly inflationary economy under (cid:48).S. (cid:34)AA(cid:43). See (cid:41)ote 2(cid:11) "Significant Accounting (cid:43)olicies(cid:11)" of the notes to consolidated financial statements for further information regarding highly inflationary accounting. (cid:47)o the e(cid:77)tent currency devaluation occurs across our business(cid:11) (cid:76)e are li(cid:64)ely to e(cid:77)perience a lag in the timing to pass through (cid:48).S. dollar(cid:12)denominated input costs across our business(cid:11) (cid:76)hich (cid:76)ould adversely impact our margins and profitability. As such(cid:11) (cid:76)e may be e(cid:77)posed to future e(cid:77)change rate fluctuations(cid:11) and such fluctuations could have an adverse effect on our reported cash flo(cid:76)(cid:11) financial condition(cid:11) and results of operations(cid:11) the effect of (cid:76)hich may be material. Our Board of (cid:31)irectors has approved a hedging policy to limit and manage the ris(cid:64) of such foreign e(cid:77)change fluctuations(cid:11) ho(cid:76)ever(cid:11) if our hedges are not effective in mitigating our foreign currency ris(cid:64)s(cid:11) if (cid:76)e are under(cid:12)hedged(cid:11) or if a hedge provider defaults on their obligations under hedging arrangements(cid:11) it could have an adverse impact on our results of operations. (cid:23)(cid:50)(cid:56)eres(cid:56) Ra(cid:56)es (cid:62) Risi(cid:50)(cid:43) i(cid:50)(cid:56)eres(cid:56) ra(cid:56)es i(cid:50)(cid:39)rease o(cid:57)r (cid:38)orrowi(cid:50)(cid:43) (cid:39)os(cid:56)s o(cid:50) o(cid:57)r (cid:58)aria(cid:38)(cid:48)e ra(cid:56)e i(cid:50)(cid:40)e(cid:38)(cid:56)e(cid:40)(cid:50)ess a(cid:50)(cid:40) (cid:39)o(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e o(cid:56)(cid:44)er (cid:50)e(cid:43)a(cid:56)i(cid:58)e im(cid:52)a(cid:39)(cid:56)s(cid:8) As of (cid:37)une 30(cid:11) 2022(cid:11) appro(cid:77)imately fifty percent of our indebtedness (cid:76)as sub(cid:63)ect to variable interest rates. (cid:50)hen interest rates increase(cid:11) our debt service obligations increase on our variable rate indebtedness even though the amount borro(cid:76)ed remains the same. Increases in short(cid:12)term interest rates (cid:76)ill directly impact the amount of interest (cid:76)e pay. (cid:50)e manage e(cid:77)posure to interest rates by maintaining a mi(cid:77)ture of fi(cid:77)ed(cid:12)rate and variable(cid:12)rate debt(cid:11) monitoring global interest rates(cid:11) and(cid:11) (cid:76)here appropriate(cid:11) entering into various derivative instruments. (cid:35)o(cid:76)ever(cid:11) if our derivative instruments are not effective in mitigating our interest rate ris(cid:64)(cid:11) if (cid:76)e are under(cid:12)hedged(cid:11) or if a hedge provider defaults on their obligations under hedging arrangements(cid:11) it could have an adverse impact on our results of operations. In addition(cid:11) rising interest rates could reduce the attractiveness of cash management programs (cid:76)e use(cid:11) such as customer and supply chain finance programs(cid:11) (cid:76)hich could negatively impact our cash and (cid:76)or(cid:64)ing capital and increase our borro(cid:76)ings. (cid:45)efer to (cid:41)ote 14(cid:11) "(cid:31)ebt(cid:11)" of the notes to consolidated financial statements for information about our variable rate borro(cid:76)ings. Also refer to "Item 7A (cid:12) (cid:44)uantitative and (cid:44)ualitative (cid:31)isclosures about (cid:40)ar(cid:64)et (cid:45)is(cid:64)(cid:11)" including interest rate ris(cid:64)(cid:11) in this Annual (cid:45)eport on Form 10(cid:12)(cid:38). (cid:21)oo(cid:40)wi(cid:48)(cid:48) a(cid:50)(cid:40) (cid:29)(cid:56)(cid:44)er (cid:23)(cid:50)(cid:56)a(cid:50)(cid:43)i(cid:38)(cid:48)e (cid:15)sse(cid:56)s (cid:62) (cid:15) si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) wri(cid:56)e(cid:7)(cid:40)ow(cid:50) of (cid:43)oo(cid:40)wi(cid:48)(cid:48) a(cid:50)(cid:40)(cid:9)or o(cid:56)(cid:44)er i(cid:50)(cid:56)a(cid:50)(cid:43)i(cid:38)(cid:48)e asse(cid:56)s wo(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e a ma(cid:56)eria(cid:48) a(cid:40)(cid:58)erse effe(cid:39)(cid:56) o(cid:50) o(cid:57)r re(cid:52)or(cid:56)e(cid:40) res(cid:57)(cid:48)(cid:56)s of o(cid:52)era(cid:56)io(cid:50)s a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:52)osi(cid:56)io(cid:50)(cid:8) As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had $6.(cid:24) billion of good(cid:76)ill and other intangible assets. (cid:50)e revie(cid:76) our good(cid:76)ill balance for impairment at least once a year and (cid:76)henever events or a change in circumstances indicate that an impairment may have occurred using the business valuation methods allo(cid:76)ed in accordance (cid:76)ith current accounting standards. Future changes in the cost of capital(cid:11) e(cid:77)pected cash flo(cid:76)s(cid:11) or other factors may cause our good(cid:76)ill and(cid:14)or other intangible assets to be impaired(cid:11) resulting in a non(cid:12)cash charge against results of operations to (cid:76)rite do(cid:76)n these assets for the amount of the impairment. In addition(cid:11) if (cid:76)e ma(cid:64)e changes in our business strategy or if e(cid:77)ternal conditions(cid:11) such as the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) adversely affect our business operations(cid:11) (cid:76)e may be required to record an impairment charge for good(cid:76)ill or intangibles(cid:11) (cid:76)hich (cid:76)ould lead to decreased assets and reduced net operating results. If a significant (cid:76)rite do(cid:76)n is required(cid:11) the charge (cid:76)ould have a material adverse effect on our reported results of operations and net (cid:76)orth. (cid:50)e have identified the valuation of intangible assets and good(cid:76)ill as a critical accounting estimate. See "Item 7. (cid:12) (cid:40)anagement(cid:89)s (cid:31)iscussion and Analysis of Financial Condition and (cid:45)esults of Operations(cid:11)" "Critical Accounting Estimates and (cid:37)udgments(cid:11)" of this Annual (cid:45)eport on Form 10(cid:12)(cid:38). (cid:23)(cid:50)(cid:56)er(cid:50)a(cid:48) (cid:17)o(cid:50)(cid:56)ro(cid:48)s (cid:62) (cid:23)f we fai(cid:48) (cid:56)o mai(cid:50)(cid:56)ai(cid:50) a(cid:50) effe(cid:39)(cid:56)i(cid:58)e s(cid:61)s(cid:56)em of i(cid:50)(cid:56)er(cid:50)a(cid:48) (cid:39)o(cid:50)(cid:56)ro(cid:48) o(cid:58)er fi(cid:50)a(cid:50)(cid:39)ia(cid:48) re(cid:52)or(cid:56)i(cid:50)(cid:43) we ma(cid:61) (cid:50)o(cid:56) (cid:38)e a(cid:38)(cid:48)e (cid:56)o a(cid:39)(cid:39)(cid:57)ra(cid:56)e(cid:48)(cid:61) re(cid:52)or(cid:56) o(cid:57)r fi(cid:50)a(cid:50)(cid:39)ia(cid:48) res(cid:57)(cid:48)(cid:56)s w(cid:44)i(cid:39)(cid:44) ma(cid:61) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) i(cid:50)(cid:58)es(cid:56)or (cid:39)o(cid:50)fi(cid:40)e(cid:50)(cid:39)e a(cid:50)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) im(cid:52)a(cid:39)(cid:56) o(cid:57)r s(cid:56)o(cid:39)(cid:47) (cid:52)ri(cid:39)e(cid:8) (cid:50)e have been sub(cid:63)ect to the requirements of Section 404 of the Sarbanes(cid:12)O(cid:77)ley Act ("SO(cid:51)") since fiscal year 2020. (cid:50)hile our internal controls over financial reporting currently meet the standards set forth in SO(cid:51)(cid:11) our internal control over financial reporting may not prevent or detect misstatements as any controls or procedures(cid:11) no matter ho(cid:76) (cid:76)ell designed and operated(cid:11) can provide only reasonable assurance from misstatement. (cid:50)e identified t(cid:76)o material (cid:76)ea(cid:64)nesses in our internal control over financial reporting in connection (cid:76)ith our listing on the (cid:41)(cid:52)SE in 201(cid:24) related to (cid:48).S. (cid:34)AA(cid:43) e(cid:77)pertise and segregation of duties (cid:76)ithin (cid:64)ey information technology systems (cid:76)hich (cid:76)ere remediated in fiscal years 2020 and 2021(cid:11) respectively. (cid:47)here can be no assurance that (cid:76)e (cid:76)ill not identify ne(cid:76) material (cid:76)ea(cid:64)nesses in the future. Any ne(cid:76)ly identified material (cid:76)ea(cid:64)nesses could limit our ability to prevent or detect a misstatement of our financial results(cid:11) lead to a loss of investor confidence(cid:11) and have a negative impact on the trading price of our common stoc(cid:64). (cid:23)(cid:50)s(cid:57)ra(cid:50)(cid:39)e (cid:62) (cid:29)(cid:57)r i(cid:50)s(cid:57)ra(cid:50)(cid:39)e (cid:52)o(cid:48)i(cid:39)ies(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) o(cid:57)r (cid:57)se of a (cid:39)a(cid:52)(cid:56)i(cid:58)e i(cid:50)s(cid:57)ra(cid:50)(cid:39)e (cid:39)om(cid:52)a(cid:50)(cid:61)(cid:6) ma(cid:61) (cid:50)o(cid:56) (cid:52)ro(cid:58)i(cid:40)e a(cid:40)e(cid:53)(cid:57)a(cid:56)e (cid:52)ro(cid:56)e(cid:39)(cid:56)io(cid:50) a(cid:43)ai(cid:50)s(cid:56) a(cid:48)(cid:48) of (cid:56)(cid:44)e ris(cid:47)s we fa(cid:39)e(cid:8) (cid:50)e see(cid:64) protection from a number of our (cid:64)ey operational ris(cid:64) e(cid:77)posures through the purchase of insurance. A significant portion of our insurance is placed in the insurance mar(cid:64)et (cid:76)ith third(cid:12)party re(cid:12)insurers. Our policies (cid:76)ith such third(cid:12) party re(cid:12)insurers cover a variety of ris(cid:64) e(cid:77)posures(cid:11) including property damage. Although (cid:76)e believe the coverage provided by such policies is consistent (cid:76)ith industry practice(cid:11) they may not adequately cover certain ris(cid:64)s and there is no guarantee that any 1(cid:24) 20 Amcor Annual Report 2022 Form 10-K 2(cid:20) claims made under such policies (cid:76)ill ultimately be paid or that (cid:76)e (cid:76)ill be able to maintain such insurance at acceptable premium cost levels in the future. Additionally(cid:11) (cid:76)e retain a portion of our insurable ris(cid:64) through a captive insurance company(cid:11) Amcor Insurances (cid:43)te Ltd(cid:11) (cid:76)hich is located in Singapore. Our captive insurance company collects annual premiums from our business groups(cid:11) and assumes specific ris(cid:64)s relating to various ris(cid:64) e(cid:77)posures(cid:11) including property damage. (cid:47)he captive insurance company may be required to ma(cid:64)e payment for insurance claims (cid:76)hich e(cid:77)ceed the captive(cid:6)s reserves(cid:11) (cid:76)hich could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. Legal and Compliance Ris(cid:61)s (cid:23)(cid:50)(cid:56)e(cid:48)(cid:48)e(cid:39)(cid:56)(cid:57)a(cid:48) (cid:30)ro(cid:52)er(cid:56)(cid:61) (cid:62) (cid:29)(cid:57)r i(cid:50)a(cid:38)i(cid:48)i(cid:56)(cid:61) (cid:56)o (cid:40)efe(cid:50)(cid:40) o(cid:57)r i(cid:50)(cid:56)e(cid:48)(cid:48)e(cid:39)(cid:56)(cid:57)a(cid:48) (cid:52)ro(cid:52)er(cid:56)(cid:61) ri(cid:43)(cid:44)(cid:56)s or i(cid:50)(cid:56)e(cid:48)(cid:48)e(cid:39)(cid:56)(cid:57)a(cid:48) (cid:52)ro(cid:52)er(cid:56)(cid:61) i(cid:50)fri(cid:50)(cid:43)eme(cid:50)(cid:56) (cid:39)(cid:48)aims a(cid:43)ai(cid:50)s(cid:56) (cid:57)s (cid:39)o(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e a(cid:50) a(cid:40)(cid:58)erse im(cid:52)a(cid:39)(cid:56) o(cid:50) o(cid:57)r a(cid:38)i(cid:48)i(cid:56)(cid:61) (cid:56)o (cid:39)om(cid:52)e(cid:56)e effe(cid:39)(cid:56)i(cid:58)e(cid:48)(cid:61)(cid:8) Our ability to compete effectively depends(cid:11) in part(cid:11) on our ability to protect and maintain the proprietary nature of our o(cid:76)ned and licensed intellectual property. (cid:50)e o(cid:76)n a number of patents on our products(cid:11) aspects of our products(cid:11) methods of use and(cid:14)or methods of manufacturing(cid:11) and (cid:76)e o(cid:76)n(cid:11) or have licenses to use(cid:11) the material trademar(cid:64) and trade name rights used in connection (cid:76)ith the pac(cid:64)aging(cid:11) mar(cid:64)eting and distribution of our ma(cid:63)or products. (cid:50)e also rely on trade secrets(cid:11) (cid:64)no(cid:76)(cid:12)ho(cid:76)(cid:11) and other unpatented proprietary technology. If (cid:76)e are unable to detect the infringement of our intellectual property or to enforce our intellectual property rights(cid:11) our competitive position may suffer. (cid:47)he use of our intellectual property by someone else (cid:76)ithout our authori(cid:79)ation could reduce certain of our competitive advantages(cid:11) cause us to lose sales or other(cid:76)ise harm our business. (cid:50)e attempt to protect and restrict access to our intellectual property and proprietary information by relying on the patent(cid:11) trademar(cid:64)(cid:11) copyright(cid:11) and trade secret la(cid:76)s of the countries in (cid:76)hich (cid:76)e operate(cid:11) as (cid:76)ell as non(cid:12)disclosure agreements. (cid:35)o(cid:76)ever(cid:11) it may be possible for a third party to obtain our information (cid:76)ithout our authori(cid:79)ation(cid:11) independently develop similar technologies(cid:11) or breach a non(cid:12)disclosure agreement entered into (cid:76)ith us. Our pending patent applications(cid:11) and our pending trademar(cid:64) registration applications(cid:11) may not be allo(cid:76)ed or competitors may challenge the validity or scope of our patents or trademar(cid:64)s. Our competitors might avoid infringement by designing around our intellectual property rights or by developing non(cid:12)infringing competing technologies. In addition(cid:11) our patents(cid:11) trademar(cid:64)s(cid:11) and other intellectual property rights may not provide us a significant competitive advantage. Furthermore(cid:11) many of the countries in (cid:76)hich (cid:76)e operate(cid:11) particularly the emerging mar(cid:64)ets(cid:11) do not have intellectual property la(cid:76)s that protect proprietary rights as fully as the la(cid:76)s of the more developed (cid:63)urisdictions in (cid:76)hich (cid:76)e operate(cid:11) such as the (cid:48)nited States and the European (cid:48)nion. (cid:47)he costs associated (cid:76)ith protecting our intellectual property rights could also adversely impact our business. Similarly(cid:11) (cid:76)hile (cid:76)e have not received any significant claims from third parties suggesting that (cid:76)e may be infringing on their intellectual property rights(cid:11) there can be no assurance that (cid:76)e (cid:76)ill not receive such claims in the future. If (cid:76)e (cid:76)ere held liable for a claim of infringement(cid:11) (cid:76)e could be required to pay damages(cid:11) obtain licenses or cease ma(cid:64)ing or selling certain products. Intellectual property litigation(cid:11) (cid:76)hich could result in substantial cost to us and divert the attention of management(cid:11) may be necessary to protect our trade secrets or proprietary technology or for us to defend against claimed infringement of the rights of others and to determine the scope and validity of others(cid:89) proprietary rights. (cid:50)e may not prevail in any such litigation(cid:11) and if (cid:76)e are unsuccessful(cid:11) (cid:76)e may not be able to obtain any necessary licenses on reasonable terms or at all. Failure to protect our patents(cid:11) trademar(cid:64)s(cid:11) and other intellectual property rights could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. (cid:47)here is an increased scrutiny from shareholders(cid:11) customers(cid:11) and governments on corporate ES(cid:34) practices. Our commitment to sustainability and ES(cid:34) practices remains at the core of our business and (cid:76)e have established goals and targets related to our commitment. (cid:35)o(cid:76)ever(cid:11) our ES(cid:34) practices may not meet the standards of all of our sta(cid:64)eholders and advocacy groups may campaign for further changes. (cid:40)any of our large(cid:11) global customers are also committing to long(cid:12)term targets to reduce greenhouse gas emissions (cid:76)ithin their supply chains. If (cid:76)e are unable to support customers in achieving these reductions(cid:11) customers may see(cid:64) out competitors (cid:76)ho are better able to support such reductions. A failure(cid:11) or perceived failure(cid:11) to respond to e(cid:77)pectations of all parties(cid:11) including (cid:76)ith meeting our o(cid:76)n climate(cid:12)related and other ES(cid:34) target ambitions(cid:11) could cause harm to our business and reputation and have a negative impact on the trading price of our common stoc(cid:64). (cid:41)e(cid:76) government regulations could also result in ne(cid:76) or more stringent forms of ES(cid:34) oversight and disclosures (cid:76)hich may result in increased e(cid:77)penditures for environmental controls(cid:11) ne(cid:76) ta(cid:77)es on the products (cid:76)e produce and significantly increase our compliance costs to meet ne(cid:76) disclosure requirements. (cid:19)(cid:50)(cid:58)iro(cid:50)me(cid:50)(cid:56)a(cid:48)(cid:6) (cid:22)ea(cid:48)(cid:56)(cid:44)(cid:6) a(cid:50)(cid:40) Safe(cid:56)(cid:61) re(cid:43)(cid:57)(cid:48)a(cid:56)io(cid:50)s (cid:62) (cid:17)(cid:44)a(cid:50)(cid:43)i(cid:50)(cid:43) (cid:43)o(cid:58)er(cid:50)me(cid:50)(cid:56) re(cid:43)(cid:57)(cid:48)a(cid:56)io(cid:50)s i(cid:50) e(cid:50)(cid:58)iro(cid:50)me(cid:50)(cid:56)a(cid:48)(cid:6) (cid:44)ea(cid:48)(cid:56)(cid:44)(cid:6) a(cid:50)(cid:40) safe(cid:56)(cid:61) ma(cid:56)(cid:56)ers(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) (cid:39)(cid:48)ima(cid:56)e (cid:39)(cid:44)a(cid:50)(cid:43)e(cid:6) ma(cid:61) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:39)om(cid:52)a(cid:50)(cid:61)(cid:8) (cid:41)umerous legislative and regulatory initiatives have been passed and anticipated in response to concerns about greenhouse gas emissions and climate change. (cid:50)e are a manufacturing entity that utili(cid:79)es petrochemical(cid:12)based ra(cid:76) materials to produce many of our products. Increased environmental legislation or regulation(cid:11) including regulations related to e(cid:77)tended producer responsibility ("E(cid:43)(cid:45)")(cid:11) could result in higher costs for us in the form of higher ra(cid:76) material cost(cid:11) increased energy and freight costs(cid:11) and ne(cid:76) ta(cid:77)es on pac(cid:64)aging products or result in reduced demand. It is possible that certain materials might cease to be permitted to be used in our processes. (cid:34)overnment bans of(cid:11) or restrictions on certain materials or pac(cid:64)aging formats may close off mar(cid:64)ets to Amcor(cid:6)s business. (cid:40)andates to use certain types of materials(cid:11) such as post(cid:12)consumer recycled ("(cid:43)C(cid:45)") content(cid:11) may lead to supply shortages and higher prices for those materials as current recycling rates may be insufficient to meet increased demand for (cid:43)C(cid:45) (cid:76)ithin and beyond the pac(cid:64)aging industry. (cid:50)e could also incur additional compliance costs for monitoring and reporting emissions and for maintaining permits. Additionally(cid:11) a si(cid:79)able portion of our business comes from healthcare pac(cid:64)aging and food and beverage pac(cid:64)aging(cid:11) both highly regulated mar(cid:64)ets. If (cid:76)e fail to comply (cid:76)ith these regulatory requirements(cid:11) our results of operations could be adversely impacted. Tax (cid:26)aw (cid:17)(cid:44)a(cid:50)(cid:43)es (cid:62)(cid:17)(cid:44)a(cid:50)(cid:43)es i(cid:50) (cid:56)ax (cid:48)aws or (cid:39)(cid:44)a(cid:50)(cid:43)es i(cid:50) o(cid:57)r (cid:43)eo(cid:43)ra(cid:52)(cid:44)i(cid:39) mix of ear(cid:50)i(cid:50)(cid:43)s (cid:39)o(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e a ma(cid:56)eria(cid:48) im(cid:52)a(cid:39)(cid:56) o(cid:50) o(cid:57)r fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:39)o(cid:50)(cid:40)i(cid:56)io(cid:50) a(cid:50)(cid:40) res(cid:57)(cid:48)(cid:56)s of o(cid:52)era(cid:56)io(cid:50)(cid:8) (cid:50)e are sub(cid:63)ect to income and other ta(cid:77)es in the many (cid:63)urisdictions in (cid:76)hich (cid:76)e operate. (cid:47)a(cid:77) la(cid:76)s and regulations are comple(cid:77) and the determination of our global provision for income ta(cid:77)es and current and deferred ta(cid:77) assets and liabilities requires (cid:63)udgment and estimation. (cid:50)e are sub(cid:63)ect to routine e(cid:77)aminations of our income ta(cid:77) returns(cid:11) and ta(cid:77) authorities may disagree (cid:76)ith our ta(cid:77) positions and assess additional ta(cid:77). Our future income ta(cid:77)es could also be negatively impacted by our mi(cid:77) of earnings in the (cid:63)urisdictions in (cid:76)hich (cid:76)e operate being different than anticipated given differences in statutory ta(cid:77) rates in the countries in (cid:76)hich (cid:76)e operate. In addition(cid:11) certain ta(cid:77) policy efforts(cid:11) including any ta(cid:77) la(cid:76) changes resulting from the Organi(cid:79)ation for Economic Cooperation and (cid:31)evelopment ("OEC(cid:31)") and the (cid:34)20(cid:6)s inclusive frame(cid:76)or(cid:64) on Base Erosion and (cid:43)rofit Shifting ("BE(cid:43)S")(cid:11) could adversely impact our ta(cid:77) rate and subsequent ta(cid:77) e(cid:77)pense. (cid:31)espite the publication of the Anti (cid:34)lobal Base Erosion model rules and initial commentary(cid:11) there are many open points to be clarified and there is still significant uncertainty(cid:11) (cid:76)hich (cid:76)e (cid:76)ill continue to monitor until a more conclusive assessment (cid:76)ill be possible. (cid:26)i(cid:56)i(cid:43)a(cid:56)io(cid:50) (cid:62) (cid:26)i(cid:56)i(cid:43)a(cid:56)io(cid:50)(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) (cid:52)ro(cid:40)(cid:57)(cid:39)(cid:56) (cid:48)ia(cid:38)i(cid:48)i(cid:56)(cid:61) (cid:39)(cid:48)aims(cid:6) or re(cid:43)(cid:57)(cid:48)a(cid:56)or(cid:61) (cid:40)e(cid:58)e(cid:48)o(cid:52)me(cid:50)(cid:56)s (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess o(cid:52)era(cid:56)io(cid:50)s(cid:6) a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:52)erforma(cid:50)(cid:39)e(cid:8) Ris(cid:61)s Relating to Being a Jersey, Channel Islands Company Listing Ordinary Shares (cid:50)e are(cid:11) and in the future (cid:76)ill li(cid:64)ely become(cid:11) involved in la(cid:76)suits(cid:11) regulatory inquiries(cid:11) and governmental and other legal proceedings arising out of the ordinary course of our business. (cid:34)iven our global footprint(cid:11) (cid:76)e are e(cid:77)posed to more uncertainty regarding the regulatory environment. (cid:47)he timing of the final resolutions to la(cid:76)suits(cid:11) regulatory inquiries(cid:11) and governmental and other legal proceedings is typically uncertain. Additionally(cid:11) the possible outcomes of(cid:11) or resolutions to(cid:11) these proceedings could include adverse (cid:63)udgments or settlements(cid:11) either of (cid:76)hich could require substantial payments. In addition(cid:11) actions (cid:76)e have ta(cid:64)en or may ta(cid:64)e(cid:11) or decisions (cid:76)e have made or may ma(cid:64)e(cid:11) as a consequence of CO(cid:49)I(cid:31)(cid:12)1(cid:24) or the (cid:45)ussia(cid:12) (cid:48)(cid:64)raine conflict(cid:11) may result in legal claims or litigation against us. (cid:45)efer to "Item 3. (cid:12) Legal (cid:43)roceedings" of this Annual (cid:45)eport on Form 10(cid:12)(cid:38). (cid:19)(cid:50)(cid:58)iro(cid:50)me(cid:50)(cid:56)a(cid:48)(cid:6) So(cid:39)ia(cid:48) a(cid:50)(cid:40) (cid:21)o(cid:58)er(cid:50)a(cid:50)(cid:39)e (cid:4)(cid:2)(cid:19)S(cid:21)(cid:2)(cid:5) (cid:30)ra(cid:39)(cid:56)i(cid:39)es (cid:62) (cid:23)(cid:50)(cid:39)reasi(cid:50)(cid:43) s(cid:39)r(cid:57)(cid:56)i(cid:50)(cid:61) a(cid:50)(cid:40) (cid:39)(cid:44)a(cid:50)(cid:43)i(cid:50)(cid:43) ex(cid:52)e(cid:39)(cid:56)a(cid:56)io(cid:50)s from i(cid:50)(cid:58)es(cid:56)ors(cid:6) (cid:39)(cid:57)s(cid:56)omers(cid:6) a(cid:50)(cid:40) (cid:43)o(cid:58)er(cid:50)me(cid:50)(cid:56)s wi(cid:56)(cid:44) res(cid:52)e(cid:39)(cid:56) (cid:56)o o(cid:57)r (cid:19)S(cid:21) (cid:52)ra(cid:39)(cid:56)i(cid:39)es a(cid:50)(cid:40) (cid:39)ommi(cid:56)me(cid:50)(cid:56)s ma(cid:61) im(cid:52)ose a(cid:40)(cid:40)i(cid:56)io(cid:50)a(cid:48) (cid:39)os(cid:56)s o(cid:50) (cid:57)s or ex(cid:52)ose (cid:57)s (cid:56)o a(cid:40)(cid:40)i(cid:56)io(cid:50)a(cid:48) ris(cid:47)s(cid:8) (cid:29)(cid:57)r or(cid:40)i(cid:50)ar(cid:61) s(cid:44)ares are iss(cid:57)e(cid:40) (cid:57)(cid:50)(cid:40)er (cid:56)(cid:44)e (cid:48)aws of (cid:24)erse(cid:61)(cid:6) (cid:17)(cid:44)a(cid:50)(cid:50)e(cid:48) (cid:23)s(cid:48)a(cid:50)(cid:40)s(cid:6) w(cid:44)i(cid:39)(cid:44) ma(cid:61) (cid:50)o(cid:56) (cid:52)ro(cid:58)i(cid:40)e (cid:56)(cid:44)e (cid:48)e(cid:58)e(cid:48) of (cid:48)e(cid:43)a(cid:48) (cid:39)er(cid:56)ai(cid:50)(cid:56)(cid:61) a(cid:50)(cid:40) (cid:56)ra(cid:50)s(cid:52)are(cid:50)(cid:39)(cid:61) affor(cid:40)e(cid:40) (cid:38)(cid:61) i(cid:50)(cid:39)or(cid:52)ora(cid:56)io(cid:50) i(cid:50) a (cid:34)(cid:8)S(cid:8) (cid:46)(cid:57)ris(cid:40)i(cid:39)(cid:56)io(cid:50) a(cid:50)(cid:40) w(cid:44)i(cid:39)(cid:44) (cid:40)iffer i(cid:50) some res(cid:52)e(cid:39)(cid:56)s (cid:56)o (cid:56)(cid:44)e (cid:48)aws a(cid:52)(cid:52)(cid:48)i(cid:39)a(cid:38)(cid:48)e (cid:56)o o(cid:56)(cid:44)er (cid:34)(cid:8)S(cid:8) (cid:39)or(cid:52)ora(cid:56)io(cid:50)s(cid:8) (cid:50)e are organi(cid:79)ed under the la(cid:76)s of (cid:37)ersey(cid:11) Channel Islands(cid:11) a British cro(cid:76)n dependency that is an island located off the coast of (cid:41)ormandy(cid:11) France. (cid:37)ersey is not a member of the European (cid:48)nion. (cid:37)ersey(cid:11) Channel Islands legislation regarding companies is largely based on English corporate la(cid:76) principles. (cid:47)he rights of holders of our ordinary shares are governed by (cid:37)ersey la(cid:76)(cid:11) including the Companies ((cid:37)ersey) La(cid:76) 1(cid:24)(cid:24)1(cid:11) as amended(cid:11) and by the Amcor Articles of Association(cid:11) as may be amended from time to time. (cid:47)hese rights differ in some respects from the rights of other shareholders in corporations incorporated in the (cid:48)nited States. Further(cid:11) there can be no assurance that the la(cid:76)s of (cid:37)ersey(cid:11) Channel Islands(cid:11) (cid:76)ill not change in the future or that they (cid:76)ill serve to protect investors in a similar fashion afforded under corporate la(cid:76) principles in the (cid:48).S.(cid:11) (cid:76)hich could adversely affect the rights of investors. 21 Amcor Annual Report 2022 22 2(cid:20) Form 10-K 22 claims made under such policies (cid:76)ill ultimately be paid or that (cid:76)e (cid:76)ill be able to maintain such insurance at acceptable (cid:47)here is an increased scrutiny from shareholders(cid:11) customers(cid:11) and governments on corporate ES(cid:34) practices. Our premium cost levels in the future. Additionally(cid:11) (cid:76)e retain a portion of our insurable ris(cid:64) through a captive insurance company(cid:11) Amcor Insurances (cid:43)te Ltd(cid:11) (cid:76)hich is located in Singapore. Our captive insurance company collects annual premiums from our business groups(cid:11) and assumes specific ris(cid:64)s relating to various ris(cid:64) e(cid:77)posures(cid:11) including property damage. (cid:47)he captive insurance company may be required to ma(cid:64)e payment for insurance claims (cid:76)hich e(cid:77)ceed the captive(cid:6)s reserves(cid:11) (cid:76)hich could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. Legal and Compliance Ris(cid:61)s (cid:23)(cid:50)(cid:56)e(cid:48)(cid:48)e(cid:39)(cid:56)(cid:57)a(cid:48) (cid:30)ro(cid:52)er(cid:56)(cid:61) (cid:62) (cid:29)(cid:57)r i(cid:50)a(cid:38)i(cid:48)i(cid:56)(cid:61) (cid:56)o (cid:40)efe(cid:50)(cid:40) o(cid:57)r i(cid:50)(cid:56)e(cid:48)(cid:48)e(cid:39)(cid:56)(cid:57)a(cid:48) (cid:52)ro(cid:52)er(cid:56)(cid:61) ri(cid:43)(cid:44)(cid:56)s or i(cid:50)(cid:56)e(cid:48)(cid:48)e(cid:39)(cid:56)(cid:57)a(cid:48) (cid:52)ro(cid:52)er(cid:56)(cid:61) i(cid:50)fri(cid:50)(cid:43)eme(cid:50)(cid:56) (cid:39)(cid:48)aims a(cid:43)ai(cid:50)s(cid:56) (cid:57)s (cid:39)o(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e a(cid:50) a(cid:40)(cid:58)erse im(cid:52)a(cid:39)(cid:56) o(cid:50) o(cid:57)r a(cid:38)i(cid:48)i(cid:56)(cid:61) (cid:56)o (cid:39)om(cid:52)e(cid:56)e effe(cid:39)(cid:56)i(cid:58)e(cid:48)(cid:61)(cid:8) Our ability to compete effectively depends(cid:11) in part(cid:11) on our ability to protect and maintain the proprietary nature of our o(cid:76)ned and licensed intellectual property. (cid:50)e o(cid:76)n a number of patents on our products(cid:11) aspects of our products(cid:11) methods of use and(cid:14)or methods of manufacturing(cid:11) and (cid:76)e o(cid:76)n(cid:11) or have licenses to use(cid:11) the material trademar(cid:64) and trade name rights used in connection (cid:76)ith the pac(cid:64)aging(cid:11) mar(cid:64)eting and distribution of our ma(cid:63)or products. (cid:50)e also rely on trade secrets(cid:11) (cid:64)no(cid:76)(cid:12)ho(cid:76)(cid:11) and other unpatented proprietary technology. If (cid:76)e are unable to detect the infringement of our intellectual property or to enforce our intellectual property rights(cid:11) our competitive position may suffer. (cid:47)he use of our intellectual property by someone else (cid:76)ithout our authori(cid:79)ation could reduce certain of our competitive advantages(cid:11) cause us to lose sales or other(cid:76)ise harm our business. (cid:50)e attempt to protect and restrict access to our intellectual property and proprietary information by relying on the patent(cid:11) trademar(cid:64)(cid:11) copyright(cid:11) and trade secret la(cid:76)s of the countries in (cid:76)hich (cid:76)e operate(cid:11) as (cid:76)ell as non(cid:12)disclosure agreements. (cid:35)o(cid:76)ever(cid:11) it may be possible for a third party to obtain our information (cid:76)ithout our authori(cid:79)ation(cid:11) independently develop similar technologies(cid:11) or breach a non(cid:12)disclosure agreement entered into (cid:76)ith us. Our pending patent applications(cid:11) and our pending trademar(cid:64) registration applications(cid:11) may not be allo(cid:76)ed or competitors may challenge the validity or scope of our patents or trademar(cid:64)s. Our competitors might avoid infringement by designing around our intellectual property rights or by developing non(cid:12)infringing competing technologies. In addition(cid:11) our patents(cid:11) trademar(cid:64)s(cid:11) and other intellectual property rights may not provide us a significant competitive advantage. Furthermore(cid:11) many of the countries in (cid:76)hich (cid:76)e operate(cid:11) particularly the emerging mar(cid:64)ets(cid:11) do not have intellectual property la(cid:76)s that protect proprietary rights as fully as the la(cid:76)s of the more developed (cid:63)urisdictions in (cid:76)hich (cid:76)e operate(cid:11) such as the (cid:48)nited States and the European (cid:48)nion. (cid:47)he costs associated (cid:76)ith protecting our intellectual property rights could also adversely impact our business. Similarly(cid:11) (cid:76)hile (cid:76)e have not received any significant claims from third parties suggesting that (cid:76)e may be infringing on their intellectual property rights(cid:11) there can be no assurance that (cid:76)e (cid:76)ill not receive such claims in the future. If (cid:76)e (cid:76)ere held liable for a claim of infringement(cid:11) (cid:76)e could be required to pay damages(cid:11) obtain licenses or cease ma(cid:64)ing or selling certain products. Intellectual property litigation(cid:11) (cid:76)hich could result in substantial cost to us and divert the attention of management(cid:11) may be necessary to protect our trade secrets or proprietary technology or for us to defend against claimed infringement of the rights of others and to determine the scope and validity of others(cid:89) proprietary rights. (cid:50)e may not prevail in any such litigation(cid:11) and if (cid:76)e are unsuccessful(cid:11) (cid:76)e may not be able to obtain any necessary licenses on reasonable terms or at all. Failure to protect our patents(cid:11) trademar(cid:64)s(cid:11) and other intellectual property rights could have an adverse effect on our business(cid:11) financial condition(cid:11) results of operations(cid:11) or cash flo(cid:76)s. commitment to sustainability and ES(cid:34) practices remains at the core of our business and (cid:76)e have established goals and targets related to our commitment. (cid:35)o(cid:76)ever(cid:11) our ES(cid:34) practices may not meet the standards of all of our sta(cid:64)eholders and advocacy groups may campaign for further changes. (cid:40)any of our large(cid:11) global customers are also committing to long(cid:12)term targets to reduce greenhouse gas emissions (cid:76)ithin their supply chains. If (cid:76)e are unable to support customers in achieving these reductions(cid:11) customers may see(cid:64) out competitors (cid:76)ho are better able to support such reductions. A failure(cid:11) or perceived failure(cid:11) to respond to e(cid:77)pectations of all parties(cid:11) including (cid:76)ith meeting our o(cid:76)n climate(cid:12)related and other ES(cid:34) target ambitions(cid:11) could cause harm to our business and reputation and have a negative impact on the trading price of our common stoc(cid:64). (cid:41)e(cid:76) government regulations could also result in ne(cid:76) or more stringent forms of ES(cid:34) oversight and disclosures (cid:76)hich may result in increased e(cid:77)penditures for environmental controls(cid:11) ne(cid:76) ta(cid:77)es on the products (cid:76)e produce and significantly increase our compliance costs to meet ne(cid:76) disclosure requirements. (cid:19)(cid:50)(cid:58)iro(cid:50)me(cid:50)(cid:56)a(cid:48)(cid:6) (cid:22)ea(cid:48)(cid:56)(cid:44)(cid:6) a(cid:50)(cid:40) Safe(cid:56)(cid:61) re(cid:43)(cid:57)(cid:48)a(cid:56)io(cid:50)s (cid:62) (cid:17)(cid:44)a(cid:50)(cid:43)i(cid:50)(cid:43) (cid:43)o(cid:58)er(cid:50)me(cid:50)(cid:56) re(cid:43)(cid:57)(cid:48)a(cid:56)io(cid:50)s i(cid:50) e(cid:50)(cid:58)iro(cid:50)me(cid:50)(cid:56)a(cid:48)(cid:6) (cid:44)ea(cid:48)(cid:56)(cid:44)(cid:6) a(cid:50)(cid:40) safe(cid:56)(cid:61) ma(cid:56)(cid:56)ers(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) (cid:39)(cid:48)ima(cid:56)e (cid:39)(cid:44)a(cid:50)(cid:43)e(cid:6) ma(cid:61) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:39)om(cid:52)a(cid:50)(cid:61)(cid:8) (cid:41)umerous legislative and regulatory initiatives have been passed and anticipated in response to concerns about greenhouse gas emissions and climate change. (cid:50)e are a manufacturing entity that utili(cid:79)es petrochemical(cid:12)based ra(cid:76) materials to produce many of our products. Increased environmental legislation or regulation(cid:11) including regulations related to e(cid:77)tended producer responsibility ("E(cid:43)(cid:45)")(cid:11) could result in higher costs for us in the form of higher ra(cid:76) material cost(cid:11) increased energy and freight costs(cid:11) and ne(cid:76) ta(cid:77)es on pac(cid:64)aging products or result in reduced demand. It is possible that certain materials might cease to be permitted to be used in our processes. (cid:34)overnment bans of(cid:11) or restrictions on certain materials or pac(cid:64)aging formats may close off mar(cid:64)ets to Amcor(cid:6)s business. (cid:40)andates to use certain types of materials(cid:11) such as post(cid:12)consumer recycled ("(cid:43)C(cid:45)") content(cid:11) may lead to supply shortages and higher prices for those materials as current recycling rates may be insufficient to meet increased demand for (cid:43)C(cid:45) (cid:76)ithin and beyond the pac(cid:64)aging industry. (cid:50)e could also incur additional compliance costs for monitoring and reporting emissions and for maintaining permits. Additionally(cid:11) a si(cid:79)able portion of our business comes from healthcare pac(cid:64)aging and food and beverage pac(cid:64)aging(cid:11) both highly regulated mar(cid:64)ets. If (cid:76)e fail to comply (cid:76)ith these regulatory requirements(cid:11) our results of operations could be adversely impacted. Tax (cid:26)aw (cid:17)(cid:44)a(cid:50)(cid:43)es (cid:62)(cid:17)(cid:44)a(cid:50)(cid:43)es i(cid:50) (cid:56)ax (cid:48)aws or (cid:39)(cid:44)a(cid:50)(cid:43)es i(cid:50) o(cid:57)r (cid:43)eo(cid:43)ra(cid:52)(cid:44)i(cid:39) mix of ear(cid:50)i(cid:50)(cid:43)s (cid:39)o(cid:57)(cid:48)(cid:40) (cid:44)a(cid:58)e a ma(cid:56)eria(cid:48) im(cid:52)a(cid:39)(cid:56) o(cid:50) o(cid:57)r fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:39)o(cid:50)(cid:40)i(cid:56)io(cid:50) a(cid:50)(cid:40) res(cid:57)(cid:48)(cid:56)s of o(cid:52)era(cid:56)io(cid:50)(cid:8) (cid:50)e are sub(cid:63)ect to income and other ta(cid:77)es in the many (cid:63)urisdictions in (cid:76)hich (cid:76)e operate. (cid:47)a(cid:77) la(cid:76)s and regulations are comple(cid:77) and the determination of our global provision for income ta(cid:77)es and current and deferred ta(cid:77) assets and liabilities requires (cid:63)udgment and estimation. (cid:50)e are sub(cid:63)ect to routine e(cid:77)aminations of our income ta(cid:77) returns(cid:11) and ta(cid:77) authorities may disagree (cid:76)ith our ta(cid:77) positions and assess additional ta(cid:77). Our future income ta(cid:77)es could also be negatively impacted by our mi(cid:77) of earnings in the (cid:63)urisdictions in (cid:76)hich (cid:76)e operate being different than anticipated given differences in statutory ta(cid:77) rates in the countries in (cid:76)hich (cid:76)e operate. In addition(cid:11) certain ta(cid:77) policy efforts(cid:11) including any ta(cid:77) la(cid:76) changes resulting from the Organi(cid:79)ation for Economic Cooperation and (cid:31)evelopment ("OEC(cid:31)") and the (cid:34)20(cid:6)s inclusive frame(cid:76)or(cid:64) on Base Erosion and (cid:43)rofit Shifting ("BE(cid:43)S")(cid:11) could adversely impact our ta(cid:77) rate and subsequent ta(cid:77) e(cid:77)pense. (cid:31)espite the publication of the Anti (cid:34)lobal Base Erosion model rules and initial commentary(cid:11) there are many open points to be clarified and there is still significant uncertainty(cid:11) (cid:76)hich (cid:76)e (cid:76)ill continue to monitor until a more conclusive assessment (cid:76)ill be possible. (cid:26)i(cid:56)i(cid:43)a(cid:56)io(cid:50) (cid:62) (cid:26)i(cid:56)i(cid:43)a(cid:56)io(cid:50)(cid:6) i(cid:50)(cid:39)(cid:48)(cid:57)(cid:40)i(cid:50)(cid:43) (cid:52)ro(cid:40)(cid:57)(cid:39)(cid:56) (cid:48)ia(cid:38)i(cid:48)i(cid:56)(cid:61) (cid:39)(cid:48)aims(cid:6) or re(cid:43)(cid:57)(cid:48)a(cid:56)or(cid:61) (cid:40)e(cid:58)e(cid:48)o(cid:52)me(cid:50)(cid:56)s (cid:39)o(cid:57)(cid:48)(cid:40) a(cid:40)(cid:58)erse(cid:48)(cid:61) affe(cid:39)(cid:56) o(cid:57)r (cid:38)(cid:57)si(cid:50)ess o(cid:52)era(cid:56)io(cid:50)s(cid:6) a(cid:50)(cid:40) fi(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:52)erforma(cid:50)(cid:39)e(cid:8) Ris(cid:61)s Relating to Being a Jersey, Channel Islands Company Listing Ordinary Shares (cid:50)e are(cid:11) and in the future (cid:76)ill li(cid:64)ely become(cid:11) involved in la(cid:76)suits(cid:11) regulatory inquiries(cid:11) and governmental and other legal proceedings arising out of the ordinary course of our business. (cid:34)iven our global footprint(cid:11) (cid:76)e are e(cid:77)posed to more uncertainty regarding the regulatory environment. (cid:47)he timing of the final resolutions to la(cid:76)suits(cid:11) regulatory inquiries(cid:11) and governmental and other legal proceedings is typically uncertain. Additionally(cid:11) the possible outcomes of(cid:11) or resolutions to(cid:11) these proceedings could include adverse (cid:63)udgments or settlements(cid:11) either of (cid:76)hich could require substantial payments. In addition(cid:11) actions (cid:76)e have ta(cid:64)en or may ta(cid:64)e(cid:11) or decisions (cid:76)e have made or may ma(cid:64)e(cid:11) as a consequence of CO(cid:49)I(cid:31)(cid:12)1(cid:24) or the (cid:45)ussia(cid:12) (cid:48)(cid:64)raine conflict(cid:11) may result in legal claims or litigation against us. (cid:45)efer to "Item 3. (cid:12) Legal (cid:43)roceedings" of this Annual (cid:45)eport on Form 10(cid:12)(cid:38). (cid:19)(cid:50)(cid:58)iro(cid:50)me(cid:50)(cid:56)a(cid:48)(cid:6) So(cid:39)ia(cid:48) a(cid:50)(cid:40) (cid:21)o(cid:58)er(cid:50)a(cid:50)(cid:39)e (cid:4)(cid:2)(cid:19)S(cid:21)(cid:2)(cid:5) (cid:30)ra(cid:39)(cid:56)i(cid:39)es (cid:62) (cid:23)(cid:50)(cid:39)reasi(cid:50)(cid:43) s(cid:39)r(cid:57)(cid:56)i(cid:50)(cid:61) a(cid:50)(cid:40) (cid:39)(cid:44)a(cid:50)(cid:43)i(cid:50)(cid:43) ex(cid:52)e(cid:39)(cid:56)a(cid:56)io(cid:50)s from i(cid:50)(cid:58)es(cid:56)ors(cid:6) (cid:39)(cid:57)s(cid:56)omers(cid:6) a(cid:50)(cid:40) (cid:43)o(cid:58)er(cid:50)me(cid:50)(cid:56)s wi(cid:56)(cid:44) res(cid:52)e(cid:39)(cid:56) (cid:56)o o(cid:57)r (cid:19)S(cid:21) (cid:52)ra(cid:39)(cid:56)i(cid:39)es a(cid:50)(cid:40) (cid:39)ommi(cid:56)me(cid:50)(cid:56)s ma(cid:61) im(cid:52)ose a(cid:40)(cid:40)i(cid:56)io(cid:50)a(cid:48) (cid:39)os(cid:56)s o(cid:50) (cid:57)s or ex(cid:52)ose (cid:57)s (cid:56)o a(cid:40)(cid:40)i(cid:56)io(cid:50)a(cid:48) ris(cid:47)s(cid:8) (cid:29)(cid:57)r or(cid:40)i(cid:50)ar(cid:61) s(cid:44)ares are iss(cid:57)e(cid:40) (cid:57)(cid:50)(cid:40)er (cid:56)(cid:44)e (cid:48)aws of (cid:24)erse(cid:61)(cid:6) (cid:17)(cid:44)a(cid:50)(cid:50)e(cid:48) (cid:23)s(cid:48)a(cid:50)(cid:40)s(cid:6) w(cid:44)i(cid:39)(cid:44) ma(cid:61) (cid:50)o(cid:56) (cid:52)ro(cid:58)i(cid:40)e (cid:56)(cid:44)e (cid:48)e(cid:58)e(cid:48) of (cid:48)e(cid:43)a(cid:48) (cid:39)er(cid:56)ai(cid:50)(cid:56)(cid:61) a(cid:50)(cid:40) (cid:56)ra(cid:50)s(cid:52)are(cid:50)(cid:39)(cid:61) affor(cid:40)e(cid:40) (cid:38)(cid:61) i(cid:50)(cid:39)or(cid:52)ora(cid:56)io(cid:50) i(cid:50) a (cid:34)(cid:8)S(cid:8) (cid:46)(cid:57)ris(cid:40)i(cid:39)(cid:56)io(cid:50) a(cid:50)(cid:40) w(cid:44)i(cid:39)(cid:44) (cid:40)iffer i(cid:50) some res(cid:52)e(cid:39)(cid:56)s (cid:56)o (cid:56)(cid:44)e (cid:48)aws a(cid:52)(cid:52)(cid:48)i(cid:39)a(cid:38)(cid:48)e (cid:56)o o(cid:56)(cid:44)er (cid:34)(cid:8)S(cid:8) (cid:39)or(cid:52)ora(cid:56)io(cid:50)s(cid:8) (cid:50)e are organi(cid:79)ed under the la(cid:76)s of (cid:37)ersey(cid:11) Channel Islands(cid:11) a British cro(cid:76)n dependency that is an island located off the coast of (cid:41)ormandy(cid:11) France. (cid:37)ersey is not a member of the European (cid:48)nion. (cid:37)ersey(cid:11) Channel Islands legislation regarding companies is largely based on English corporate la(cid:76) principles. (cid:47)he rights of holders of our ordinary shares are governed by (cid:37)ersey la(cid:76)(cid:11) including the Companies ((cid:37)ersey) La(cid:76) 1(cid:24)(cid:24)1(cid:11) as amended(cid:11) and by the Amcor Articles of Association(cid:11) as may be amended from time to time. (cid:47)hese rights differ in some respects from the rights of other shareholders in corporations incorporated in the (cid:48)nited States. Further(cid:11) there can be no assurance that the la(cid:76)s of (cid:37)ersey(cid:11) Channel Islands(cid:11) (cid:76)ill not change in the future or that they (cid:76)ill serve to protect investors in a similar fashion afforded under corporate la(cid:76) principles in the (cid:48).S.(cid:11) (cid:76)hich could adversely affect the rights of investors. 21 22 Amcor Annual Report 2022 Form 10-K 2(cid:22) (cid:34)(cid:8)S(cid:8) s(cid:44)are(cid:44)o(cid:48)(cid:40)ers ma(cid:61) (cid:50)o(cid:56) (cid:38)e a(cid:38)(cid:48)e (cid:56)o e(cid:50)for(cid:39)e (cid:39)i(cid:58)i(cid:48) (cid:48)ia(cid:38)i(cid:48)i(cid:56)ies a(cid:43)ai(cid:50)s(cid:56) (cid:57)s(cid:8) Item 1B(cid:12) - (cid:45)nresolved Staff Comments A significant portion of our assets are located outside of the (cid:48)nited States and several of our directors and officers are (cid:41)one. citi(cid:79)ens or residents of (cid:63)urisdictions outside of the (cid:48)nited States. As a result(cid:11) it may be difficult for investors to successfully serve a claim (cid:76)ithin the (cid:48)nited States upon those non(cid:12)(cid:48).S. directors and officers(cid:11) or to enforce (cid:63)udgments reali(cid:79)ed in the (cid:48)nited States. Item 2(cid:12) - Properties (cid:37)udgments of (cid:48).S. courts may not be directly enforceable outside of the (cid:48).S. and the enforcement of (cid:63)udgments of (cid:48).S. courts outside of the (cid:48).S.(cid:11) including those in Australia and (cid:37)ersey(cid:11) may be sub(cid:63)ect to limitations. Investors may also have difficulties pursuing an original action brought in a court in a (cid:63)urisdiction outside the (cid:48).S.(cid:11) including Australia and (cid:37)ersey(cid:11) for liabilities under the securities la(cid:76)s of the (cid:48).S. Additionally(cid:11) our Articles of Association provide that (cid:76)hile the (cid:45)oyal Court of (cid:37)ersey (cid:76)ill have non(cid:12)e(cid:77)clusive (cid:63)urisdiction over actions brought against us(cid:11) the (cid:45)oyal Court of (cid:37)ersey (cid:76)ill be the sole and e(cid:77)clusive forum for derivative shareholder actions(cid:11) actions for breach of fiduciary duty by our directors and officers(cid:11) actions arising out of Companies ((cid:37)ersey) La(cid:76) 1(cid:24)(cid:24)1(cid:11) as amended(cid:11) or actions asserting a claim against our directors or officers governed by the internal affairs doctrine. (cid:47)he e(cid:77)clusive forum provision (cid:76)ould not prevent derivative shareholder actions based on claims arising under (cid:48).S. federal securities la(cid:76)s from being raised in a (cid:48).S. court and (cid:76)ould not prevent a (cid:48).S. court from asserting (cid:63)urisdiction over such claims. (cid:35)o(cid:76)ever(cid:11) there is uncertainty (cid:76)hether a (cid:48).S. or (cid:37)ersey court (cid:76)ould enforce the e(cid:77)clusive forum provision for actions claiming breach of fiduciary duty and other claims. (cid:50)e consider our plants and other physical properties(cid:11) (cid:76)hether o(cid:76)ned or leased(cid:11) to be suitable(cid:11) adequate(cid:11) and of sufficient productive capacity to meet the requirements of our business. Our manufacturing plants operate at varying levels of utili(cid:79)ation depending on the type of operation and mar(cid:64)et conditions. (cid:47)he brea(cid:64)do(cid:76)n of our significant manufacturing and support facilities at (cid:37)une 30(cid:11) 2022 (cid:76)ere as follo(cid:76)s(cid:25) (cid:47)his segment has 16(cid:24) significant manufacturing and support facilities located in 3(cid:24) countries(cid:11) of (cid:76)hich 118 are o(cid:76)ned directly by us and 51 are leased from outside parties. Initial building lease terms typically provide for minimum terms in a range of t(cid:76)o to 36 years and have one or more rene(cid:76)al options. (cid:47)his segment has 52 significant manufacturing and support facilities located in 11 countries(cid:11) of (cid:76)hich 12 are o(cid:76)ned directly by us and 40 are leased from outside parties. Initial building lease terms typically provide for minimum terms in a range of t(cid:76)o to 20 years and have one or more rene(cid:76)al options. Our primary e(cid:77)ecutive offices are located in (cid:53)urich(cid:11) S(cid:76)it(cid:79)erland. (cid:45)efer to (cid:41)ote 20(cid:11) "Contingencies and Legal (cid:43)roceedings(cid:11)" of the notes to consolidated financial statements for Fle(cid:74)ibles Segment Rigid Pac(cid:61)aging Segment Corporate and (cid:31)eneral Item 3(cid:12) - Legal Proceedings information about legal proceedings. Item (cid:18)(cid:12) - (cid:37)ine Safety Disclosures (cid:41)ot applicable. 23 Amcor Annual Report 2022 24 2(cid:22) Form 10-K 2(cid:23) (cid:34)(cid:8)S(cid:8) s(cid:44)are(cid:44)o(cid:48)(cid:40)ers ma(cid:61) (cid:50)o(cid:56) (cid:38)e a(cid:38)(cid:48)e (cid:56)o e(cid:50)for(cid:39)e (cid:39)i(cid:58)i(cid:48) (cid:48)ia(cid:38)i(cid:48)i(cid:56)ies a(cid:43)ai(cid:50)s(cid:56) (cid:57)s(cid:8) Item 1B(cid:12) - (cid:45)nresolved Staff Comments A significant portion of our assets are located outside of the (cid:48)nited States and several of our directors and officers are (cid:41)one. citi(cid:79)ens or residents of (cid:63)urisdictions outside of the (cid:48)nited States. As a result(cid:11) it may be difficult for investors to successfully serve a claim (cid:76)ithin the (cid:48)nited States upon those non(cid:12)(cid:48).S. directors and officers(cid:11) or to enforce (cid:63)udgments reali(cid:79)ed in the (cid:48)nited Item 2(cid:12) - Properties States. (cid:37)udgments of (cid:48).S. courts may not be directly enforceable outside of the (cid:48).S. and the enforcement of (cid:63)udgments of (cid:48).S. courts outside of the (cid:48).S.(cid:11) including those in Australia and (cid:37)ersey(cid:11) may be sub(cid:63)ect to limitations. Investors may also have difficulties pursuing an original action brought in a court in a (cid:63)urisdiction outside the (cid:48).S.(cid:11) including Australia and (cid:37)ersey(cid:11) for liabilities under the securities la(cid:76)s of the (cid:48).S. Additionally(cid:11) our Articles of Association provide that (cid:76)hile the (cid:45)oyal Court of (cid:37)ersey (cid:76)ill have non(cid:12)e(cid:77)clusive (cid:63)urisdiction over actions brought against us(cid:11) the (cid:45)oyal Court of (cid:37)ersey (cid:76)ill be the sole and e(cid:77)clusive forum for derivative shareholder actions(cid:11) actions for breach of fiduciary duty by our directors and officers(cid:11) actions arising out of Companies ((cid:37)ersey) La(cid:76) 1(cid:24)(cid:24)1(cid:11) as amended(cid:11) or actions asserting a claim against our directors or officers governed by the internal affairs doctrine. (cid:47)he e(cid:77)clusive forum provision (cid:76)ould not prevent derivative shareholder actions based on claims arising under (cid:48).S. federal securities la(cid:76)s from being raised in a (cid:48).S. court and (cid:76)ould not prevent a (cid:48).S. court from asserting (cid:63)urisdiction over such claims. (cid:35)o(cid:76)ever(cid:11) there is uncertainty (cid:76)hether a (cid:48).S. or (cid:37)ersey court (cid:76)ould enforce the e(cid:77)clusive forum provision for actions claiming breach of fiduciary duty and other claims. (cid:50)e consider our plants and other physical properties(cid:11) (cid:76)hether o(cid:76)ned or leased(cid:11) to be suitable(cid:11) adequate(cid:11) and of sufficient productive capacity to meet the requirements of our business. Our manufacturing plants operate at varying levels of utili(cid:79)ation depending on the type of operation and mar(cid:64)et conditions. (cid:47)he brea(cid:64)do(cid:76)n of our significant manufacturing and support facilities at (cid:37)une 30(cid:11) 2022 (cid:76)ere as follo(cid:76)s(cid:25) Fle(cid:74)ibles Segment (cid:47)his segment has 16(cid:24) significant manufacturing and support facilities located in 3(cid:24) countries(cid:11) of (cid:76)hich 118 are o(cid:76)ned directly by us and 51 are leased from outside parties. Initial building lease terms typically provide for minimum terms in a range of t(cid:76)o to 36 years and have one or more rene(cid:76)al options. Rigid Pac(cid:61)aging Segment (cid:47)his segment has 52 significant manufacturing and support facilities located in 11 countries(cid:11) of (cid:76)hich 12 are o(cid:76)ned directly by us and 40 are leased from outside parties. Initial building lease terms typically provide for minimum terms in a range of t(cid:76)o to 20 years and have one or more rene(cid:76)al options. Corporate and (cid:31)eneral Our primary e(cid:77)ecutive offices are located in (cid:53)urich(cid:11) S(cid:76)it(cid:79)erland. Item 3(cid:12) - Legal Proceedings (cid:45)efer to (cid:41)ote 20(cid:11) "Contingencies and Legal (cid:43)roceedings(cid:11)" of the notes to consolidated financial statements for information about legal proceedings. Item (cid:18)(cid:12) - (cid:37)ine Safety Disclosures (cid:41)ot applicable. 23 24 Amcor Annual Report 2022 Form 10-K 2(cid:24) PAR(cid:44) II Shareholder Return Performance Item (cid:19)(cid:12) - (cid:37)ar(cid:61)et for Registrant(cid:6)s E(cid:67)uity, Related Stoc(cid:61)holder (cid:37)atters and Issuer Purchases of E(cid:67)uity Securities Our ordinary shares are traded on the (cid:41)e(cid:76) (cid:52)or(cid:64) Stoc(cid:64) E(cid:77)change (the "(cid:41)(cid:52)SE") under the symbol A(cid:40)C(cid:45) and our C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is") are traded on the Australian Securities E(cid:77)change (the "AS(cid:51)") under the symbol A(cid:40)C. As of (cid:37)une 30(cid:11) 2022(cid:11) there (cid:76)ere 105(cid:11)788 registered holders of record of our ordinary shares and C(cid:31)Is. (cid:47)he information under this caption "Shareholder (cid:45)eturn (cid:43)erformance" in this Item 5 of this Annual (cid:45)eport on Form 10(cid:12)(cid:38) is not deemed to be "soliciting material" or to be "filed" (cid:76)ith the SEC or sub(cid:63)ect to (cid:45)egulation 14A or 14C under the E(cid:77)change Act(cid:11) or to the liabilities of Section 18 of the E(cid:77)change Act and (cid:76)ill not be deemed to be incorporated by reference into any filing under the Securities Act of 1(cid:24)33(cid:11) as amended(cid:11) or the E(cid:77)change Act(cid:11) e(cid:77)cept to the e(cid:77)tent (cid:76)e specifically incorporate it by reference into such a filing. Share Repurchases Share repurchase activity during the three months ended (cid:37)une 30(cid:11) 2022 (cid:76)as as follo(cid:76)s (in millions(cid:11) e(cid:77)cept number of the AS(cid:51) 200 Inde(cid:77) for the period beginning (cid:37)une 11(cid:11) 201(cid:24). (cid:47)he graph assumes $100 (cid:76)as invested on (cid:37)une 11(cid:11) 201(cid:24)(cid:11) and that shares(cid:11) (cid:76)hich are reflected in thousands(cid:11) and per share amounts(cid:11) (cid:76)hich are e(cid:77)pressed in (cid:48).S. dollars)(cid:25) (cid:44)otal (cid:38)umber of Shares Purchased (1) Average Price Paid Per Share (1)(2) (cid:44)otal (cid:38)umber of Shares Purchased as Part of Publicly Announced Plans or Programs Appro(cid:74)imate Dollar Value of Shares (cid:44)hat (cid:37)ay Yet Be Purchased (cid:45)nder the Programs (3) (cid:85) $ 11(cid:11)324 3(cid:11)423 1(cid:18),(cid:21)(cid:18)(cid:21) (cid:3) (cid:85) 12.62 13.24 12(cid:12)(cid:21)(cid:20) (cid:85) $ 10(cid:11)324 3(cid:11)423 13,(cid:21)(cid:18)(cid:21) 178 45 (cid:85) Period April 1 (cid:12) 30(cid:11) 2022 (cid:40)ay 1 (cid:12) 31(cid:11) 2022 (cid:37)une 1 (cid:12) 30(cid:11) 2022 (cid:44)otal Includes shares purchased on the open mar(cid:64)et to satisfy the vesting and e(cid:77)ercises of share(cid:12)based compensation a(cid:76)ards. (1) (2) Average price paid per share e(cid:77)cludes costs associated (cid:76)ith the repurchase. (3) On August 17(cid:11) 2021(cid:11) our Board of (cid:31)irectors approved a buybac(cid:64) of $400 million of ordinary shares and(cid:14)or C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is") during the follo(cid:76)ing t(cid:76)elve months. In addition(cid:11) on February 1(cid:11) 2022(cid:11) our Board of (cid:31)irectors approved an additional $200 million buybac(cid:64) of ordinary shares and C(cid:31)Is during the ne(cid:77)t t(cid:76)elve months. Both buybac(cid:64) programs have been completed as of (cid:37)une 30(cid:11) 2022. On August 17(cid:11) 2022(cid:11) our Board of (cid:31)irectors approved a further $400 million buybac(cid:64) of ordinary shares and(cid:14)or C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is") during the ne(cid:77)t t(cid:76)elve months. (cid:47)he timing(cid:11) volume(cid:11) and nature of share repurchases may be amended(cid:11) suspended(cid:11) or discontinued at any time. (cid:47)he line graph belo(cid:76) compares the annual percentage change in Amcor plc(cid:6)s cumulative total shareholder return on its ordinary shares (cid:76)ith the cumulative total return of its (cid:43)eer (cid:34)roup(cid:11) International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup(cid:11) the S(cid:5)(cid:43) 500 Inde(cid:77)(cid:11) and all dividends (cid:76)ere reinvested. (cid:47)he Company has elected to change the composition of the presented peer group from the International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup to a ne(cid:76) (cid:43)eer (cid:34)roup(cid:11) the composition of (cid:76)hich is detailed later in this section. (cid:47)he Company believes that the ne(cid:76) (cid:43)eer (cid:34)roup provides investors (cid:76)ith more relevant information about the Company(cid:6)s total shareholder return and relative performance against comparable companies both in Australia and internationally. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company presents a transition total shareholder return graph that incorporates both (cid:43)eer (cid:34)roup and International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup. June 11, 201(cid:23) June 30, 201(cid:23) June 30, 2020 June 30, 2021 June 30, 2022 100.00 $ 102.77 $ (cid:24)5.68 $ 111.82 $ 126.13 100.00 $ 107.05 $ 115.08 $ 162.03 $ 144.83 100.00 $ 102.08 $ (cid:24)3.5(cid:24) $ 131.41 $ 114.86 100.00 $ 100.12 $ 104.54 $ 124.7(cid:24) $ 126.34 $ $ $ $ $ International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup 100.00 $ 101.55 $ (cid:24)1.28 $ 135.67 $ 114.23 Amcor plc S(cid:5)(cid:43) 500 S(cid:5)(cid:43)(cid:14)AS(cid:51) 200 (cid:43)eer (cid:34)roup 25 Amcor Annual Report 2022 26 2(cid:24) Form 10-K 2(cid:25) PAR(cid:44) II Shareholder Return Performance Item (cid:19)(cid:12) - (cid:37)ar(cid:61)et for Registrant(cid:6)s E(cid:67)uity, Related Stoc(cid:61)holder (cid:37)atters and Issuer Purchases of E(cid:67)uity Securities Our ordinary shares are traded on the (cid:41)e(cid:76) (cid:52)or(cid:64) Stoc(cid:64) E(cid:77)change (the "(cid:41)(cid:52)SE") under the symbol A(cid:40)C(cid:45) and our C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is") are traded on the Australian Securities E(cid:77)change (the "AS(cid:51)") under the symbol A(cid:40)C. As of (cid:37)une 30(cid:11) 2022(cid:11) there (cid:76)ere 105(cid:11)788 registered holders of record of our ordinary shares and C(cid:31)Is. (cid:47)he information under this caption "Shareholder (cid:45)eturn (cid:43)erformance" in this Item 5 of this Annual (cid:45)eport on Form 10(cid:12)(cid:38) is not deemed to be "soliciting material" or to be "filed" (cid:76)ith the SEC or sub(cid:63)ect to (cid:45)egulation 14A or 14C under the E(cid:77)change Act(cid:11) or to the liabilities of Section 18 of the E(cid:77)change Act and (cid:76)ill not be deemed to be incorporated by reference into any filing under the Securities Act of 1(cid:24)33(cid:11) as amended(cid:11) or the E(cid:77)change Act(cid:11) e(cid:77)cept to the e(cid:77)tent (cid:76)e specifically incorporate it by reference into such a filing. (cid:47)he line graph belo(cid:76) compares the annual percentage change in Amcor plc(cid:6)s cumulative total shareholder return on its ordinary shares (cid:76)ith the cumulative total return of its (cid:43)eer (cid:34)roup(cid:11) International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup(cid:11) the S(cid:5)(cid:43) 500 Inde(cid:77)(cid:11) and the AS(cid:51) 200 Inde(cid:77) for the period beginning (cid:37)une 11(cid:11) 201(cid:24). (cid:47)he graph assumes $100 (cid:76)as invested on (cid:37)une 11(cid:11) 201(cid:24)(cid:11) and that all dividends (cid:76)ere reinvested. (cid:47)he Company has elected to change the composition of the presented peer group from the International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup to a ne(cid:76) (cid:43)eer (cid:34)roup(cid:11) the composition of (cid:76)hich is detailed later in this section. (cid:47)he Company believes that the ne(cid:76) (cid:43)eer (cid:34)roup provides investors (cid:76)ith more relevant information about the Company(cid:6)s total shareholder return and relative performance against comparable companies both in Australia and internationally. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company presents a transition total shareholder return graph that incorporates both (cid:43)eer (cid:34)roup and International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup. Share Repurchases Share repurchase activity during the three months ended (cid:37)une 30(cid:11) 2022 (cid:76)as as follo(cid:76)s (in millions(cid:11) e(cid:77)cept number of shares(cid:11) (cid:76)hich are reflected in thousands(cid:11) and per share amounts(cid:11) (cid:76)hich are e(cid:77)pressed in (cid:48).S. dollars)(cid:25) (cid:44)otal (cid:38)umber of Shares Purchased (1) Average Price Paid Per Share (1)(2) (cid:44)otal (cid:38)umber of Shares Purchased as Part of Publicly Appro(cid:74)imate Dollar Value of Shares (cid:44)hat (cid:37)ay Yet Be Announced Plans or Purchased (cid:45)nder the Programs Programs (3) (cid:85) $ 11(cid:11)324 3(cid:11)423 1(cid:18),(cid:21)(cid:18)(cid:21) (cid:3) (cid:85) 12.62 13.24 12(cid:12)(cid:21)(cid:20) (cid:85) $ 10(cid:11)324 3(cid:11)423 13,(cid:21)(cid:18)(cid:21) 178 45 (cid:85) Period April 1 (cid:12) 30(cid:11) 2022 (cid:40)ay 1 (cid:12) 31(cid:11) 2022 (cid:37)une 1 (cid:12) 30(cid:11) 2022 (cid:44)otal (1) Includes shares purchased on the open mar(cid:64)et to satisfy the vesting and e(cid:77)ercises of share(cid:12)based compensation a(cid:76)ards. (2) Average price paid per share e(cid:77)cludes costs associated (cid:76)ith the repurchase. (3) On August 17(cid:11) 2021(cid:11) our Board of (cid:31)irectors approved a buybac(cid:64) of $400 million of ordinary shares and(cid:14)or C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is") during the follo(cid:76)ing t(cid:76)elve months. In addition(cid:11) on February 1(cid:11) 2022(cid:11) our Board of (cid:31)irectors approved an additional $200 million buybac(cid:64) of ordinary shares and C(cid:31)Is during the ne(cid:77)t t(cid:76)elve months. Both buybac(cid:64) programs have been completed as of (cid:37)une 30(cid:11) 2022. On August 17(cid:11) 2022(cid:11) our Board of (cid:31)irectors approved a further $400 million buybac(cid:64) of ordinary shares and(cid:14)or C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is") during the ne(cid:77)t t(cid:76)elve months. (cid:47)he timing(cid:11) volume(cid:11) and nature of share repurchases may be amended(cid:11) suspended(cid:11) or discontinued at any time. Amcor plc S(cid:5)(cid:43) 500 S(cid:5)(cid:43)(cid:14)AS(cid:51) 200 (cid:43)eer (cid:34)roup International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup June 11, 201(cid:23) June 30, 201(cid:23) June 30, 2020 June 30, 2021 June 30, 2022 $ $ $ $ $ 100.00 $ 102.77 $ (cid:24)5.68 $ 111.82 $ 126.13 100.00 $ 107.05 $ 115.08 $ 162.03 $ 144.83 100.00 $ 102.08 $ (cid:24)3.5(cid:24) $ 131.41 $ 114.86 100.00 $ 100.12 $ 104.54 $ 124.7(cid:24) $ 126.34 100.00 $ 101.55 $ (cid:24)1.28 $ 135.67 $ 114.23 25 26 Amcor Annual Report 2022 (cid:47)he (cid:43)eer (cid:34)roup consists of Ansell Limited(cid:11) Aptar(cid:34)roup(cid:11) Inc.(cid:11) Avery (cid:31)ennison Corporation(cid:11) Ball Corporation(cid:11) Berry Item (cid:21)(cid:12) - (cid:37)anagement(cid:6)s Discussion and Analysis of Financial Condition and Results of Operations Form 10-K 2(cid:26) (cid:34)lobal (cid:34)roup(cid:11) Inc.(cid:11) Brambles Limited(cid:11) Coles (cid:34)roup Limited(cid:11) Conagra Brands Inc.(cid:11) Cro(cid:76)n (cid:35)oldings(cid:11) Inc.(cid:11) (cid:31)anone SA(cid:11) (cid:34)eneral (cid:40)ills Inc.(cid:11) (cid:34)raphic (cid:43)ac(cid:64)aging (cid:35)olding Co(cid:11) (cid:35)uhtama(cid:64)i Oy(cid:63)(cid:11) International (cid:43)aper Company(cid:11) (cid:37)ohnson (cid:5) (cid:37)ohnson(cid:11) (cid:47)he (cid:38)raft (cid:35)ein(cid:79) Company(cid:11) (cid:40)ondele(cid:79) International(cid:11) Inc.(cid:11) (cid:41)estl(cid:80) S.A.(cid:11) O(cid:12)I (cid:34)lass(cid:11) Inc.(cid:11) Orora Limited(cid:11) (cid:43)epsico(cid:11) Inc.(cid:11) (cid:47)he (cid:43)rocter (cid:5) (cid:34)amble Company(cid:11) Sealed Air Corporation(cid:11) Silgan (cid:35)oldings Inc.(cid:11) Sonoco (cid:43)roducts Company(cid:11) (cid:47)reasury (cid:50)ine Estates Limited(cid:11) (cid:48)nilever (cid:43)LC(cid:11) (cid:50)esfarmers Limited(cid:11) (cid:50)est(cid:45)oc(cid:64) Company(cid:11) and (cid:50)ool(cid:76)orths (cid:34)roup Limited. (cid:47)he International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup consists of Aptar(cid:34)roup(cid:11) Inc.(cid:11) Ball Corporation(cid:11) Berry (cid:34)lobal (cid:34)roup(cid:11) Inc.(cid:11) CCL Industries Inc.(cid:11) Cro(cid:76)n (cid:35)oldings(cid:11) Inc.(cid:11) (cid:34)raphic (cid:43)ac(cid:64)aging (cid:35)olding Company(cid:11) (cid:35)uhtama(cid:64)i Oy(cid:63)(cid:11) International (cid:43)aper Company(cid:11) (cid:40)ayr(cid:12)(cid:40)elnhof (cid:38)arton A(cid:34)(cid:11) O(cid:12)I (cid:34)lass(cid:11) Inc.(cid:11) Sealed Air Corporation(cid:11) Silgan (cid:35)oldings Inc.(cid:11) Sonoco (cid:43)roducts Company(cid:11) and (cid:50)est(cid:45)oc(cid:64) Company. (cid:47)he International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup has been replaced by the (cid:43)eer (cid:34)roup and (cid:76)ill not be published in future Annual (cid:45)eports on Form 10(cid:12)(cid:38). (cid:27)anagement(cid:60)(cid:53) (cid:18)(cid:44)(cid:53)(cid:38)(cid:55)(cid:53)(cid:53)(cid:44)on and (cid:16)nal(cid:59)(cid:53)(cid:44)(cid:53) (cid:53)(cid:43)o(cid:55)ld (cid:37)e read (cid:44)n (cid:38)on(cid:45)(cid:55)n(cid:38)t(cid:44)on w(cid:44)t(cid:43) t(cid:43)e Con(cid:53)ol(cid:44)dated F(cid:44)nan(cid:38)(cid:44)al (cid:32)tatement(cid:53) and related (cid:28)ote(cid:53) (cid:44)n(cid:38)l(cid:55)ded (cid:44)n Item (cid:15) o(cid:41) t(cid:43)(cid:44)(cid:53) (cid:16)nn(cid:55)al (cid:31)e(cid:51)ort on Form (cid:10)(cid:9)-(cid:25)(cid:7) (cid:44)wo Year Review of Results (in millions) (cid:41)et sales Cost of sales (cid:34)ross profit Operating e(cid:77)penses(cid:25) Selling(cid:11) general(cid:11) and administrative e(cid:77)penses (cid:45)esearch and development e(cid:77)penses (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net Other income(cid:11) net Operating income Interest income Interest e(cid:77)pense Other non(cid:12)operating income(cid:11) net 2022 2021 $ 14(cid:11)544 100.0 (cid:4) $ 12(cid:11)861 100.0 (cid:4) (11(cid:11)724) (80.6) (10(cid:11)12(cid:24)) (78.8) 2(cid:11)820 1(cid:24).4 2(cid:11)732 21.2 (1(cid:11)284) ((cid:24)6) (234) 33 (8.8) (0.7) (1.6) 0.2 (1(cid:11)2(cid:24)2) (10.0) (100) ((cid:24)4) 75 (0.8) (0.7) 0.6 1(cid:11)23(cid:24) 8.5 1(cid:11)321 10.3 24 (15(cid:24)) 11 0.2 (1.1) 0.1 14 (153) 11 0.1 (1.2) 0.1 Income from continuing operations before income ta(cid:77)es and equity in income(cid:14) (loss) of affiliated companies 1(cid:11)115 7.7 1(cid:11)1(cid:24)3 (cid:24).3 Income ta(cid:77) e(cid:77)pense Equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77) (300) (cid:85) (2.1) (cid:85) (261) 1(cid:24) (2.0) 0.1 (cid:38)et income (cid:3) (cid:22)1(cid:19) (cid:19)(cid:12)(cid:20) (cid:4) (cid:3) (cid:23)(cid:19)1 (cid:21)(cid:12)(cid:18) (cid:4) (cid:41)et income attributable to non(cid:12)controlling interests (10) (0.1) (12) (0.1) (cid:38)et income attributable to Amcor plc (cid:3) (cid:22)0(cid:19) (cid:19)(cid:12)(cid:19) (cid:4) (cid:3) (cid:23)3(cid:23) (cid:21)(cid:12)3 (cid:4) 27 Amcor Annual Report 2022 28 (cid:47)he (cid:43)eer (cid:34)roup consists of Ansell Limited(cid:11) Aptar(cid:34)roup(cid:11) Inc.(cid:11) Avery (cid:31)ennison Corporation(cid:11) Ball Corporation(cid:11) Berry Item (cid:21)(cid:12) - (cid:37)anagement(cid:6)s Discussion and Analysis of Financial Condition and Results of Operations (cid:34)lobal (cid:34)roup(cid:11) Inc.(cid:11) Brambles Limited(cid:11) Coles (cid:34)roup Limited(cid:11) Conagra Brands Inc.(cid:11) Cro(cid:76)n (cid:35)oldings(cid:11) Inc.(cid:11) (cid:31)anone SA(cid:11) (cid:34)eneral (cid:40)ills Inc.(cid:11) (cid:34)raphic (cid:43)ac(cid:64)aging (cid:35)olding Co(cid:11) (cid:35)uhtama(cid:64)i Oy(cid:63)(cid:11) International (cid:43)aper Company(cid:11) (cid:37)ohnson (cid:5) (cid:37)ohnson(cid:11) (cid:47)he (cid:38)raft (cid:35)ein(cid:79) Company(cid:11) (cid:40)ondele(cid:79) International(cid:11) Inc.(cid:11) (cid:41)estl(cid:80) S.A.(cid:11) O(cid:12)I (cid:34)lass(cid:11) Inc.(cid:11) Orora Limited(cid:11) (cid:43)epsico(cid:11) Inc.(cid:11) (cid:47)he (cid:43)rocter (cid:5) (cid:34)amble Company(cid:11) Sealed Air Corporation(cid:11) Silgan (cid:35)oldings Inc.(cid:11) Sonoco (cid:43)roducts Company(cid:11) (cid:47)reasury (cid:50)ine Estates Limited(cid:11) (cid:48)nilever (cid:27)anagement(cid:60)(cid:53) (cid:18)(cid:44)(cid:53)(cid:38)(cid:55)(cid:53)(cid:53)(cid:44)on and (cid:16)nal(cid:59)(cid:53)(cid:44)(cid:53) (cid:53)(cid:43)o(cid:55)ld (cid:37)e read (cid:44)n (cid:38)on(cid:45)(cid:55)n(cid:38)t(cid:44)on w(cid:44)t(cid:43) t(cid:43)e Con(cid:53)ol(cid:44)dated F(cid:44)nan(cid:38)(cid:44)al (cid:32)tatement(cid:53) and related (cid:28)ote(cid:53) (cid:44)n(cid:38)l(cid:55)ded (cid:44)n Item (cid:15) o(cid:41) t(cid:43)(cid:44)(cid:53) (cid:16)nn(cid:55)al (cid:31)e(cid:51)ort on Form (cid:10)(cid:9)-(cid:25)(cid:7) 2(cid:26) Form 10-K 2(cid:27) (cid:43)LC(cid:11) (cid:50)esfarmers Limited(cid:11) (cid:50)est(cid:45)oc(cid:64) Company(cid:11) and (cid:50)ool(cid:76)orths (cid:34)roup Limited. (cid:44)wo Year Review of Results (cid:47)he International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup consists of Aptar(cid:34)roup(cid:11) Inc.(cid:11) Ball Corporation(cid:11) Berry (cid:34)lobal (cid:34)roup(cid:11) Inc.(cid:11) CCL Industries Inc.(cid:11) Cro(cid:76)n (cid:35)oldings(cid:11) Inc.(cid:11) (cid:34)raphic (cid:43)ac(cid:64)aging (cid:35)olding Company(cid:11) (cid:35)uhtama(cid:64)i Oy(cid:63)(cid:11) International (cid:43)aper Company(cid:11) (cid:40)ayr(cid:12)(cid:40)elnhof (cid:38)arton A(cid:34)(cid:11) O(cid:12)I (cid:34)lass(cid:11) Inc.(cid:11) Sealed Air Corporation(cid:11) Silgan (cid:35)oldings Inc.(cid:11) Sonoco (cid:43)roducts Company(cid:11) and (cid:50)est(cid:45)oc(cid:64) Company. (cid:47)he International (cid:43)ac(cid:64)aging (cid:43)eer (cid:34)roup has been replaced by the (cid:43)eer (cid:34)roup and (cid:76)ill not be published in future Annual (cid:45)eports on Form 10(cid:12)(cid:38). (in millions) (cid:41)et sales Cost of sales (cid:34)ross profit Operating e(cid:77)penses(cid:25) Selling(cid:11) general(cid:11) and administrative e(cid:77)penses (cid:45)esearch and development e(cid:77)penses (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net Other income(cid:11) net Operating income Interest income Interest e(cid:77)pense Other non(cid:12)operating income(cid:11) net 2022 2021 $ 14(cid:11)544 100.0 (cid:4) $ 12(cid:11)861 100.0 (cid:4) (11(cid:11)724) (80.6) (10(cid:11)12(cid:24)) (78.8) 2(cid:11)820 1(cid:24).4 2(cid:11)732 21.2 (1(cid:11)284) ((cid:24)6) (234) 33 (8.8) (0.7) (1.6) 0.2 (1(cid:11)2(cid:24)2) (10.0) (100) ((cid:24)4) 75 (0.8) (0.7) 0.6 1(cid:11)23(cid:24) 8.5 1(cid:11)321 10.3 24 (15(cid:24)) 11 0.2 (1.1) 0.1 14 (153) 11 0.1 (1.2) 0.1 Income from continuing operations before income ta(cid:77)es and equity in income(cid:14) (loss) of affiliated companies 1(cid:11)115 7.7 1(cid:11)1(cid:24)3 (cid:24).3 Income ta(cid:77) e(cid:77)pense Equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77) (300) (cid:85) (2.1) (cid:85) (261) 1(cid:24) (2.0) 0.1 (cid:38)et income (cid:3) (cid:22)1(cid:19) (cid:19)(cid:12)(cid:20) (cid:4) (cid:3) (cid:23)(cid:19)1 (cid:21)(cid:12)(cid:18) (cid:4) (cid:41)et income attributable to non(cid:12)controlling interests (10) (0.1) (12) (0.1) (cid:38)et income attributable to Amcor plc (cid:3) (cid:22)0(cid:19) (cid:19)(cid:12)(cid:19) (cid:4) (cid:3) (cid:23)3(cid:23) (cid:21)(cid:12)3 (cid:4) 27 28 Amcor Annual Report 2022 Form 10-K 2(cid:28) Overview Amcor is a global leader in developing and producing responsible pac(cid:64)aging for food(cid:11) beverage(cid:11) pharmaceutical(cid:11) medical(cid:11) home and personal(cid:12)care(cid:11) and other products. (cid:50)e (cid:76)or(cid:64) (cid:76)ith leading companies around the (cid:76)orld to protect their products and the people (cid:76)ho rely on them(cid:11) differentiate brands(cid:11) and improve supply chains through a range of fle(cid:77)ible and rigid pac(cid:64)aging(cid:11) specialty cartons(cid:11) closures(cid:11) and services. (cid:50)e are focused on ma(cid:64)ing pac(cid:64)aging that is increasingly light(cid:12)(cid:76)eighted(cid:11) recyclable and reusable(cid:11) and made using an increasing amount of recycled content. (cid:31)uring fiscal year 2022(cid:11) Amcor generated $14.5 billion in sales from operations that spanned 221 locations in over 40 countries. Since our decision in (cid:40)arch 2022 to scale bac(cid:64) our (cid:45)ussian operations(cid:11) (cid:76)e have remained committed to continuing to support our (cid:45)ussian and (cid:48)(cid:64)raine employees and customers. (cid:50)e are proactively ta(cid:64)ing steps to mitigate the financial impact of e(cid:77)iting our (cid:45)ussian operations(cid:11) including ad(cid:63)usting our European footprint to reallocate and consolidate volumes from (cid:45)ussia and (cid:48)(cid:64)raine to leverage utili(cid:79)ation and deliver enhanced efficiencies across Central and (cid:50)estern Europe(cid:11) as (cid:76)ell as ta(cid:64)ing actions to restructure our regional cost base. In addition to the $(cid:24)0 million in impairment charges on assets held for sale(cid:11) (cid:76)e incurred $48 million in other impairment charges given the e(cid:77)pectation that certain assets not held for sale in the conflict region (cid:76)ill not be recoverable(cid:11) and $62 million in restructuring and other costs in the fourth quarter of fiscal year 2022 related to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict. (cid:50)e e(cid:77)pect appro(cid:77)imately $30 million in additional restructuring and other costs in fiscal year 2023 Significant Items Affecting the Periods Presented (cid:23)m(cid:52)a(cid:39)(cid:56) of (cid:17)(cid:29)(cid:35)(cid:23)(cid:18)(cid:7)(cid:11)(cid:14) (cid:50)e continue to monitor the impact of the ongoing 201(cid:24) (cid:41)ovel Coronavirus ("CO(cid:49)I(cid:31)(cid:12)1(cid:24)") pandemic on all aspects of our business. (cid:47)he CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic has resulted in intermittent regional government restrictions on the movement of people(cid:11) goods(cid:11) and non(cid:12)essential services resulting in a period of historic uncertainty and challenges. (cid:50)e remain focused on our commitment to the health and safety of our employees as our first priority. (cid:50)e e(cid:77)pect to continue to evaluate our response and related precautions until the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic has been fully resolved as a public health crisis. (cid:50)e have e(cid:77)perienced minimal disruptions to our operations to date as (cid:76)e have largely been deemed as providing essential services. Our facilities have largely been e(cid:77)empt from government mandated closure orders and (cid:76)hile governmental measures may be modified(cid:11) (cid:76)e e(cid:77)pect that our facilities (cid:76)ill remain operational given the essential products (cid:76)e supply. (cid:35)o(cid:76)ever(cid:11) despite our best efforts to contain the impact in our facilities(cid:11) it remains possible that significant disruptions could occur as a result of the pandemic(cid:11) including temporary closures of our facilities due to outbrea(cid:64)s of the virus among our (cid:76)or(cid:64)force or government mandates. (cid:50)e continue to believe (cid:76)e are (cid:76)ell(cid:12)positioned to meet the challenges of the ongoing CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic. (cid:35)o(cid:76)ever(cid:11) (cid:76)e cannot reasonably estimate the duration and severity of this pandemic or its ultimate impact on the global economy and our operations and financial results. (cid:47)he ultimate near(cid:12)term impact of the pandemic on our business (cid:76)ill depend on the e(cid:77)tent and nature of any future disruptions across the supply chain(cid:11) the implementation of further social distancing measures and other government(cid:12)imposed restrictions(cid:11) as (cid:76)ell as the nature and pace of macroeconomic recovery in (cid:64)ey global economies. Raw (cid:27)a(cid:56)eria(cid:48)(cid:6) (cid:23)(cid:50)f(cid:48)a(cid:56)io(cid:50)(cid:6) a(cid:50)(cid:40) S(cid:57)(cid:52)(cid:52)(cid:48)(cid:61) (cid:17)(cid:44)ai(cid:50) Tre(cid:50)(cid:40)s (cid:31)uring fiscal year 2022(cid:11) (cid:76)e e(cid:77)perienced persistent supply shortages and price volatility of certain resins and ra(cid:76) materials in both of our reportable segments as a result of mar(cid:64)et dynamics that first materiali(cid:79)ed in the second half of fiscal year 2021 and higher rates of regional inflation impacting energy(cid:11) fuel(cid:11) and labor costs. (cid:47)he underlying causes for the volatility can be attributed to a variety of factors(cid:11) including the ongoing impacts of the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic resulting in labor shortages and transportation constraints(cid:11) energy shortages and (cid:76)eather disruptions impacting ra(cid:76) material supply in certain regions. (cid:47)he comple(cid:77) factors driving ongoing mar(cid:64)et volatility continue and could be further e(cid:77)acerbated by the continuation of the (cid:45)ussia(cid:12) (cid:48)(cid:64)raine conflict. (cid:50)e intend to continue to (cid:76)or(cid:64) closely (cid:76)ith our suppliers and customers(cid:11) leveraging our global capabilities and e(cid:77)pertise to (cid:76)or(cid:64) through supply and other resulting issues. So(cid:57)(cid:56)(cid:44) (cid:15)fri(cid:39)a (cid:20)ire On (cid:37)uly 13(cid:11) 2021(cid:11) our (cid:31)urban(cid:11) South Africa(cid:11) manufacturing facility (cid:76)as destroyed by fire associated (cid:76)ith general civil unrest. (cid:47)he facility employed 350 individuals and no employees (cid:76)ere in(cid:63)ured as the facility had been closed in advance of the disturbance. In fiscal year 2022(cid:11) (cid:76)e recorded $45 million in e(cid:77)pense before insurance settlements(cid:11) primarily related to inventory(cid:11) property(cid:11) and equipment losses from the fire and other related e(cid:77)penses. (cid:50)e have insurance for the ma(cid:63)ority of property and other losses resulting from the fire and have received $33 million in insurance settlements in fiscal year 2022. R(cid:57)ssia(cid:7)(cid:34)(cid:47)rai(cid:50)e (cid:17)o(cid:50)f(cid:48)i(cid:39)(cid:56) (cid:22)i(cid:43)(cid:44)(cid:48)(cid:61) (cid:23)(cid:50)f(cid:48)a(cid:56)io(cid:50)ar(cid:61) (cid:15)(cid:39)(cid:39)o(cid:57)(cid:50)(cid:56)i(cid:50)(cid:43) (cid:45)ussia(cid:6)s invasion of (cid:48)(cid:64)raine that began in February 2022 continues as of the date of the filing of this annual report. In advance of the invasion(cid:11) (cid:76)e proactively suspended operations at our small manufacturing site in (cid:48)(cid:64)raine. (cid:50)e also operate three manufacturing facilities in (cid:45)ussia. In the fourth quarter of fiscal year 2022(cid:11) after a thorough revie(cid:76) of our strategic options(cid:11) (cid:76)e committed to sell our (cid:45)ussian operations(cid:11) (cid:76)hich resulted in a non(cid:12)cash $(cid:24)0 million impairment charge. 2(cid:24) Amcor Annual Report 2022 30 For further information(cid:11) refer to (cid:41)ote 4(cid:11) "(cid:45)estructuring(cid:11) Impairment(cid:11) and (cid:45)elated E(cid:77)penses(cid:11) net(cid:11)" (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations(cid:11)" and (cid:41)ote 7(cid:11) "(cid:45)estructuring" of "(cid:43)art II(cid:11) Item 8(cid:11) (cid:41)otes to Consolidated Financial related to our e(cid:77)it decision. Statements." (cid:12)(cid:10)(cid:11)(cid:14) (cid:16)emis (cid:23)(cid:50)(cid:56)e(cid:43)ra(cid:56)io(cid:50) (cid:30)(cid:48)a(cid:50) In connection (cid:76)ith the acquisition of Bemis Company(cid:11) Inc. ("Bemis")(cid:11) (cid:76)e initiated restructuring activities in the fourth quarter of 201(cid:24) aimed at integrating and optimi(cid:79)ing the combined organi(cid:79)ation. (cid:50)e have e(cid:77)ceeded the targeted pre(cid:12)ta(cid:77) synergies of $180 million by appro(cid:77)imately 10(cid:4) driven by procurement(cid:11) supply chain and general and administrative savings as of (cid:37)une 30(cid:11) 2022. (cid:47)he 201(cid:24) Bemis Integration (cid:43)lan (cid:76)as completed by (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ith final pre(cid:12)ta(cid:77) integration cost amounting to $253 million. (cid:47)he total 201(cid:24) Bemis Integration (cid:43)lan cost includes $213 million of restructuring and related e(cid:77)penses(cid:11) net(cid:11) and $40 million of general integration e(cid:77)penses. (cid:47)he net cash e(cid:77)penditures for the plan(cid:11) including disposal proceeds(cid:11) are $170 million(cid:11) of (cid:76)hich $40 million relates to general integration e(cid:77)penses. As part of this (cid:43)lan(cid:11) (cid:76)e have incurred $144 million in employee related e(cid:77)penses(cid:11) $36 million in fi(cid:77)ed asset related e(cid:77)penses(cid:11) $3(cid:24) million in other restructuring and $45 million in restructuring related e(cid:77)penses(cid:11) partially offset by a gain on disposal of a business of $51 million. In fiscal year 2022(cid:11) the (cid:43)lan resulted in net cash outflo(cid:76)s of $4(cid:24) million of (cid:76)hich $47 million (cid:76)ere payments related to restructuring and related e(cid:77)penditures. (cid:47)he remaining cash outflo(cid:76) (cid:76)ill be primarily incurred in fiscal year 2023. (cid:12)(cid:10)(cid:11)(cid:13) Ri(cid:43)i(cid:40) (cid:30)a(cid:39)(cid:47)a(cid:43)i(cid:50)(cid:43) Res(cid:56)r(cid:57)(cid:39)(cid:56)(cid:57)ri(cid:50)(cid:43) (cid:30)(cid:48)a(cid:50) On August 21(cid:11) 2018(cid:11) (cid:76)e announced a restructuring plan in Amcor (cid:45)igid (cid:43)ac(cid:64)aging ("2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan") aimed at reducing structural costs and optimi(cid:79)ing the footprint. (cid:47)he (cid:43)lan included the closures of manufacturing facilities and headcount reductions to achieve manufacturing footprint optimi(cid:79)ation and productivity improvements(cid:11) as (cid:76)ell as overhead cost reductions. (cid:47)he 2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan (cid:76)as completed by (cid:37)une 30(cid:11) 2021 (cid:76)ith total pre(cid:12)ta(cid:77) restructuring costs of $121 million(cid:11) of (cid:76)hich $78 million resulted in cash e(cid:77)penditures(cid:11) (cid:76)ith the main component being the cost to e(cid:77)it manufacturing facilities and employee related costs. For more information about our restructuring plans(cid:11) refer to (cid:41)ote 7(cid:11) "(cid:45)estructuring." (cid:19)(cid:53)(cid:57)i(cid:56)(cid:61) (cid:27)e(cid:56)(cid:44)o(cid:40) (cid:23)(cid:50)(cid:58)es(cid:56)me(cid:50)(cid:56) (cid:7) (cid:15)(cid:27)(cid:35)(cid:23)(cid:21) (cid:22)o(cid:48)(cid:40)i(cid:50)(cid:43)s (cid:26)imi(cid:56)e(cid:40) (cid:4)(cid:2)(cid:15)(cid:27)(cid:35)(cid:23)(cid:21)(cid:2)(cid:5) (cid:50)e sold our equity method investment in A(cid:40)(cid:49)I(cid:34) on September 30(cid:11) 2020(cid:11) reali(cid:79)ing a net gain of $15 million(cid:11) (cid:76)hich (cid:76)as recorded in equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77) in the consolidated statements of income. (cid:43)rior to the sale and due to impairment indicators being present for the year ended (cid:37)une 30(cid:11) 2020(cid:11) (cid:76)e performed impairment tests by comparing the carrying value of our investment in A(cid:40)(cid:49)I(cid:34) to the fair value of the investment(cid:11) (cid:76)hich (cid:76)as determined based on A(cid:40)(cid:49)I(cid:34)(cid:6)s quoted share price. (cid:50)e recorded an impairment charge of $26 million in fiscal year 2020(cid:11) as the fair value of the investment (cid:76)as belo(cid:76) its carrying value. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments." (cid:50)e have subsidiaries in Argentina that historically had a functional currency of the Argentine (cid:43)eso. As of (cid:37)une 30(cid:11) 2018(cid:11) the Argentine economy (cid:76)as designated as highly inflationary for accounting purposes. Accordingly(cid:11) beginning (cid:37)uly 1(cid:11) 2018(cid:11) (cid:76)e began reporting the financial results of our Argentine subsidiaries (cid:76)ith a functional currency of the (cid:48).S. dollar. (cid:47)he transition to highly inflationary accounting resulted in a negative impact on monetary balances of $16 million(cid:11) $1(cid:24) million(cid:11) and $28 million that (cid:76)as reflected in the consolidated statements of income for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. 2(cid:28) Form 10-K (cid:22)0 Overview Amcor is a global leader in developing and producing responsible pac(cid:64)aging for food(cid:11) beverage(cid:11) pharmaceutical(cid:11) medical(cid:11) home and personal(cid:12)care(cid:11) and other products. (cid:50)e (cid:76)or(cid:64) (cid:76)ith leading companies around the (cid:76)orld to protect their products and the people (cid:76)ho rely on them(cid:11) differentiate brands(cid:11) and improve supply chains through a range of fle(cid:77)ible and rigid pac(cid:64)aging(cid:11) specialty cartons(cid:11) closures(cid:11) and services. (cid:50)e are focused on ma(cid:64)ing pac(cid:64)aging that is increasingly light(cid:12)(cid:76)eighted(cid:11) recyclable and reusable(cid:11) and made using an increasing amount of recycled content. (cid:31)uring fiscal year 2022(cid:11) Amcor generated $14.5 billion in sales from operations that spanned 221 locations in over 40 countries. Significant Items Affecting the Periods Presented (cid:23)m(cid:52)a(cid:39)(cid:56) of (cid:17)(cid:29)(cid:35)(cid:23)(cid:18)(cid:7)(cid:11)(cid:14) (cid:50)e continue to monitor the impact of the ongoing 201(cid:24) (cid:41)ovel Coronavirus ("CO(cid:49)I(cid:31)(cid:12)1(cid:24)") pandemic on all aspects of our business. (cid:47)he CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic has resulted in intermittent regional government restrictions on the movement of people(cid:11) goods(cid:11) and non(cid:12)essential services resulting in a period of historic uncertainty and challenges. (cid:50)e remain focused on our commitment to the health and safety of our employees as our first priority. (cid:50)e e(cid:77)pect to continue to evaluate our response and related precautions until the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic has been fully resolved as a public health crisis. (cid:50)e have e(cid:77)perienced minimal disruptions to our operations to date as (cid:76)e have largely been deemed as providing essential services. Our facilities have largely been e(cid:77)empt from government mandated closure orders and (cid:76)hile governmental measures may be modified(cid:11) (cid:76)e e(cid:77)pect that our facilities (cid:76)ill remain operational given the essential products (cid:76)e supply. (cid:35)o(cid:76)ever(cid:11) despite our best efforts to contain the impact in our facilities(cid:11) it remains possible that significant disruptions could occur as a result of the pandemic(cid:11) including temporary closures of our facilities due to outbrea(cid:64)s of the virus among our (cid:76)or(cid:64)force or government mandates. (cid:50)e continue to believe (cid:76)e are (cid:76)ell(cid:12)positioned to meet the challenges of the ongoing CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic. (cid:35)o(cid:76)ever(cid:11) (cid:76)e cannot reasonably estimate the duration and severity of this pandemic or its ultimate impact on the global economy and our operations and financial results. (cid:47)he ultimate near(cid:12)term impact of the pandemic on our business (cid:76)ill depend on the e(cid:77)tent and nature of any future disruptions across the supply chain(cid:11) the implementation of further social distancing measures and other government(cid:12)imposed restrictions(cid:11) as (cid:76)ell as the nature and pace of macroeconomic recovery in (cid:64)ey global economies. Raw (cid:27)a(cid:56)eria(cid:48)(cid:6) (cid:23)(cid:50)f(cid:48)a(cid:56)io(cid:50)(cid:6) a(cid:50)(cid:40) S(cid:57)(cid:52)(cid:52)(cid:48)(cid:61) (cid:17)(cid:44)ai(cid:50) Tre(cid:50)(cid:40)s (cid:31)uring fiscal year 2022(cid:11) (cid:76)e e(cid:77)perienced persistent supply shortages and price volatility of certain resins and ra(cid:76) materials in both of our reportable segments as a result of mar(cid:64)et dynamics that first materiali(cid:79)ed in the second half of fiscal year 2021 and higher rates of regional inflation impacting energy(cid:11) fuel(cid:11) and labor costs. (cid:47)he underlying causes for the volatility can be attributed to a variety of factors(cid:11) including the ongoing impacts of the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic resulting in labor shortages and transportation constraints(cid:11) energy shortages and (cid:76)eather disruptions impacting ra(cid:76) material supply in certain regions. (cid:47)he comple(cid:77) factors driving ongoing mar(cid:64)et volatility continue and could be further e(cid:77)acerbated by the continuation of the (cid:45)ussia(cid:12) (cid:48)(cid:64)raine conflict. (cid:50)e intend to continue to (cid:76)or(cid:64) closely (cid:76)ith our suppliers and customers(cid:11) leveraging our global capabilities and e(cid:77)pertise to (cid:76)or(cid:64) through supply and other resulting issues. So(cid:57)(cid:56)(cid:44) (cid:15)fri(cid:39)a (cid:20)ire R(cid:57)ssia(cid:7)(cid:34)(cid:47)rai(cid:50)e (cid:17)o(cid:50)f(cid:48)i(cid:39)(cid:56) On (cid:37)uly 13(cid:11) 2021(cid:11) our (cid:31)urban(cid:11) South Africa(cid:11) manufacturing facility (cid:76)as destroyed by fire associated (cid:76)ith general civil unrest. (cid:47)he facility employed 350 individuals and no employees (cid:76)ere in(cid:63)ured as the facility had been closed in advance of the disturbance. In fiscal year 2022(cid:11) (cid:76)e recorded $45 million in e(cid:77)pense before insurance settlements(cid:11) primarily related to inventory(cid:11) property(cid:11) and equipment losses from the fire and other related e(cid:77)penses. (cid:50)e have insurance for the ma(cid:63)ority of property and other losses resulting from the fire and have received $33 million in insurance settlements in fiscal year 2022. (cid:45)ussia(cid:6)s invasion of (cid:48)(cid:64)raine that began in February 2022 continues as of the date of the filing of this annual report. In advance of the invasion(cid:11) (cid:76)e proactively suspended operations at our small manufacturing site in (cid:48)(cid:64)raine. (cid:50)e also operate three manufacturing facilities in (cid:45)ussia. In the fourth quarter of fiscal year 2022(cid:11) after a thorough revie(cid:76) of our strategic options(cid:11) (cid:76)e committed to sell our (cid:45)ussian operations(cid:11) (cid:76)hich resulted in a non(cid:12)cash $(cid:24)0 million impairment charge. Since our decision in (cid:40)arch 2022 to scale bac(cid:64) our (cid:45)ussian operations(cid:11) (cid:76)e have remained committed to continuing to support our (cid:45)ussian and (cid:48)(cid:64)raine employees and customers. (cid:50)e are proactively ta(cid:64)ing steps to mitigate the financial impact of e(cid:77)iting our (cid:45)ussian operations(cid:11) including ad(cid:63)usting our European footprint to reallocate and consolidate volumes from (cid:45)ussia and (cid:48)(cid:64)raine to leverage utili(cid:79)ation and deliver enhanced efficiencies across Central and (cid:50)estern Europe(cid:11) as (cid:76)ell as ta(cid:64)ing actions to restructure our regional cost base. In addition to the $(cid:24)0 million in impairment charges on assets held for sale(cid:11) (cid:76)e incurred $48 million in other impairment charges given the e(cid:77)pectation that certain assets not held for sale in the conflict region (cid:76)ill not be recoverable(cid:11) and $62 million in restructuring and other costs in the fourth quarter of fiscal year 2022 related to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict. (cid:50)e e(cid:77)pect appro(cid:77)imately $30 million in additional restructuring and other costs in fiscal year 2023 related to our e(cid:77)it decision. For further information(cid:11) refer to (cid:41)ote 4(cid:11) "(cid:45)estructuring(cid:11) Impairment(cid:11) and (cid:45)elated E(cid:77)penses(cid:11) net(cid:11)" (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations(cid:11)" and (cid:41)ote 7(cid:11) "(cid:45)estructuring" of "(cid:43)art II(cid:11) Item 8(cid:11) (cid:41)otes to Consolidated Financial Statements." (cid:12)(cid:10)(cid:11)(cid:14) (cid:16)emis (cid:23)(cid:50)(cid:56)e(cid:43)ra(cid:56)io(cid:50) (cid:30)(cid:48)a(cid:50) In connection (cid:76)ith the acquisition of Bemis Company(cid:11) Inc. ("Bemis")(cid:11) (cid:76)e initiated restructuring activities in the fourth quarter of 201(cid:24) aimed at integrating and optimi(cid:79)ing the combined organi(cid:79)ation. (cid:50)e have e(cid:77)ceeded the targeted pre(cid:12)ta(cid:77) synergies of $180 million by appro(cid:77)imately 10(cid:4) driven by procurement(cid:11) supply chain and general and administrative savings as of (cid:37)une 30(cid:11) 2022. (cid:47)he 201(cid:24) Bemis Integration (cid:43)lan (cid:76)as completed by (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ith final pre(cid:12)ta(cid:77) integration cost amounting to $253 million. (cid:47)he total 201(cid:24) Bemis Integration (cid:43)lan cost includes $213 million of restructuring and related e(cid:77)penses(cid:11) net(cid:11) and $40 million of general integration e(cid:77)penses. (cid:47)he net cash e(cid:77)penditures for the plan(cid:11) including disposal proceeds(cid:11) are $170 million(cid:11) of (cid:76)hich $40 million relates to general integration e(cid:77)penses. As part of this (cid:43)lan(cid:11) (cid:76)e have incurred $144 million in employee related e(cid:77)penses(cid:11) $36 million in fi(cid:77)ed asset related e(cid:77)penses(cid:11) $3(cid:24) million in other restructuring and $45 million in restructuring related e(cid:77)penses(cid:11) partially offset by a gain on disposal of a business of $51 million. In fiscal year 2022(cid:11) the (cid:43)lan resulted in net cash outflo(cid:76)s of $4(cid:24) million of (cid:76)hich $47 million (cid:76)ere payments related to restructuring and related e(cid:77)penditures. (cid:47)he remaining cash outflo(cid:76) (cid:76)ill be primarily incurred in fiscal year 2023. (cid:12)(cid:10)(cid:11)(cid:13) Ri(cid:43)i(cid:40) (cid:30)a(cid:39)(cid:47)a(cid:43)i(cid:50)(cid:43) Res(cid:56)r(cid:57)(cid:39)(cid:56)(cid:57)ri(cid:50)(cid:43) (cid:30)(cid:48)a(cid:50) On August 21(cid:11) 2018(cid:11) (cid:76)e announced a restructuring plan in Amcor (cid:45)igid (cid:43)ac(cid:64)aging ("2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan") aimed at reducing structural costs and optimi(cid:79)ing the footprint. (cid:47)he (cid:43)lan included the closures of manufacturing facilities and headcount reductions to achieve manufacturing footprint optimi(cid:79)ation and productivity improvements(cid:11) as (cid:76)ell as overhead cost reductions. (cid:47)he 2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan (cid:76)as completed by (cid:37)une 30(cid:11) 2021 (cid:76)ith total pre(cid:12)ta(cid:77) restructuring costs of $121 million(cid:11) of (cid:76)hich $78 million resulted in cash e(cid:77)penditures(cid:11) (cid:76)ith the main component being the cost to e(cid:77)it manufacturing facilities and employee related costs. For more information about our restructuring plans(cid:11) refer to (cid:41)ote 7(cid:11) "(cid:45)estructuring." (cid:19)(cid:53)(cid:57)i(cid:56)(cid:61) (cid:27)e(cid:56)(cid:44)o(cid:40) (cid:23)(cid:50)(cid:58)es(cid:56)me(cid:50)(cid:56) (cid:7) (cid:15)(cid:27)(cid:35)(cid:23)(cid:21) (cid:22)o(cid:48)(cid:40)i(cid:50)(cid:43)s (cid:26)imi(cid:56)e(cid:40) (cid:4)(cid:2)(cid:15)(cid:27)(cid:35)(cid:23)(cid:21)(cid:2)(cid:5) (cid:50)e sold our equity method investment in A(cid:40)(cid:49)I(cid:34) on September 30(cid:11) 2020(cid:11) reali(cid:79)ing a net gain of $15 million(cid:11) (cid:76)hich (cid:76)as recorded in equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77) in the consolidated statements of income. (cid:43)rior to the sale and due to impairment indicators being present for the year ended (cid:37)une 30(cid:11) 2020(cid:11) (cid:76)e performed impairment tests by comparing the carrying value of our investment in A(cid:40)(cid:49)I(cid:34) to the fair value of the investment(cid:11) (cid:76)hich (cid:76)as determined based on A(cid:40)(cid:49)I(cid:34)(cid:6)s quoted share price. (cid:50)e recorded an impairment charge of $26 million in fiscal year 2020(cid:11) as the fair value of the investment (cid:76)as belo(cid:76) its carrying value. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments." (cid:22)i(cid:43)(cid:44)(cid:48)(cid:61) (cid:23)(cid:50)f(cid:48)a(cid:56)io(cid:50)ar(cid:61) (cid:15)(cid:39)(cid:39)o(cid:57)(cid:50)(cid:56)i(cid:50)(cid:43) (cid:50)e have subsidiaries in Argentina that historically had a functional currency of the Argentine (cid:43)eso. As of (cid:37)une 30(cid:11) 2018(cid:11) the Argentine economy (cid:76)as designated as highly inflationary for accounting purposes. Accordingly(cid:11) beginning (cid:37)uly 1(cid:11) 2018(cid:11) (cid:76)e began reporting the financial results of our Argentine subsidiaries (cid:76)ith a functional currency of the (cid:48).S. dollar. (cid:47)he transition to highly inflationary accounting resulted in a negative impact on monetary balances of $16 million(cid:11) $1(cid:24) million(cid:11) and $28 million that (cid:76)as reflected in the consolidated statements of income for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. 2(cid:24) 30 Amcor Annual Report 2022 Form 10-K 31 Results of Operations (cid:33)(cid:43)e (cid:41)ollow(cid:44)ng (cid:44)(cid:53) a d(cid:44)(cid:53)(cid:38)(cid:55)(cid:53)(cid:53)(cid:44)on and anal(cid:59)(cid:53)(cid:44)(cid:53) o(cid:41) (cid:38)(cid:43)ange(cid:53) (cid:44)n t(cid:43)e re(cid:53)(cid:55)lt(cid:53) o(cid:41) o(cid:51)erat(cid:44)on(cid:53) (cid:41)or (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear (cid:11)(cid:9)(cid:11)(cid:11) (cid:38)om(cid:51)ared to (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear (cid:11)(cid:9)(cid:11)(cid:10)(cid:7) (cid:16) d(cid:44)(cid:53)(cid:38)(cid:55)(cid:53)(cid:53)(cid:44)on and anal(cid:59)(cid:53)(cid:44)(cid:53) regard(cid:44)ng o(cid:55)r re(cid:53)(cid:55)lt(cid:53) o(cid:41) o(cid:51)erat(cid:44)on(cid:53) (cid:41)or (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear (cid:11)(cid:9)(cid:11)(cid:10) (cid:38)om(cid:51)ared to (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear (cid:11)(cid:9)(cid:11)(cid:9) t(cid:43)at are not (cid:44)n(cid:38)l(cid:55)ded (cid:44)n t(cid:43)(cid:44)(cid:53) (cid:16)nn(cid:55)al (cid:31)e(cid:51)ort on Form (cid:10)(cid:9)-(cid:25) (cid:38)an (cid:37)e (cid:41)o(cid:55)nd (cid:44)n (cid:30)art II(cid:5) Item (cid:14) o(cid:41) o(cid:55)r (cid:16)nn(cid:55)al (cid:31)e(cid:51)ort on Form (cid:10)(cid:9)-(cid:25) (cid:41)or t(cid:43)e (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear ended (cid:24)(cid:55)ne (cid:12)(cid:9)(cid:5) (cid:11)(cid:9)(cid:11)(cid:10)(cid:5) (cid:41)(cid:44)led w(cid:44)t(cid:43) t(cid:43)e (cid:32)(cid:19)C on (cid:16)(cid:55)g(cid:55)(cid:53)t (cid:11)(cid:13)(cid:5) (cid:11)(cid:9)(cid:11)(cid:10) and (cid:44)n(cid:38)or(cid:51)orated (cid:37)(cid:59) re(cid:41)eren(cid:38)e(cid:7) (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) Res(cid:57)(cid:48)(cid:56)s of (cid:29)(cid:52)era(cid:56)io(cid:50)s ((cid:3) in millions, e(cid:74)cept per share data) (cid:41)et sales Operating income Operating income as a percentage of net sales (cid:41)et income attributable to Amcor plc (cid:31)iluted Earnings (cid:43)er Share 2022 2021 $ 14(cid:11)544 $ 12(cid:11)861 1(cid:11)23(cid:24) 8.5 (cid:4) 1(cid:11)321 10.3 (cid:4) $ $ 805 0.52(cid:24) $ $ (cid:24)3(cid:24) 0.602 (cid:41)et sales increased by $1(cid:11)683 million(cid:11) or by 13.1(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. E(cid:77)cluding the impact of disposed and ceased operations of $87 million(cid:11) or (0.7(cid:4))(cid:11) negative currency impacts of $24(cid:24) million(cid:11) or (1.(cid:24)(cid:4))(cid:11) and pass(cid:12)through of ra(cid:76) material costs of $1(cid:11)530 million(cid:11) or 11.(cid:24)(cid:4)(cid:11) the increase in net sales for the fiscal year 2022 (cid:76)as $4(cid:24)0 million or 3.8(cid:4)(cid:11) driven by marginally favorable volumes of 0.4(cid:4) and favorable price(cid:14)mi(cid:77) of 3.4(cid:4). (cid:41)et income attributable to Amcor plc decreased by $134 million(cid:11) or by 14.3(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) mainly as a result of increased restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net of $140 million(cid:11) largely due to costs related to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) and higher ta(cid:77) charges of $3(cid:24) million(cid:11) offset by increased gross profit of $88 million. (cid:31)iluted earnings per share ("(cid:31)iluted E(cid:43)S") decreased by $0.073(cid:11) or by 12.1(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) (cid:76)ith net income attributable to ordinary shareholders decreasing by 14.3(cid:4) and the diluted (cid:76)eighted(cid:12)average number of shares outstanding decreasing by 2.6(cid:4). (cid:47)he decrease in the diluted (cid:76)eighted(cid:12)average number of shares outstanding (cid:76)as due to repurchase of shares under announced share buybac(cid:64) programs. Se(cid:43)me(cid:50)(cid:56) Res(cid:57)(cid:48)(cid:56)s of (cid:29)(cid:52)era(cid:56)io(cid:50)s Fle(cid:74)ibles Segment (cid:47)he Fle(cid:77)ibles reportable segment develops and supplies fle(cid:77)ible pac(cid:64)aging globally. ((cid:3) in millions) (cid:41)et sales including intersegment sales Ad(cid:63)usted EBI(cid:47) from continuing operations Ad(cid:63)usted EBI(cid:47) from continuing operations as a percentage of net sales 2022 2021 $ 11(cid:11)151 $ 10(cid:11)040 1(cid:11)517 13.6 (cid:4) 1(cid:11)427 14.2 (cid:4) (cid:41)et sales including intersegment sales increased by $1(cid:11)111 million(cid:11) or by 11.1(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. E(cid:77)cluding the impact of disposed and ceased operations of $87 million(cid:11) or (0.8(cid:4))(cid:11) negative currency impacts of $248 million(cid:11) or (2.5(cid:4))(cid:11) and pass(cid:12)through of ra(cid:76) material costs of $1(cid:11)0(cid:24)1 million(cid:11) or 10.(cid:24)(cid:4)(cid:11) the increase in net sales including intersegment sales for fiscal year 2022 (cid:76)as $355 million(cid:11) or 3.5(cid:4)(cid:11) driven by favorable price(cid:14)mi(cid:77). Ad(cid:63)usted earnings before interest and ta(cid:77) from continuing operations ("Ad(cid:63)usted EBI(cid:47)") increased by $(cid:24)0 million(cid:11) or by 6.3(cid:4) in fiscal year 2022(cid:11) compared to fiscal year 2021. E(cid:77)cluding the impact of disposed and ceased operations of $4 million(cid:11) or (0.2(cid:4)) and negative currency impacts of $31 million(cid:11) or 2.3(cid:4)(cid:11) the increase in Ad(cid:63)usted EBI(cid:47) for fiscal year 2022 (cid:76)as $125 million(cid:11) or 8.8(cid:4)(cid:11) driven by favorable price(cid:14)mi(cid:77) of 8.0(cid:4)(cid:11) plant cost improvements of 2.4(cid:4) and favorable volumes of 0.8(cid:4)(cid:11) partially offset by unfavorable selling(cid:11) general(cid:11) and administrative ("S(cid:34)(cid:5)A") and other cost impacts of (2.4(cid:4)). Rigid Pac(cid:61)aging Segment (cid:47)he (cid:45)igid (cid:43)ac(cid:64)aging reportable segment manufactures rigid pac(cid:64)aging containers and related products. ((cid:3) in millions) (cid:41)et sales Ad(cid:63)usted EBI(cid:47) from continuing operations Ad(cid:63)usted EBI(cid:47) from continuing operations as a percentage of net sales 2022 2021 $ 3(cid:11)3(cid:24)3 $ 28(cid:24) 8.5 (cid:4) 2(cid:11)823 2(cid:24)(cid:24) 10.6 (cid:4) (cid:41)et sales increased by $570 million(cid:11) or by 20.2(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. E(cid:77)cluding positive currency impacts of $1 million(cid:11) and pass(cid:12)through of ra(cid:76) material costs of $43(cid:24) million(cid:11) or 15.6(cid:4)(cid:11) the increase in net sales including intersegment sales for the fiscal year 2022 (cid:76)as $132 million(cid:11) or 4.7(cid:4)(cid:11) driven by favorable volumes of 2.8(cid:4) and favorable price(cid:14)mi(cid:77) of 1.(cid:24)(cid:4). Ad(cid:63)usted EBI(cid:47) decreased by $10 million(cid:11) or by 3.3(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:50)ith minor impacts from currency impacts(cid:11) the decrease in Ad(cid:63)usted EBI(cid:47) for fiscal year 2022 (cid:76)as $10 million(cid:11) or 3.5(cid:4)(cid:11) driven by favorable price(cid:14)mi(cid:77) of 20.5(cid:4)(cid:11) favorable volumes of (cid:24).2(cid:4)(cid:11) unfavorable plant costs of (30.0(cid:4))(cid:11) and unfavorable selling(cid:11) general(cid:11) and administrative ("S(cid:34)(cid:5)A")(cid:11) and other cost impacts of (3.2(cid:4)). (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:21)ross (cid:30)rofi(cid:56) ((cid:3) in millions) (cid:34)ross profit (cid:34)ross profit as a percentage of net sales (cid:34)ross profit increased by $88 million(cid:11) or by 3.2(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)he increase (cid:76)as primarily driven by the increase in net sales of 13.1(cid:4) referred to above. (cid:34)ross profit as a percentage of sales decreased to 1(cid:24).4(cid:4) for the fiscal year 2022(cid:11) primarily due to the impact on the calculation from the pass through of higher ra(cid:76) material costs (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) Se(cid:48)(cid:48)i(cid:50)(cid:43)(cid:6) (cid:21)e(cid:50)era(cid:48)(cid:6) a(cid:50)(cid:40) (cid:15)(cid:40)mi(cid:50)is(cid:56)ra(cid:56)i(cid:58)e (cid:4)(cid:2)S(cid:21)(cid:3)(cid:15)(cid:2)(cid:5) (cid:19)x(cid:52)e(cid:50)ses during the period. ((cid:3) in millions) S(cid:34)(cid:5)A e(cid:77)penses S(cid:34)(cid:5)A e(cid:77)penses as a percentage of net sales 2022 2021 $ 2(cid:11)820 $ 2(cid:11)732 1(cid:24).4 (cid:4) 21.2 (cid:4) 2022 2021 $ (1(cid:11)284) $ (1(cid:11)2(cid:24)2) (8.8) (cid:4) (10.0) (cid:4) S(cid:34)(cid:5)A decreased by $8 million(cid:11) or by 0.6(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) largely driven by favorable e(cid:77)change rates. (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) Res(cid:56)r(cid:57)(cid:39)(cid:56)(cid:57)ri(cid:50)(cid:43)(cid:6) (cid:23)m(cid:52)airme(cid:50)(cid:56)(cid:6) a(cid:50)(cid:40) Re(cid:48)a(cid:56)e(cid:40) (cid:19)x(cid:52)e(cid:50)ses(cid:6) (cid:28)e(cid:56) ((cid:3) in millions) (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net(cid:11) as a percentage of net sales 2022 2021 $ (234) $ (1.6) (cid:4) ((cid:24)4) (0.7) (cid:4) (cid:45)estructuring(cid:11) impairment(cid:11) and related costs increased by $140 million(cid:11) or by 148.(cid:24)(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)he increase (cid:76)as primarily driven by the non(cid:12)recurrence of a gain on disposal of a non(cid:12)core European hospital supplies business of $52 million in fiscal year 2021(cid:11) and charges related to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict in fiscal year 2022(cid:11) offset by the completion of the (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan in (cid:37)une 2021. (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:29)(cid:56)(cid:44)er (cid:23)(cid:50)(cid:39)ome(cid:6) (cid:28)e(cid:56) ((cid:3) in millions) Other income(cid:11) net Other income(cid:11) net(cid:11) as a percentage of net sales 2022 2021 $ 33 $ 0.2 (cid:4) 75 0.6 (cid:4) 31 Amcor Annual Report 2022 32 31 Form 10-K (cid:22)2 Results of Operations (cid:33)(cid:43)e (cid:41)ollow(cid:44)ng (cid:44)(cid:53) a d(cid:44)(cid:53)(cid:38)(cid:55)(cid:53)(cid:53)(cid:44)on and anal(cid:59)(cid:53)(cid:44)(cid:53) o(cid:41) (cid:38)(cid:43)ange(cid:53) (cid:44)n t(cid:43)e re(cid:53)(cid:55)lt(cid:53) o(cid:41) o(cid:51)erat(cid:44)on(cid:53) (cid:41)or (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear (cid:11)(cid:9)(cid:11)(cid:11) (cid:38)om(cid:51)ared to (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear (cid:11)(cid:9)(cid:11)(cid:10)(cid:7) (cid:16) d(cid:44)(cid:53)(cid:38)(cid:55)(cid:53)(cid:53)(cid:44)on and anal(cid:59)(cid:53)(cid:44)(cid:53) regard(cid:44)ng o(cid:55)r re(cid:53)(cid:55)lt(cid:53) o(cid:41) o(cid:51)erat(cid:44)on(cid:53) (cid:41)or (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear (cid:11)(cid:9)(cid:11)(cid:10) (cid:38)om(cid:51)ared to (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear (cid:11)(cid:9)(cid:11)(cid:9) t(cid:43)at are not (cid:44)n(cid:38)l(cid:55)ded (cid:44)n t(cid:43)(cid:44)(cid:53) (cid:16)nn(cid:55)al (cid:31)e(cid:51)ort on Form (cid:10)(cid:9)-(cid:25) (cid:38)an (cid:37)e (cid:41)o(cid:55)nd (cid:44)n (cid:30)art II(cid:5) Item (cid:14) o(cid:41) o(cid:55)r (cid:16)nn(cid:55)al (cid:31)e(cid:51)ort on Form (cid:10)(cid:9)-(cid:25) (cid:41)or t(cid:43)e (cid:41)(cid:44)(cid:53)(cid:38)al (cid:59)ear ended (cid:24)(cid:55)ne (cid:12)(cid:9)(cid:5) (cid:11)(cid:9)(cid:11)(cid:10)(cid:5) (cid:41)(cid:44)led w(cid:44)t(cid:43) t(cid:43)e (cid:32)(cid:19)C on (cid:16)(cid:55)g(cid:55)(cid:53)t (cid:11)(cid:13)(cid:5) (cid:11)(cid:9)(cid:11)(cid:10) and (cid:44)n(cid:38)or(cid:51)orated (cid:37)(cid:59) re(cid:41)eren(cid:38)e(cid:7) (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) Res(cid:57)(cid:48)(cid:56)s of (cid:29)(cid:52)era(cid:56)io(cid:50)s ((cid:3) in millions, e(cid:74)cept per share data) (cid:41)et sales Operating income Operating income as a percentage of net sales (cid:41)et income attributable to Amcor plc (cid:31)iluted Earnings (cid:43)er Share 2022 2021 $ 14(cid:11)544 $ 12(cid:11)861 1(cid:11)23(cid:24) 8.5 (cid:4) 1(cid:11)321 10.3 (cid:4) $ $ 805 0.52(cid:24) $ $ (cid:24)3(cid:24) 0.602 (cid:41)et sales increased by $1(cid:11)683 million(cid:11) or by 13.1(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. E(cid:77)cluding the impact of disposed and ceased operations of $87 million(cid:11) or (0.7(cid:4))(cid:11) negative currency impacts of $24(cid:24) million(cid:11) or (1.(cid:24)(cid:4))(cid:11) and pass(cid:12)through of ra(cid:76) material costs of $1(cid:11)530 million(cid:11) or 11.(cid:24)(cid:4)(cid:11) the increase in net sales for the fiscal year 2022 (cid:76)as $4(cid:24)0 million or 3.8(cid:4)(cid:11) driven by marginally favorable volumes of 0.4(cid:4) and favorable price(cid:14)mi(cid:77) of 3.4(cid:4). (cid:41)et income attributable to Amcor plc decreased by $134 million(cid:11) or by 14.3(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) mainly as a result of increased restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net of $140 million(cid:11) largely due to costs related to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) and higher ta(cid:77) charges of $3(cid:24) million(cid:11) offset by increased gross profit of $88 million. (cid:31)iluted earnings per share ("(cid:31)iluted E(cid:43)S") decreased by $0.073(cid:11) or by 12.1(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) (cid:76)ith net income attributable to ordinary shareholders decreasing by 14.3(cid:4) and the diluted (cid:76)eighted(cid:12)average number of shares outstanding decreasing by 2.6(cid:4). (cid:47)he decrease in the diluted (cid:76)eighted(cid:12)average number of shares outstanding (cid:76)as due to repurchase of shares under announced share buybac(cid:64) programs. Se(cid:43)me(cid:50)(cid:56) Res(cid:57)(cid:48)(cid:56)s of (cid:29)(cid:52)era(cid:56)io(cid:50)s Fle(cid:74)ibles Segment (cid:47)he Fle(cid:77)ibles reportable segment develops and supplies fle(cid:77)ible pac(cid:64)aging globally. ((cid:3) in millions) (cid:41)et sales including intersegment sales Ad(cid:63)usted EBI(cid:47) from continuing operations Ad(cid:63)usted EBI(cid:47) from continuing operations as a percentage of net sales 2022 2021 $ 11(cid:11)151 $ 10(cid:11)040 1(cid:11)517 13.6 (cid:4) 1(cid:11)427 14.2 (cid:4) (cid:41)et sales including intersegment sales increased by $1(cid:11)111 million(cid:11) or by 11.1(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. E(cid:77)cluding the impact of disposed and ceased operations of $87 million(cid:11) or (0.8(cid:4))(cid:11) negative currency impacts of $248 million(cid:11) or (2.5(cid:4))(cid:11) and pass(cid:12)through of ra(cid:76) material costs of $1(cid:11)0(cid:24)1 million(cid:11) or 10.(cid:24)(cid:4)(cid:11) the increase in net sales including intersegment sales for fiscal year 2022 (cid:76)as $355 million(cid:11) or 3.5(cid:4)(cid:11) driven by favorable price(cid:14)mi(cid:77). Ad(cid:63)usted earnings before interest and ta(cid:77) from continuing operations ("Ad(cid:63)usted EBI(cid:47)") increased by $(cid:24)0 million(cid:11) or by 6.3(cid:4) in fiscal year 2022(cid:11) compared to fiscal year 2021. E(cid:77)cluding the impact of disposed and ceased operations of $4 million(cid:11) or (0.2(cid:4)) and negative currency impacts of $31 million(cid:11) or 2.3(cid:4)(cid:11) the increase in Ad(cid:63)usted EBI(cid:47) for fiscal year 2022 (cid:76)as $125 million(cid:11) or 8.8(cid:4)(cid:11) driven by favorable price(cid:14)mi(cid:77) of 8.0(cid:4)(cid:11) plant cost improvements of 2.4(cid:4) and favorable volumes of 0.8(cid:4)(cid:11) partially offset by unfavorable selling(cid:11) general(cid:11) and administrative ("S(cid:34)(cid:5)A") and other cost impacts of (2.4(cid:4)). Rigid Pac(cid:61)aging Segment (cid:47)he (cid:45)igid (cid:43)ac(cid:64)aging reportable segment manufactures rigid pac(cid:64)aging containers and related products. ((cid:3) in millions) (cid:41)et sales Ad(cid:63)usted EBI(cid:47) from continuing operations Ad(cid:63)usted EBI(cid:47) from continuing operations as a percentage of net sales 2022 2021 $ 3(cid:11)3(cid:24)3 $ 28(cid:24) 8.5 (cid:4) 2(cid:11)823 2(cid:24)(cid:24) 10.6 (cid:4) (cid:41)et sales increased by $570 million(cid:11) or by 20.2(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. E(cid:77)cluding positive currency impacts of $1 million(cid:11) and pass(cid:12)through of ra(cid:76) material costs of $43(cid:24) million(cid:11) or 15.6(cid:4)(cid:11) the increase in net sales including intersegment sales for the fiscal year 2022 (cid:76)as $132 million(cid:11) or 4.7(cid:4)(cid:11) driven by favorable volumes of 2.8(cid:4) and favorable price(cid:14)mi(cid:77) of 1.(cid:24)(cid:4). Ad(cid:63)usted EBI(cid:47) decreased by $10 million(cid:11) or by 3.3(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:50)ith minor impacts from currency impacts(cid:11) the decrease in Ad(cid:63)usted EBI(cid:47) for fiscal year 2022 (cid:76)as $10 million(cid:11) or 3.5(cid:4)(cid:11) driven by favorable price(cid:14)mi(cid:77) of 20.5(cid:4)(cid:11) favorable volumes of (cid:24).2(cid:4)(cid:11) unfavorable plant costs of (30.0(cid:4))(cid:11) and unfavorable selling(cid:11) general(cid:11) and administrative ("S(cid:34)(cid:5)A")(cid:11) and other cost impacts of (3.2(cid:4)). (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:21)ross (cid:30)rofi(cid:56) ((cid:3) in millions) (cid:34)ross profit (cid:34)ross profit as a percentage of net sales 2022 2021 $ 2(cid:11)820 $ 2(cid:11)732 1(cid:24).4 (cid:4) 21.2 (cid:4) (cid:34)ross profit increased by $88 million(cid:11) or by 3.2(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)he increase (cid:76)as primarily driven by the increase in net sales of 13.1(cid:4) referred to above. (cid:34)ross profit as a percentage of sales decreased to 1(cid:24).4(cid:4) for the fiscal year 2022(cid:11) primarily due to the impact on the calculation from the pass through of higher ra(cid:76) material costs during the period. (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) Se(cid:48)(cid:48)i(cid:50)(cid:43)(cid:6) (cid:21)e(cid:50)era(cid:48)(cid:6) a(cid:50)(cid:40) (cid:15)(cid:40)mi(cid:50)is(cid:56)ra(cid:56)i(cid:58)e (cid:4)(cid:2)S(cid:21)(cid:3)(cid:15)(cid:2)(cid:5) (cid:19)x(cid:52)e(cid:50)ses ((cid:3) in millions) S(cid:34)(cid:5)A e(cid:77)penses S(cid:34)(cid:5)A e(cid:77)penses as a percentage of net sales 2022 2021 $ (1(cid:11)284) $ (1(cid:11)2(cid:24)2) (8.8) (cid:4) (10.0) (cid:4) S(cid:34)(cid:5)A decreased by $8 million(cid:11) or by 0.6(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) largely driven by favorable e(cid:77)change rates. (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) Res(cid:56)r(cid:57)(cid:39)(cid:56)(cid:57)ri(cid:50)(cid:43)(cid:6) (cid:23)m(cid:52)airme(cid:50)(cid:56)(cid:6) a(cid:50)(cid:40) Re(cid:48)a(cid:56)e(cid:40) (cid:19)x(cid:52)e(cid:50)ses(cid:6) (cid:28)e(cid:56) ((cid:3) in millions) (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net(cid:11) as a percentage of net sales 2022 2021 $ (234) $ (1.6) (cid:4) ((cid:24)4) (0.7) (cid:4) (cid:45)estructuring(cid:11) impairment(cid:11) and related costs increased by $140 million(cid:11) or by 148.(cid:24)(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)he increase (cid:76)as primarily driven by the non(cid:12)recurrence of a gain on disposal of a non(cid:12)core European hospital supplies business of $52 million in fiscal year 2021(cid:11) and charges related to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict in fiscal year 2022(cid:11) offset by the completion of the (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan in (cid:37)une 2021. (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:29)(cid:56)(cid:44)er (cid:23)(cid:50)(cid:39)ome(cid:6) (cid:28)e(cid:56) ((cid:3) in millions) Other income(cid:11) net Other income(cid:11) net(cid:11) as a percentage of net sales 2022 2021 $ 33 $ 0.2 (cid:4) 75 0.6 (cid:4) 31 32 Amcor Annual Report 2022 Other income(cid:11) net decreased by $42 million(cid:11) or by 56.0(cid:4) (cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) mainly due to the non(cid:12)reoccurrence of credits related to a favorable Bra(cid:79)il Supreme Court ruling on Bra(cid:79)il indirect ta(cid:77) in fiscal year 2021. Presentation of (cid:38)on-(cid:31)AAP Information Form 10-K 33 (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:23)(cid:50)(cid:56)eres(cid:56) (cid:23)(cid:50)(cid:39)ome ((cid:3) in millions) Interest income Interest income as a percentage of net sales 2022 2021 $ 24 $ 0.2 (cid:4) 14 0.1 (cid:4) Interest income increased by $10 million(cid:11) or by 71.4(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) mainly driven by yield improvements on Euro denominated commercial paper and improved rates on cash balances held by the (cid:34)roup. (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:23)(cid:50)(cid:56)eres(cid:56) (cid:19)x(cid:52)e(cid:50)se ((cid:3) in millions) Interest e(cid:77)pense Interest e(cid:77)pense as a percentage of net sales 2022 2021 $ (15(cid:24)) $ (1.1) (cid:4) (153) (1.2) (cid:4) Interest e(cid:77)pense increased by $6 million(cid:11) or by 3.(cid:24)(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021 due to higher short(cid:12)term variable rates. (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:23)(cid:50)(cid:39)ome Tax (cid:19)x(cid:52)e(cid:50)se ((cid:3) in millions) Income ta(cid:77) e(cid:77)pense Effective ta(cid:77) rate 2022 2021 $ (300) $ 26.(cid:24) (cid:4) (261) 21.(cid:24) (cid:4) Income ta(cid:77) e(cid:77)pense increased by $3(cid:24) million(cid:11) or by 14.(cid:24)(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)he increase (cid:76)as predominantly attributable to an increase in ta(cid:77) provisions for uncertain ta(cid:77) positions. (cid:47)his Annual (cid:45)eport on Form 10(cid:12)(cid:38) refers to non(cid:12)(cid:34)AA(cid:43) financial measures(cid:25) ad(cid:63)usted earnings before interest and ta(cid:77)es ("Ad(cid:63)usted EBI(cid:47)")(cid:11) ad(cid:63)usted net income(cid:11) and net debt. Such measures have not been prepared in accordance (cid:76)ith accounting principles generally accepted in the (cid:48)nited States of America ("(cid:48).S. (cid:34)AA(cid:43)"). (cid:47)hese non(cid:12)(cid:34)AA(cid:43) financial measures ad(cid:63)ust for factors that are unusual or unpredictable. (cid:47)hese measures e(cid:77)clude the impact of significant ta(cid:77) reforms(cid:11) certain amounts related to the effect of changes in currency e(cid:77)change rates(cid:11) acquisitions(cid:11) and restructuring(cid:11) including employee(cid:12)related costs(cid:11) equipment relocation costs(cid:11) accelerated depreciation(cid:11) and the (cid:76)rite(cid:12)do(cid:76)n of equipment. (cid:47)hese measures also e(cid:77)clude gains or losses on sales of significant property and divestitures(cid:11) significant property and other impairments(cid:11) net of insurance recovery(cid:11) certain litigation matters(cid:11) significant pension settlements(cid:11) impairments in good(cid:76)ill and equity method investments(cid:11) and certain acquisition(cid:12)related e(cid:77)penses(cid:11) including transaction e(cid:77)penses(cid:11) due diligence e(cid:77)penses(cid:11) professional and legal fees(cid:11) purchase accounting ad(cid:63)ustments for inventory(cid:11) order bac(cid:64)log(cid:11) intangible amorti(cid:79)ation(cid:11) changes in the fair value of deferred acquisition payments(cid:11) and impacts related to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict. (cid:47)his ad(cid:63)usted information should not be construed as an alternative to results determined in accordance (cid:76)ith (cid:48).S. (cid:34)AA(cid:43). (cid:50)e use the non(cid:12)(cid:34)AA(cid:43) measures to evaluate operating performance and believe that these non(cid:12)(cid:34)AA(cid:43) measures are useful to enable investors and other e(cid:77)ternal parties to perform comparisons of our current and historical performance. A reconciliation of reported net income attributable to Amcor plc to Ad(cid:63)usted EBI(cid:47) from continuing operations and ad(cid:63)usted net income from continuing operations for fiscal years 2022(cid:11) 2021(cid:11) and 2020 is as follo(cid:76)s(cid:25) (cid:41)et income attributable to Amcor plc(cid:11) as reported $ 805 $ (cid:24)3(cid:24) $ 612 ((cid:3) in millions) Add(cid:25) (cid:41)et income attributable to non(cid:12)controlling interests Add(cid:25) (Income)(cid:14)loss from discontinued operations(cid:11) net of ta(cid:77) Income from continuing operations Add(cid:25) Income ta(cid:77) e(cid:77)pense Add(cid:25) Interest e(cid:77)pense Less(cid:25) Interest income EBI(cid:47) from continuing operations Add(cid:25) (cid:40)aterial restructuring programs (1) Add(cid:25) Impairments in equity method investments (2) Add(cid:25) (cid:40)aterial acquisition costs and other (3) Add(cid:25) Impact of hyperinflation (5) Add(cid:25) (cid:43)ension settlements (6) Add(cid:14)(Less)(cid:25) (cid:41)et (gain)(cid:14)loss on disposals (7) Add(cid:25) (cid:43)roperty and other losses(cid:11) net (8) Add(cid:25) (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict impacts ((cid:24)) Ad(cid:60)usted EBI(cid:44) from continuing operations Less(cid:25) Income ta(cid:77) e(cid:77)pense Less(cid:25) Ad(cid:63)ustments to income ta(cid:77) e(cid:77)pense (10) Less(cid:25) Interest e(cid:77)pense Add(cid:25) Interest income Add(cid:25) Amorti(cid:79)ation of acquired intangible assets from business combinations (4) Years ended June 30, 2022 2021 2020 (24) (14) 1(cid:11)250 1(cid:11)351 10 (cid:85) 815 300 15(cid:24) 163 37 (cid:85) 4 16 8 10 13 200 1,(cid:21)01 (300) (32) (15(cid:24)) 24 (cid:85) 12 (cid:85) (cid:24)51 261 153 88 (cid:85) 7 165 1(cid:24) (cid:85) ((cid:24)) (cid:85) (cid:77) (261) (51) (153) 14 (cid:85) 4 8 624 187 207 (22) (cid:24)(cid:24)6 106 26 145 1(cid:24)1 28 5 (cid:77) (cid:85) (cid:77) (187) (8(cid:24)) (207) 22 (4) (4) 1,(cid:20)21 1,(cid:18)(cid:23)(cid:21) Less(cid:25) (cid:40)aterial restructuring programs attributable to non(cid:12)controlling interests Less(cid:25) (cid:41)et income attributable to non(cid:12)controlling interests (10) (12) Ad(cid:60)usted net income from continuing operations (cid:3) 1,22(cid:18) (cid:3) 1,1(cid:19)(cid:22) (cid:3) 1,02(cid:22) (1) (cid:40)aterial restructuring programs includes restructuring and related e(cid:77)penses for the 201(cid:24) Bemis Integration (cid:43)lan for fiscal year 2022 and 2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan and the 201(cid:24) Bemis Integration (cid:43)lan for fiscal years 2021 and 2020. (cid:45)efer to (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for more information about our restructuring activities. 33 Amcor Annual Report 2022 34 Other income(cid:11) net decreased by $42 million(cid:11) or by 56.0(cid:4) (cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) mainly due to the non(cid:12)reoccurrence of credits related to a favorable Bra(cid:79)il Supreme Court ruling on Bra(cid:79)il indirect ta(cid:77) in fiscal year Presentation of (cid:38)on-(cid:31)AAP Information 33 Form 10-K 34 (cid:47)his Annual (cid:45)eport on Form 10(cid:12)(cid:38) refers to non(cid:12)(cid:34)AA(cid:43) financial measures(cid:25) ad(cid:63)usted earnings before interest and ta(cid:77)es ("Ad(cid:63)usted EBI(cid:47)")(cid:11) ad(cid:63)usted net income(cid:11) and net debt. Such measures have not been prepared in accordance (cid:76)ith accounting principles generally accepted in the (cid:48)nited States of America ("(cid:48).S. (cid:34)AA(cid:43)"). (cid:47)hese non(cid:12)(cid:34)AA(cid:43) financial measures ad(cid:63)ust for factors that are unusual or unpredictable. (cid:47)hese measures e(cid:77)clude the impact of significant ta(cid:77) reforms(cid:11) certain amounts related to the effect of changes in currency e(cid:77)change rates(cid:11) acquisitions(cid:11) and restructuring(cid:11) including employee(cid:12)related costs(cid:11) equipment relocation costs(cid:11) accelerated depreciation(cid:11) and the (cid:76)rite(cid:12)do(cid:76)n of equipment. (cid:47)hese measures also e(cid:77)clude gains or losses on sales of significant property and divestitures(cid:11) significant property and other impairments(cid:11) net of insurance recovery(cid:11) certain litigation matters(cid:11) significant pension settlements(cid:11) impairments in good(cid:76)ill and equity method investments(cid:11) and certain acquisition(cid:12)related e(cid:77)penses(cid:11) including transaction e(cid:77)penses(cid:11) due diligence e(cid:77)penses(cid:11) professional and legal fees(cid:11) purchase accounting ad(cid:63)ustments for inventory(cid:11) order bac(cid:64)log(cid:11) intangible amorti(cid:79)ation(cid:11) changes in the fair value of deferred acquisition payments(cid:11) and impacts related to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict. (cid:47)his ad(cid:63)usted information should not be construed as an alternative to results determined in accordance (cid:76)ith (cid:48).S. (cid:34)AA(cid:43). (cid:50)e use the non(cid:12)(cid:34)AA(cid:43) measures to evaluate operating performance and believe that these non(cid:12)(cid:34)AA(cid:43) measures are useful to enable investors and other e(cid:77)ternal parties to perform comparisons of our current and historical performance. A reconciliation of reported net income attributable to Amcor plc to Ad(cid:63)usted EBI(cid:47) from continuing operations and ad(cid:63)usted net income from continuing operations for fiscal years 2022(cid:11) 2021(cid:11) and 2020 is as follo(cid:76)s(cid:25) ((cid:3) in millions) Years ended June 30, 2022 2021 2020 (cid:41)et income attributable to Amcor plc(cid:11) as reported $ 805 $ (cid:24)3(cid:24) $ 612 2021. (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:23)(cid:50)(cid:56)eres(cid:56) (cid:23)(cid:50)(cid:39)ome ((cid:3) in millions) Interest income Interest income as a percentage of net sales (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:23)(cid:50)(cid:56)eres(cid:56) (cid:19)x(cid:52)e(cid:50)se ((cid:3) in millions) Interest e(cid:77)pense Interest e(cid:77)pense as a percentage of net sales short(cid:12)term variable rates. (cid:17)o(cid:50)so(cid:48)i(cid:40)a(cid:56)e(cid:40) (cid:23)(cid:50)(cid:39)ome Tax (cid:19)x(cid:52)e(cid:50)se ((cid:3) in millions) Income ta(cid:77) e(cid:77)pense Effective ta(cid:77) rate Interest income increased by $10 million(cid:11) or by 71.4(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021(cid:11) mainly driven by yield improvements on Euro denominated commercial paper and improved rates on cash balances held by the (cid:34)roup. Interest e(cid:77)pense increased by $6 million(cid:11) or by 3.(cid:24)(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021 due to higher 2022 2021 $ 24 $ 0.2 (cid:4) 14 0.1 (cid:4) 2022 2021 $ (15(cid:24)) $ (1.1) (cid:4) (153) (1.2) (cid:4) 2022 2021 $ (300) $ 26.(cid:24) (cid:4) (261) 21.(cid:24) (cid:4) Income ta(cid:77) e(cid:77)pense increased by $3(cid:24) million(cid:11) or by 14.(cid:24)(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)he increase (cid:76)as predominantly attributable to an increase in ta(cid:77) provisions for uncertain ta(cid:77) positions. Add(cid:25) (cid:41)et income attributable to non(cid:12)controlling interests Add(cid:25) (Income)(cid:14)loss from discontinued operations(cid:11) net of ta(cid:77) Income from continuing operations Add(cid:25) Income ta(cid:77) e(cid:77)pense Add(cid:25) Interest e(cid:77)pense Less(cid:25) Interest income EBI(cid:47) from continuing operations Add(cid:25) (cid:40)aterial restructuring programs (1) Add(cid:25) Impairments in equity method investments (2) Add(cid:25) (cid:40)aterial acquisition costs and other (3) Add(cid:25) Amorti(cid:79)ation of acquired intangible assets from business combinations (4) Add(cid:25) Impact of hyperinflation (5) Add(cid:25) (cid:43)ension settlements (6) Add(cid:14)(Less)(cid:25) (cid:41)et (gain)(cid:14)loss on disposals (7) Add(cid:25) (cid:43)roperty and other losses(cid:11) net (8) Add(cid:25) (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict impacts ((cid:24)) Ad(cid:60)usted EBI(cid:44) from continuing operations Less(cid:25) Income ta(cid:77) e(cid:77)pense Less(cid:25) Ad(cid:63)ustments to income ta(cid:77) e(cid:77)pense (10) Less(cid:25) Interest e(cid:77)pense Add(cid:25) Interest income Less(cid:25) (cid:40)aterial restructuring programs attributable to non(cid:12)controlling interests 10 (cid:85) 815 300 15(cid:24) 12 (cid:85) (cid:24)51 261 153 (24) (14) 1(cid:11)250 1(cid:11)351 37 (cid:85) 4 163 16 8 10 13 200 1,(cid:21)01 (300) (32) (15(cid:24)) 24 (cid:85) 88 (cid:85) 7 165 1(cid:24) (cid:85) ((cid:24)) (cid:85) (cid:77) (261) (51) (153) 14 (cid:85) 4 8 624 187 207 (22) (cid:24)(cid:24)6 106 26 145 1(cid:24)1 28 5 (cid:77) (cid:85) (cid:77) (187) (8(cid:24)) (207) 22 (4) (4) 1,(cid:20)21 1,(cid:18)(cid:23)(cid:21) Less(cid:25) (cid:41)et income attributable to non(cid:12)controlling interests (10) (12) Ad(cid:60)usted net income from continuing operations (cid:3) 1,22(cid:18) (cid:3) 1,1(cid:19)(cid:22) (cid:3) 1,02(cid:22) (1) (cid:40)aterial restructuring programs includes restructuring and related e(cid:77)penses for the 201(cid:24) Bemis Integration (cid:43)lan for fiscal year 2022 and 2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan and the 201(cid:24) Bemis Integration (cid:43)lan for fiscal years 2021 and 2020. (cid:45)efer to (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for more information about our restructuring activities. 33 34 Amcor Annual Report 2022 Form 10-K 35 (2) (3) Impairments in equity method investments include the impairment charges related to other(cid:12)than(cid:12)temporary impairments related to the investment in A(cid:40)(cid:49)I(cid:34). (cid:31)uring the fiscal year 2021(cid:11) (cid:76)e sold our interest in A(cid:40)(cid:49)I(cid:34). (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments(cid:11)" for more information about our equity method investments. Includes costs associated (cid:76)ith the Bemis transaction. Fiscal year 2021 includes a $1(cid:24) million benefit related to Bra(cid:79)il indirect ta(cid:77)es resulting from a (cid:40)ay 2021 Bra(cid:79)il Supreme Court decision. (cid:31)uring fiscal year 2020(cid:11) material acquisition costs and other includes $58 million amorti(cid:79)ation of Bemis acquisition related inventory fair value step(cid:12)up and $88 million of Bemis transaction related costs and integration costs not qualifying as e(cid:77)it costs(cid:11) including certain advisory(cid:11) legal(cid:11) audit(cid:11) and audit related fees. (4) Amorti(cid:79)ation of acquired intangible assets from business combinations includes amorti(cid:79)ation e(cid:77)penses related to all acquired intangible assets from past acquisitions(cid:11) including $26 million of sales bac(cid:64)log amorti(cid:79)ation for the fiscal year 2020 from the Bemis acquisition. Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina (cid:76)here the functional currency (cid:76)as the Argentine (cid:43)eso. (5) (6) (cid:43)ension settlements in fiscal year 2022 relate to the purchases of group annuity contracts and transfer of pension plan assets and related benefit obligations. (cid:45)efer to (cid:41)ote 13(cid:11) "(cid:43)ension and Other (cid:43)ost(cid:12)(cid:45)etirement (cid:43)lans(cid:11)" for more information. For fiscal year 2020(cid:11) impact of pension settlements includes the amount of actuarial losses recogni(cid:79)ed in the consolidated statements of income related to the settlement of certain defined benefit plans(cid:11) not including related ta(cid:77) effects. (7) (cid:41)et (gain)(cid:14)loss on disposals includes an e(cid:77)pense of $10 million from the disposal of non(cid:12)core assets for fiscal year 2022. (cid:45)efer to (cid:41)ote 11(cid:11) "Fair (cid:49)alue (cid:40)easurements(cid:11)" for more information. Fiscal year 2021 includes the gain reali(cid:79)ed upon the disposal of A(cid:40)(cid:49)I(cid:34) and the loss upon disposal of other non(cid:12)core businesses not part of material restructuring programs. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments(cid:11)" for further information on the disposal of A(cid:40)(cid:49)I(cid:34) and (cid:41)ote 5(cid:11) "(cid:31)ivestitures(cid:11)" for more information about our other disposals. (8) (cid:43)roperty and other losses(cid:11) net includes property and related business losses primarily associated (cid:76)ith the destruction of our (cid:31)urban(cid:11) South Africa facility during general civil unrest in (cid:37)uly 2021(cid:11) net of insurance recovery. ((cid:24)) (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict impacts include $138 million of impairment charges(cid:11) $57 million of restructuring and related e(cid:77)penses(cid:11) and $5 million of other e(cid:77)penses for fiscal year 2022. (cid:45)efer to (cid:41)ote 4(cid:11)"(cid:45)estructuring(cid:11) Impairment(cid:11) and (cid:45)elated E(cid:77)penses(cid:11) (cid:41)et(cid:11)" and (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for further information. (10) (cid:41)et ta(cid:77) impact on items (1) through ((cid:24)) above. Re(cid:39)o(cid:50)(cid:39)i(cid:48)ia(cid:56)io(cid:50) of (cid:28)e(cid:56) (cid:18)e(cid:38)(cid:56) A reconciliation of total debt to net debt at (cid:37)une 30(cid:11) 2022 and 2021 is as follo(cid:76)s(cid:25) ((cid:3) in millions) Current portion of long(cid:12)term debt Short(cid:12)term debt Long(cid:12)term debt(cid:11) less current portion (cid:47)otal debt Less cash and cash equivalents (cid:38)et debt June 30, 2022 June 30, 2021 $ (cid:3) 14 $ 136 6(cid:11)340 6(cid:11)4(cid:24)0 775 (cid:19),(cid:21)1(cid:19) (cid:3) 5 (cid:24)8 6(cid:11)186 6(cid:11)28(cid:24) 850 (cid:19),(cid:18)3(cid:23) Supplemental (cid:31)uarantor Information Amcor plc(cid:11) along (cid:76)ith certain (cid:76)holly o(cid:76)ned subsidiary guarantors(cid:11) guarantee the follo(cid:76)ing senior notes issued by the (cid:76)holly o(cid:76)ned subsidiaries(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. and Amcor (cid:48)(cid:38) Finance plc. (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) 4.000(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2025 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 3.100(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2026 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 3.625(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2026 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 4.500(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2028 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 2.630(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2030 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 2.6(cid:24)0(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2031 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 1.125(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2027 of Amcor (cid:48)(cid:38) Finance plc (cid:47)he si(cid:77) notes issued by Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. are guaranteed by its parent entity Amcor plc and the subsidiary guarantors Amcor (cid:43)ty Ltd(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) and Amcor (cid:48)(cid:38) Finance plc. (cid:47)he note issued by Amcor (cid:48)(cid:38) Finance plc is guaranteed by its parent entity(cid:11) Amcor plc and the subsidiary guarantors Amcor (cid:43)ty Ltd(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc.(cid:11) and Amcor Finance ((cid:48)SA)(cid:11) Inc. On (cid:37)une 30(cid:11) 2022(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc. and Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. entered into supplemental indentures governing Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:6)s 3.625(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2026 and 4.500(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2028 relating to the substitution of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. for Amcor Finance ((cid:48)SA)(cid:11) Inc. and the assumption by Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. of the covenants of Amcor Finance ((cid:48)SA)(cid:11) Inc in the indenture and the securities. Both Amcor Finance ((cid:48)SA)(cid:11) Inc. and Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. remain as guarantors of the 3.625(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2026 and 4.500(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2028. All guarantors fully(cid:11) unconditionally(cid:11) and irrevocably guarantee(cid:11) on a (cid:63)oint and several basis(cid:11) to each holder of the notes(cid:11) the due and punctual payment of the principal of(cid:11) and any premium and interest on(cid:11) such note and all other amounts payable(cid:11) (cid:76)hen and as the same shall become due and payable(cid:11) (cid:76)hether at stated maturity(cid:11) by declaration of acceleration(cid:11) call for redemption or other(cid:76)ise(cid:11) in accordance (cid:76)ith the terms of the notes and related indenture. (cid:47)he obligations of the applicable guarantors under their guarantees (cid:76)ill be limited as necessary to recogni(cid:79)e certain defenses generally available to guarantors (including those that relate to fraudulent conveyance or transfer(cid:11) voidable preference(cid:11) financial assistance(cid:11) corporate purpose(cid:11) or similar la(cid:76)s) under applicable la(cid:76). (cid:47)he guarantees (cid:76)ill be unsecured and unsubordinated obligations of the guarantors and (cid:76)ill ran(cid:64) equally (cid:76)ith all e(cid:77)isting and future unsecured and unsubordinated debt of each guarantor. (cid:41)one of our other subsidiaries guarantee such notes. (cid:47)he issuers and guarantors conduct large parts of their operations through other subsidiaries of Amcor plc. Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. is incorporated in (cid:40)issouri in the (cid:48)nited States(cid:11) Amcor (cid:48)(cid:38) Finance plc is incorporated in England and (cid:50)ales(cid:11) (cid:48)nited (cid:38)ingdom(cid:11) and the guarantors are incorporated under the la(cid:76)s of (cid:37)ersey(cid:11) Australia(cid:11) the (cid:48)nited States(cid:11) and England and (cid:50)ales and(cid:11) therefore(cid:11) insolvency proceedings (cid:76)ith respect to the issuers and guarantors could proceed under(cid:11) and be governed by(cid:11) among others(cid:11) (cid:37)ersey(cid:11) Australian(cid:11) (cid:48)nited States(cid:11) or English insolvency la(cid:76)(cid:11) as the case may be(cid:11) if either issuer or any guarantor defaults on its obligations under the applicable (cid:41)otes or (cid:34)uarantees(cid:11) respectively. Set forth belo(cid:76) is the summari(cid:79)ed financial information of the combined Obligor (cid:34)roup made up of Amcor plc (as parent guarantor)(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. and Amcor (cid:48)(cid:38) Finance plc (as subsidiary issuers of the notes and guarantors of each other(cid:89)s notes)(cid:11) and Amcor Finance ((cid:48)SA)(cid:11) Inc. and Amcor (cid:43)ty Ltd (as the remaining subsidiary guarantors). 35 Amcor Annual Report 2022 36 (2) Impairments in equity method investments include the impairment charges related to other(cid:12)than(cid:12)temporary impairments related to the investment in A(cid:40)(cid:49)I(cid:34). (cid:31)uring the fiscal year 2021(cid:11) (cid:76)e sold our interest in A(cid:40)(cid:49)I(cid:34). (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments(cid:11)" for more information about our equity method investments. (3) Includes costs associated (cid:76)ith the Bemis transaction. Fiscal year 2021 includes a $1(cid:24) million benefit related to Bra(cid:79)il indirect ta(cid:77)es resulting from a (cid:40)ay 2021 Bra(cid:79)il Supreme Court decision. (cid:31)uring fiscal year 2020(cid:11) material acquisition costs and other includes $58 million amorti(cid:79)ation of Bemis acquisition related inventory fair value step(cid:12)up and $88 million of Bemis transaction related costs and integration costs not qualifying as e(cid:77)it costs(cid:11) including certain advisory(cid:11) legal(cid:11) audit(cid:11) and audit related fees. (4) Amorti(cid:79)ation of acquired intangible assets from business combinations includes amorti(cid:79)ation e(cid:77)penses related to all acquired intangible assets from past acquisitions(cid:11) including $26 million of sales bac(cid:64)log amorti(cid:79)ation for the fiscal year 2020 from the Bemis (5) Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina (cid:76)here the acquisition. functional currency (cid:76)as the Argentine (cid:43)eso. (6) (cid:43)ension settlements in fiscal year 2022 relate to the purchases of group annuity contracts and transfer of pension plan assets and related benefit obligations. (cid:45)efer to (cid:41)ote 13(cid:11) "(cid:43)ension and Other (cid:43)ost(cid:12)(cid:45)etirement (cid:43)lans(cid:11)" for more information. For fiscal year 2020(cid:11) impact of pension settlements includes the amount of actuarial losses recogni(cid:79)ed in the consolidated statements of income related to the settlement of certain defined benefit plans(cid:11) not including related ta(cid:77) effects. (7) (cid:41)et (gain)(cid:14)loss on disposals includes an e(cid:77)pense of $10 million from the disposal of non(cid:12)core assets for fiscal year 2022. (cid:45)efer to (cid:41)ote 11(cid:11) "Fair (cid:49)alue (cid:40)easurements(cid:11)" for more information. Fiscal year 2021 includes the gain reali(cid:79)ed upon the disposal of A(cid:40)(cid:49)I(cid:34) and the loss upon disposal of other non(cid:12)core businesses not part of material restructuring programs. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments(cid:11)" for further information on the disposal of A(cid:40)(cid:49)I(cid:34) and (cid:41)ote 5(cid:11) "(cid:31)ivestitures(cid:11)" for more information about our other disposals. (8) (cid:43)roperty and other losses(cid:11) net includes property and related business losses primarily associated (cid:76)ith the destruction of our (cid:31)urban(cid:11) South Africa facility during general civil unrest in (cid:37)uly 2021(cid:11) net of insurance recovery. ((cid:24)) (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict impacts include $138 million of impairment charges(cid:11) $57 million of restructuring and related e(cid:77)penses(cid:11) and $5 million of other e(cid:77)penses for fiscal year 2022. (cid:45)efer to (cid:41)ote 4(cid:11)"(cid:45)estructuring(cid:11) Impairment(cid:11) and (cid:45)elated E(cid:77)penses(cid:11) (cid:41)et(cid:11)" and (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for further information. (10) (cid:41)et ta(cid:77) impact on items (1) through ((cid:24)) above. Re(cid:39)o(cid:50)(cid:39)i(cid:48)ia(cid:56)io(cid:50) of (cid:28)e(cid:56) (cid:18)e(cid:38)(cid:56) A reconciliation of total debt to net debt at (cid:37)une 30(cid:11) 2022 and 2021 is as follo(cid:76)s(cid:25) ((cid:3) in millions) Short(cid:12)term debt Current portion of long(cid:12)term debt Long(cid:12)term debt(cid:11) less current portion (cid:47)otal debt (cid:38)et debt Less cash and cash equivalents June 30, 2022 June 30, 2021 $ (cid:3) 14 $ 136 6(cid:11)340 6(cid:11)4(cid:24)0 775 (cid:19),(cid:21)1(cid:19) (cid:3) 5 (cid:24)8 6(cid:11)186 6(cid:11)28(cid:24) 850 (cid:19),(cid:18)3(cid:23) 35 Form 10-K 36 Supplemental (cid:31)uarantor Information Amcor plc(cid:11) along (cid:76)ith certain (cid:76)holly o(cid:76)ned subsidiary guarantors(cid:11) guarantee the follo(cid:76)ing senior notes issued by the (cid:76)holly o(cid:76)ned subsidiaries(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. and Amcor (cid:48)(cid:38) Finance plc. (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) 4.000(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2025 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 3.100(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2026 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 3.625(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2026 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 4.500(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2028 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 2.630(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2030 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 2.6(cid:24)0(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2031 of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. 1.125(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2027 of Amcor (cid:48)(cid:38) Finance plc (cid:47)he si(cid:77) notes issued by Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. are guaranteed by its parent entity Amcor plc and the subsidiary guarantors Amcor (cid:43)ty Ltd(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) and Amcor (cid:48)(cid:38) Finance plc. (cid:47)he note issued by Amcor (cid:48)(cid:38) Finance plc is guaranteed by its parent entity(cid:11) Amcor plc and the subsidiary guarantors Amcor (cid:43)ty Ltd(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc.(cid:11) and Amcor Finance ((cid:48)SA)(cid:11) Inc. On (cid:37)une 30(cid:11) 2022(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc. and Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. entered into supplemental indentures governing Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:6)s 3.625(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2026 and 4.500(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2028 relating to the substitution of Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. for Amcor Finance ((cid:48)SA)(cid:11) Inc. and the assumption by Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. of the covenants of Amcor Finance ((cid:48)SA)(cid:11) Inc in the indenture and the securities. Both Amcor Finance ((cid:48)SA)(cid:11) Inc. and Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. remain as guarantors of the 3.625(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2026 and 4.500(cid:4) (cid:34)uaranteed Senior (cid:41)otes due 2028. All guarantors fully(cid:11) unconditionally(cid:11) and irrevocably guarantee(cid:11) on a (cid:63)oint and several basis(cid:11) to each holder of the notes(cid:11) the due and punctual payment of the principal of(cid:11) and any premium and interest on(cid:11) such note and all other amounts payable(cid:11) (cid:76)hen and as the same shall become due and payable(cid:11) (cid:76)hether at stated maturity(cid:11) by declaration of acceleration(cid:11) call for redemption or other(cid:76)ise(cid:11) in accordance (cid:76)ith the terms of the notes and related indenture. (cid:47)he obligations of the applicable guarantors under their guarantees (cid:76)ill be limited as necessary to recogni(cid:79)e certain defenses generally available to guarantors (including those that relate to fraudulent conveyance or transfer(cid:11) voidable preference(cid:11) financial assistance(cid:11) corporate purpose(cid:11) or similar la(cid:76)s) under applicable la(cid:76). (cid:47)he guarantees (cid:76)ill be unsecured and unsubordinated obligations of the guarantors and (cid:76)ill ran(cid:64) equally (cid:76)ith all e(cid:77)isting and future unsecured and unsubordinated debt of each guarantor. (cid:41)one of our other subsidiaries guarantee such notes. (cid:47)he issuers and guarantors conduct large parts of their operations through other subsidiaries of Amcor plc. Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. is incorporated in (cid:40)issouri in the (cid:48)nited States(cid:11) Amcor (cid:48)(cid:38) Finance plc is incorporated in England and (cid:50)ales(cid:11) (cid:48)nited (cid:38)ingdom(cid:11) and the guarantors are incorporated under the la(cid:76)s of (cid:37)ersey(cid:11) Australia(cid:11) the (cid:48)nited States(cid:11) and England and (cid:50)ales and(cid:11) therefore(cid:11) insolvency proceedings (cid:76)ith respect to the issuers and guarantors could proceed under(cid:11) and be governed by(cid:11) among others(cid:11) (cid:37)ersey(cid:11) Australian(cid:11) (cid:48)nited States(cid:11) or English insolvency la(cid:76)(cid:11) as the case may be(cid:11) if either issuer or any guarantor defaults on its obligations under the applicable (cid:41)otes or (cid:34)uarantees(cid:11) respectively. Set forth belo(cid:76) is the summari(cid:79)ed financial information of the combined Obligor (cid:34)roup made up of Amcor plc (as parent guarantor)(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. and Amcor (cid:48)(cid:38) Finance plc (as subsidiary issuers of the notes and guarantors of each other(cid:89)s notes)(cid:11) and Amcor Finance ((cid:48)SA)(cid:11) Inc. and Amcor (cid:43)ty Ltd (as the remaining subsidiary guarantors). 35 36 Amcor Annual Report 2022 Form 10-K 37 (cid:16)asis of (cid:30)re(cid:52)ara(cid:56)io(cid:50) Li(cid:67)uidity and Capital Resources (cid:47)he follo(cid:76)ing summari(cid:79)ed financial information is presented for the parent(cid:11) issuer(cid:11) and guarantor subsidiaries ("Obligor (cid:34)roup") on a combined basis after elimination of intercompany transactions bet(cid:76)een entities in the combined group and amounts related to investments in any subsidiary that is a non(cid:12)guarantor. (cid:47)his information is not intended to present the financial position or results of operations of the combined group of companies in accordance (cid:76)ith (cid:48).S. (cid:34)AA(cid:43). Statement of Income for Obligor (cid:31)roup (in millions) For the year ended June 30, (cid:41)et sales (cid:12) e(cid:77)ternal (cid:41)et sales (cid:12) to subsidiaries outside the Obligor (cid:34)roup (cid:47)otal net sales (cid:34)ross profit (cid:38)et income (1) (cid:41)et income attributable to non(cid:12)controlling interests (cid:38)et income attributable to Obligor (cid:31)roup $ $ (cid:3) (cid:3) 2022 1(cid:11)0(cid:24)2 11 1(cid:11)103 1(cid:24)0 3(cid:23)(cid:23) (cid:85) 3(cid:23)(cid:23) (cid:50)e finance our business primarily through cash flo(cid:76)s provided by operating activities(cid:11) borro(cid:76)ings from ban(cid:64)s(cid:11) and proceeds from issuances of debt and equity. (cid:50)e periodically revie(cid:76) our capital structure and liquidity position in light of mar(cid:64)et conditions(cid:11) e(cid:77)pected future cash flo(cid:76)s(cid:11) potential funding requirements for debt refinancing(cid:11) capital e(cid:77)penditures and acquisitions(cid:11) the cost of capital(cid:11) sensitivity analyses reflecting do(cid:76)nside scenarios(cid:11) the impact on our financial metrics and credit ratings(cid:11) and our ease of access to funding sources. (cid:47)he CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic and geopolitical tensions have not materially impacted our liquidity position(cid:11) current and e(cid:77)pected cash flo(cid:76)s from operating activities(cid:11) or available cash. (cid:50)e believe that our cash flo(cid:76)s provided by operating activities(cid:11) together (cid:76)ith borro(cid:76)ings available under our credit facilities and access to the commercial paper mar(cid:64)et(cid:11) bac(cid:64)stopped by our ban(cid:64) debt facilities(cid:11) (cid:76)ill continue to provide sufficient liquidity to fund our operations(cid:11) capital e(cid:77)penditures(cid:11) and other commitments(cid:11) including dividends and purchases of our ordinary shares and C(cid:35)ESS (cid:31)epositary Instruments under authori(cid:79)ed share repurchase programs(cid:11) into the foreseeable future. (cid:29)(cid:58)er(cid:58)iew ((cid:3) in millions) (cid:41)et cash provided by operating activities (cid:41)et cash (used in)(cid:14)provided by investing activities (cid:41)et cash used in financing activities (cid:17)as(cid:44) (cid:20)(cid:48)ow (cid:29)(cid:58)er(cid:58)iew Year Ended June 30, 2022 2021 $ 1(cid:11)526 $ (527) (8(cid:24)1) 1(cid:11)461 (233) (1(cid:11)17(cid:24)) (1) Includes $648 million of net intercompany income mainly attributable to intercompany dividends and intercompany interest income. (cid:28)et Ca(cid:53)(cid:43) (cid:30)ro(cid:56)(cid:44)ded (cid:37)(cid:59) (cid:29)(cid:51)erat(cid:44)ng (cid:16)(cid:38)t(cid:44)(cid:56)(cid:44)t(cid:44)e(cid:53) Balance Sheet for Obligor (cid:31)roup (in millions) As of June 30, Current assets (cid:12) e(cid:77)ternal Assets Current assets (cid:12) due from subsidiaries outside the Obligor (cid:34)roup (cid:47)otal current assets (cid:41)on(cid:12)current assets (cid:12) e(cid:77)ternal (cid:41)on(cid:12)current assets (cid:12) due from subsidiaries outside the Obligor (cid:34)roup (cid:47)otal non(cid:12)current assets (cid:44)otal assets Current liabilities (cid:12) e(cid:77)ternal Liabilities Current liabilities (cid:12) due to subsidiaries outside the Obligor (cid:34)roup (cid:47)otal current liabilities (cid:41)on(cid:12)current liabilities (cid:12) e(cid:77)ternal (cid:41)on(cid:12)current liabilities (cid:12) due to subsidiaries outside the Obligor (cid:34)roup (cid:47)otal non(cid:12)current liabilities (cid:44)otal liabilities 2022 (cid:41)et cash inflo(cid:76)s provided by operating activities increased by $65 million(cid:11) or by 4(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)his increase (cid:76)as primarily due to higher net income(cid:11) ad(cid:63)usted for non(cid:12)cash items(cid:11) in fiscal year 2022(cid:11) partially offset by (cid:76)or(cid:64)ing capital outflo(cid:76)s compared (cid:76)ith fiscal year 2021. (cid:47)he variance in "Other(cid:11) net" (cid:76)ithin net cash inflo(cid:76)s provided by operating activities is primarily attributed to the timing of ta(cid:77) payments bet(cid:76)een periods. $ (cid:3) $ (cid:3) 1(cid:11)254 83 1(cid:11)337 1(cid:11)3(cid:24)6 10(cid:11)(cid:24)78 12(cid:11)374 13,(cid:21)11 2(cid:11)014 23 2(cid:11)037 6(cid:11)456 11(cid:11)255 17(cid:11)711 1(cid:23),(cid:21)(cid:18)(cid:22) (cid:28)et Ca(cid:53)(cid:43) (cid:3)(cid:34)(cid:53)ed (cid:44)n(cid:4)(cid:8)(cid:30)ro(cid:56)(cid:44)ded (cid:37)(cid:59) In(cid:56)e(cid:53)t(cid:44)ng (cid:16)(cid:38)t(cid:44)(cid:56)(cid:44)t(cid:44)e(cid:53) (cid:41)et cash outflo(cid:76)s from investing activities increased by $2(cid:24)4 million(cid:11) or by 126(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)his increase (cid:76)as primarily due to higher disposal proceeds from the disposal of A(cid:40)(cid:49)I(cid:34)(cid:11) the European hospital supplies business and other non(cid:12)core businesses in fiscal year 2021 and higher capital e(cid:77)penditures in fiscal year 2022. Capital e(cid:77)penditures (cid:76)ere $527 million for fiscal year 2022(cid:11) an increase of $5(cid:24) million compared to $468 million for fiscal year 2021. (cid:47)he increase in capital e(cid:77)penditures (cid:76)as primarily due to the increased capital spending in the Fle(cid:77)ibles (cid:28)et Ca(cid:53)(cid:43) (cid:34)(cid:53)ed (cid:44)n F(cid:44)nan(cid:38)(cid:44)ng (cid:16)(cid:38)t(cid:44)(cid:56)(cid:44)t(cid:44)e(cid:53) (cid:41)et cash flo(cid:76)s used in financing activities decreased by $288 million(cid:11) or by 24(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)his decrease is primarily due to higher cash net debt dra(cid:76)do(cid:76)ns compared (cid:76)ith fiscal year 2021(cid:11) partially offset by higher share buybac(cid:64)s and on(cid:12)mar(cid:64)et purchases of o(cid:76)n shares in fiscal year 2022. segment. (cid:28)e(cid:56) (cid:18)e(cid:38)(cid:56) (cid:50)e borro(cid:76) from financial institutions and debt investors in the form of ban(cid:64) overdrafts(cid:11) ban(cid:64) loans(cid:11) corporate bonds(cid:11) unsecured notes(cid:11) and commercial paper. (cid:50)e have a mi(cid:77)ture of fi(cid:77)ed and floating interest rates and use interest rate s(cid:76)aps to provide further fle(cid:77)ibility in managing the interest cost of borro(cid:76)ings. Short(cid:12)term debt consists of ban(cid:64) debt (cid:76)ith a duration of less than 12 months and ban(cid:64) overdrafts (cid:76)hich are classified as current due to the short(cid:12)term nature of the borro(cid:76)ings(cid:11) e(cid:77)cept (cid:76)here (cid:76)e have the ability and intent to refinance and as such e(cid:77)tend the debt beyond 12 months. (cid:47)he current portion of long(cid:12)term debt consists of debt amounts repayable (cid:76)ithin a year after the balance sheet date. 37 Amcor Annual Report 2022 38 (cid:16)asis of (cid:30)re(cid:52)ara(cid:56)io(cid:50) Li(cid:67)uidity and Capital Resources 37 Form 10-K 38 (cid:47)he follo(cid:76)ing summari(cid:79)ed financial information is presented for the parent(cid:11) issuer(cid:11) and guarantor subsidiaries ("Obligor (cid:34)roup") on a combined basis after elimination of intercompany transactions bet(cid:76)een entities in the combined group and amounts related to investments in any subsidiary that is a non(cid:12)guarantor. (cid:47)his information is not intended to present the financial position or results of operations of the combined group of companies in accordance (cid:76)ith (cid:48).S. (cid:34)AA(cid:43). Statement of Income for Obligor (cid:31)roup (in millions) (1) Includes $648 million of net intercompany income mainly attributable to intercompany dividends and intercompany interest Balance Sheet for Obligor (cid:31)roup (in millions) For the year ended June 30, (cid:41)et sales (cid:12) e(cid:77)ternal (cid:41)et sales (cid:12) to subsidiaries outside the Obligor (cid:34)roup (cid:47)otal net sales (cid:34)ross profit (cid:38)et income (1) (cid:41)et income attributable to non(cid:12)controlling interests (cid:38)et income attributable to Obligor (cid:31)roup income. Current assets (cid:12) due from subsidiaries outside the Obligor (cid:34)roup (cid:41)on(cid:12)current assets (cid:12) due from subsidiaries outside the Obligor (cid:34)roup Assets Liabilities As of June 30, Current assets (cid:12) e(cid:77)ternal (cid:47)otal current assets (cid:41)on(cid:12)current assets (cid:12) e(cid:77)ternal (cid:47)otal non(cid:12)current assets (cid:44)otal assets Current liabilities (cid:12) e(cid:77)ternal (cid:47)otal current liabilities (cid:41)on(cid:12)current liabilities (cid:12) e(cid:77)ternal (cid:47)otal non(cid:12)current liabilities (cid:44)otal liabilities Current liabilities (cid:12) due to subsidiaries outside the Obligor (cid:34)roup (cid:41)on(cid:12)current liabilities (cid:12) due to subsidiaries outside the Obligor (cid:34)roup $ $ (cid:3) (cid:3) $ (cid:3) $ (cid:3) 2022 2022 1(cid:11)0(cid:24)2 11 1(cid:11)103 1(cid:24)0 3(cid:23)(cid:23) (cid:85) 3(cid:23)(cid:23) 1(cid:11)254 83 1(cid:11)337 1(cid:11)3(cid:24)6 10(cid:11)(cid:24)78 12(cid:11)374 13,(cid:21)11 2(cid:11)014 23 2(cid:11)037 6(cid:11)456 11(cid:11)255 17(cid:11)711 1(cid:23),(cid:21)(cid:18)(cid:22) (cid:50)e finance our business primarily through cash flo(cid:76)s provided by operating activities(cid:11) borro(cid:76)ings from ban(cid:64)s(cid:11) and proceeds from issuances of debt and equity. (cid:50)e periodically revie(cid:76) our capital structure and liquidity position in light of mar(cid:64)et conditions(cid:11) e(cid:77)pected future cash flo(cid:76)s(cid:11) potential funding requirements for debt refinancing(cid:11) capital e(cid:77)penditures and acquisitions(cid:11) the cost of capital(cid:11) sensitivity analyses reflecting do(cid:76)nside scenarios(cid:11) the impact on our financial metrics and credit ratings(cid:11) and our ease of access to funding sources. (cid:47)he CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic and geopolitical tensions have not materially impacted our liquidity position(cid:11) current and e(cid:77)pected cash flo(cid:76)s from operating activities(cid:11) or available cash. (cid:50)e believe that our cash flo(cid:76)s provided by operating activities(cid:11) together (cid:76)ith borro(cid:76)ings available under our credit facilities and access to the commercial paper mar(cid:64)et(cid:11) bac(cid:64)stopped by our ban(cid:64) debt facilities(cid:11) (cid:76)ill continue to provide sufficient liquidity to fund our operations(cid:11) capital e(cid:77)penditures(cid:11) and other commitments(cid:11) including dividends and purchases of our ordinary shares and C(cid:35)ESS (cid:31)epositary Instruments under authori(cid:79)ed share repurchase programs(cid:11) into the foreseeable future. (cid:29)(cid:58)er(cid:58)iew ((cid:3) in millions) (cid:41)et cash provided by operating activities (cid:41)et cash (used in)(cid:14)provided by investing activities (cid:41)et cash used in financing activities (cid:17)as(cid:44) (cid:20)(cid:48)ow (cid:29)(cid:58)er(cid:58)iew (cid:28)et Ca(cid:53)(cid:43) (cid:30)ro(cid:56)(cid:44)ded (cid:37)(cid:59) (cid:29)(cid:51)erat(cid:44)ng (cid:16)(cid:38)t(cid:44)(cid:56)(cid:44)t(cid:44)e(cid:53) Year Ended June 30, 2022 2021 $ 1(cid:11)526 $ (527) (8(cid:24)1) 1(cid:11)461 (233) (1(cid:11)17(cid:24)) (cid:41)et cash inflo(cid:76)s provided by operating activities increased by $65 million(cid:11) or by 4(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)his increase (cid:76)as primarily due to higher net income(cid:11) ad(cid:63)usted for non(cid:12)cash items(cid:11) in fiscal year 2022(cid:11) partially offset by (cid:76)or(cid:64)ing capital outflo(cid:76)s compared (cid:76)ith fiscal year 2021. (cid:47)he variance in "Other(cid:11) net" (cid:76)ithin net cash inflo(cid:76)s provided by operating activities is primarily attributed to the timing of ta(cid:77) payments bet(cid:76)een periods. (cid:28)et Ca(cid:53)(cid:43) (cid:3)(cid:34)(cid:53)ed (cid:44)n(cid:4)(cid:8)(cid:30)ro(cid:56)(cid:44)ded (cid:37)(cid:59) In(cid:56)e(cid:53)t(cid:44)ng (cid:16)(cid:38)t(cid:44)(cid:56)(cid:44)t(cid:44)e(cid:53) (cid:41)et cash outflo(cid:76)s from investing activities increased by $2(cid:24)4 million(cid:11) or by 126(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)his increase (cid:76)as primarily due to higher disposal proceeds from the disposal of A(cid:40)(cid:49)I(cid:34)(cid:11) the European hospital supplies business and other non(cid:12)core businesses in fiscal year 2021 and higher capital e(cid:77)penditures in fiscal year 2022. Capital e(cid:77)penditures (cid:76)ere $527 million for fiscal year 2022(cid:11) an increase of $5(cid:24) million compared to $468 million for fiscal year 2021. (cid:47)he increase in capital e(cid:77)penditures (cid:76)as primarily due to the increased capital spending in the Fle(cid:77)ibles segment. (cid:28)et Ca(cid:53)(cid:43) (cid:34)(cid:53)ed (cid:44)n F(cid:44)nan(cid:38)(cid:44)ng (cid:16)(cid:38)t(cid:44)(cid:56)(cid:44)t(cid:44)e(cid:53) (cid:41)et cash flo(cid:76)s used in financing activities decreased by $288 million(cid:11) or by 24(cid:4)(cid:11) in fiscal year 2022(cid:11) compared to fiscal year 2021. (cid:47)his decrease is primarily due to higher cash net debt dra(cid:76)do(cid:76)ns compared (cid:76)ith fiscal year 2021(cid:11) partially offset by higher share buybac(cid:64)s and on(cid:12)mar(cid:64)et purchases of o(cid:76)n shares in fiscal year 2022. (cid:28)e(cid:56) (cid:18)e(cid:38)(cid:56) (cid:50)e borro(cid:76) from financial institutions and debt investors in the form of ban(cid:64) overdrafts(cid:11) ban(cid:64) loans(cid:11) corporate bonds(cid:11) unsecured notes(cid:11) and commercial paper. (cid:50)e have a mi(cid:77)ture of fi(cid:77)ed and floating interest rates and use interest rate s(cid:76)aps to provide further fle(cid:77)ibility in managing the interest cost of borro(cid:76)ings. Short(cid:12)term debt consists of ban(cid:64) debt (cid:76)ith a duration of less than 12 months and ban(cid:64) overdrafts (cid:76)hich are classified as current due to the short(cid:12)term nature of the borro(cid:76)ings(cid:11) e(cid:77)cept (cid:76)here (cid:76)e have the ability and intent to refinance and as such e(cid:77)tend the debt beyond 12 months. (cid:47)he current portion of long(cid:12)term debt consists of debt amounts repayable (cid:76)ithin a year after the balance sheet date. 37 38 Amcor Annual Report 2022 Form 10-K 39 Our primary ban(cid:64) debt facilities and notes are unsecured and sub(cid:63)ect to negative pledge arrangements limiting the (cid:27)a(cid:56)eria(cid:48) (cid:17)as(cid:44) Re(cid:53)(cid:57)ireme(cid:50)(cid:56)s amount of secured indebtedness (cid:76)e can incur to 10.0(cid:4) of our total tangible assets(cid:11) sub(cid:63)ect to some e(cid:77)ceptions and variations by facility. In addition(cid:11) the covenants of the ban(cid:64) debt facilities require us to maintain a leverage ratio not higher than 3.(cid:24) times. (cid:47)he negative pledge arrangements and the financial covenants are defined in the related debt agreements. As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e (cid:76)ere in compliance (cid:76)ith all applicable covenants under our ban(cid:64) debt facilities. Our net debt as of (cid:37)une 30(cid:11) 2022 and (cid:37)une 30(cid:11) 2021 (cid:76)as $5.7 billion and $5.4 billion(cid:11) respectively. (cid:15)(cid:58)ai(cid:48)a(cid:38)(cid:48)e (cid:20)i(cid:50)a(cid:50)(cid:39)i(cid:50)(cid:43) As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had undra(cid:76)n credit facilities available in the amount of $1.4 billion. Our senior facilities are available to fund (cid:76)or(cid:64)ing capital(cid:11) gro(cid:76)th capital e(cid:77)penditures(cid:11) and refinancing obligations and are provided to us by t(cid:76)o ban(cid:64) syndicates. (cid:47)hese facilities mature in April 2025 and April 2027(cid:11) respectively(cid:11) and the revolving tranches have t(cid:76)o 12(cid:12)month options available to management to e(cid:77)tend the maturity date. As of (cid:37)une 30(cid:11) 2022(cid:11) the revolving senior ban(cid:64) debt facilities had an aggregate limit of $3.8 billion(cid:11) of (cid:76)hich $2.4 billion had been dra(cid:76)n (inclusive of amounts dra(cid:76)n under commercial paper programs reducing the overall balance of available senior facilities). On April 26(cid:11) 2022(cid:11) (cid:76)e terminated the previously e(cid:77)isting senior ban(cid:64) debt facilities(cid:11) and simultaneously(cid:11) (cid:76)e entered into ne(cid:76) three(cid:12) and five(cid:12)year syndicated facility agreements providing an aggregate limit of $3.8 billion. Sub(cid:63)ect to certain conditions(cid:11) (cid:76)e can request the total commitment level under each agreement to be increased by up to $500 million. For further information(cid:11) refer to (cid:41)ote 14(cid:11) "(cid:31)ebt." On (cid:40)ay 17(cid:11) 2022(cid:11) (cid:76)e issued (cid:48).S. dollar notes (cid:76)ith a principal amount of $500 million and a contractual maturity in (cid:40)ay 2025. (cid:47)he notes pay a coupon of 4.00(cid:4) per annum(cid:11) payable semi(cid:12)annually in arrears. Amcor(cid:89)s material cash requirements for future periods from (cid:64)no(cid:76)n contractual obligations are included belo(cid:76). (cid:50)e e(cid:77)pect to fund these cash requirements primarily through cash flo(cid:76)s provided by operating activities(cid:11) borro(cid:76)ings from ban(cid:64)s(cid:11) and proceeds from issuances of debt and equity. (cid:47)hese amounts reflect material cash requirements for (cid:76)hich (cid:76)e are contractually committed. (cid:31)ebt obligations(cid:25) (cid:45)efer to (cid:41)ote 14(cid:11) (cid:86)(cid:31)ebt(cid:87) of the notes to consolidated financial statements for additional information about our debt obligations and the related timing of these e(cid:77)pected payments. Interest payments(cid:25) (cid:45)efer to (cid:41)ote 14(cid:11) (cid:86)(cid:31)ebt(cid:87) of the notes to consolidated financial statements for additional information about our interest payments and the related timing of the e(cid:77)pected payments. Operating and finance leases(cid:25) (cid:45)efer to (cid:41)ote 15(cid:11) (cid:86)Leases(cid:87) of the notes to consolidated financial statements for information about our lease obligations and the related timing of the e(cid:77)pected payments. Employee benefit plan obligations(cid:25) (cid:45)efer to (cid:41)ote 13(cid:11) (cid:86)(cid:43)ension and Other (cid:43)ost(cid:12)(cid:45)etirement (cid:43)lans(cid:87) of the notes to consolidated financial statements for additional information about our employee benefit plan obligations and the related timing of the e(cid:77)pected payments. 2023. Capital e(cid:77)penditures(cid:25) As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e have $223 million in committed capital e(cid:77)penditures for the fiscal year Other purchase obligations(cid:25) Amcor has other purchase obligations(cid:11) including commitments to purchase a specified minimum amount of goods(cid:11) inclusive of ra(cid:76) materials(cid:11) utilities(cid:11) and other. (cid:47)hese obligations are legally binding and non(cid:12)cancellable. (cid:50)here (cid:76)e are unable to determine the periods in (cid:76)hich these obligations could be payable under these contracts(cid:11) (cid:76)e present the cash requirement in the earliest period in (cid:76)hich the minimum obligation could be payable. (cid:47)he estimated future cash outlays are appro(cid:77)imately $1.6 billion(cid:11) $550 million(cid:11) $500 million(cid:11) $300 million(cid:11) and $100 million in fiscal years 2023(cid:11) 2024(cid:11) 2025(cid:11) 2026(cid:11) and 2027(cid:11) respectively. On (cid:31)ecember 15(cid:11) 2021(cid:11) (cid:76)e redeemed (cid:48).S. private placement notes of a principal amount of $275 million at maturity. (cid:29)ff(cid:7)(cid:16)a(cid:48)a(cid:50)(cid:39)e S(cid:44)ee(cid:56) (cid:15)rra(cid:50)(cid:43)eme(cid:50)(cid:56)s (cid:47)he notes carried an interest rate of 5.(cid:24)5(cid:4). On (cid:37)uly 15(cid:11) 2021(cid:11) (cid:76)e redeemed (cid:48).S. dollar notes (cid:76)ith a principal amount of $400 million that had a contractual maturity of October 15(cid:11) 2021 and carried an interest rate of 4.50(cid:4). sheet contractual obligations or other commitments. (cid:26)i(cid:53)(cid:57)i(cid:40)i(cid:56)(cid:61) Ris(cid:47) a(cid:50)(cid:40) (cid:29)(cid:57)(cid:56)(cid:48)oo(cid:47) Other than as described under "(cid:40)aterial Cash (cid:45)equirements" as of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had no significant off(cid:12)balance (cid:18)i(cid:58)i(cid:40)e(cid:50)(cid:40) (cid:30)a(cid:61)me(cid:50)(cid:56)s In fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) (cid:76)e paid $732 million(cid:11) $742 million(cid:11) and $761 million(cid:11) respectively(cid:11) in dividends. (cid:17)re(cid:40)i(cid:56) Ra(cid:56)i(cid:50)(cid:43) Our capital structure and financial practices have earned us investment grade credit ratings from t(cid:76)o internationally recogni(cid:79)ed credit rating agencies. (cid:47)hese investment grade credit ratings are important to our ability to issue debt at favorable rates of interest(cid:11) for various terms(cid:11) and from a diverse range of mar(cid:64)ets that are highly liquid(cid:11) including European and (cid:48).S. debt capital mar(cid:64)ets and from global financial institutions. S(cid:44)are Re(cid:52)(cid:57)r(cid:39)(cid:44)ases On August 17(cid:11) 2021(cid:11) our Board of (cid:31)irectors approved a $400 million buybac(cid:64) of ordinary shares and C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is"). In addition(cid:11) on February 1(cid:11) 2022(cid:11) our Board of (cid:31)irectors approved an additional $200 million buybac(cid:64) of ordinary shares and C(cid:31)Is. (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e repurchased appro(cid:77)imately $600 million(cid:11) e(cid:77)cluding transaction costs(cid:11) or 4(cid:24) million shares. (cid:47)he shares repurchased (cid:76)ere canceled upon repurchase. Additionally(cid:11) on August 17(cid:11) 2022(cid:11) our Board of (cid:31)irectors approved a further $400 million buybac(cid:64) of ordinary shares and(cid:14)or C(cid:31)Is in the ne(cid:77)t t(cid:76)elve months. (cid:50)e had cash outflo(cid:76)s of $143 million(cid:11) $8 million(cid:11) and $67 million for the purchase of our shares in the open mar(cid:64)et during fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively(cid:11) as treasury shares to satisfy the vesting and e(cid:77)ercises of share(cid:12)based compensation a(cid:76)ards. As of (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) (cid:76)e held treasury shares at cost of $18 million(cid:11) $2(cid:24) million(cid:11) and $67 million(cid:11) representing 2 million(cid:11) 3 million(cid:11) and 7 million shares(cid:11) respectively. Liquidity ris(cid:64) arises from the possibility that (cid:76)e might encounter difficulty in settling our debts or other(cid:76)ise meeting our obligations related to financial liabilities. (cid:50)e manage liquidity ris(cid:64) centrally and such management involves maintaining available funding and ensuring that (cid:76)e have access to an adequate amount of committed credit facilities. (cid:31)ue to the dynamic nature of our business(cid:11) the aim is to maintain fle(cid:77)ibility (cid:76)ithin our funding structure through the use of ban(cid:64) overdrafts(cid:11) ban(cid:64) loans(cid:11) corporate bonds(cid:11) unsecured notes(cid:11) and commercial paper. (cid:47)he follo(cid:76)ing guidelines are used to manage our liquidity ris(cid:64)(cid:25) (cid:82) maintaining minimum undra(cid:76)n committed liquidity of at least $200 million that can be dra(cid:76)n at short notice(cid:26) regularly performing a comprehensive analysis of all cash inflo(cid:76)s and outflo(cid:76)s in relation to operational(cid:11) investing(cid:11) and financing activities(cid:26) generally using tradable instruments only in highly liquid mar(cid:64)ets(cid:26) (cid:82) maintaining a senior credit investment grade rating (cid:76)ith a reputable independent rating agency(cid:26) (cid:82) managing credit ris(cid:64) related to financial assets(cid:26) (cid:82) monitoring the duration of long(cid:12)term debt(cid:26) only investing surplus cash (cid:76)ith ma(cid:63)or financial institutions(cid:26) and to the e(cid:77)tent practicable(cid:11) spreading the maturity dates of long(cid:12)term debt facilities. In the fourth quarter of fiscal year 2022(cid:11) (cid:76)e terminated our 3(cid:12)(cid:11) 4(cid:12)(cid:11) and 5(cid:12)year syndicated facility agreements. (cid:47)he three facility agreements collectively provided $3.8 billion of credit facilities. On the same day(cid:11) (cid:76)e entered into three(cid:12) and five(cid:12)year syndicated facility agreements that each provide a revolving credit facility of $1.(cid:24) billion(cid:11) $3.8 billion in total. (cid:47)he facilities are unsecured and have contractual maturities in April 2025 and April 2027(cid:11) respectively. (cid:47)he agreements include customary terms and conditions for a syndicated facility of this nature(cid:11) and the revolving tranches have t(cid:76)o 12(cid:12)month options available to management to e(cid:77)tend the maturity date. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) an aggregate principal amount of $2.4 billion and $1.8 billion(cid:11) respectively(cid:11) (cid:76)as dra(cid:76)n under commercial paper programs. (cid:35)o(cid:76)ever(cid:11) such programs are bac(cid:64)stopped by committed ban(cid:64) syndicated loan facilities (cid:76)ith maturities in April 2025 ($1.(cid:24) billion)(cid:11) and April 2027 ($1.(cid:24) billion)(cid:11) (cid:76)ith an option to e(cid:77)tend(cid:11) under (cid:76)hich (cid:76)e had $1.4 billion in unused capacity remaining as of (cid:37)une 30(cid:11) 2022. (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) 3(cid:24) Amcor Annual Report 2022 40 39 Form 10-K (cid:23)0 Our primary ban(cid:64) debt facilities and notes are unsecured and sub(cid:63)ect to negative pledge arrangements limiting the (cid:27)a(cid:56)eria(cid:48) (cid:17)as(cid:44) Re(cid:53)(cid:57)ireme(cid:50)(cid:56)s amount of secured indebtedness (cid:76)e can incur to 10.0(cid:4) of our total tangible assets(cid:11) sub(cid:63)ect to some e(cid:77)ceptions and variations by facility. In addition(cid:11) the covenants of the ban(cid:64) debt facilities require us to maintain a leverage ratio not higher than 3.(cid:24) times. (cid:47)he negative pledge arrangements and the financial covenants are defined in the related debt agreements. As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e (cid:76)ere in compliance (cid:76)ith all applicable covenants under our ban(cid:64) debt facilities. Our net debt as of (cid:37)une 30(cid:11) 2022 and (cid:37)une 30(cid:11) 2021 (cid:76)as $5.7 billion and $5.4 billion(cid:11) respectively. (cid:15)(cid:58)ai(cid:48)a(cid:38)(cid:48)e (cid:20)i(cid:50)a(cid:50)(cid:39)i(cid:50)(cid:43) As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had undra(cid:76)n credit facilities available in the amount of $1.4 billion. Our senior facilities are available to fund (cid:76)or(cid:64)ing capital(cid:11) gro(cid:76)th capital e(cid:77)penditures(cid:11) and refinancing obligations and are provided to us by t(cid:76)o ban(cid:64) syndicates. (cid:47)hese facilities mature in April 2025 and April 2027(cid:11) respectively(cid:11) and the revolving tranches have t(cid:76)o 12(cid:12)month options available to management to e(cid:77)tend the maturity date. As of (cid:37)une 30(cid:11) 2022(cid:11) the revolving senior ban(cid:64) debt facilities had an aggregate limit of $3.8 billion(cid:11) of (cid:76)hich $2.4 billion had been dra(cid:76)n (inclusive of amounts dra(cid:76)n under commercial paper programs reducing the overall balance of available senior facilities). On April 26(cid:11) 2022(cid:11) (cid:76)e terminated the previously e(cid:77)isting senior ban(cid:64) debt facilities(cid:11) and simultaneously(cid:11) (cid:76)e entered into ne(cid:76) three(cid:12) and five(cid:12)year syndicated facility agreements providing an aggregate limit of $3.8 billion. Sub(cid:63)ect to certain conditions(cid:11) (cid:76)e can request the total commitment level under each agreement to be increased by up to $500 million. For further information(cid:11) refer to (cid:41)ote 14(cid:11) "(cid:31)ebt." On (cid:40)ay 17(cid:11) 2022(cid:11) (cid:76)e issued (cid:48).S. dollar notes (cid:76)ith a principal amount of $500 million and a contractual maturity in (cid:40)ay 2025. (cid:47)he notes pay a coupon of 4.00(cid:4) per annum(cid:11) payable semi(cid:12)annually in arrears. Amcor(cid:89)s material cash requirements for future periods from (cid:64)no(cid:76)n contractual obligations are included belo(cid:76). (cid:50)e e(cid:77)pect to fund these cash requirements primarily through cash flo(cid:76)s provided by operating activities(cid:11) borro(cid:76)ings from ban(cid:64)s(cid:11) and proceeds from issuances of debt and equity. (cid:47)hese amounts reflect material cash requirements for (cid:76)hich (cid:76)e are contractually committed. (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:82) (cid:31)ebt obligations(cid:25) (cid:45)efer to (cid:41)ote 14(cid:11) (cid:86)(cid:31)ebt(cid:87) of the notes to consolidated financial statements for additional information about our debt obligations and the related timing of these e(cid:77)pected payments. Interest payments(cid:25) (cid:45)efer to (cid:41)ote 14(cid:11) (cid:86)(cid:31)ebt(cid:87) of the notes to consolidated financial statements for additional information about our interest payments and the related timing of the e(cid:77)pected payments. Operating and finance leases(cid:25) (cid:45)efer to (cid:41)ote 15(cid:11) (cid:86)Leases(cid:87) of the notes to consolidated financial statements for information about our lease obligations and the related timing of the e(cid:77)pected payments. Employee benefit plan obligations(cid:25) (cid:45)efer to (cid:41)ote 13(cid:11) (cid:86)(cid:43)ension and Other (cid:43)ost(cid:12)(cid:45)etirement (cid:43)lans(cid:87) of the notes to consolidated financial statements for additional information about our employee benefit plan obligations and the related timing of the e(cid:77)pected payments. Capital e(cid:77)penditures(cid:25) As of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e have $223 million in committed capital e(cid:77)penditures for the fiscal year 2023. Other purchase obligations(cid:25) Amcor has other purchase obligations(cid:11) including commitments to purchase a specified minimum amount of goods(cid:11) inclusive of ra(cid:76) materials(cid:11) utilities(cid:11) and other. (cid:47)hese obligations are legally binding and non(cid:12)cancellable. (cid:50)here (cid:76)e are unable to determine the periods in (cid:76)hich these obligations could be payable under these contracts(cid:11) (cid:76)e present the cash requirement in the earliest period in (cid:76)hich the minimum obligation could be payable. (cid:47)he estimated future cash outlays are appro(cid:77)imately $1.6 billion(cid:11) $550 million(cid:11) $500 million(cid:11) $300 million(cid:11) and $100 million in fiscal years 2023(cid:11) 2024(cid:11) 2025(cid:11) 2026(cid:11) and 2027(cid:11) respectively. On (cid:31)ecember 15(cid:11) 2021(cid:11) (cid:76)e redeemed (cid:48).S. private placement notes of a principal amount of $275 million at maturity. (cid:29)ff(cid:7)(cid:16)a(cid:48)a(cid:50)(cid:39)e S(cid:44)ee(cid:56) (cid:15)rra(cid:50)(cid:43)eme(cid:50)(cid:56)s (cid:47)he notes carried an interest rate of 5.(cid:24)5(cid:4). Other than as described under "(cid:40)aterial Cash (cid:45)equirements" as of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e had no significant off(cid:12)balance On (cid:37)uly 15(cid:11) 2021(cid:11) (cid:76)e redeemed (cid:48).S. dollar notes (cid:76)ith a principal amount of $400 million that had a contractual maturity of October 15(cid:11) 2021 and carried an interest rate of 4.50(cid:4). sheet contractual obligations or other commitments. (cid:26)i(cid:53)(cid:57)i(cid:40)i(cid:56)(cid:61) Ris(cid:47) a(cid:50)(cid:40) (cid:29)(cid:57)(cid:56)(cid:48)oo(cid:47) Liquidity ris(cid:64) arises from the possibility that (cid:76)e might encounter difficulty in settling our debts or other(cid:76)ise meeting our obligations related to financial liabilities. (cid:50)e manage liquidity ris(cid:64) centrally and such management involves maintaining available funding and ensuring that (cid:76)e have access to an adequate amount of committed credit facilities. (cid:31)ue to the dynamic nature of our business(cid:11) the aim is to maintain fle(cid:77)ibility (cid:76)ithin our funding structure through the use of ban(cid:64) overdrafts(cid:11) ban(cid:64) loans(cid:11) corporate bonds(cid:11) unsecured notes(cid:11) and commercial paper. (cid:47)he follo(cid:76)ing guidelines are used to manage our liquidity ris(cid:64)(cid:25) (cid:82) maintaining minimum undra(cid:76)n committed liquidity of at least $200 million that can be dra(cid:76)n at short notice(cid:26) (cid:82) regularly performing a comprehensive analysis of all cash inflo(cid:76)s and outflo(cid:76)s in relation to operational(cid:11) investing(cid:11) and financing activities(cid:26) generally using tradable instruments only in highly liquid mar(cid:64)ets(cid:26) (cid:82) (cid:82) maintaining a senior credit investment grade rating (cid:76)ith a reputable independent rating agency(cid:26) (cid:82) managing credit ris(cid:64) related to financial assets(cid:26) (cid:82) monitoring the duration of long(cid:12)term debt(cid:26) (cid:82) (cid:82) only investing surplus cash (cid:76)ith ma(cid:63)or financial institutions(cid:26) and to the e(cid:77)tent practicable(cid:11) spreading the maturity dates of long(cid:12)term debt facilities. In the fourth quarter of fiscal year 2022(cid:11) (cid:76)e terminated our 3(cid:12)(cid:11) 4(cid:12)(cid:11) and 5(cid:12)year syndicated facility agreements. (cid:47)he three facility agreements collectively provided $3.8 billion of credit facilities. On the same day(cid:11) (cid:76)e entered into three(cid:12) and five(cid:12)year syndicated facility agreements that each provide a revolving credit facility of $1.(cid:24) billion(cid:11) $3.8 billion in total. (cid:47)he facilities are unsecured and have contractual maturities in April 2025 and April 2027(cid:11) respectively. (cid:47)he agreements include customary terms and conditions for a syndicated facility of this nature(cid:11) and the revolving tranches have t(cid:76)o 12(cid:12)month options available to management to e(cid:77)tend the maturity date. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) an aggregate principal amount of $2.4 billion and $1.8 billion(cid:11) respectively(cid:11) (cid:76)as dra(cid:76)n under commercial paper programs. (cid:35)o(cid:76)ever(cid:11) such programs are bac(cid:64)stopped by committed ban(cid:64) syndicated loan facilities (cid:76)ith maturities in April 2025 ($1.(cid:24) billion)(cid:11) and April 2027 ($1.(cid:24) billion)(cid:11) (cid:76)ith an option to e(cid:77)tend(cid:11) under (cid:76)hich (cid:76)e had $1.4 billion in unused capacity remaining as of (cid:37)une 30(cid:11) 2022. 3(cid:24) 40 Amcor Annual Report 2022 (cid:18)i(cid:58)i(cid:40)e(cid:50)(cid:40) (cid:30)a(cid:61)me(cid:50)(cid:56)s (cid:17)re(cid:40)i(cid:56) Ra(cid:56)i(cid:50)(cid:43) S(cid:44)are Re(cid:52)(cid:57)r(cid:39)(cid:44)ases In fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) (cid:76)e paid $732 million(cid:11) $742 million(cid:11) and $761 million(cid:11) respectively(cid:11) in dividends. Our capital structure and financial practices have earned us investment grade credit ratings from t(cid:76)o internationally recogni(cid:79)ed credit rating agencies. (cid:47)hese investment grade credit ratings are important to our ability to issue debt at favorable rates of interest(cid:11) for various terms(cid:11) and from a diverse range of mar(cid:64)ets that are highly liquid(cid:11) including European and (cid:48).S. debt capital mar(cid:64)ets and from global financial institutions. On August 17(cid:11) 2021(cid:11) our Board of (cid:31)irectors approved a $400 million buybac(cid:64) of ordinary shares and C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is"). In addition(cid:11) on February 1(cid:11) 2022(cid:11) our Board of (cid:31)irectors approved an additional $200 million buybac(cid:64) of ordinary shares and C(cid:31)Is. (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)e repurchased appro(cid:77)imately $600 million(cid:11) e(cid:77)cluding transaction costs(cid:11) or 4(cid:24) million shares. (cid:47)he shares repurchased (cid:76)ere canceled upon repurchase. Additionally(cid:11) on August 17(cid:11) 2022(cid:11) our Board of (cid:31)irectors approved a further $400 million buybac(cid:64) of ordinary shares and(cid:14)or C(cid:31)Is in the ne(cid:77)t t(cid:76)elve months. (cid:50)e had cash outflo(cid:76)s of $143 million(cid:11) $8 million(cid:11) and $67 million for the purchase of our shares in the open mar(cid:64)et during fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively(cid:11) as treasury shares to satisfy the vesting and e(cid:77)ercises of share(cid:12)based compensation a(cid:76)ards. As of (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) (cid:76)e held treasury shares at cost of $18 million(cid:11) $2(cid:24) million(cid:11) and $67 million(cid:11) representing 2 million(cid:11) 3 million(cid:11) and 7 million shares(cid:11) respectively. Form 10-K 41 (cid:50)e e(cid:77)pect long(cid:12)term future funding needs to primarily relate to refinancing and servicing our outstanding financial Critical Accounting Estimates and Judgments liabilities maturing as outlined above and to finance our capital e(cid:77)penditure and payments for acquisitions that may be completed. (cid:50)e e(cid:77)pect to continue to fund our long(cid:12)term business needs on the same basis as in the past(cid:11) i.e.(cid:11) partially through the cash flo(cid:76) provided by operating activities available to the business and management of the capital of the business(cid:11) in particular through issuance of commercial paper and debt securities on a regular basis. (cid:50)e decide on discretionary gro(cid:76)th capital e(cid:77)penditures and acquisitions individually based on(cid:11) among other factors(cid:11) the return on investment after related financing costs and the paybac(cid:64) period of required upfront cash investments in light of our mid(cid:12)term liquidity planning covering a period of four years post the current fiscal year. Our long(cid:12)term access to liquidity depends on both our results of operations and on the availability of funding in financial mar(cid:64)ets. Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements(cid:11) (cid:76)hich have been prepared in accordance (cid:76)ith (cid:48).S. (cid:34)AA(cid:43). (cid:47)he preparation of these financial statements requires us to ma(cid:64)e estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of e(cid:77)penses during the reporting period. On an ongoing basis(cid:11) (cid:76)e evaluate our estimates and (cid:63)udgments(cid:11) including those related to retirement benefits(cid:11) intangible assets(cid:11) good(cid:76)ill(cid:11) and e(cid:77)pected future performance of operations. Our estimates and (cid:63)udgments are based on historical e(cid:77)perience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. (cid:50)e believe the follo(cid:76)ing are critical accounting estimates used in the preparation of our consolidated financial statements. Pension Costs (cid:82) (cid:82) (cid:82) (cid:82) the calculation of annual pension costs and related assets and liabilities(cid:26) valuation of intangible assets and good(cid:76)ill(cid:26) calculation of deferred ta(cid:77)es and uncertain ta(cid:77) positions(cid:26) and valuation of assets and liabilities held for sale. Appro(cid:77)imately (cid:24)0(cid:4) of our principal defined benefit plans are closed to ne(cid:76) entrants and future accruals. (cid:47)he accounting for defined benefit pension plans requires us to recogni(cid:79)e the overfunded or underfunded status of the pension plans on our balance sheet. A substantial portion of our pension amounts relates to our defined benefit plans in the (cid:48)nited States(cid:11) S(cid:76)it(cid:79)erland(cid:11) and the (cid:48)nited (cid:38)ingdom. (cid:41)et periodic pension cost recorded in fiscal year 2022 (cid:76)as $12 million(cid:11) compared to pension cost of $15 million in fiscal year 2021 and $10 million in fiscal year 2020. (cid:50)e e(cid:77)pect net periodic pension cost before the effect of income ta(cid:77)es for fiscal year 2023 to be appro(cid:77)imately $(cid:24) million. For our sponsored plans(cid:11) the relevant accounting guidance requires that management ma(cid:64)e certain assumptions relating to the long(cid:12)term rate of return on plan assets(cid:11) discount rates used to determine the present value of future obligations and e(cid:77)penses(cid:11) salary inflation rates(cid:11) mortality rates(cid:11) and other assumptions. (cid:50)e believe that 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(cid:11) actuarial valuations(cid:11) mar(cid:64)et conditions(cid:11) and contracted benefit changes. (cid:47)he selection of assumptions is based on historical trends and (cid:64)no(cid:76)n economic and mar(cid:64)et conditions at the time of valuation(cid:11) as (cid:76)ell as independent studies of trends performed by our actuaries. (cid:35)o(cid:76)ever(cid:11) actual results may differ substantially from the estimates that (cid:76)ere based on the critical assumptions. (cid:47)he amount by (cid:76)hich the fair value of plan assets differs from the pro(cid:63)ected benefit obligation of a pension plan must be recorded on the consolidated balance sheets as an asset(cid:11) in the case of an overfunded plan(cid:11) or as a liability(cid:11) in the case of an underfunded plan. (cid:47)he gains or losses and prior service costs or credits that arise but are not recogni(cid:79)ed as components of pension cost are recorded as a component of other comprehensive income(cid:14)(loss). (cid:43)ension plan liabilities are revalued annually(cid:11) or (cid:76)hen an event occurs that requires remeasurement(cid:11) based on updated assumptions and information about the individuals covered by the plan. Accumulated actuarial gains and losses in e(cid:77)cess of a 10 percent corridor and the prior service cost are amorti(cid:79)ed on a straight(cid:12)line basis from the date recogni(cid:79)ed over the average remaining service period of active participants or over the average life e(cid:77)pectancy for plans (cid:76)ith significant inactive participants. (cid:47)he service costs related to defined benefits are included in operating income. (cid:47)he other components of net benefit cost are presented in the consolidated statements of income separately from the service cost component and outside operating income. (cid:50)e revie(cid:76) annually the discount rate used to calculate the present value of pension plan liabilities. (cid:47)he discount rate used at each measurement date is set based on a high(cid:12)quality corporate bond yield curve(cid:11) derived based on bond universe information sourced from reputable third(cid:12)party inde(cid:77)es(cid:11) data providers(cid:11) and rating agencies. In countries (cid:76)here there is no deep mar(cid:64)et in corporate bonds(cid:11) (cid:76)e have used a government bond approach to set the discount rate. Additionally(cid:11) the e(cid:77)pected long(cid:12) term rate of return on plan assets is derived for each benefit plan by considering the e(cid:77)pected future long(cid:12)term return assumption for each individual asset class. A single long(cid:12)term return assumption is then derived for each plan based upon the plan(cid:6)s target asset allocation. 41 Amcor Annual Report 2022 42 (cid:50)e e(cid:77)pect long(cid:12)term future funding needs to primarily relate to refinancing and servicing our outstanding financial Critical Accounting Estimates and Judgments 41 Form 10-K (cid:23)2 liabilities maturing as outlined above and to finance our capital e(cid:77)penditure and payments for acquisitions that may be completed. (cid:50)e e(cid:77)pect to continue to fund our long(cid:12)term business needs on the same basis as in the past(cid:11) i.e.(cid:11) partially through the cash flo(cid:76) provided by operating activities available to the business and management of the capital of the business(cid:11) in particular through issuance of commercial paper and debt securities on a regular basis. (cid:50)e decide on discretionary gro(cid:76)th capital e(cid:77)penditures and acquisitions individually based on(cid:11) among other factors(cid:11) the return on investment after related financing costs and the paybac(cid:64) period of required upfront cash investments in light of our mid(cid:12)term liquidity planning covering a period of four years post the current fiscal year. Our long(cid:12)term access to liquidity depends on both our results of operations and on the availability of funding in financial mar(cid:64)ets. Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements(cid:11) (cid:76)hich have been prepared in accordance (cid:76)ith (cid:48).S. (cid:34)AA(cid:43). (cid:47)he preparation of these financial statements requires us to ma(cid:64)e estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of e(cid:77)penses during the reporting period. On an ongoing basis(cid:11) (cid:76)e evaluate our estimates and (cid:63)udgments(cid:11) including those related to retirement benefits(cid:11) intangible assets(cid:11) good(cid:76)ill(cid:11) and e(cid:77)pected future performance of operations. Our estimates and (cid:63)udgments are based on historical e(cid:77)perience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. (cid:50)e believe the follo(cid:76)ing are critical accounting estimates used in the preparation of our consolidated financial statements. (cid:82) (cid:82) (cid:82) (cid:82) the calculation of annual pension costs and related assets and liabilities(cid:26) valuation of intangible assets and good(cid:76)ill(cid:26) calculation of deferred ta(cid:77)es and uncertain ta(cid:77) positions(cid:26) and valuation of assets and liabilities held for sale. Pension Costs Appro(cid:77)imately (cid:24)0(cid:4) of our principal defined benefit plans are closed to ne(cid:76) entrants and future accruals. (cid:47)he accounting for defined benefit pension plans requires us to recogni(cid:79)e the overfunded or underfunded status of the pension plans on our balance sheet. A substantial portion of our pension amounts relates to our defined benefit plans in the (cid:48)nited States(cid:11) S(cid:76)it(cid:79)erland(cid:11) and the (cid:48)nited (cid:38)ingdom. (cid:41)et periodic pension cost recorded in fiscal year 2022 (cid:76)as $12 million(cid:11) compared to pension cost of $15 million in fiscal year 2021 and $10 million in fiscal year 2020. (cid:50)e e(cid:77)pect net periodic pension cost before the effect of income ta(cid:77)es for fiscal year 2023 to be appro(cid:77)imately $(cid:24) million. For our sponsored plans(cid:11) the relevant accounting guidance requires that management ma(cid:64)e certain assumptions relating to the long(cid:12)term rate of return on plan assets(cid:11) discount rates used to determine the present value of future obligations and e(cid:77)penses(cid:11) salary inflation rates(cid:11) mortality rates(cid:11) and other assumptions. (cid:50)e believe that 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(cid:11) actuarial valuations(cid:11) mar(cid:64)et conditions(cid:11) and contracted benefit changes. (cid:47)he selection of assumptions is based on historical trends and (cid:64)no(cid:76)n economic and mar(cid:64)et conditions at the time of valuation(cid:11) as (cid:76)ell as independent studies of trends performed by our actuaries. (cid:35)o(cid:76)ever(cid:11) actual results may differ substantially from the estimates that (cid:76)ere based on the critical assumptions. (cid:47)he amount by (cid:76)hich the fair value of plan assets differs from the pro(cid:63)ected benefit obligation of a pension plan must be recorded on the consolidated balance sheets as an asset(cid:11) in the case of an overfunded plan(cid:11) or as a liability(cid:11) in the case of an underfunded plan. (cid:47)he gains or losses and prior service costs or credits that arise but are not recogni(cid:79)ed as components of pension cost are recorded as a component of other comprehensive income(cid:14)(loss). (cid:43)ension plan liabilities are revalued annually(cid:11) or (cid:76)hen an event occurs that requires remeasurement(cid:11) based on updated assumptions and information about the individuals covered by the plan. Accumulated actuarial gains and losses in e(cid:77)cess of a 10 percent corridor and the prior service cost are amorti(cid:79)ed on a straight(cid:12)line basis from the date recogni(cid:79)ed over the average remaining service period of active participants or over the average life e(cid:77)pectancy for plans (cid:76)ith significant inactive participants. (cid:47)he service costs related to defined benefits are included in operating income. (cid:47)he other components of net benefit cost are presented in the consolidated statements of income separately from the service cost component and outside operating income. (cid:50)e revie(cid:76) annually the discount rate used to calculate the present value of pension plan liabilities. (cid:47)he discount rate used at each measurement date is set based on a high(cid:12)quality corporate bond yield curve(cid:11) derived based on bond universe information sourced from reputable third(cid:12)party inde(cid:77)es(cid:11) data providers(cid:11) and rating agencies. In countries (cid:76)here there is no deep mar(cid:64)et in corporate bonds(cid:11) (cid:76)e have used a government bond approach to set the discount rate. Additionally(cid:11) the e(cid:77)pected long(cid:12) term rate of return on plan assets is derived for each benefit plan by considering the e(cid:77)pected future long(cid:12)term return assumption for each individual asset class. A single long(cid:12)term return assumption is then derived for each plan based upon the plan(cid:6)s target asset allocation. 41 42 Amcor Annual Report 2022 the more li(cid:64)ely than not threshold based on all available evidence. Significant (cid:63)udgments and estimates(cid:11) including e(cid:77)pected future performance of operations and ta(cid:77)able earnings and the feasibility of ta(cid:77) planning strategies(cid:11) are required in determining future changes to ta(cid:77) la(cid:76)s or statutory ta(cid:77) rates(cid:11) (cid:76)e may need to ad(cid:63)ust valuation allo(cid:76)ances or ta(cid:77) liabilities(cid:11) (cid:76)hich could have a material impact on our consolidated financial position and results of operations. Valuation of Assets and Liabilities (cid:32)eld for Sale (cid:31)isposal groups held for sale are assessed for impairment by comparing their fair values less cost to sell to their carrying values. (cid:47)he fair values of disposal groups held for sale are estimated using accepted valuation techniques (cid:76)hich include earnings multiples(cid:11) discounted cash flo(cid:76)s(cid:11) and indicative bids. A number of significant estimates and assumptions are involved in the application of these techniques(cid:11) including the forecasting of sales(cid:11) e(cid:77)penses(cid:11) and a variety of other factors. (cid:50)e consider historical e(cid:77)perience(cid:11) guidance received from third parties(cid:11) and all other information available at the time the estimates are made to derive fair value. (cid:35)o(cid:76)ever(cid:11) the fair value that is ultimately reali(cid:79)ed upon the divestiture of a business may significantly differ from the estimated fair value recogni(cid:79)ed in our consolidated financial statements(cid:11) especially for disposal groups located (cid:76)ithin countries at (cid:76)ar. (cid:38)ew Accounting Pronouncements ne(cid:76) accounting pronouncements. (cid:45)efer to (cid:41)ote 3(cid:11) "(cid:41)e(cid:76) Accounting (cid:34)uidance" of the notes to consolidated financial statements for information about (cid:30)e(cid:50)sio(cid:50) (cid:15)ss(cid:57)m(cid:52)(cid:56)io(cid:50)s Se(cid:50)si(cid:56)i(cid:58)i(cid:56)(cid:61) (cid:15)(cid:50)a(cid:48)(cid:61)sis (cid:47)he follo(cid:76)ing chart depicts the sensitivity of estimated fiscal year 2023 pension e(cid:77)pense to incremental changes in the the need for and amount of valuation allo(cid:76)ances for deferred ta(cid:77) assets. If actual results differ from these estimates or there are discount rate and the e(cid:77)pected long(cid:12)term rate of return on assets. Form 10-K 43 (cid:44)otal Increase (Decrease) to Pension E(cid:74)pense from Current Assumption (cid:44)otal Increase (Decrease) to Pension E(cid:74)pense from Current Assumption Discount Rate (cid:10)25 basis points (in (cid:3) millions) Rate of Return on Plan Assets (in (cid:3) millions) 1 (cid:10)25 basis points 3(cid:12)(cid:22)0 percent (current assumption) (cid:85) (cid:18)(cid:12)(cid:18)2 percent (current assumption) (cid:12)25 basis points (1) (cid:12)25 basis points (3) (cid:85) 3 Intangible Assets and (cid:31)oodwill (cid:34)ood(cid:76)ill represents the e(cid:77)cess of the aggregate purchase price over the fair value of net assets acquired(cid:11) including intangible assets. (cid:34)ood(cid:76)ill is not amorti(cid:79)ed but is instead tested annually or (cid:76)hen events and circumstances indicate an impairment may have occurred. Our reporting units each contain good(cid:76)ill that is assessed for potential impairment. All good(cid:76)ill is assigned to a reporting unit(cid:11) (cid:76)hich is defined as an operating segment(cid:11) at the time of each acquisition based on the relative fair value of the reporting unit. (cid:50)e have si(cid:77) reporting units(cid:11) of (cid:76)hich five are included in our Fle(cid:77)ibles Segment. (cid:47)he other reporting unit that is also a reportable segment is (cid:45)igid (cid:43)ac(cid:64)aging. (cid:34)ood(cid:76)ill for our reporting units is revie(cid:76)ed for impairment annually in the fourth quarter of each year or (cid:76)henever events and circumstances indicate an impairment may have occurred during the year. (cid:50)hen the carrying value of a reporting unit e(cid:77)ceeds its fair value(cid:11) (cid:76)e recogni(cid:79)e an impairment loss equal to the difference bet(cid:76)een the carrying value and estimated fair value of the reporting unit(cid:11) ad(cid:63)usted for any ta(cid:77) benefits(cid:11) limited to the amount of the carrying value of good(cid:76)ill. In performing our impairment analysis(cid:11) (cid:76)e may elect to first assess qualitative factors to determine (cid:76)hether a quantitative test is necessary. If (cid:76)e determine that a quantitative test is necessary(cid:11) or elect to perform a quantitative test instead of the qualitative test(cid:11) (cid:76)e derive an estimate of fair values for each of our reporting units using income approaches. (cid:47)he most significant assumptions used in the determination of the estimated fair value of the reporting units are revenue gro(cid:76)th(cid:11) pro(cid:63)ected operating income gro(cid:76)th(cid:11) terminal values(cid:11) and discount rates. Our estimates associated (cid:76)ith the good(cid:76)ill impairment tests are considered critical due to the amount of good(cid:76)ill recorded on our consolidated balance sheets and the (cid:63)udgment required in determining fair value amounts(cid:11) including pro(cid:63)ected future cash flo(cid:76)s. (cid:37)udgment is used in assessing (cid:76)hether good(cid:76)ill should be tested more frequently for impairment than annually. Factors such as a significant decrease in e(cid:77)pected net earnings(cid:11) adverse equity mar(cid:64)et conditions(cid:11) and other e(cid:77)ternal events(cid:11) such as the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic and the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) may result in the need for more frequent assessments. Intangible assets consist primarily of purchased customer relationships(cid:11) technology(cid:11) trademar(cid:64)s(cid:11) and soft(cid:76)are and are amorti(cid:79)ed using the straight(cid:12)line method over their estimated useful lives(cid:11) (cid:76)hich range from one to 20 years. (cid:50)e revie(cid:76) these intangible assets for impairment as changes in circumstances or the occurrence of events suggest that the remaining value is not recoverable. (cid:47)he test for impairment requires us to ma(cid:64)e estimates about fair value(cid:11) most of (cid:76)hich are based on pro(cid:63)ected future cash flo(cid:76)s and discount rates. (cid:47)hese estimates and pro(cid:63)ections require (cid:63)udgments as to future events(cid:11) conditions(cid:11) and amounts of future cash flo(cid:76)s. Deferred (cid:44)a(cid:74)es and (cid:45)ncertain (cid:44)a(cid:74) Positions (cid:50)e deal (cid:76)ith uncertainties and (cid:63)udgments in the application of comple(cid:77) ta(cid:77) regulations in a multitude of (cid:63)urisdictions. (cid:47)he determination of uncertain ta(cid:77) positions is based on an evaluation of (cid:76)hether the (cid:76)eight of available evidence indicates that it is more li(cid:64)ely than not that the position ta(cid:64)en or e(cid:77)pected to be ta(cid:64)en in the ta(cid:77) return (cid:76)ill be sustained on ta(cid:77) audit(cid:11) including resolution of related appeals or litigation processes(cid:11) if any. (cid:47)he recogni(cid:79)ed ta(cid:77) benefits are measured as the largest benefit of having a more li(cid:64)ely than not li(cid:64)elihood of being sustained upon settlement. Significant estimates are required in determining such uncertain ta(cid:77) positions and related income ta(cid:77) e(cid:77)pense and benefit. Additionally(cid:11) (cid:76)e are also required to assess the li(cid:64)elihood of recovering deferred ta(cid:77) assets against future sources of ta(cid:77)able income (cid:76)hich might result in the need for a valuation allo(cid:76)ance on deferred ta(cid:77) assets(cid:11) including operating loss(cid:11) capital loss(cid:11) and ta(cid:77) credit carryfor(cid:76)ards if (cid:76)e do not reach 43 Amcor Annual Report 2022 44 43 Form 10-K 44 the more li(cid:64)ely than not threshold based on all available evidence. Significant (cid:63)udgments and estimates(cid:11) including e(cid:77)pected future performance of operations and ta(cid:77)able earnings and the feasibility of ta(cid:77) planning strategies(cid:11) are required in determining the need for and amount of valuation allo(cid:76)ances for deferred ta(cid:77) assets. If actual results differ from these estimates or there are future changes to ta(cid:77) la(cid:76)s or statutory ta(cid:77) rates(cid:11) (cid:76)e may need to ad(cid:63)ust valuation allo(cid:76)ances or ta(cid:77) liabilities(cid:11) (cid:76)hich could have a material impact on our consolidated financial position and results of operations. Valuation of Assets and Liabilities (cid:32)eld for Sale (cid:31)isposal groups held for sale are assessed for impairment by comparing their fair values less cost to sell to their carrying values. (cid:47)he fair values of disposal groups held for sale are estimated using accepted valuation techniques (cid:76)hich include earnings multiples(cid:11) discounted cash flo(cid:76)s(cid:11) and indicative bids. A number of significant estimates and assumptions are involved in the application of these techniques(cid:11) including the forecasting of sales(cid:11) e(cid:77)penses(cid:11) and a variety of other factors. (cid:50)e consider historical e(cid:77)perience(cid:11) guidance received from third parties(cid:11) and all other information available at the time the estimates are made to derive fair value. (cid:35)o(cid:76)ever(cid:11) the fair value that is ultimately reali(cid:79)ed upon the divestiture of a business may significantly differ from the estimated fair value recogni(cid:79)ed in our consolidated financial statements(cid:11) especially for disposal groups located (cid:76)ithin countries at (cid:76)ar. (cid:38)ew Accounting Pronouncements (cid:45)efer to (cid:41)ote 3(cid:11) "(cid:41)e(cid:76) Accounting (cid:34)uidance" of the notes to consolidated financial statements for information about ne(cid:76) accounting pronouncements. (cid:30)e(cid:50)sio(cid:50) (cid:15)ss(cid:57)m(cid:52)(cid:56)io(cid:50)s Se(cid:50)si(cid:56)i(cid:58)i(cid:56)(cid:61) (cid:15)(cid:50)a(cid:48)(cid:61)sis (cid:47)he follo(cid:76)ing chart depicts the sensitivity of estimated fiscal year 2023 pension e(cid:77)pense to incremental changes in the discount rate and the e(cid:77)pected long(cid:12)term rate of return on assets. (cid:44)otal Increase (Decrease) to Pension E(cid:74)pense from Current Assumption (cid:44)otal Increase (Decrease) to Pension E(cid:74)pense from Current Assumption (3) (cid:85) 3 (in (cid:3) millions) Rate of Return on Plan Assets (in (cid:3) millions) 3(cid:12)(cid:22)0 percent (current assumption) (cid:85) (cid:18)(cid:12)(cid:18)2 percent (current assumption) 1 (cid:10)25 basis points (1) (cid:12)25 basis points Discount Rate (cid:10)25 basis points (cid:12)25 basis points Intangible Assets and (cid:31)oodwill (cid:34)ood(cid:76)ill represents the e(cid:77)cess of the aggregate purchase price over the fair value of net assets acquired(cid:11) including intangible assets. (cid:34)ood(cid:76)ill is not amorti(cid:79)ed but is instead tested annually or (cid:76)hen events and circumstances indicate an impairment may have occurred. Our reporting units each contain good(cid:76)ill that is assessed for potential impairment. All good(cid:76)ill is assigned to a reporting unit(cid:11) (cid:76)hich is defined as an operating segment(cid:11) at the time of each acquisition based on the relative fair value of the reporting unit. (cid:50)e have si(cid:77) reporting units(cid:11) of (cid:76)hich five are included in our Fle(cid:77)ibles Segment. (cid:47)he other reporting unit that is also a reportable segment is (cid:45)igid (cid:43)ac(cid:64)aging. (cid:34)ood(cid:76)ill for our reporting units is revie(cid:76)ed for impairment annually in the fourth quarter of each year or (cid:76)henever events and circumstances indicate an impairment may have occurred during the year. (cid:50)hen the carrying value of a reporting unit e(cid:77)ceeds its fair value(cid:11) (cid:76)e recogni(cid:79)e an impairment loss equal to the difference bet(cid:76)een the carrying value and estimated fair value of the reporting unit(cid:11) ad(cid:63)usted for any ta(cid:77) benefits(cid:11) limited to the amount of the carrying value of good(cid:76)ill. In performing our impairment analysis(cid:11) (cid:76)e may elect to first assess qualitative factors to determine (cid:76)hether a quantitative test is necessary. If (cid:76)e determine that a quantitative test is necessary(cid:11) or elect to perform a quantitative test instead of the qualitative test(cid:11) (cid:76)e derive an estimate of fair values for each of our reporting units using income approaches. (cid:47)he most significant assumptions used in the determination of the estimated fair value of the reporting units are revenue gro(cid:76)th(cid:11) pro(cid:63)ected operating income gro(cid:76)th(cid:11) terminal values(cid:11) and discount rates. Our estimates associated (cid:76)ith the good(cid:76)ill impairment tests are considered critical due to the amount of good(cid:76)ill recorded on our consolidated balance sheets and the (cid:63)udgment required in determining fair value amounts(cid:11) including pro(cid:63)ected future cash flo(cid:76)s. (cid:37)udgment is used in assessing (cid:76)hether good(cid:76)ill should be tested more frequently for impairment than annually. Factors such as a significant decrease in e(cid:77)pected net earnings(cid:11) adverse equity mar(cid:64)et conditions(cid:11) and other e(cid:77)ternal events(cid:11) such as the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic and the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict(cid:11) may result in the need for more frequent assessments. Intangible assets consist primarily of purchased customer relationships(cid:11) technology(cid:11) trademar(cid:64)s(cid:11) and soft(cid:76)are and are amorti(cid:79)ed using the straight(cid:12)line method over their estimated useful lives(cid:11) (cid:76)hich range from one to 20 years. (cid:50)e revie(cid:76) these intangible assets for impairment as changes in circumstances or the occurrence of events suggest that the remaining value is not recoverable. (cid:47)he test for impairment requires us to ma(cid:64)e estimates about fair value(cid:11) most of (cid:76)hich are based on pro(cid:63)ected future cash flo(cid:76)s and discount rates. (cid:47)hese estimates and pro(cid:63)ections require (cid:63)udgments as to future events(cid:11) conditions(cid:11) and amounts of future cash flo(cid:76)s. Deferred (cid:44)a(cid:74)es and (cid:45)ncertain (cid:44)a(cid:74) Positions (cid:50)e deal (cid:76)ith uncertainties and (cid:63)udgments in the application of comple(cid:77) ta(cid:77) regulations in a multitude of (cid:63)urisdictions. (cid:47)he determination of uncertain ta(cid:77) positions is based on an evaluation of (cid:76)hether the (cid:76)eight of available evidence indicates that it is more li(cid:64)ely than not that the position ta(cid:64)en or e(cid:77)pected to be ta(cid:64)en in the ta(cid:77) return (cid:76)ill be sustained on ta(cid:77) audit(cid:11) including resolution of related appeals or litigation processes(cid:11) if any. (cid:47)he recogni(cid:79)ed ta(cid:77) benefits are measured as the largest benefit of having a more li(cid:64)ely than not li(cid:64)elihood of being sustained upon settlement. Significant estimates are required in determining such uncertain ta(cid:77) positions and related income ta(cid:77) e(cid:77)pense and benefit. Additionally(cid:11) (cid:76)e are also required to assess the li(cid:64)elihood of recovering deferred ta(cid:77) assets against future sources of ta(cid:77)able income (cid:76)hich might result in the need for a valuation allo(cid:76)ance on deferred ta(cid:77) assets(cid:11) including operating loss(cid:11) capital loss(cid:11) and ta(cid:77) credit carryfor(cid:76)ards if (cid:76)e do not reach 43 44 Amcor Annual Report 2022 Form 10-K 45 Item (cid:21)A(cid:12) - Quantitative and Qualitative Disclosures About (cid:37)ar(cid:61)et Ris(cid:61) (cid:29)(cid:58)er(cid:58)iew A 1(cid:4) increase on average prices for resins(cid:11) film(cid:11) aluminum(cid:11) and liquids(cid:11) not passed on to the customer by (cid:76)ay of a price ad(cid:63)ustment(cid:11) (cid:76)ould have resulted in an increase in cost of sales and hence an adverse impact on income from continuing operations before income ta(cid:77)es and equity in income (loss) of affiliated companies for fiscal years 2022 and 2021 of $74 million and $58 million(cid:11) respectively. (cid:17)re(cid:40)i(cid:56) Ris(cid:47) Credit ris(cid:64) refers to the ris(cid:64) that a counterparty (cid:76)ill default on its contractual obligations(cid:11) resulting in financial loss. (cid:50)e are e(cid:77)posed to credit ris(cid:64) arising from financing activities including deposits (cid:76)ith ban(cid:64)s and financial institutions(cid:11) foreign e(cid:77)change transactions and other financial instruments(cid:11) as (cid:76)ell as from over(cid:12)the(cid:12)counter ra(cid:76) material and commodity related derivative instruments. (cid:50)e manage our credit ris(cid:64) from balances (cid:76)ith financial institutions through our counterparty ris(cid:64) policy(cid:11) (cid:76)hich provide guidelines on setting limits to minimi(cid:79)e the concentration of ris(cid:64)s and therefore mitigating financial loss through potential counterparty failure and on dealing and settlement procedures. (cid:47)he investment of surplus funds is made only (cid:76)ith approved counterparties and (cid:76)ithin credit limits assigned to each specific counterparty. Financial derivative instruments can only be entered into (cid:76)ith high credit quality approved financial institutions. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) (cid:76)e did not have a significant concentration of credit ris(cid:64) in relation to derivatives entered into in accordance (cid:76)ith our hedging and ris(cid:64) management activities. Our activities e(cid:77)pose us to a variety of mar(cid:64)et ris(cid:64)s and financial ris(cid:64)s. Our overall ris(cid:64) management program see(cid:64)s to minimi(cid:79)e potential adverse effects of these ris(cid:64)s on Amcor(cid:6)s financial performance. From time to time(cid:11) (cid:76)e enter into various derivative financial instruments(cid:11) such as foreign e(cid:77)change contracts(cid:11) commodity fi(cid:77)ed price s(cid:76)aps (on behalf of customers)(cid:11) and interest rate s(cid:76)aps to manage these ris(cid:64)s. Our hedging activities are conducted on a centrali(cid:79)ed basis through standard operating procedures and delegated authorities(cid:11) (cid:76)hich provide guidelines for control(cid:11) counterparty ris(cid:64)(cid:11) and ongoing reporting. (cid:47)hese derivative instruments are designed to reduce the economic ris(cid:64) associated (cid:76)ith movements in foreign e(cid:77)change rates(cid:11) ra(cid:76) material prices(cid:11) and to fi(cid:77)ed and variable interest rates(cid:11) but may not have been designated or qualify for hedge accounting under (cid:48).S. (cid:34)AA(cid:43) and hence may increase income statement volatility. (cid:35)o(cid:76)ever(cid:11) (cid:76)e do not trade in derivative financial instruments for speculative purposes. In addition(cid:11) (cid:76)e may enter into loan agreements in currencies other than the respective legal entity(cid:6)s functional currency to economically hedge foreign e(cid:77)change ris(cid:64) in net investments in our non(cid:12)(cid:48).S. subsidiaries(cid:11) (cid:76)hich do not qualify for hedge accounting under (cid:48).S. (cid:34)AA(cid:43) and hence may increase income statement volatility. (cid:47)here have been no material changes in the ris(cid:64)s described belo(cid:76)(cid:11) other than increased volatility in connection (cid:76)ith the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict and the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic(cid:11) for fiscal years 2022 and 2021(cid:11) related to interest rate ris(cid:64)(cid:11) foreign e(cid:77)change ris(cid:64)(cid:11) ra(cid:76) material and commodity price ris(cid:64)(cid:11) and credit ris(cid:64). (cid:23)(cid:50)(cid:56)eres(cid:56) Ra(cid:56)e Ris(cid:47) Our policy is to manage e(cid:77)posure to interest rate ris(cid:64) by maintaining a mi(cid:77)ture of fi(cid:77)ed(cid:12)rate and variable(cid:12)rate debt(cid:11) monitoring global interest rates and(cid:11) (cid:76)here appropriate(cid:11) hedging floating interest rate e(cid:77)posure or debt at fi(cid:77)ed interest rates through the use of various interest rate derivative instruments including(cid:11) but not limited to(cid:11) interest rate s(cid:76)aps(cid:11) cross(cid:12)currency interest rate s(cid:76)aps(cid:11) and interest rate loc(cid:64)s. An increase of 1(cid:4) in the floating rate on the relevant interest rate yield curve applicable to both derivative and non(cid:12) derivative instruments denominated in (cid:48).S. dollars and Euros(cid:11) the currencies (cid:76)ith the largest interest rate sensitivity(cid:11) outstanding as of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ould have resulted in an adverse impact on income from continuing operations before income ta(cid:77)es and equity in income(cid:14)(loss) of affiliated companies of $2(cid:24) million e(cid:77)pense for the fiscal year ended (cid:37)une 30(cid:11) 2022. (cid:20)orei(cid:43)(cid:50) (cid:19)x(cid:39)(cid:44)a(cid:50)(cid:43)e Ris(cid:47) (cid:50)e operate in over 40 countries across the (cid:76)orld and(cid:11) as a result(cid:11) (cid:76)e are e(cid:77)posed to movements in foreign currency e(cid:77)change rates. For the year ended (cid:37)une 30(cid:11) 2022(cid:11) a hypothetical but reasonably possible adverse change of 1(cid:4) in the underlying average foreign currency e(cid:77)change rate for the Euro (cid:76)ould have resulted in an adverse impact on our net sales of $25 million. (cid:31)uring fiscal years 2022 and 2021(cid:11) 4(cid:24)(cid:4) and 48(cid:4) of our net sales(cid:11) respectively(cid:11) (cid:76)ere effectively generated in (cid:48).S. dollar functional currency entities. (cid:31)uring fiscal years 2022 and 2021(cid:11) 17(cid:4) and 18(cid:4) of net sales(cid:11) respectively(cid:11) (cid:76)ere generated in Euro functional currency entities (cid:76)ith the remaining 34(cid:4) and 34(cid:4) of net sales(cid:11) respectively(cid:11) being generated in entities (cid:76)ith functional currencies other than (cid:48).S. dollars and Euros. (cid:47)he impact of translating Euro and other non(cid:12)(cid:48).S. dollar net sales and operating e(cid:77)penses into (cid:48).S. dollar for reporting purposes (cid:76)ill vary depending on the movement of those currencies from period to period. Raw (cid:27)a(cid:56)eria(cid:48) a(cid:50)(cid:40) (cid:17)ommo(cid:40)i(cid:56)(cid:61) (cid:30)ri(cid:39)e Ris(cid:47) (cid:47)he primary ra(cid:76) materials for our products are resins(cid:11) film(cid:11) aluminum(cid:11) and chemicals. (cid:50)e have mar(cid:64)et ris(cid:64) primarily in connection (cid:76)ith the pricing of our products and are e(cid:77)posed to commodity price ris(cid:64) from a number of commodities and certain other ra(cid:76) materials and energy price ris(cid:64). Changes in prices of our (cid:64)ey ra(cid:76) materials and commodities(cid:11) including resins(cid:11) film(cid:11) aluminum(cid:11) in(cid:64)s(cid:11) solvents(cid:11) adhesives and liquids(cid:11) and other ra(cid:76) materials(cid:11) may result in a temporary or permanent reduction in income before income ta(cid:77)es and equity in income(cid:14)(loss) of affiliated companies depending on the level of recovery by material type. (cid:47)he level of recovery depends both on the type of material and the mar(cid:64)et in (cid:76)hich (cid:76)e operate. Across our business(cid:11) (cid:76)e have a number of contractual provisions that allo(cid:76) for passing on of ra(cid:76) material price fluctuations to customers (cid:76)ithin predefined periods. 45 Amcor Annual Report 2022 46 45 Form 10-K 46 A 1(cid:4) increase on average prices for resins(cid:11) film(cid:11) aluminum(cid:11) and liquids(cid:11) not passed on to the customer by (cid:76)ay of a price ad(cid:63)ustment(cid:11) (cid:76)ould have resulted in an increase in cost of sales and hence an adverse impact on income from continuing operations before income ta(cid:77)es and equity in income (loss) of affiliated companies for fiscal years 2022 and 2021 of $74 million and $58 million(cid:11) respectively. (cid:17)re(cid:40)i(cid:56) Ris(cid:47) Credit ris(cid:64) refers to the ris(cid:64) that a counterparty (cid:76)ill default on its contractual obligations(cid:11) resulting in financial loss. (cid:50)e are e(cid:77)posed to credit ris(cid:64) arising from financing activities including deposits (cid:76)ith ban(cid:64)s and financial institutions(cid:11) foreign e(cid:77)change transactions and other financial instruments(cid:11) as (cid:76)ell as from over(cid:12)the(cid:12)counter ra(cid:76) material and commodity related derivative instruments. (cid:50)e manage our credit ris(cid:64) from balances (cid:76)ith financial institutions through our counterparty ris(cid:64) policy(cid:11) (cid:76)hich provide guidelines on setting limits to minimi(cid:79)e the concentration of ris(cid:64)s and therefore mitigating financial loss through potential counterparty failure and on dealing and settlement procedures. (cid:47)he investment of surplus funds is made only (cid:76)ith approved counterparties and (cid:76)ithin credit limits assigned to each specific counterparty. Financial derivative instruments can only be entered into (cid:76)ith high credit quality approved financial institutions. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) (cid:76)e did not have a significant concentration of credit ris(cid:64) in relation to derivatives entered into in accordance (cid:76)ith our hedging and ris(cid:64) management activities. Item (cid:21)A(cid:12) - Quantitative and Qualitative Disclosures About (cid:37)ar(cid:61)et Ris(cid:61) (cid:29)(cid:58)er(cid:58)iew Our activities e(cid:77)pose us to a variety of mar(cid:64)et ris(cid:64)s and financial ris(cid:64)s. Our overall ris(cid:64) management program see(cid:64)s to minimi(cid:79)e potential adverse effects of these ris(cid:64)s on Amcor(cid:6)s financial performance. From time to time(cid:11) (cid:76)e enter into various derivative financial instruments(cid:11) such as foreign e(cid:77)change contracts(cid:11) commodity fi(cid:77)ed price s(cid:76)aps (on behalf of customers)(cid:11) and interest rate s(cid:76)aps to manage these ris(cid:64)s. Our hedging activities are conducted on a centrali(cid:79)ed basis through standard operating procedures and delegated authorities(cid:11) (cid:76)hich provide guidelines for control(cid:11) counterparty ris(cid:64)(cid:11) and ongoing reporting. (cid:47)hese derivative instruments are designed to reduce the economic ris(cid:64) associated (cid:76)ith movements in foreign e(cid:77)change rates(cid:11) ra(cid:76) material prices(cid:11) and to fi(cid:77)ed and variable interest rates(cid:11) but may not have been designated or qualify for hedge accounting under (cid:48).S. (cid:34)AA(cid:43) and hence may increase income statement volatility. (cid:35)o(cid:76)ever(cid:11) (cid:76)e do not trade in derivative financial instruments for speculative purposes. In addition(cid:11) (cid:76)e may enter into loan agreements in currencies other than the respective legal entity(cid:6)s functional currency to economically hedge foreign e(cid:77)change ris(cid:64) in net investments in our non(cid:12)(cid:48).S. subsidiaries(cid:11) (cid:76)hich do not qualify for hedge accounting under (cid:48).S. (cid:34)AA(cid:43) and hence may increase income statement volatility. (cid:47)here have been no material changes in the ris(cid:64)s described belo(cid:76)(cid:11) other than increased volatility in connection (cid:76)ith the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict and the CO(cid:49)I(cid:31)(cid:12)1(cid:24) pandemic(cid:11) for fiscal years 2022 and 2021(cid:11) related to interest rate ris(cid:64)(cid:11) foreign e(cid:77)change ris(cid:64)(cid:11) ra(cid:76) material and commodity price ris(cid:64)(cid:11) and credit ris(cid:64). (cid:23)(cid:50)(cid:56)eres(cid:56) Ra(cid:56)e Ris(cid:47) Our policy is to manage e(cid:77)posure to interest rate ris(cid:64) by maintaining a mi(cid:77)ture of fi(cid:77)ed(cid:12)rate and variable(cid:12)rate debt(cid:11) monitoring global interest rates and(cid:11) (cid:76)here appropriate(cid:11) hedging floating interest rate e(cid:77)posure or debt at fi(cid:77)ed interest rates through the use of various interest rate derivative instruments including(cid:11) but not limited to(cid:11) interest rate s(cid:76)aps(cid:11) cross(cid:12)currency interest rate s(cid:76)aps(cid:11) and interest rate loc(cid:64)s. An increase of 1(cid:4) in the floating rate on the relevant interest rate yield curve applicable to both derivative and non(cid:12) derivative instruments denominated in (cid:48).S. dollars and Euros(cid:11) the currencies (cid:76)ith the largest interest rate sensitivity(cid:11) outstanding as of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ould have resulted in an adverse impact on income from continuing operations before income ta(cid:77)es and equity in income(cid:14)(loss) of affiliated companies of $2(cid:24) million e(cid:77)pense for the fiscal year ended (cid:37)une 30(cid:11) 2022. (cid:20)orei(cid:43)(cid:50) (cid:19)x(cid:39)(cid:44)a(cid:50)(cid:43)e Ris(cid:47) e(cid:77)change rates. (cid:50)e operate in over 40 countries across the (cid:76)orld and(cid:11) as a result(cid:11) (cid:76)e are e(cid:77)posed to movements in foreign currency For the year ended (cid:37)une 30(cid:11) 2022(cid:11) a hypothetical but reasonably possible adverse change of 1(cid:4) in the underlying average foreign currency e(cid:77)change rate for the Euro (cid:76)ould have resulted in an adverse impact on our net sales of $25 million. (cid:31)uring fiscal years 2022 and 2021(cid:11) 4(cid:24)(cid:4) and 48(cid:4) of our net sales(cid:11) respectively(cid:11) (cid:76)ere effectively generated in (cid:48).S. dollar functional currency entities. (cid:31)uring fiscal years 2022 and 2021(cid:11) 17(cid:4) and 18(cid:4) of net sales(cid:11) respectively(cid:11) (cid:76)ere generated in Euro functional currency entities (cid:76)ith the remaining 34(cid:4) and 34(cid:4) of net sales(cid:11) respectively(cid:11) being generated in entities (cid:76)ith functional currencies other than (cid:48).S. dollars and Euros. (cid:47)he impact of translating Euro and other non(cid:12)(cid:48).S. dollar net sales and operating e(cid:77)penses into (cid:48).S. dollar for reporting purposes (cid:76)ill vary depending on the movement of those currencies from period to period. Raw (cid:27)a(cid:56)eria(cid:48) a(cid:50)(cid:40) (cid:17)ommo(cid:40)i(cid:56)(cid:61) (cid:30)ri(cid:39)e Ris(cid:47) (cid:47)he primary ra(cid:76) materials for our products are resins(cid:11) film(cid:11) aluminum(cid:11) and chemicals. (cid:50)e have mar(cid:64)et ris(cid:64) primarily in connection (cid:76)ith the pricing of our products and are e(cid:77)posed to commodity price ris(cid:64) from a number of commodities and certain other ra(cid:76) materials and energy price ris(cid:64). Changes in prices of our (cid:64)ey ra(cid:76) materials and commodities(cid:11) including resins(cid:11) film(cid:11) aluminum(cid:11) in(cid:64)s(cid:11) solvents(cid:11) adhesives and liquids(cid:11) and other ra(cid:76) materials(cid:11) may result in a temporary or permanent reduction in income before income ta(cid:77)es and equity in income(cid:14)(loss) of affiliated companies depending on the level of recovery by material type. (cid:47)he level of recovery depends both on the type of material and the mar(cid:64)et in (cid:76)hich (cid:76)e operate. Across our business(cid:11) (cid:76)e have a number of contractual provisions that allo(cid:76) for passing on of ra(cid:76) material price fluctuations to customers (cid:76)ithin predefined periods. 45 46 Amcor Annual Report 2022 Form 10-K 47 Item (cid:22)(cid:12) - Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm (cid:47)o the Board of (cid:31)irectors and Shareholders of Amcor plc (cid:29)(cid:52)i(cid:50)io(cid:50)s o(cid:50) (cid:56)(cid:44)e (cid:20)i(cid:50)a(cid:50)(cid:39)ia(cid:48) S(cid:56)a(cid:56)eme(cid:50)(cid:56)s a(cid:50)(cid:40) (cid:23)(cid:50)(cid:56)er(cid:50)a(cid:48) (cid:17)o(cid:50)(cid:56)ro(cid:48) o(cid:58)er (cid:20)i(cid:50)a(cid:50)(cid:39)ia(cid:48) Re(cid:52)or(cid:56)i(cid:50)(cid:43) (cid:50)e have audited the accompanying consolidated balance sheets of Amcor plc and its subsidiaries (the (cid:86)Company(cid:87)) as of (cid:37)une 30(cid:11) 2022 and 2021 and the related consolidated statements of income(cid:11) comprehensive income(cid:11) equity and cash flo(cid:76)s for each of the three years in the period ended (cid:37)une 30(cid:11) 2022(cid:11) including the related notes and financial statement schedule listed in the inde(cid:77) appearing under Item 15(a)(2) (collectively referred to as the (cid:86)consolidated financial statements(cid:87)). (cid:50)e also have audited the Company(cid:6)s internal control over financial reporting as of (cid:37)une 30(cid:11) 2022 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organi(cid:79)ations of the (cid:47)read(cid:76)ay Commission (COSO). In our opinion(cid:11) the consolidated financial statements referred to above present fairly(cid:11) in all material respects(cid:11) the financial position of the Company as of (cid:37)une 30(cid:11) 2022 and 2021 and the results of its operations and its cash flo(cid:76)s for each of the three years in the period ended (cid:37)une 30(cid:11)2022 in conformity (cid:76)ith accounting principles generally accepted in the (cid:48)nited States of America. Also in our opinion(cid:11) the Company maintained(cid:11) in all material respects(cid:11) effective internal control over financial reporting as of (cid:37)une 30(cid:11) 2022(cid:11) based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. (cid:16)asis for (cid:29)(cid:52)i(cid:50)io(cid:50)s (cid:47)he Company(cid:6)s management is responsible for these consolidated financial statements(cid:11) for maintaining effective internal control over financial reporting(cid:11) and for its assessment of the effectiveness of internal control over financial reporting(cid:11) included in (cid:40)anagement(cid:89)s (cid:45)eport on Internal Control Over Financial (cid:45)eporting appearing under Item (cid:24)A. Our responsibility is to e(cid:77)press opinions on the Company(cid:89)s consolidated financial statements and on the Company(cid:6)s internal control over financial reporting based on our audits. (cid:50)e are a public accounting firm registered (cid:76)ith the (cid:43)ublic Company Accounting Oversight Board ((cid:48)nited States) ((cid:43)CAOB) and are required to be independent (cid:76)ith respect to the Company in accordance (cid:76)ith the (cid:48).S. federal securities la(cid:76)s and the applicable rules and regulations of the Securities and E(cid:77)change Commission and the (cid:43)CAOB. (cid:50)e conducted our audits in accordance (cid:76)ith the standards of the (cid:43)CAOB. (cid:47)hose standards require that (cid:76)e plan and perform the audits to obtain reasonable assurance about (cid:76)hether the consolidated financial statements are free of material misstatement(cid:11) (cid:76)hether due to error or fraud(cid:11) and (cid:76)hether effective internal control over financial reporting (cid:76)as maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the ris(cid:64)s of material misstatement of the consolidated financial statements(cid:11) (cid:76)hether due to error or fraud(cid:11) and performing procedures that respond to those ris(cid:64)s. Such procedures included e(cid:77)amining(cid:11) on a test basis(cid:11) evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management(cid:11) as (cid:76)ell as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting(cid:11) assessing the ris(cid:64) that a material (cid:76)ea(cid:64)ness e(cid:77)ists(cid:11) and testing and evaluating the design and operating effectiveness of internal control based on the assessed ris(cid:64). Our audits also included performing such other procedures as (cid:76)e considered necessary in the circumstances. (cid:50)e believe that our audits provide a reasonable basis for our opinions. (cid:18)efi(cid:50)i(cid:56)io(cid:50) a(cid:50)(cid:40) (cid:26)imi(cid:56)a(cid:56)io(cid:50)s of (cid:23)(cid:50)(cid:56)er(cid:50)a(cid:48) (cid:17)o(cid:50)(cid:56)ro(cid:48) o(cid:58)er (cid:20)i(cid:50)a(cid:50)(cid:39)ia(cid:48) Re(cid:52)or(cid:56)i(cid:50)(cid:43) A company(cid:89)s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for e(cid:77)ternal purposes in accordance (cid:76)ith generally accepted accounting principles. A company(cid:89)s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that(cid:11) in reasonable detail(cid:11) accurately and fairly reflect the transactions and dispositions of the assets of the company(cid:26) (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance (cid:76)ith generally accepted accounting principles(cid:11) and that receipts and e(cid:77)penditures of the company are being made only in accordance (cid:76)ith authori(cid:79)ations of management and directors of the company(cid:26) and (iii) provide reasonable assurance regarding prevention or timely detection of unauthori(cid:79)ed acquisition(cid:11) use(cid:11) or disposition of the company(cid:89)s assets that could have a material effect on the financial statements. Because of its inherent limitations(cid:11) internal control over financial reporting may not prevent or detect misstatements. Also(cid:11) pro(cid:63)ections of any evaluation of effectiveness to future periods are sub(cid:63)ect to the ris(cid:64) that controls may become inadequate because of changes in conditions(cid:11) or that the degree of compliance (cid:76)ith the policies or procedures may deteriorate. (cid:17)ri(cid:56)i(cid:39)a(cid:48) (cid:15)(cid:57)(cid:40)i(cid:56) (cid:27)a(cid:56)(cid:56)ers (cid:47)he critical audit matter communicated belo(cid:76) is a matter arising from the current period audit of the consolidated financial statements that (cid:76)as communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging(cid:11) sub(cid:63)ective(cid:11) or comple(cid:77) (cid:63)udgments. (cid:47)he communication of critical audit matters does not alter in any (cid:76)ay our opinion on the consolidated financial statements(cid:11) ta(cid:64)en as a (cid:76)hole(cid:11) and (cid:76)e are not(cid:11) by communicating the critical audit matter belo(cid:76)(cid:11) providing a separate opinion on the critical audit matter or on the accounts or disclosures to (cid:76)hich it relates. (cid:35)al(cid:55)at(cid:44)on o(cid:41) a(cid:53)(cid:53)et(cid:53) and l(cid:44)a(cid:37)(cid:44)l(cid:44)t(cid:44)e(cid:53) (cid:43)eld (cid:41)or (cid:53)ale As described in (cid:41)otes 2(cid:11) 4(cid:11) and 6 to the consolidated financial statements(cid:11) during the fourth quarter of fiscal year 2022(cid:11) the Company classified the assets and liabilities of its three manufacturing facilities in (cid:45)ussia ((cid:86)(cid:45)ussian business(cid:87)) as held for sale(cid:11) as a result of the Company(cid:6)s decision to sell its (cid:45)ussian operations. (cid:47)he Company has recorded an impairment charge of $(cid:24)0 million as of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ithin the line item (cid:86)(cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net(cid:87) on the consolidated statements of income. Assets and liabilities held for sale are reported at the lo(cid:76)er of their carrying value or fair value less cost to sell. Fair value is determined based on management(cid:89)s assessment of indicative bids(cid:11) a mar(cid:64)et multiples model in (cid:76)hich a mar(cid:64)et multiple is applied to forecasted earnings before interest(cid:11) ta(cid:77)es(cid:11) depreciation(cid:11) and amorti(cid:79)ation ((cid:86)EBI(cid:47)(cid:31)A(cid:87))(cid:11) discounted cash flo(cid:76)s(cid:11) appraised values or management(cid:6)s estimates(cid:11) depending on the specific situation. (cid:47)he principal considerations for our determination that performing procedures relating to the valuation of assets and liabilities held for sale is a critical audit matter are the significant (cid:63)udgment by management (cid:76)hen developing the fair value measurement of the (cid:45)ussian business and a high degree of auditor (cid:63)udgment(cid:11) sub(cid:63)ectivity(cid:11) and effort in performing procedures and evaluating management(cid:89)s significant assumptions related to mar(cid:64)et multiples and forecasted EBI(cid:47)(cid:31)A. Addressing the matter involved performing procedures and evaluating audit evidence in connection (cid:76)ith forming our overall opinion on the consolidated financial statements. (cid:47)hese procedures included testing the effectiveness of controls relating to management(cid:89)s valuation of assets and liabilities held for sale. (cid:47)hese procedures also included(cid:11) among others(cid:11) (i) testing management(cid:89)s process for developing the fair value estimate(cid:26) (ii) evaluating the appropriateness of the mar(cid:64)et multiples model(cid:26) (iii) testing the completeness and accuracy of underlying data used in the model and (iv) evaluating the reasonableness of the significant assumptions used by management related to mar(cid:64)et multiples and forecasted EBI(cid:47)(cid:31)A. Evaluating management(cid:89)s assumptions related to mar(cid:64)et multiples and forecasted EBI(cid:47)(cid:31)A involved evaluating (cid:76)hether the assumptions used by management (cid:76)ere reasonable considering (i) the current and past performance of the (cid:45)ussian business(cid:26) (ii) the consistency (cid:76)ith e(cid:77)ternal mar(cid:64)et and industry data(cid:26) and (iii) (cid:76)hether these assumptions (cid:76)ere consistent (cid:76)ith evidence obtained in other areas of the audit. (cid:14)s(cid:14) (cid:43)rice(cid:76)aterhouseCoopers A(cid:34) (cid:53)urich(cid:11) S(cid:76)it(cid:79)erland August 18(cid:11) 2022 (cid:50)e have served as the Company(cid:6)s auditor since 201(cid:24). 47 Amcor Annual Report 2022 48 47 Form 10-K 48 (cid:17)ri(cid:56)i(cid:39)a(cid:48) (cid:15)(cid:57)(cid:40)i(cid:56) (cid:27)a(cid:56)(cid:56)ers (cid:47)he critical audit matter communicated belo(cid:76) is a matter arising from the current period audit of the consolidated financial statements that (cid:76)as communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging(cid:11) sub(cid:63)ective(cid:11) or comple(cid:77) (cid:63)udgments. (cid:47)he communication of critical audit matters does not alter in any (cid:76)ay our opinion on the consolidated financial statements(cid:11) ta(cid:64)en as a (cid:76)hole(cid:11) and (cid:76)e are not(cid:11) by communicating the critical audit matter belo(cid:76)(cid:11) providing a separate opinion on the critical audit matter or on the accounts or disclosures to (cid:76)hich it relates. (cid:35)al(cid:55)at(cid:44)on o(cid:41) a(cid:53)(cid:53)et(cid:53) and l(cid:44)a(cid:37)(cid:44)l(cid:44)t(cid:44)e(cid:53) (cid:43)eld (cid:41)or (cid:53)ale As described in (cid:41)otes 2(cid:11) 4(cid:11) and 6 to the consolidated financial statements(cid:11) during the fourth quarter of fiscal year 2022(cid:11) the Company classified the assets and liabilities of its three manufacturing facilities in (cid:45)ussia ((cid:86)(cid:45)ussian business(cid:87)) as held for sale(cid:11) as a result of the Company(cid:6)s decision to sell its (cid:45)ussian operations. (cid:47)he Company has recorded an impairment charge of $(cid:24)0 million as of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ithin the line item (cid:86)(cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net(cid:87) on the consolidated statements of income. Assets and liabilities held for sale are reported at the lo(cid:76)er of their carrying value or fair value less cost to sell. Fair value is determined based on management(cid:89)s assessment of indicative bids(cid:11) a mar(cid:64)et multiples model in (cid:76)hich a mar(cid:64)et multiple is applied to forecasted earnings before interest(cid:11) ta(cid:77)es(cid:11) depreciation(cid:11) and amorti(cid:79)ation ((cid:86)EBI(cid:47)(cid:31)A(cid:87))(cid:11) discounted cash flo(cid:76)s(cid:11) appraised values or management(cid:6)s estimates(cid:11) depending on the specific situation. (cid:47)he principal considerations for our determination that performing procedures relating to the valuation of assets and liabilities held for sale is a critical audit matter are the significant (cid:63)udgment by management (cid:76)hen developing the fair value measurement of the (cid:45)ussian business and a high degree of auditor (cid:63)udgment(cid:11) sub(cid:63)ectivity(cid:11) and effort in performing procedures and evaluating management(cid:89)s significant assumptions related to mar(cid:64)et multiples and forecasted EBI(cid:47)(cid:31)A. Addressing the matter involved performing procedures and evaluating audit evidence in connection (cid:76)ith forming our overall opinion on the consolidated financial statements. (cid:47)hese procedures included testing the effectiveness of controls relating to management(cid:89)s valuation of assets and liabilities held for sale. (cid:47)hese procedures also included(cid:11) among others(cid:11) (i) testing management(cid:89)s process for developing the fair value estimate(cid:26) (ii) evaluating the appropriateness of the mar(cid:64)et multiples model(cid:26) (iii) testing the completeness and accuracy of underlying data used in the model and (iv) evaluating the reasonableness of the significant assumptions used by management related to mar(cid:64)et multiples and forecasted EBI(cid:47)(cid:31)A. Evaluating management(cid:89)s assumptions related to mar(cid:64)et multiples and forecasted EBI(cid:47)(cid:31)A involved evaluating (cid:76)hether the assumptions used by management (cid:76)ere reasonable considering (i) the current and past performance of the (cid:45)ussian business(cid:26) (ii) the consistency (cid:76)ith e(cid:77)ternal mar(cid:64)et and industry data(cid:26) and (iii) (cid:76)hether these assumptions (cid:76)ere consistent (cid:76)ith evidence obtained in other areas of the audit. (cid:14)s(cid:14) (cid:43)rice(cid:76)aterhouseCoopers A(cid:34) (cid:53)urich(cid:11) S(cid:76)it(cid:79)erland August 18(cid:11) 2022 (cid:50)e have served as the Company(cid:6)s auditor since 201(cid:24). Item (cid:22)(cid:12) - Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm (cid:47)o the Board of (cid:31)irectors and Shareholders of Amcor plc (cid:29)(cid:52)i(cid:50)io(cid:50)s o(cid:50) (cid:56)(cid:44)e (cid:20)i(cid:50)a(cid:50)(cid:39)ia(cid:48) S(cid:56)a(cid:56)eme(cid:50)(cid:56)s a(cid:50)(cid:40) (cid:23)(cid:50)(cid:56)er(cid:50)a(cid:48) (cid:17)o(cid:50)(cid:56)ro(cid:48) o(cid:58)er (cid:20)i(cid:50)a(cid:50)(cid:39)ia(cid:48) Re(cid:52)or(cid:56)i(cid:50)(cid:43) (cid:50)e have audited the accompanying consolidated balance sheets of Amcor plc and its subsidiaries (the (cid:86)Company(cid:87)) as of (cid:37)une 30(cid:11) 2022 and 2021 and the related consolidated statements of income(cid:11) comprehensive income(cid:11) equity and cash flo(cid:76)s for each of the three years in the period ended (cid:37)une 30(cid:11) 2022(cid:11) including the related notes and financial statement schedule listed in the inde(cid:77) appearing under Item 15(a)(2) (collectively referred to as the (cid:86)consolidated financial statements(cid:87)). (cid:50)e also have audited the Company(cid:6)s internal control over financial reporting as of (cid:37)une 30(cid:11) 2022 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organi(cid:79)ations of the (cid:47)read(cid:76)ay Commission (COSO). In our opinion(cid:11) the consolidated financial statements referred to above present fairly(cid:11) in all material respects(cid:11) the financial position of the Company as of (cid:37)une 30(cid:11) 2022 and 2021 and the results of its operations and its cash flo(cid:76)s for each of the three years in the period ended (cid:37)une 30(cid:11)2022 in conformity (cid:76)ith accounting principles generally accepted in the (cid:48)nited States of America. Also in our opinion(cid:11) the Company maintained(cid:11) in all material respects(cid:11) effective internal control over financial reporting as of (cid:37)une 30(cid:11) 2022(cid:11) based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. (cid:16)asis for (cid:29)(cid:52)i(cid:50)io(cid:50)s (cid:47)he Company(cid:6)s management is responsible for these consolidated financial statements(cid:11) for maintaining effective internal control over financial reporting(cid:11) and for its assessment of the effectiveness of internal control over financial reporting(cid:11) included in (cid:40)anagement(cid:89)s (cid:45)eport on Internal Control Over Financial (cid:45)eporting appearing under Item (cid:24)A. Our responsibility is to e(cid:77)press opinions on the Company(cid:89)s consolidated financial statements and on the Company(cid:6)s internal control over financial reporting based on our audits. (cid:50)e are a public accounting firm registered (cid:76)ith the (cid:43)ublic Company Accounting Oversight Board ((cid:48)nited States) ((cid:43)CAOB) and are required to be independent (cid:76)ith respect to the Company in accordance (cid:76)ith the (cid:48).S. federal securities la(cid:76)s and the applicable rules and regulations of the Securities and E(cid:77)change Commission and the (cid:43)CAOB. (cid:50)e conducted our audits in accordance (cid:76)ith the standards of the (cid:43)CAOB. (cid:47)hose standards require that (cid:76)e plan and perform the audits to obtain reasonable assurance about (cid:76)hether the consolidated financial statements are free of material misstatement(cid:11) (cid:76)hether due to error or fraud(cid:11) and (cid:76)hether effective internal control over financial reporting (cid:76)as maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the ris(cid:64)s of material misstatement of the consolidated financial statements(cid:11) (cid:76)hether due to error or fraud(cid:11) and performing procedures that respond to those ris(cid:64)s. Such procedures included e(cid:77)amining(cid:11) on a test basis(cid:11) evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management(cid:11) as (cid:76)ell as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting(cid:11) assessing the ris(cid:64) that a material (cid:76)ea(cid:64)ness e(cid:77)ists(cid:11) and testing and evaluating the design and operating effectiveness of internal control based on the assessed ris(cid:64). Our audits also included performing such other procedures as (cid:76)e considered necessary in the circumstances. (cid:50)e believe that our audits provide a reasonable basis for our opinions. (cid:18)efi(cid:50)i(cid:56)io(cid:50) a(cid:50)(cid:40) (cid:26)imi(cid:56)a(cid:56)io(cid:50)s of (cid:23)(cid:50)(cid:56)er(cid:50)a(cid:48) (cid:17)o(cid:50)(cid:56)ro(cid:48) o(cid:58)er (cid:20)i(cid:50)a(cid:50)(cid:39)ia(cid:48) Re(cid:52)or(cid:56)i(cid:50)(cid:43) A company(cid:89)s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for e(cid:77)ternal purposes in accordance (cid:76)ith generally accepted accounting principles. A company(cid:89)s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that(cid:11) in reasonable detail(cid:11) accurately and fairly reflect the transactions and dispositions of the assets of the company(cid:26) (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance (cid:76)ith generally accepted accounting principles(cid:11) and that receipts and e(cid:77)penditures of the company are being made only in accordance (cid:76)ith authori(cid:79)ations of management and directors of the company(cid:26) and (iii) provide reasonable assurance regarding prevention or timely detection of unauthori(cid:79)ed acquisition(cid:11) use(cid:11) or disposition of the company(cid:89)s assets that could have a material effect on the financial statements. Because of its inherent limitations(cid:11) internal control over financial reporting may not prevent or detect misstatements. Also(cid:11) pro(cid:63)ections of any evaluation of effectiveness to future periods are sub(cid:63)ect to the ris(cid:64) that controls may become inadequate because of changes in conditions(cid:11) or that the degree of compliance (cid:76)ith the policies or procedures may deteriorate. 47 48 Amcor Annual Report 2022 Form 10-K 49 Amcor plc and Subsidiaries Consolidated Statements of Income ((cid:3) in millions, e(cid:74)cept per share data) Amcor plc and Subsidiaries Consolidated Statements of Comprehensive Income ((cid:3) in millions) For the years ended June 30, 2022 2021 2020 For the years ended June 30, (cid:41)et sales Cost of sales (cid:34)ross profit Operating e(cid:77)penses(cid:25) Selling(cid:11) general(cid:11) and administrative e(cid:77)penses (cid:45)esearch and development e(cid:77)penses (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net Other income(cid:11) net Operating income Interest income Interest e(cid:77)pense Other non(cid:12)operating income(cid:11) net $ 14(cid:11)544 $ 12(cid:11)861 $ (11(cid:11)724) (10(cid:11)12(cid:24)) 12(cid:11)468 ((cid:24)(cid:11)(cid:24)32) (cid:41)et income Other comprehensive income(cid:14)(loss)(cid:25) 2(cid:11)820 2(cid:11)732 2(cid:11)536 (1(cid:11)284) ((cid:24)6) (234) 33 (1(cid:11)2(cid:24)2) (100) ((cid:24)4) 75 (1(cid:11)385) ((cid:24)7) (115) 55 (cid:41)et gains(cid:14)(losses) on cash flo(cid:76) hedges(cid:11) net of ta(cid:77) (a) Foreign currency translation ad(cid:63)ustments(cid:11) net of ta(cid:77) (b) (cid:41)et investment hedge of foreign operations(cid:11) net of ta(cid:77) (c) (cid:43)ension(cid:11) net of ta(cid:77) (d) Other comprehensive income(cid:13)(loss) (cid:44)otal comprehensive income Comprehensive income attributable to non(cid:12)controlling interests 1(cid:11)23(cid:24) 1(cid:11)321 (cid:24)(cid:24)4 (a) (cid:47)a(cid:77) benefit related to cash flo(cid:76) hedges 24 (15(cid:24)) 11 14 (153) 11 22 (207) 16 (b) (cid:47)a(cid:77) benefit(cid:14)(e(cid:77)pense) related to foreign currency translation ad(cid:63)ustments (c) (cid:47)a(cid:77) benefit related to net investment hedge of foreign operations (d) (cid:47)a(cid:77) benefit(cid:14)(e(cid:77)pense) related to pension ad(cid:63)ustments (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:7) 2022 2021 2020 $ 815 $ (cid:24)51 $ 616 (7) (201) (cid:85) (cid:24)4 (114) 701 (10) 26 205 (cid:85) 52 283 1(cid:11)234 (12) 2 $ (5) $ (cid:85) $ (21) $ (cid:85) $ 7 $ (cid:85) $ (14) $ (22) (287) (2) (16) (327) 28(cid:24) (4) 2(cid:22)(cid:19) (cid:85) (2) 1 12 (cid:3) $ $ $ $ Comprehensive income attributable to Amcor plc (cid:20)(cid:23)1 (cid:3) 1,222 (cid:3) Income from continuing operations before income ta(cid:77)es and equity in income(cid:14) (loss) of affiliated companies 1(cid:11)115 1(cid:11)1(cid:24)3 825 Income ta(cid:77) e(cid:77)pense Equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77) Income from continuing operations Loss from discontinued operations(cid:11) net of ta(cid:77) (cid:38)et income (cid:41)et income attributable to non(cid:12)controlling interests (cid:38)et income attributable to Amcor plc Basic earnings per share: Income from continuing operations Loss from discontinued operations (cid:41)et income Diluted earnings per share: Income from continuing operations Loss from discontinued operations (cid:41)et income (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:7) (300) (cid:85) 815 (cid:85) (261) 1(cid:24) (cid:24)51 (cid:85) (187) (14) 624 (8) (cid:22)1(cid:19) (cid:3) (cid:23)(cid:19)1 (cid:3) (cid:20)1(cid:20) (10) (12) (4) (cid:22)0(cid:19) (cid:3) (cid:23)3(cid:23) (cid:3) (cid:20)12 0.532 $ 0.604 $ (cid:85) (cid:85) 0.532 $ 0.604 $ 0.52(cid:24) $ 0.602 $ (cid:85) (cid:85) 0.52(cid:24) $ 0.602 $ 0.387 (0.005) 0.382 0.387 (0.005) 0.382 (cid:3) (cid:3) $ $ $ $ 4(cid:24) Amcor Annual Report 2022 50 49 Form 10-K (cid:24)0 Amcor plc and Subsidiaries Consolidated Statements of Income ((cid:3) in millions, e(cid:74)cept per share data) Amcor plc and Subsidiaries Consolidated Statements of Comprehensive Income ((cid:3) in millions) 2022 2021 2020 $ 815 $ (cid:24)51 $ 616 (7) (201) (cid:85) (cid:24)4 (114) 701 (10) 26 205 (cid:85) 52 283 1(cid:11)234 (12) (cid:3) $ $ $ $ (cid:20)(cid:23)1 (cid:3) 1,222 (cid:3) 2 $ (5) $ (cid:85) $ (21) $ (cid:85) $ 7 $ (cid:85) $ (14) $ (22) (287) (2) (16) (327) 28(cid:24) (4) 2(cid:22)(cid:19) (cid:85) (2) 1 12 For the years ended June 30, 2022 2021 2020 For the years ended June 30, $ 14(cid:11)544 $ 12(cid:11)861 $ (11(cid:11)724) (10(cid:11)12(cid:24)) 12(cid:11)468 ((cid:24)(cid:11)(cid:24)32) (cid:41)et income Other comprehensive income(cid:14)(loss)(cid:25) (cid:41)et gains(cid:14)(losses) on cash flo(cid:76) hedges(cid:11) net of ta(cid:77) (a) Foreign currency translation ad(cid:63)ustments(cid:11) net of ta(cid:77) (b) (cid:41)et investment hedge of foreign operations(cid:11) net of ta(cid:77) (c) (cid:43)ension(cid:11) net of ta(cid:77) (d) Other comprehensive income(cid:13)(loss) (cid:44)otal comprehensive income Comprehensive income attributable to non(cid:12)controlling interests Comprehensive income attributable to Amcor plc 1(cid:11)23(cid:24) 1(cid:11)321 (cid:24)(cid:24)4 (a) (cid:47)a(cid:77) benefit related to cash flo(cid:76) hedges (b) (cid:47)a(cid:77) benefit(cid:14)(e(cid:77)pense) related to foreign currency translation ad(cid:63)ustments (c) (cid:47)a(cid:77) benefit related to net investment hedge of foreign operations (d) (cid:47)a(cid:77) benefit(cid:14)(e(cid:77)pense) related to pension ad(cid:63)ustments (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:7) 2(cid:11)820 2(cid:11)732 2(cid:11)536 (1(cid:11)284) ((cid:24)6) (234) 33 (1(cid:11)2(cid:24)2) (100) ((cid:24)4) 75 (1(cid:11)385) ((cid:24)7) (115) 55 24 (15(cid:24)) 11 (300) (cid:85) 815 (cid:85) 14 (153) 11 (261) 1(cid:24) (cid:24)51 (cid:85) 22 (207) 16 (187) (14) 624 (8) (cid:41)et sales Cost of sales (cid:34)ross profit Operating e(cid:77)penses(cid:25) Selling(cid:11) general(cid:11) and administrative e(cid:77)penses (cid:45)esearch and development e(cid:77)penses (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net Other income(cid:11) net Operating income Interest income Interest e(cid:77)pense Other non(cid:12)operating income(cid:11) net Income ta(cid:77) e(cid:77)pense Equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77) Income from continuing operations Loss from discontinued operations(cid:11) net of ta(cid:77) Income from continuing operations before income ta(cid:77)es and equity in income(cid:14) (loss) of affiliated companies 1(cid:11)115 1(cid:11)1(cid:24)3 825 (cid:38)et income (cid:22)1(cid:19) (cid:3) (cid:23)(cid:19)1 (cid:3) (cid:20)1(cid:20) (cid:41)et income attributable to non(cid:12)controlling interests (10) (12) (4) (cid:38)et income attributable to Amcor plc (cid:22)0(cid:19) (cid:3) (cid:23)3(cid:23) (cid:3) (cid:20)12 Basic earnings per share: Income from continuing operations Loss from discontinued operations (cid:41)et income Diluted earnings per share: Income from continuing operations Loss from discontinued operations (cid:41)et income (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:7) 0.532 $ 0.604 $ (cid:85) (cid:85) 0.532 $ 0.604 $ 0.52(cid:24) $ 0.602 $ (cid:85) (cid:85) 0.52(cid:24) $ 0.602 $ 0.387 (0.005) 0.382 0.387 (0.005) 0.382 (cid:3) (cid:3) $ $ $ $ 4(cid:24) 50 Amcor Annual Report 2022 Form 10-K 51 Amcor plc and Subsidiaries Consolidated Balance Sheets ((cid:3) in millions, e(cid:74)cept share and per share data) Amcor plc and Subsidiaries Consolidated Statements of Cash Flows ((cid:3) in millions) As of June 30, 2022 2021 Assets Current assets: Cash and cash equivalents (cid:47)rade receivables(cid:11) net of allo(cid:76)ance for doubtful accounts of $25 and $28(cid:11) respectively Inventories(cid:11) net (cid:43)repaid e(cid:77)penses and other current assets Assets held for sale(cid:11) net (cid:47)otal current assets (cid:38)on-current assets: (cid:43)roperty(cid:11) plant(cid:11) and equipment(cid:11) net Operating lease assets (cid:31)eferred ta(cid:77) assets Other intangible assets(cid:11) net (cid:34)ood(cid:76)ill Employee benefit assets Other non(cid:12)current assets (cid:47)otal non(cid:12)current assets (cid:44)otal assets Liabilities Current liabilities: Current portion of long(cid:12)term debt Short(cid:12)term debt (cid:47)rade payables Accrued employee costs Other current liabilities Liabilities held for sale (cid:47)otal current liabilities (cid:38)on-current liabilities: Long(cid:12)term debt(cid:11) less current portion Operating lease liabilities (cid:31)eferred ta(cid:77) liabilities Employee benefit obligations Other non(cid:12)current liabilities (cid:47)otal non(cid:12)current liabilities (cid:44)otal liabilities Commitments and contingencies (See (cid:41)ote 20) Shareholders(cid:6) E(cid:67)uity Amcor plc shareholders(cid:78) e(cid:67)uity: Ordinary shares ($0.01 par value)(cid:25) Authori(cid:79)ed ((cid:24)(cid:11)000 million shares) Issued (1(cid:11)48(cid:24) and 1(cid:11)538 million shares(cid:11) respectively) Additional paid(cid:12)in capital (cid:45)etained earnings Accumulated other comprehensive loss (cid:47)reasury shares (2 and 3 million shares(cid:11) respectively) (cid:44)otal Amcor plc shareholders(cid:6) e(cid:67)uity (cid:41)on(cid:12)controlling interests (cid:44)otal shareholders(cid:6) e(cid:67)uity (cid:44)otal liabilities and shareholders(cid:6) e(cid:67)uity (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:7) $ 775 $ 1(cid:11)(cid:24)35 2(cid:11)43(cid:24) 512 1(cid:24)2 5(cid:11)853 3(cid:11)646 560 130 1(cid:11)657 5(cid:11)285 8(cid:24) 206 11(cid:11)573 1(cid:21),(cid:18)2(cid:20) (cid:3) 14 $ 136 3(cid:11)073 471 1(cid:11)344 65 5(cid:11)103 6(cid:11)340 4(cid:24)3 677 201 471 8(cid:11)182 13,2(cid:22)(cid:19) (cid:3) 850 1(cid:11)864 1(cid:11)(cid:24)(cid:24)1 561 (cid:85) 5(cid:11)266 3(cid:11)761 532 13(cid:24) 1(cid:11)835 5(cid:11)41(cid:24) 52 184 11(cid:11)(cid:24)22 1(cid:21),1(cid:22)(cid:22) 5 (cid:24)8 2(cid:11)574 523 1(cid:11)145 (cid:85) 4(cid:11)345 6(cid:11)186 462 6(cid:24)6 307 371 8(cid:11)022 12,3(cid:20)(cid:21) 15 $ 4(cid:11)431 534 (880) (18) 4(cid:11)082 5(cid:24) (cid:18),1(cid:18)1 1(cid:21),(cid:18)2(cid:20) (cid:3) 15 5(cid:11)0(cid:24)2 452 (766) (2(cid:24)) 4(cid:11)764 57 (cid:18),(cid:22)21 1(cid:21),1(cid:22)(cid:22) (cid:3) $ (cid:3) $ (cid:3) 51 Amcor Annual Report 2022 52 For the years ended June 30, Cash flo(cid:76)s from operating activities(cid:25) (cid:41)et income 2022 2021 2020 $ 815 $ (cid:24)51 $ Ad(cid:63)ustments to reconcile net income to net cash provided by operating activities(cid:25) (cid:31)epreciation(cid:11) amorti(cid:79)ation(cid:11) and impairment (cid:45)ussia and (cid:48)(cid:64)raine impairment (cid:41)et periodic benefit cost Amorti(cid:79)ation of debt discount and deferred financing costs (cid:41)et gain on disposal of property(cid:11) plant(cid:11) and equipment (cid:41)et gain on disposal of businesses Equity in (income)(cid:14)loss of affiliated companies (cid:41)et foreign e(cid:77)change (gain)(cid:14)loss Share(cid:12)based compensation Other(cid:11) net Loss from highly inflationary accounting for Argentine subsidiaries (cid:31)eferred income ta(cid:77)es(cid:11) net (cid:31)ividends received from affiliated companies Changes in operating assets and liabilities(cid:11) e(cid:77)cluding effect of acquisitions(cid:11) divestitures(cid:11) and currency(cid:25) (cid:47)rade receivables Inventories (cid:43)repaid e(cid:77)penses and other current assets (cid:47)rade payables Other current liabilities Accrued employee costs Employee benefit obligations Other(cid:11) net (cid:38)et cash provided by operating activities Cash flo(cid:76)s from investing activities(cid:25) Issuance of loans to affiliated companies Investments in affiliated companies and other (cid:43)urchase of property(cid:11) plant(cid:11) and equipment(cid:11) and other intangible assets ((cid:43)ayments)(cid:14)proceeds from divestitures (cid:43)roceeds from sales of property(cid:11) plant(cid:11) and equipment(cid:11) and other intangible assets (cid:38)et cash (used in)(cid:13)provided by investing activities Cash flo(cid:76)s from financing activities(cid:25) (cid:43)roceeds from issuance of shares (cid:43)urchase of treasury shares (cid:43)roceeds from(cid:14)(purchase of) non(cid:12)controlling interest (cid:43)roceeds from issuance of long(cid:12)term debt (cid:45)epayment of long(cid:12)term debt (cid:41)et borro(cid:76)ing(cid:14)(repayment) of commercial paper (cid:41)et borro(cid:76)ing(cid:14)(repayment) of short(cid:12)term debt (cid:45)epayment of lease liabilities Share buybac(cid:64)(cid:14)cancellations (cid:31)ividends paid (cid:38)et cash used in financing activities Effect of e(cid:77)change rates on cash and cash equivalents Cash and cash equivalents classified as held for sale (cid:41)et increase(cid:14)(decrease) in cash and cash equivalents Cash and cash equivalents balance at beginning of the fiscal year 1,(cid:19)2(cid:20) 1,(cid:18)(cid:20)1 1,3(cid:22)(cid:18) 625 138 12 2 (3) (cid:85) (cid:85) (14) 63 106 22 (33) (cid:85) (272) (626) (67) 711 123 (20) (35) (21) (5) (12) (527) (1) 18 ((cid:19)2(cid:21)) 114 (143) (cid:85) 1(cid:11)066 (1(cid:11)243) 638 15 (5) (601) (732) ((cid:22)(cid:23)1) (108) (75) (75) 850 574 (cid:85) 15 10 (10) (44) (1(cid:24)) 21 58 (83) 27 4 4 (18(cid:24)) (112) ((cid:24)0) 342 11 2(cid:24) (40) 2 (cid:85) (5) (468) 214 26 (233) 30 (8) (8) 7(cid:24)0 (530) (235) (123) (2) (351) (742) 58 (cid:85) 107 743 (1,1(cid:21)(cid:23)) 616 652 (cid:85) 10 8 (4) (cid:85) 14 (16) 34 (cid:85) 38 (114) 7 133 26 (23) (48) 8 81 (33) (5) (cid:85) (cid:85) (400) 425 13 3(cid:22) (67) 1 4 3(cid:11)1(cid:24)4 (4(cid:11)225) 1(cid:11)742 (585) (2) (537) (761) (1,23(cid:20)) (45) (cid:85) 141 602 (cid:21)(cid:18)3 Cash and cash equivalents balance at end of the fiscal year (cid:3) (cid:21)(cid:21)(cid:19) (cid:3) (cid:22)(cid:19)0 (cid:3) (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:5) (cid:44)n(cid:38)l(cid:55)d(cid:44)ng (cid:28)ote (cid:11)(cid:12)(cid:5) (cid:2)(cid:32)(cid:55)(cid:51)(cid:51)lemental Ca(cid:53)(cid:43) Flow In(cid:41)ormat(cid:44)on(cid:7)(cid:2) As of June 30, Current assets: Cash and cash equivalents Assets (cid:47)rade receivables(cid:11) net of allo(cid:76)ance for doubtful accounts of $25 and $28(cid:11) respectively 2022 2021 $ 775 $ Liabilities 11(cid:11)573 1(cid:21),(cid:18)2(cid:20) (cid:3) 11(cid:11)(cid:24)22 1(cid:21),1(cid:22)(cid:22) (cid:3) $ 14 $ Inventories(cid:11) net (cid:43)repaid e(cid:77)penses and other current assets Assets held for sale(cid:11) net (cid:47)otal current assets (cid:38)on-current assets: (cid:43)roperty(cid:11) plant(cid:11) and equipment(cid:11) net Operating lease assets (cid:31)eferred ta(cid:77) assets Other intangible assets(cid:11) net (cid:34)ood(cid:76)ill Employee benefit assets Other non(cid:12)current assets (cid:47)otal non(cid:12)current assets (cid:44)otal assets Current liabilities: Current portion of long(cid:12)term debt Short(cid:12)term debt (cid:47)rade payables Accrued employee costs Other current liabilities Liabilities held for sale (cid:47)otal current liabilities (cid:38)on-current liabilities: Long(cid:12)term debt(cid:11) less current portion Operating lease liabilities (cid:31)eferred ta(cid:77) liabilities Employee benefit obligations Other non(cid:12)current liabilities (cid:47)otal non(cid:12)current liabilities (cid:44)otal liabilities Issued (1(cid:11)48(cid:24) and 1(cid:11)538 million shares(cid:11) respectively) $ 15 $ Commitments and contingencies (See (cid:41)ote 20) Shareholders(cid:6) E(cid:67)uity Amcor plc shareholders(cid:78) e(cid:67)uity: Ordinary shares ($0.01 par value)(cid:25) Authori(cid:79)ed ((cid:24)(cid:11)000 million shares) Additional paid(cid:12)in capital (cid:45)etained earnings Accumulated other comprehensive loss (cid:47)reasury shares (2 and 3 million shares(cid:11) respectively) (cid:44)otal Amcor plc shareholders(cid:6) e(cid:67)uity (cid:41)on(cid:12)controlling interests (cid:44)otal shareholders(cid:6) e(cid:67)uity (cid:44)otal liabilities and shareholders(cid:6) e(cid:67)uity (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:7) 1(cid:11)(cid:24)35 2(cid:11)43(cid:24) 512 1(cid:24)2 5(cid:11)853 3(cid:11)646 560 130 1(cid:11)657 5(cid:11)285 8(cid:24) 206 136 3(cid:11)073 471 1(cid:11)344 65 5(cid:11)103 6(cid:11)340 4(cid:24)3 677 201 471 8(cid:11)182 4(cid:11)431 534 (880) (18) 4(cid:11)082 5(cid:24) (cid:18),1(cid:18)1 850 1(cid:11)864 1(cid:11)(cid:24)(cid:24)1 561 (cid:85) 5(cid:11)266 3(cid:11)761 532 13(cid:24) 1(cid:11)835 5(cid:11)41(cid:24) 52 184 5 (cid:24)8 2(cid:11)574 523 1(cid:11)145 (cid:85) 4(cid:11)345 6(cid:11)186 462 6(cid:24)6 307 371 8(cid:11)022 12,3(cid:20)(cid:21) 15 5(cid:11)0(cid:24)2 452 (766) (2(cid:24)) 4(cid:11)764 57 (cid:18),(cid:22)21 1(cid:21),1(cid:22)(cid:22) (cid:3) 13,2(cid:22)(cid:19) (cid:3) 51 Form 10-K (cid:24)2 Amcor plc and Subsidiaries Consolidated Balance Sheets ((cid:3) in millions, e(cid:74)cept share and per share data) Amcor plc and Subsidiaries Consolidated Statements of Cash Flows ((cid:3) in millions) For the years ended June 30, Cash flo(cid:76)s from operating activities(cid:25) (cid:41)et income Ad(cid:63)ustments to reconcile net income to net cash provided by operating activities(cid:25) 2022 2021 2020 $ 815 $ (cid:24)51 $ 616 (cid:31)epreciation(cid:11) amorti(cid:79)ation(cid:11) and impairment (cid:45)ussia and (cid:48)(cid:64)raine impairment (cid:41)et periodic benefit cost Amorti(cid:79)ation of debt discount and deferred financing costs (cid:41)et gain on disposal of property(cid:11) plant(cid:11) and equipment (cid:41)et gain on disposal of businesses Equity in (income)(cid:14)loss of affiliated companies (cid:41)et foreign e(cid:77)change (gain)(cid:14)loss Share(cid:12)based compensation Other(cid:11) net Loss from highly inflationary accounting for Argentine subsidiaries (cid:31)eferred income ta(cid:77)es(cid:11) net (cid:31)ividends received from affiliated companies Changes in operating assets and liabilities(cid:11) e(cid:77)cluding effect of acquisitions(cid:11) divestitures(cid:11) and currency(cid:25) (cid:47)rade receivables Inventories (cid:43)repaid e(cid:77)penses and other current assets (cid:47)rade payables Other current liabilities Accrued employee costs Employee benefit obligations Other(cid:11) net (cid:38)et cash provided by operating activities Cash flo(cid:76)s from investing activities(cid:25) Issuance of loans to affiliated companies Investments in affiliated companies and other (cid:43)urchase of property(cid:11) plant(cid:11) and equipment(cid:11) and other intangible assets ((cid:43)ayments)(cid:14)proceeds from divestitures (cid:43)roceeds from sales of property(cid:11) plant(cid:11) and equipment(cid:11) and other intangible assets (cid:38)et cash (used in)(cid:13)provided by investing activities Cash flo(cid:76)s from financing activities(cid:25) (cid:43)roceeds from issuance of shares (cid:43)urchase of treasury shares (cid:43)roceeds from(cid:14)(purchase of) non(cid:12)controlling interest (cid:43)roceeds from issuance of long(cid:12)term debt (cid:45)epayment of long(cid:12)term debt (cid:41)et borro(cid:76)ing(cid:14)(repayment) of commercial paper (cid:41)et borro(cid:76)ing(cid:14)(repayment) of short(cid:12)term debt (cid:45)epayment of lease liabilities Share buybac(cid:64)(cid:14)cancellations (cid:31)ividends paid (cid:38)et cash used in financing activities Effect of e(cid:77)change rates on cash and cash equivalents Cash and cash equivalents classified as held for sale (cid:3) 1(cid:21),(cid:18)2(cid:20) (cid:3) (cid:41)et increase(cid:14)(decrease) in cash and cash equivalents Cash and cash equivalents balance at beginning of the fiscal year 625 138 12 2 (3) (cid:85) (cid:85) (14) 63 106 22 (33) (cid:85) (272) (626) (67) 711 123 (20) (35) (21) 1,(cid:19)2(cid:20) (5) (12) (527) (1) 18 ((cid:19)2(cid:21)) 114 (143) (cid:85) 1(cid:11)066 (1(cid:11)243) 638 15 (5) (601) (732) ((cid:22)(cid:23)1) (108) (75) (75) 850 574 (cid:85) 15 10 (10) (44) (1(cid:24)) 21 58 (83) 27 4 4 (18(cid:24)) (112) ((cid:24)0) 342 11 2(cid:24) (40) 2 1,(cid:18)(cid:20)1 (cid:85) (5) (468) 214 26 (233) 30 (8) (8) 7(cid:24)0 (530) (235) (123) (2) (351) (742) (1,1(cid:21)(cid:23)) 58 (cid:85) 107 743 Cash and cash equivalents balance at end of the fiscal year (cid:3) (cid:21)(cid:21)(cid:19) (cid:3) (cid:22)(cid:19)0 (cid:3) 652 (cid:85) 10 8 (4) (cid:85) 14 (16) 34 (cid:85) 38 (114) 7 133 26 (23) (48) 8 81 (33) (5) 1,3(cid:22)(cid:18) (cid:85) (cid:85) (400) 425 13 3(cid:22) 1 (67) 4 3(cid:11)1(cid:24)4 (4(cid:11)225) 1(cid:11)742 (585) (2) (537) (761) (1,23(cid:20)) (45) (cid:85) 141 602 (cid:21)(cid:18)3 51 52 Amcor Annual Report 2022 (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:5) (cid:44)n(cid:38)l(cid:55)d(cid:44)ng (cid:28)ote (cid:11)(cid:12)(cid:5) (cid:2)(cid:32)(cid:55)(cid:51)(cid:51)lemental Ca(cid:53)(cid:43) Flow In(cid:41)ormat(cid:44)on(cid:7)(cid:2) Amcor plc and Subsidiaries (cid:38)otes to Consolidated Financial Statements (cid:38)ote 1 - Business Description Amcor plc ("Amcor" or the "Company") is a public limited company incorporated under the La(cid:76)s of the Baili(cid:76)ic(cid:64) of (cid:37)ersey. (cid:47)he Company(cid:6)s history dates bac(cid:64) more than 150 years(cid:11) (cid:76)ith origins in both Australia and the (cid:48)nited States of America. (cid:47)oday(cid:11) Amcor is a global leader in developing and producing responsible pac(cid:64)aging for food(cid:11) beverage(cid:11) pharmaceutical(cid:11) medical(cid:11) home and personal(cid:12)care(cid:11) and other consumer goods end mar(cid:64)ets. (cid:47)he Company(cid:6)s innovation e(cid:77)cellence and global pac(cid:64)aging e(cid:77)pertise enables the Company to solve pac(cid:64)aging challenges around the (cid:76)orld every day(cid:11) producing pac(cid:64)aging that is more functional(cid:11) appealing(cid:11) and cost effective for its customers and their consumers and importantly(cid:11) more sustainable for the environment. (cid:47)he Company(cid:6)s business activities are organi(cid:79)ed around t(cid:76)o reportable segments(cid:11) Fle(cid:77)ibles and (cid:45)igid (cid:43)ac(cid:64)aging. (cid:47)he Company has a globally diverse operating footprint(cid:11) selling to customers in Europe(cid:11) (cid:41)orth America(cid:11) Latin America(cid:11) and the Asia (cid:43)acific regions. (cid:47)he Company develops and produces a broad range of pac(cid:64)aging products including fle(cid:77)ible pac(cid:64)aging(cid:11) rigid pac(cid:64)aging containers(cid:11) specialty cartons(cid:11) and closures. (cid:47)he Company(cid:6)s sales are (cid:76)idely diversified(cid:11) (cid:76)ith the ma(cid:63)ority of sales made to the food(cid:11) beverage(cid:11) pharmaceutical(cid:11) medical device(cid:11) home and personal care(cid:11) and other consumer goods end mar(cid:64)ets. All mar(cid:64)ets are considered to be highly competitive as to price(cid:11) innovation(cid:11) quality(cid:11) and service. Form 10-K 53 Amcor plc and Subsidiaries Consolidated Statements of E(cid:67)uity ((cid:3) in millions, e(cid:74)cept per share data) Balance as of June 30, 201(cid:23) (cid:3) 1(cid:20) (cid:3) (cid:20),00(cid:22) (cid:3) 32(cid:18) (cid:3) ((cid:21)22) (cid:3) (1(cid:20)) (cid:3) (cid:20)(cid:19) (cid:3) (cid:19),(cid:20)(cid:21)(cid:19) Ordinary Shares Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss (cid:44)reasury Shares (cid:38)on- controlling Interest (cid:44)otal (cid:41)et income Other comprehensive loss Share buybac(cid:64)(cid:14)cancellations (cid:31)ividends declared ($0.465 per share) Options e(cid:77)ercised and shares vested For(cid:76)ard contracts entered to purchase o(cid:76)n equity to meet share(cid:12)based incentive plans(cid:11) net of ta(cid:77) (cid:43)urchase of treasury shares Share(cid:12)based compensation e(cid:77)pense Change in non(cid:12)controlling interest Cumulative ad(cid:63)ustment related to the adoption of ASC 842 (cid:85) (537) (15) (10) 34 Balance as of June 30, 2020 1(cid:20) (cid:19),(cid:18)(cid:22)0 (cid:41)et income Other comprehensive income Share buybac(cid:64)(cid:14)cancellations (cid:31)ividends declared ($0.4675 per share) Options e(cid:77)ercised and shares vested For(cid:76)ard contracts entered to purchase o(cid:76)n equity to meet share(cid:12)based incentive plans(cid:11) net of ta(cid:77) (cid:43)urchase of treasury shares Share(cid:12)based compensation e(cid:77)pense Change in non(cid:12)controlling interest Cumulative ad(cid:63)ustment related to the adoption of ASC 326 (1) (350) (16) (72) 58 (8) Balance as of June 30, 2021 1(cid:19) (cid:19),0(cid:23)2 (cid:41)et income Other comprehensive loss Share buybac(cid:64)(cid:14)cancellations (cid:31)ividends declared ($0.4775 per share) Options e(cid:77)ercised and shares vested For(cid:76)ard contracts entered to purchase o(cid:76)n equity to meet share(cid:12)based incentive plans(cid:11) net of ta(cid:77) (cid:43)urchase of treasury shares Share(cid:12)based compensation e(cid:77)pense Change in non(cid:12)controlling interest (cid:85) (601) (40) (83) 63 (cid:85) 612 (748) (cid:85) 58 2(cid:18)(cid:20) (cid:24)3(cid:24) (728) (cid:85) (5) (cid:18)(cid:19)2 805 (723) (327) 16 (67) (1,0(cid:18)(cid:23)) ((cid:20)(cid:21)) 283 46 (8) ((cid:21)(cid:20)(cid:20)) (2(cid:23)) (114) 154 (143) 4 (cid:85) (13) 5 (cid:20)1 12 (cid:85) (14) (2) (cid:19)(cid:21) 10 (cid:85) ((cid:24)) 1 616 (327) (537) (761) 1 (10) (67) 34 5 58 (cid:18),(cid:20)(cid:22)(cid:21) (cid:24)51 283 (351) (742) 30 (72) (8) 58 (10) (5) (cid:18),(cid:22)21 815 (114) (601) (732) 114 (83) (143) 63 1 Balance as of June 30, 2022 (cid:3) 1(cid:19) (cid:3) (cid:18),(cid:18)31 (cid:3) (cid:19)3(cid:18) (cid:3) ((cid:22)(cid:22)0) (cid:3) (1(cid:22)) (cid:3) (cid:19)(cid:23) (cid:3) (cid:18),1(cid:18)1 (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:7) 53 Amcor Annual Report 2022 54 53 Form 10-K 54 Amcor plc and Subsidiaries Consolidated Statements of E(cid:67)uity ((cid:3) in millions, e(cid:74)cept per share data) Amcor plc and Subsidiaries (cid:38)otes to Consolidated Financial Statements (cid:38)ote 1 - Business Description Amcor plc ("Amcor" or the "Company") is a public limited company incorporated under the La(cid:76)s of the Baili(cid:76)ic(cid:64) of (cid:37)ersey. (cid:47)he Company(cid:6)s history dates bac(cid:64) more than 150 years(cid:11) (cid:76)ith origins in both Australia and the (cid:48)nited States of America. (cid:47)oday(cid:11) Amcor is a global leader in developing and producing responsible pac(cid:64)aging for food(cid:11) beverage(cid:11) pharmaceutical(cid:11) medical(cid:11) home and personal(cid:12)care(cid:11) and other consumer goods end mar(cid:64)ets. (cid:47)he Company(cid:6)s innovation e(cid:77)cellence and global pac(cid:64)aging e(cid:77)pertise enables the Company to solve pac(cid:64)aging challenges around the (cid:76)orld every day(cid:11) producing pac(cid:64)aging that is more functional(cid:11) appealing(cid:11) and cost effective for its customers and their consumers and importantly(cid:11) more sustainable for the environment. (cid:47)he Company(cid:6)s business activities are organi(cid:79)ed around t(cid:76)o reportable segments(cid:11) Fle(cid:77)ibles and (cid:45)igid (cid:43)ac(cid:64)aging. (cid:47)he Company has a globally diverse operating footprint(cid:11) selling to customers in Europe(cid:11) (cid:41)orth America(cid:11) Latin America(cid:11) and the Asia (cid:43)acific regions. (cid:47)he Company develops and produces a broad range of pac(cid:64)aging products including fle(cid:77)ible pac(cid:64)aging(cid:11) rigid pac(cid:64)aging containers(cid:11) specialty cartons(cid:11) and closures. (cid:47)he Company(cid:6)s sales are (cid:76)idely diversified(cid:11) (cid:76)ith the ma(cid:63)ority of sales made to the food(cid:11) beverage(cid:11) pharmaceutical(cid:11) medical device(cid:11) home and personal care(cid:11) and other consumer goods end mar(cid:64)ets. All mar(cid:64)ets are considered to be highly competitive as to price(cid:11) innovation(cid:11) quality(cid:11) and service. 54 Amcor Annual Report 2022 Balance as of June 30, 201(cid:23) (cid:3) 1(cid:20) (cid:3) (cid:20),00(cid:22) (cid:3) 32(cid:18) (cid:3) ((cid:21)22) (cid:3) (1(cid:20)) (cid:3) (cid:20)(cid:19) (cid:3) (cid:19),(cid:20)(cid:21)(cid:19) Additional Accumulated Other (cid:38)on- Ordinary Shares Paid-In Capital Retained Earnings Comprehensive (cid:44)reasury controlling Loss Shares Interest (cid:44)otal (cid:85) (537) (327) (cid:41)et income Other comprehensive loss Share buybac(cid:64)(cid:14)cancellations (cid:31)ividends declared ($0.465 per share) Options e(cid:77)ercised and shares vested For(cid:76)ard contracts entered to purchase o(cid:76)n equity to meet share(cid:12)based incentive plans(cid:11) net of ta(cid:77) (cid:43)urchase of treasury shares Share(cid:12)based compensation e(cid:77)pense Change in non(cid:12)controlling interest Cumulative ad(cid:63)ustment related to the adoption of ASC 842 (cid:41)et income Other comprehensive income Share buybac(cid:64)(cid:14)cancellations (cid:31)ividends declared ($0.4675 per share) Options e(cid:77)ercised and shares vested For(cid:76)ard contracts entered to purchase o(cid:76)n equity to meet share(cid:12)based incentive plans(cid:11) net of ta(cid:77) (cid:43)urchase of treasury shares Share(cid:12)based compensation e(cid:77)pense Change in non(cid:12)controlling interest Cumulative ad(cid:63)ustment related to the adoption of ASC 326 (cid:41)et income Other comprehensive loss Share buybac(cid:64)(cid:14)cancellations (cid:31)ividends declared ($0.4775 per share) Options e(cid:77)ercised and shares vested For(cid:76)ard contracts entered to purchase o(cid:76)n equity to meet share(cid:12)based incentive plans(cid:11) net of ta(cid:77) (cid:43)urchase of treasury shares Share(cid:12)based compensation e(cid:77)pense Change in non(cid:12)controlling interest Balance as of June 30, 2020 1(cid:20) (cid:19),(cid:18)(cid:22)0 (1,0(cid:18)(cid:23)) ((cid:20)(cid:21)) (cid:18),(cid:20)(cid:22)(cid:21) (1) (350) 283 Balance as of June 30, 2021 1(cid:19) (cid:19),0(cid:23)2 ((cid:21)(cid:20)(cid:20)) (2(cid:23)) (cid:18),(cid:22)21 (cid:85) (601) (114) Balance as of June 30, 2022 (cid:3) 1(cid:19) (cid:3) (cid:18),(cid:18)31 (cid:3) (cid:19)3(cid:18) (cid:3) ((cid:22)(cid:22)0) (cid:3) (1(cid:22)) (cid:3) (cid:19)(cid:23) (cid:3) (cid:18),1(cid:18)1 (cid:32)ee a(cid:38)(cid:38)om(cid:51)an(cid:59)(cid:44)ng note(cid:53) to (cid:38)on(cid:53)ol(cid:44)dated (cid:41)(cid:44)nan(cid:38)(cid:44)al (cid:53)tatement(cid:53)(cid:7) 4 (cid:85) (13) 5 (cid:20)1 12 (cid:85) (14) (2) (cid:19)(cid:21) 10 (cid:85) ((cid:24)) 1 616 (327) (537) (761) 1 (10) (67) 34 5 58 (cid:24)51 283 (351) (742) 30 (72) (8) 58 (10) (5) 815 (114) (601) (732) 114 (83) (143) 63 1 16 (67) 46 (8) 154 (143) 612 (748) (cid:85) 58 2(cid:18)(cid:20) (cid:24)3(cid:24) (728) (cid:85) (5) (cid:18)(cid:19)2 805 (723) (15) (10) 34 (16) (72) 58 (8) (40) (83) 63 (cid:85) 53 Form 10-K 55 (cid:38)ote 2 - Significant Accounting Policies Basis of Presentation and Principles of Consolidation: (cid:47)he consolidated financial statements include the accounts of the Company and subsidiaries for (cid:76)hich the Company has a controlling financial interest. All significant intercompany transactions and balances have been eliminated. (cid:47)he consolidated financial statements are prepared in accordance (cid:76)ith accounting principles generally accepted in the (cid:48)nited States of America ("(cid:48).S. (cid:34)AA(cid:43)"). Certain amounts in the Company(cid:6)s notes to consolidated financial statements may not add or recalculate due to operations (cid:76)ith a functional currency other than the (cid:48).S. dollar are translated at the e(cid:77)change rate as of the balance sheet date(cid:11) rounding. Business Combinations: (cid:47)he Company uses the acquisition method of accounting(cid:11) (cid:76)hich requires separate recognition of assets acquired and liabilities assumed from good(cid:76)ill(cid:11) at the acquisition date fair values. (cid:34)ood(cid:76)ill as of the acquisition date is measured as the e(cid:77)cess of consideration transferred and the fair value of any non(cid:12)controlling interests in the acquiree over the net of the acquisition date fair values of the assets acquired and liabilities assumed. (cid:31)uring the measurement period(cid:11) (cid:76)hich may be up to one year from the acquisition date(cid:11) the Company has the ability to record ad(cid:63)ustments to the assets acquired and liabilities assumed (cid:76)ith the corresponding offset to good(cid:76)ill. (cid:48)pon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed(cid:11) (cid:76)hichever comes first(cid:11) any subsequent ad(cid:63)ustments are recorded in the consolidated statements of income. (cid:32)eld for Sale and Discontinued Operations: (cid:47)he Company classifies assets and liabilities (the "disposal group") as held for sale in the period (cid:76)hen all of the relevant criteria to be classified as held for sale are met. Criteria include management commitment to sell the disposal group in its present condition and the sale being deemed probable of being completed (cid:76)ithin one year. Assets held for sale are reported at the lo(cid:76)er of their carrying value or fair value less cost to sell. Fair value is determined based on management(cid:89)s assessment of indicative bids(cid:11) a mar(cid:64)et multiples model in (cid:76)hich a mar(cid:64)et multiple is applied to forecasted earnings before interest(cid:11) ta(cid:77)es(cid:11) depreciation(cid:11) and amorti(cid:79)ation ((cid:86)EBI(cid:47)(cid:31)A(cid:87))(cid:11) discounted cash flo(cid:76)s(cid:11) appraised values or management(cid:6)s estimates(cid:11) depending on the specific situation. Any loss resulting from the measurement is recogni(cid:79)ed in the period the held for sale criteria are met. If the disposal group meets the definition of a business(cid:11) the good(cid:76)ill (cid:76)ithin the reporting unit is allocated to the disposal group based on its relative fair value. (cid:47)he Company assesses the fair value of a disposal group(cid:11) less any costs to sell(cid:11) each reporting period it remains classified as held for sale and reports any subsequent changes as an ad(cid:63)ustment to the carrying value of the disposal group(cid:11) as long as the ne(cid:76) carrying value does not e(cid:77)ceed the initial carrying value of the disposal group. Assets held for sale are not amorti(cid:79)ed or depreciated. (cid:47)he Company recorded an impairment charge on assets held for sale of $(cid:24)0 million for the fiscal year ended (cid:37)une 30(cid:11) 2022. A disposal group that represents a strategic shift to the Company or is acquired (cid:76)ith the intention to sell is reflected as a discontinued operation on the consolidated statements of income and prior periods are recast to reflect the earnings or losses as income from discontinued operations. (cid:47)he consolidated financial statements and related notes reflect the three plants in Europe acquired as part of the Bemis acquisition as a discontinued operation in fiscal year 201(cid:24) as the Company agreed to divest of these plants as a condition of approval from the European Commission. (cid:47)he plants (cid:76)ere divested in the first quarter of fiscal year 2020. See (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations(cid:11)" for more information on assets held for sale and discontinued operations. Estimates and Assumptions Re(cid:67)uired: (cid:47)he preparation of financial statements in conformity (cid:76)ith (cid:48).S. (cid:34)AA(cid:43) requires management to ma(cid:64)e estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and e(cid:77)penses during the reporting periods. (cid:47)hese estimates are based on historical e(cid:77)perience and various assumptions believed to be reasonable under the circumstances. (cid:40)anagement evaluates these estimates on an ongoing basis and ad(cid:63)usts or revises the estimates as circumstances change. As future events and their impacts cannot be determined (cid:76)ith precision(cid:11) actual results may differ from these estimates. In the opinion of management(cid:11) the consolidated financial statements reflect all ad(cid:63)ustments necessary to fairly present the results of the periods presented. (cid:44)ranslation of Foreign Currencies: (cid:47)he reporting currency of the Company is the (cid:48).S. dollar. (cid:47)he functional currency of the Company(cid:89)s subsidiaries is generally the local currency of each entity. (cid:47)ransactions in currencies other than the functional currency of the entity are recorded at the rates of e(cid:77)change prevailing at the date of the transaction. (cid:40)onetary assets and liabilities in currencies other than the entity(cid:89)s functional currency are remeasured at the e(cid:77)change rate as of the balance sheet date to the entity(cid:89)s functional currency. Foreign currency transaction gains and losses related to short(cid:12)term and long(cid:12)term debt are recorded in other non(cid:12)operating income(cid:11) net(cid:11) in the consolidated statements of income and the net gains or net losses are not 55 Amcor Annual Report 2022 56 material in any of the periods presented. All other foreign currency transaction gains and losses are recorded in other income(cid:11) net in the consolidated statements of income. (cid:47)hese foreign currency transaction net gains or net losses amounted to a net gain of $1(cid:24) million(cid:11) a net loss of $4 million(cid:11) and a net gain of $21 million during the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (cid:48)pon consolidation(cid:11) the results of operations of subsidiaries (cid:76)hose functional currency is other than the reporting currency of the Company are translated using average e(cid:77)change rates in effect during each year. Assets and liabilities of (cid:76)hile equity balances are translated at historical rates. (cid:47)ranslation gains and losses are reported in accumulated other comprehensive loss as a component of shareholders(cid:89) equity. (cid:32)ighly Inflationary Accounting: A highly inflationary economy is defined as an economy (cid:76)ith a cumulative inflation rate of appro(cid:77)imately 100 percent or more over a three(cid:12)year period. As of (cid:37)uly 1(cid:11) 2018(cid:11) the Argentine economy (cid:76)as designated as highly inflationary for accounting purposes. Accordingly(cid:11) the (cid:48).S. dollar replaced the Argentine peso as the functional currency for the Company(cid:6)s subsidiaries in Argentina. (cid:47)he impact of highly inflationary accounting on monetary balances (cid:76)as a loss of $16 million(cid:11) $1(cid:24) million(cid:11) and $28 million for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively(cid:11) in the consolidated statements of income. Revenue Recognition: (cid:47)he Company generates revenue by providing its customers (cid:76)ith fle(cid:77)ible and rigid pac(cid:64)aging(cid:11) serving a variety of mar(cid:64)ets including food(cid:11) consumer products(cid:11) and healthcare end mar(cid:64)ets. (cid:47)he Company enters into a variety of agreements (cid:76)ith customers(cid:11) including quality agreements(cid:11) pricing agreements(cid:11) and master supply agreements(cid:11) (cid:76)hich outline the terms under (cid:76)hich the Company does business (cid:76)ith a specific customer. (cid:47)he Company also sells to some customers solely based on purchase orders. (cid:47)he Company has concluded for the vast ma(cid:63)ority of its revenues(cid:11) that its contracts (cid:76)ith customers are either a purchase order or the combination of a purchase order (cid:76)ith a master supply agreement. All revenue recogni(cid:79)ed in the consolidated statements of income is considered to be revenue from contracts (cid:76)ith customers. (cid:47)he Company typically satisfies the obligation to provide pac(cid:64)aging to customers at a point in time upon shipment (cid:76)hen control is transferred to customers. (cid:45)evenue is recogni(cid:79)ed net of allo(cid:76)ances for returns and customer claims and any ta(cid:77)es collected from customers(cid:11) (cid:76)hich are subsequently remitted to governmental authorities. (cid:47)he Company does not have any material contract assets or contract liabilities. (cid:47)he Company disaggregates revenue based on geography. (cid:31)isaggregation of revenue is presented in (cid:41)ote 21(cid:11) "Segments." Si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) (cid:24)(cid:57)(cid:40)(cid:43)me(cid:50)(cid:56)s (cid:31)etermining (cid:76)hether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant (cid:63)udgment. (cid:47)he Company identified potential performance obligations in its customer master supply agreements and determined that none of them are capable of being distinct as the customer can only benefit from the supplied pac(cid:64)aging. (cid:47)herefore(cid:11) the Company has concluded that it has one performance obligation to supply pac(cid:64)aging to customers. (cid:47)he Company may provide variable consideration in several forms(cid:11) (cid:76)hich are determined through its agreements (cid:76)ith customers. (cid:47)he Company can offer prompt payment discounts(cid:11) sales rebates(cid:11) or other incentive payments to customers. Sales rebates and other incentive payments are typically a(cid:76)arded upon achievement of certain performance metrics(cid:11) including volume. (cid:47)he Company accounts for variable consideration using the most li(cid:64)ely amount method. (cid:47)he Company utili(cid:79)es forecasted sales data and rebate percentages specific to each customer agreement and updates its (cid:63)udgment of the amounts to (cid:76)hich the customer is entitled each period. (cid:47)he Company enters into long(cid:12)term agreements (cid:76)ith certain customers(cid:11) under (cid:76)hich it is obligated to ma(cid:64)e various up(cid:12)front payments for (cid:76)hich it e(cid:77)pects to receive a benefit in e(cid:77)cess of the cost over the term of the contract. (cid:47)hese up(cid:12)front payments are deferred and reflected in prepaid e(cid:77)penses and other current assets or other non(cid:12)current assets on its consolidated balance sheets. Contract incentives are typically recogni(cid:79)ed as a reduction to revenue over the term of the customer agreement. (cid:30)ra(cid:39)(cid:56)i(cid:39)a(cid:48) (cid:19)x(cid:52)e(cid:40)ie(cid:50)(cid:56)s (cid:47)he Company sells primarily through its direct sales force. Any e(cid:77)ternal sales commissions are e(cid:77)pensed (cid:76)hen incurred because the amorti(cid:79)ation period (cid:76)ould be one year or less. E(cid:77)ternal sales commission e(cid:77)pense is included in selling(cid:11) general(cid:11) and administrative e(cid:77)penses in the consolidated statements of income. 55 Form 10-K 56 (cid:38)ote 2 - Significant Accounting Policies Basis of Presentation and Principles of Consolidation: (cid:47)he consolidated financial statements include the accounts of the Company and subsidiaries for (cid:76)hich the Company has a controlling financial interest. All significant intercompany transactions and balances have been eliminated. (cid:47)he consolidated financial statements are prepared in accordance (cid:76)ith accounting principles generally accepted in the (cid:48)nited States of America ("(cid:48).S. (cid:34)AA(cid:43)"). Certain amounts in the Company(cid:6)s notes to consolidated financial statements may not add or recalculate due to rounding. Business Combinations: (cid:47)he Company uses the acquisition method of accounting(cid:11) (cid:76)hich requires separate recognition of assets acquired and liabilities assumed from good(cid:76)ill(cid:11) at the acquisition date fair values. (cid:34)ood(cid:76)ill as of the acquisition date is measured as the e(cid:77)cess of consideration transferred and the fair value of any non(cid:12)controlling interests in the acquiree over the net of the acquisition date fair values of the assets acquired and liabilities assumed. (cid:31)uring the measurement period(cid:11) (cid:76)hich may be up to one year from the acquisition date(cid:11) the Company has the ability to record ad(cid:63)ustments to the assets acquired and liabilities assumed (cid:76)ith the corresponding offset to good(cid:76)ill. (cid:48)pon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed(cid:11) (cid:76)hichever comes first(cid:11) any subsequent ad(cid:63)ustments are recorded in the consolidated statements of income. (cid:32)eld for Sale and Discontinued Operations: (cid:47)he Company classifies assets and liabilities (the "disposal group") as held for sale in the period (cid:76)hen all of the relevant criteria to be classified as held for sale are met. Criteria include management commitment to sell the disposal group in its present condition and the sale being deemed probable of being completed (cid:76)ithin one year. Assets held for sale are reported at the lo(cid:76)er of their carrying value or fair value less cost to sell. Fair value is determined based on management(cid:89)s assessment of indicative bids(cid:11) a mar(cid:64)et multiples model in (cid:76)hich a mar(cid:64)et multiple is applied to forecasted earnings before interest(cid:11) ta(cid:77)es(cid:11) depreciation(cid:11) and amorti(cid:79)ation ((cid:86)EBI(cid:47)(cid:31)A(cid:87))(cid:11) discounted cash flo(cid:76)s(cid:11) appraised values or management(cid:6)s estimates(cid:11) depending on the specific situation. Any loss resulting from the measurement is recogni(cid:79)ed in the period the held for sale criteria are met. If the disposal group meets the definition of a business(cid:11) the good(cid:76)ill (cid:76)ithin the reporting unit is allocated to the disposal group based on its relative fair value. (cid:47)he Company assesses the fair value of a disposal group(cid:11) less any costs to sell(cid:11) each reporting period it remains classified as held for sale and reports any subsequent changes as an ad(cid:63)ustment to the carrying value of the disposal group(cid:11) as long as the ne(cid:76) carrying value does not e(cid:77)ceed the initial carrying value of the disposal group. Assets held for sale are not amorti(cid:79)ed or depreciated. (cid:47)he Company recorded an impairment charge on assets held for sale of $(cid:24)0 million for the fiscal year ended (cid:37)une 30(cid:11) 2022. A disposal group that represents a strategic shift to the Company or is acquired (cid:76)ith the intention to sell is reflected as a discontinued operation on the consolidated statements of income and prior periods are recast to reflect the earnings or losses as income from discontinued operations. (cid:47)he consolidated financial statements and related notes reflect the three plants in Europe acquired as part of the Bemis acquisition as a discontinued operation in fiscal year 201(cid:24) as the Company agreed to divest of these plants as a condition of approval from the European Commission. (cid:47)he plants (cid:76)ere divested in the first quarter of fiscal year 2020. discontinued operations. See (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations(cid:11)" for more information on assets held for sale and Estimates and Assumptions Re(cid:67)uired: (cid:47)he preparation of financial statements in conformity (cid:76)ith (cid:48).S. (cid:34)AA(cid:43) requires management to ma(cid:64)e estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and e(cid:77)penses during the reporting periods. (cid:47)hese estimates are based on historical e(cid:77)perience and various assumptions believed to be reasonable under the circumstances. (cid:40)anagement evaluates these estimates on an ongoing basis and ad(cid:63)usts or revises the estimates as circumstances change. As future events and their impacts cannot be determined (cid:76)ith precision(cid:11) actual results may differ from these estimates. In the opinion of management(cid:11) the consolidated financial statements reflect all ad(cid:63)ustments necessary to fairly present the results of the periods presented. (cid:44)ranslation of Foreign Currencies: (cid:47)he reporting currency of the Company is the (cid:48).S. dollar. (cid:47)he functional currency of the Company(cid:89)s subsidiaries is generally the local currency of each entity. (cid:47)ransactions in currencies other than the functional currency of the entity are recorded at the rates of e(cid:77)change prevailing at the date of the transaction. (cid:40)onetary assets and liabilities in currencies other than the entity(cid:89)s functional currency are remeasured at the e(cid:77)change rate as of the balance sheet date to the entity(cid:89)s functional currency. Foreign currency transaction gains and losses related to short(cid:12)term and long(cid:12)term debt are recorded in other non(cid:12)operating income(cid:11) net(cid:11) in the consolidated statements of income and the net gains or net losses are not material in any of the periods presented. All other foreign currency transaction gains and losses are recorded in other income(cid:11) net in the consolidated statements of income. (cid:47)hese foreign currency transaction net gains or net losses amounted to a net gain of $1(cid:24) million(cid:11) a net loss of $4 million(cid:11) and a net gain of $21 million during the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (cid:48)pon consolidation(cid:11) the results of operations of subsidiaries (cid:76)hose functional currency is other than the reporting currency of the Company are translated using average e(cid:77)change rates in effect during each year. Assets and liabilities of operations (cid:76)ith a functional currency other than the (cid:48).S. dollar are translated at the e(cid:77)change rate as of the balance sheet date(cid:11) (cid:76)hile equity balances are translated at historical rates. (cid:47)ranslation gains and losses are reported in accumulated other comprehensive loss as a component of shareholders(cid:89) equity. (cid:32)ighly Inflationary Accounting: A highly inflationary economy is defined as an economy (cid:76)ith a cumulative inflation rate of appro(cid:77)imately 100 percent or more over a three(cid:12)year period. As of (cid:37)uly 1(cid:11) 2018(cid:11) the Argentine economy (cid:76)as designated as highly inflationary for accounting purposes. Accordingly(cid:11) the (cid:48).S. dollar replaced the Argentine peso as the functional currency for the Company(cid:6)s subsidiaries in Argentina. (cid:47)he impact of highly inflationary accounting on monetary balances (cid:76)as a loss of $16 million(cid:11) $1(cid:24) million(cid:11) and $28 million for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively(cid:11) in the consolidated statements of income. Revenue Recognition: (cid:47)he Company generates revenue by providing its customers (cid:76)ith fle(cid:77)ible and rigid pac(cid:64)aging(cid:11) serving a variety of mar(cid:64)ets including food(cid:11) consumer products(cid:11) and healthcare end mar(cid:64)ets. (cid:47)he Company enters into a variety of agreements (cid:76)ith customers(cid:11) including quality agreements(cid:11) pricing agreements(cid:11) and master supply agreements(cid:11) (cid:76)hich outline the terms under (cid:76)hich the Company does business (cid:76)ith a specific customer. (cid:47)he Company also sells to some customers solely based on purchase orders. (cid:47)he Company has concluded for the vast ma(cid:63)ority of its revenues(cid:11) that its contracts (cid:76)ith customers are either a purchase order or the combination of a purchase order (cid:76)ith a master supply agreement. All revenue recogni(cid:79)ed in the consolidated statements of income is considered to be revenue from contracts (cid:76)ith customers. (cid:47)he Company typically satisfies the obligation to provide pac(cid:64)aging to customers at a point in time upon shipment (cid:76)hen control is transferred to customers. (cid:45)evenue is recogni(cid:79)ed net of allo(cid:76)ances for returns and customer claims and any ta(cid:77)es collected from customers(cid:11) (cid:76)hich are subsequently remitted to governmental authorities. (cid:47)he Company does not have any material contract assets or contract liabilities. (cid:47)he Company disaggregates revenue based on geography. (cid:31)isaggregation of revenue is presented in (cid:41)ote 21(cid:11) "Segments." Si(cid:43)(cid:50)ifi(cid:39)a(cid:50)(cid:56) (cid:24)(cid:57)(cid:40)(cid:43)me(cid:50)(cid:56)s (cid:31)etermining (cid:76)hether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant (cid:63)udgment. (cid:47)he Company identified potential performance obligations in its customer master supply agreements and determined that none of them are capable of being distinct as the customer can only benefit from the supplied pac(cid:64)aging. (cid:47)herefore(cid:11) the Company has concluded that it has one performance obligation to supply pac(cid:64)aging to customers. (cid:47)he Company may provide variable consideration in several forms(cid:11) (cid:76)hich are determined through its agreements (cid:76)ith customers. (cid:47)he Company can offer prompt payment discounts(cid:11) sales rebates(cid:11) or other incentive payments to customers. Sales rebates and other incentive payments are typically a(cid:76)arded upon achievement of certain performance metrics(cid:11) including volume. (cid:47)he Company accounts for variable consideration using the most li(cid:64)ely amount method. (cid:47)he Company utili(cid:79)es forecasted sales data and rebate percentages specific to each customer agreement and updates its (cid:63)udgment of the amounts to (cid:76)hich the customer is entitled each period. (cid:47)he Company enters into long(cid:12)term agreements (cid:76)ith certain customers(cid:11) under (cid:76)hich it is obligated to ma(cid:64)e various up(cid:12)front payments for (cid:76)hich it e(cid:77)pects to receive a benefit in e(cid:77)cess of the cost over the term of the contract. (cid:47)hese up(cid:12)front payments are deferred and reflected in prepaid e(cid:77)penses and other current assets or other non(cid:12)current assets on its consolidated balance sheets. Contract incentives are typically recogni(cid:79)ed as a reduction to revenue over the term of the customer agreement. (cid:30)ra(cid:39)(cid:56)i(cid:39)a(cid:48) (cid:19)x(cid:52)e(cid:40)ie(cid:50)(cid:56)s (cid:47)he Company sells primarily through its direct sales force. Any e(cid:77)ternal sales commissions are e(cid:77)pensed (cid:76)hen incurred because the amorti(cid:79)ation period (cid:76)ould be one year or less. E(cid:77)ternal sales commission e(cid:77)pense is included in selling(cid:11) general(cid:11) and administrative e(cid:77)penses in the consolidated statements of income. 55 56 Amcor Annual Report 2022 (cid:47)he Company accounts for shipping and handling activities as fulfillment costs. Accordingly(cid:11) shipping and handling Inventories(cid:11) net are summari(cid:79)ed as follo(cid:76)s(cid:25) costs are classified as a component of cost of sales (cid:76)hile amounts billed to customers are classified as a component of net sales. Form 10-K 57 (cid:47)he Company e(cid:77)cludes from the measurement of the transaction price all ta(cid:77)es assessed by a government authority that are both imposed on and concurrent (cid:76)ith a specific revenue producing transaction and collected from the customer(cid:11) including sales ta(cid:77)es(cid:11) value added ta(cid:77)es(cid:11) e(cid:77)cise ta(cid:77)es(cid:11) and use ta(cid:77)es. Accordingly(cid:11) the ta(cid:77) amounts are not included in net sales. (cid:47)he Company does not ad(cid:63)ust the promised consideration for the time value of money for contracts (cid:76)here the difference bet(cid:76)een the time of payment and performance is one year or less. Research and Development: (cid:45)esearch and development e(cid:77)penses are e(cid:77)pensed as incurred. Restructuring Costs: (cid:45)estructuring costs are recogni(cid:79)ed (cid:76)hen the liability is incurred. (cid:47)he Company calculates severance obligations based on its standard customary practices. Accordingly(cid:11) the Company records provisions for severance (cid:76)hen probable and estimable and the Company has committed to the restructuring plan. In the absence of a standard customary practice or established local practice(cid:11) liabilities for severance are recogni(cid:79)ed (cid:76)hen incurred. If fi(cid:77)ed assets become impaired as a result of the Company(cid:89)s restructuring efforts(cid:11) these assets are (cid:76)ritten do(cid:76)n to their fair value less costs to sell(cid:11) as the Company commits to dispose of them and they are no longer in use. (cid:31)epreciation is accelerated on fi(cid:77)ed assets for the period of time the asset continues to be used until the asset ceases to be used. Other restructuring costs(cid:11) including costs to relocate equipment(cid:11) are generally recorded as the cost is incurred or the service is provided. See (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for more information on the Company(cid:89)s restructuring plans. Cash, Cash E(cid:67)uivalents, and Restricted Cash: (cid:47)he Company considers all highly liquid investments(cid:11) (cid:76)ith a maturity of three months or less (cid:76)hen purchased(cid:11) to be cash equivalents. Cash equivalents include demand deposits that can be readily liquidated (cid:76)ithout penalty at the Company(cid:89)s option. Cash equivalents are carried at cost (cid:76)hich appro(cid:77)imates fair mar(cid:64)et value. (cid:47)he Company had restricted cash of $8 million and $23 million at (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:11) (cid:76)hich (cid:76)as held in a share trust associated (cid:76)ith Company share(cid:12)based payment obligations. (cid:44)rade Receivables, net of allowance for doubtful accounts ((cid:2)(cid:44)rade accounts receivable, net(cid:2)): (cid:47)rade accounts receivable(cid:11) net(cid:11) are stated at the amount the Company e(cid:77)pects to collect(cid:11) (cid:76)hich is net of an allo(cid:76)ance for sales returns and the estimated losses resulting from the inability of its customers to ma(cid:64)e required payments. (cid:47)he allo(cid:76)ance for doubtful accounts is estimated based on the current e(cid:77)pected credit loss model ("CECL") and it incorporates information about past events(cid:11) current conditions(cid:11) and reasonable and supportable forecasts of future economic conditions. (cid:50)hen determining the collectability of specific customer accounts(cid:11) a number of factors are evaluated(cid:11) including(cid:25) customer credit(cid:76)orthiness(cid:11) past transaction history (cid:76)ith the customer(cid:11) and changes in customer payment terms or practices. In addition(cid:11) overall historical collection e(cid:77)perience(cid:11) current economic industry trends(cid:11) and a revie(cid:76) of the current status of trade accounts receivable are considered (cid:76)hen determining the required allo(cid:76)ance for doubtful accounts. Changes in allo(cid:76)ance for doubtful accounts (cid:76)ere not material for fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020. (cid:47)he Company enters into factoring arrangements from time to time(cid:11) including customer(cid:12)based supply(cid:12)chain financing programs(cid:11) to sell trade receivables to third(cid:12)party financial institutions. Agreements (cid:76)hich result in true sales of the transferred receivables(cid:11) (cid:76)hich occur (cid:76)hen receivables are transferred (cid:76)ithout recourse to the Company(cid:11) are reflected as a reduction of trade receivables(cid:11) net on the consolidated balance sheets and the proceeds are included in the cash flo(cid:76)s from operating activities in the consolidated statements of cash flo(cid:76)s. Agreements that allo(cid:76) the Company to maintain effective control over the transferred receivables and (cid:76)hich do not qualify as a true sale are accounted for as secured borro(cid:76)ings and recorded on the consolidated balance sheets (cid:76)ithin trade receivables(cid:11) net and short(cid:12)term debt. (cid:47)he e(cid:77)penses associated (cid:76)ith receivables factoring are recorded in the consolidated statements of income primarily as a reduction of net sales. (cid:47)he Company did not factor any trade receivables in fiscal years 2022 and 2021 (cid:76)hich did not qualify as true sales of the receivables. Inventories, net: Inventories are stated at the lo(cid:76)er of cost and net reali(cid:79)able value. (cid:47)he cost of inventories is based upon the first(cid:12)in(cid:11) first(cid:12)out ("FIFO") method or average cost method. Costs related to inventories include ra(cid:76) materials(cid:11) direct labor and manufacturing overhead. ((cid:3) in millions) (cid:45)a(cid:76) materials and supplies (cid:50)or(cid:64) in process and finished goods Less(cid:25) inventory reserves Inventories, net June 30, 2022 June 30, 2021 $ (cid:3) 1(cid:11)161 $ 1(cid:11)38(cid:24) (111) 2,(cid:18)3(cid:23) (cid:3) (cid:24)05 1(cid:11)1(cid:24)3 (107) 1,(cid:23)(cid:23)1 Property, Plant, and E(cid:67)uipment, (cid:38)et ((cid:2)PP(cid:5)E(cid:2)): (cid:43)(cid:43)(cid:5)E is carried at cost less accumulated depreciation and impairment and includes e(cid:77)penditures for ne(cid:76) facilities and equipment and those costs (cid:76)hich substantially increase the useful lives or capacity of e(cid:77)isting (cid:43)(cid:43)(cid:5)E. Cost of constructed assets includes capitali(cid:79)ed interest incurred during the construction period. (cid:40)aintenance and repairs that do not improve efficiency or e(cid:77)tend economic life are e(cid:77)pensed as incurred. (cid:43)(cid:43)(cid:5)E(cid:11) including assets held under finance leases(cid:11) is depreciated using the straight(cid:12)line method over the estimated useful lives of assets or(cid:11) in the case of leasehold improvements and finance leases(cid:11) over the period of the lease or useful life of the asset as described belo(cid:76). (cid:47)he Company periodically revie(cid:76)s these estimated useful lives and(cid:11) (cid:76)hen appropriate(cid:11) changes are made prospectively. Leasehold land Land improvements Buildings (cid:40)achinery and equipment Finance leases Over lease term (cid:48)p to 30 years (cid:48)p to 45 years (cid:48)p to 25 years Lease term or 5 (cid:12) 25 years Impairment of Long-lived Assets: (cid:47)he Company revie(cid:76)s long(cid:12)lived assets(cid:11) primarily (cid:43)(cid:43)(cid:5)E and certain identifiable intangible assets (cid:76)ith finite lives(cid:11) for impairment (cid:76)hen facts or circumstances indicate the carrying amount of an asset or asset group may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flo(cid:76)s are less than the carrying value of the assets(cid:11) the carrying values are reduced to the estimated fair value. Fair values are determined based on quoted mar(cid:64)et values(cid:11) discounted cash flo(cid:76)s(cid:11) or e(cid:77)ternal appraisals(cid:11) as applicable. Impairment of long(cid:12)lived assets recogni(cid:79)ed in the consolidated statements of income(cid:11) e(cid:77)cluding assets held for sale(cid:11) (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) Selling(cid:11) general(cid:11) and administrative e(cid:77)penses (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net (cid:44)otal impairment losses recogni(cid:76)ed in the consolidated statements of income Years ended June 30, 2022 2021 2020 $ (cid:3) 1 $ 42 (cid:18)3 (cid:3) 1 $ (cid:24) 10 (cid:3) 1 21 22 Leases: (cid:47)he Company enters into leasing arrangements for certain manufacturing sites(cid:11) offices(cid:11) (cid:76)arehouses(cid:11) land(cid:11) vehicles(cid:11) and equipment. (cid:47)he Company determines at the inception of the contract (cid:76)hether the contract is or contains a lease. A contract is a lease if it conveys the right to control an identified asset for a period of time in e(cid:77)change for consideration. For leases (cid:76)ith an original term of more than t(cid:76)elve months(cid:11) the Company recogni(cid:79)es a right(cid:12)of(cid:12)use ((cid:86)(cid:45)O(cid:48)(cid:87)) asset and a lease liability. Short(cid:12)term leases (cid:76)ith a term of t(cid:76)elve months or less are not recorded on the consolidated balance sheets and the related e(cid:77)pense is recogni(cid:79)ed on a straight(cid:12)line basis over the term of the lease. Lease liabilities are recogni(cid:79)ed at the commencement date based on the present value of the remaining lease payments over the lease terms(cid:11) (cid:76)hich include any noncancellable lease terms and any rene(cid:76)al periods that the Company is reasonably certain to e(cid:77)ercise. A significant portion of the leases of the Company includes an option or options to e(cid:77)tend the lease term. (cid:47)he Company re(cid:12)evaluates its leases on a regular basis to consider the economic and strategic incentives of e(cid:77)ercising lease rene(cid:76)al options. As the implicit rates in Company(cid:6)s leases generally cannot be readily determined(cid:11) the Company uses estimates of its incremental borro(cid:76)ing rate as the discount rates to determine the lease liabilities. 57 Amcor Annual Report 2022 58 57 Form 10-K 58 1(cid:11)161 $ June 30, 2021 (cid:24)05 June 30, 2022 $ 1(cid:11)38(cid:24) (111) 2,(cid:18)3(cid:23) (cid:3) 1(cid:11)1(cid:24)3 (107) 1,(cid:23)(cid:23)1 (cid:3) (cid:47)he Company accounts for shipping and handling activities as fulfillment costs. Accordingly(cid:11) shipping and handling Inventories(cid:11) net are summari(cid:79)ed as follo(cid:76)s(cid:25) ((cid:3) in millions) (cid:45)a(cid:76) materials and supplies (cid:50)or(cid:64) in process and finished goods Less(cid:25) inventory reserves Inventories, net costs are classified as a component of cost of sales (cid:76)hile amounts billed to customers are classified as a component of net sales. (cid:47)he Company e(cid:77)cludes from the measurement of the transaction price all ta(cid:77)es assessed by a government authority that are both imposed on and concurrent (cid:76)ith a specific revenue producing transaction and collected from the customer(cid:11) including sales ta(cid:77)es(cid:11) value added ta(cid:77)es(cid:11) e(cid:77)cise ta(cid:77)es(cid:11) and use ta(cid:77)es. Accordingly(cid:11) the ta(cid:77) amounts are not included in net sales. (cid:47)he Company does not ad(cid:63)ust the promised consideration for the time value of money for contracts (cid:76)here the difference bet(cid:76)een the time of payment and performance is one year or less. Research and Development: (cid:45)esearch and development e(cid:77)penses are e(cid:77)pensed as incurred. Restructuring Costs: (cid:45)estructuring costs are recogni(cid:79)ed (cid:76)hen the liability is incurred. (cid:47)he Company calculates severance obligations based on its standard customary practices. Accordingly(cid:11) the Company records provisions for severance (cid:76)hen probable and estimable and the Company has committed to the restructuring plan. In the absence of a standard customary practice or established local practice(cid:11) liabilities for severance are recogni(cid:79)ed (cid:76)hen incurred. If fi(cid:77)ed assets become impaired as a result of the Company(cid:89)s restructuring efforts(cid:11) these assets are (cid:76)ritten do(cid:76)n to their fair value less costs to sell(cid:11) as the Company commits to dispose of them and they are no longer in use. (cid:31)epreciation is accelerated on fi(cid:77)ed assets for the period of time the asset continues to be used until the asset ceases to be used. Other restructuring costs(cid:11) including costs to relocate equipment(cid:11) are generally recorded as the cost is incurred or the service is provided. See (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for more information on the Company(cid:89)s restructuring plans. Cash, Cash E(cid:67)uivalents, and Restricted Cash: (cid:47)he Company considers all highly liquid investments(cid:11) (cid:76)ith a maturity of three months or less (cid:76)hen purchased(cid:11) to be cash equivalents. Cash equivalents include demand deposits that can be readily liquidated (cid:76)ithout penalty at the Company(cid:89)s option. Cash equivalents are carried at cost (cid:76)hich appro(cid:77)imates fair mar(cid:64)et value. (cid:47)he Company had restricted cash of $8 million and $23 million at (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:11) (cid:76)hich (cid:76)as held in a share trust associated (cid:76)ith Company share(cid:12)based payment obligations. (cid:44)rade Receivables, net of allowance for doubtful accounts ((cid:2)(cid:44)rade accounts receivable, net(cid:2)): (cid:47)rade accounts receivable(cid:11) net(cid:11) are stated at the amount the Company e(cid:77)pects to collect(cid:11) (cid:76)hich is net of an allo(cid:76)ance for sales returns and the estimated losses resulting from the inability of its customers to ma(cid:64)e required payments. (cid:47)he allo(cid:76)ance for doubtful accounts is estimated based on the current e(cid:77)pected credit loss model ("CECL") and it incorporates information about past events(cid:11) current conditions(cid:11) and reasonable and supportable forecasts of future economic conditions. (cid:50)hen determining the collectability of specific customer accounts(cid:11) a number of factors are evaluated(cid:11) including(cid:25) customer credit(cid:76)orthiness(cid:11) past transaction history (cid:76)ith the customer(cid:11) and changes in customer payment terms or practices. In addition(cid:11) overall historical collection e(cid:77)perience(cid:11) current economic industry trends(cid:11) and a revie(cid:76) of the current status of trade accounts receivable are considered (cid:76)hen determining the required allo(cid:76)ance for doubtful accounts. Changes in allo(cid:76)ance for doubtful accounts (cid:76)ere not material for fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020. (cid:47)he Company enters into factoring arrangements from time to time(cid:11) including customer(cid:12)based supply(cid:12)chain financing programs(cid:11) to sell trade receivables to third(cid:12)party financial institutions. Agreements (cid:76)hich result in true sales of the transferred receivables(cid:11) (cid:76)hich occur (cid:76)hen receivables are transferred (cid:76)ithout recourse to the Company(cid:11) are reflected as a reduction of trade receivables(cid:11) net on the consolidated balance sheets and the proceeds are included in the cash flo(cid:76)s from operating activities in the consolidated statements of cash flo(cid:76)s. Agreements that allo(cid:76) the Company to maintain effective control over the transferred receivables and (cid:76)hich do not qualify as a true sale are accounted for as secured borro(cid:76)ings and recorded on the consolidated balance sheets (cid:76)ithin trade receivables(cid:11) net and short(cid:12)term debt. (cid:47)he e(cid:77)penses associated (cid:76)ith receivables factoring are recorded in the consolidated statements of income primarily as a reduction of net sales. (cid:47)he Company did not factor any trade receivables in fiscal years 2022 and 2021 (cid:76)hich did not qualify as true sales of the receivables. Inventories, net: Inventories are stated at the lo(cid:76)er of cost and net reali(cid:79)able value. (cid:47)he cost of inventories is based upon the first(cid:12)in(cid:11) first(cid:12)out ("FIFO") method or average cost method. Costs related to inventories include ra(cid:76) materials(cid:11) direct labor and manufacturing overhead. Property, Plant, and E(cid:67)uipment, (cid:38)et ((cid:2)PP(cid:5)E(cid:2)): (cid:43)(cid:43)(cid:5)E is carried at cost less accumulated depreciation and impairment and includes e(cid:77)penditures for ne(cid:76) facilities and equipment and those costs (cid:76)hich substantially increase the useful lives or capacity of e(cid:77)isting (cid:43)(cid:43)(cid:5)E. Cost of constructed assets includes capitali(cid:79)ed interest incurred during the construction period. (cid:40)aintenance and repairs that do not improve efficiency or e(cid:77)tend economic life are e(cid:77)pensed as incurred. (cid:43)(cid:43)(cid:5)E(cid:11) including assets held under finance leases(cid:11) is depreciated using the straight(cid:12)line method over the estimated useful lives of assets or(cid:11) in the case of leasehold improvements and finance leases(cid:11) over the period of the lease or useful life of the asset as described belo(cid:76). (cid:47)he Company periodically revie(cid:76)s these estimated useful lives and(cid:11) (cid:76)hen appropriate(cid:11) changes are made prospectively. Leasehold land Land improvements Buildings (cid:40)achinery and equipment Finance leases Over lease term (cid:48)p to 30 years (cid:48)p to 45 years (cid:48)p to 25 years Lease term or 5 (cid:12) 25 years Impairment of Long-lived Assets: (cid:47)he Company revie(cid:76)s long(cid:12)lived assets(cid:11) primarily (cid:43)(cid:43)(cid:5)E and certain identifiable intangible assets (cid:76)ith finite lives(cid:11) for impairment (cid:76)hen facts or circumstances indicate the carrying amount of an asset or asset group may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flo(cid:76)s are less than the carrying value of the assets(cid:11) the carrying values are reduced to the estimated fair value. Fair values are determined based on quoted mar(cid:64)et values(cid:11) discounted cash flo(cid:76)s(cid:11) or e(cid:77)ternal appraisals(cid:11) as applicable. Impairment of long(cid:12)lived assets recogni(cid:79)ed in the consolidated statements of income(cid:11) e(cid:77)cluding assets held for sale(cid:11) (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) Selling(cid:11) general(cid:11) and administrative e(cid:77)penses (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net (cid:44)otal impairment losses recogni(cid:76)ed in the consolidated statements of income Years ended June 30, 2021 2020 2022 $ (cid:3) 1 $ 42 (cid:18)3 (cid:3) 1 $ (cid:24) 10 (cid:3) 1 21 22 Leases: (cid:47)he Company enters into leasing arrangements for certain manufacturing sites(cid:11) offices(cid:11) (cid:76)arehouses(cid:11) land(cid:11) vehicles(cid:11) and equipment. (cid:47)he Company determines at the inception of the contract (cid:76)hether the contract is or contains a lease. A contract is a lease if it conveys the right to control an identified asset for a period of time in e(cid:77)change for consideration. For leases (cid:76)ith an original term of more than t(cid:76)elve months(cid:11) the Company recogni(cid:79)es a right(cid:12)of(cid:12)use ((cid:86)(cid:45)O(cid:48)(cid:87)) asset and a lease liability. Short(cid:12)term leases (cid:76)ith a term of t(cid:76)elve months or less are not recorded on the consolidated balance sheets and the related e(cid:77)pense is recogni(cid:79)ed on a straight(cid:12)line basis over the term of the lease. Lease liabilities are recogni(cid:79)ed at the commencement date based on the present value of the remaining lease payments over the lease terms(cid:11) (cid:76)hich include any noncancellable lease terms and any rene(cid:76)al periods that the Company is reasonably certain to e(cid:77)ercise. A significant portion of the leases of the Company includes an option or options to e(cid:77)tend the lease term. (cid:47)he Company re(cid:12)evaluates its leases on a regular basis to consider the economic and strategic incentives of e(cid:77)ercising lease rene(cid:76)al options. As the implicit rates in Company(cid:6)s leases generally cannot be readily determined(cid:11) the Company uses estimates of its incremental borro(cid:76)ing rate as the discount rates to determine the lease liabilities. 57 58 Amcor Annual Report 2022 Form 10-K 59 Certain leases require variable payments that are dependent on usage(cid:11) output(cid:11) or other factors. (cid:49)ariable lease payments that do not depend on an inde(cid:77) or rate are e(cid:77)cluded from lease payments in the measurement of the (cid:45)O(cid:48) lease asset and lease liability and recogni(cid:79)ed as an e(cid:77)pense in the period in (cid:76)hich the obligation for the payments occur. (cid:31)oodwill: (cid:34)ood(cid:76)ill represents the e(cid:77)cess of cost over the fair value of net assets acquired in a business combination. (cid:34)ood(cid:76)ill is not amorti(cid:79)ed(cid:11) but instead tested annually or (cid:76)henever events and circumstances indicate an impairment may have occurred during the fiscal year. Among the factors that could trigger an impairment revie(cid:76) are a reporting unit(cid:89)s operating results significantly declining relative to its operating plan or historical performance(cid:11) and competitive pressures and changes in the general mar(cid:64)ets in (cid:76)hich it operates. All good(cid:76)ill is assigned to a reporting unit(cid:11) (cid:76)hich is defined as the operating segment. In con(cid:63)unction (cid:76)ith the acquisition of Bemis(cid:11) the Company reassessed its segment reporting structure in the first fiscal quarter of 2020 and elected to disaggregate the Fle(cid:77)ibles Americas operating segment into Fle(cid:77)ibles (cid:41)orth America and Fle(cid:77)ibles Latin America. (cid:50)ith this change(cid:11) the Company has si(cid:77) reporting units (cid:76)ith good(cid:76)ill that are assessed for potential impairment. In performing the required impairment tests(cid:11) the Company has the option to first assess qualitative factors to determine if it is necessary to perform a quantitative assessment for good(cid:76)ill impairment. If the qualitative assessment concludes that it is more(cid:12)li(cid:64)ely(cid:12)than(cid:12)not that the fair value of a reporting unit is less than its carrying value(cid:11) a quantitative assessment is performed. (cid:47)he Company(cid:6)s quantitative assessment utili(cid:79)es present value (discounted cash flo(cid:76)) methods to determine the fair value of the reporting units (cid:76)ith good(cid:76)ill. (cid:31)etermining fair value using discounted cash flo(cid:76)s requires considerable (cid:63)udgment and is sensitive to changes in underlying assumptions and mar(cid:64)et factors. (cid:38)ey assumptions relate to revenue gro(cid:76)th(cid:11) pro(cid:63)ected operating income gro(cid:76)th(cid:11) terminal values(cid:11) and discount rates. If current e(cid:77)pectations of future gro(cid:76)th rates and margins are not met(cid:11) or if mar(cid:64)et factors outside of Amcor(cid:89)s control(cid:11) such as factors impacting the applicable discount rate(cid:11) or economic or political conditions in (cid:64)ey mar(cid:64)ets change significantly(cid:11) then good(cid:76)ill allocated to one or more reporting units may be impaired. (cid:47)he Company performs its annual impairment analysis in the fourth fiscal quarter of each fiscal year. A qualitative impairment analysis (cid:76)as performed in the fourth fiscal quarter for five of the Company(cid:6)s si(cid:77) reporting units in fiscal year 2022 and 2021. (cid:47)he Company elected to perform a quantitative good(cid:76)ill impairment test for one Fle(cid:77)ibles reporting unit in fiscal year 2022 and 2021(cid:11) and performed a quantitative impairment test for all of its reporting units in fiscal year 2020. (cid:47)he Company(cid:89)s annual impairment analyses for all three fiscal years concluded that good(cid:76)ill (cid:76)as not impaired. (cid:44)uantitative impairment analyses performed during the last three fiscal years concluded that the fair values of the reporting units substantially e(cid:77)ceeded their carrying values. (cid:41)o reporting units failed the assessments noted above in the annual impairment analysis for 2022. (cid:47)he Company(cid:6)s decision to sell its three manufacturing facilities in (cid:45)ussia ((cid:86)(cid:45)ussian business(cid:87)) in the fourth quarter of fiscal year 2022 and subsequent classification as held for sale (cid:76)as considered a triggering event (cid:76)hich required an additional quantitative impairment test for one Fle(cid:77)ibles reporting unit to assess if good(cid:76)ill is impaired. Based on the quantitative impairment test performed for this Fle(cid:77)ibles reporting unit(cid:11) the Company concluded that good(cid:76)ill (cid:76)as not impaired. Additionally(cid:11) the Company considered (cid:76)hether any other events and(cid:14)or changes in circumstances had resulted in the li(cid:64)elihood that the good(cid:76)ill of any of its other reporting units may have been impaired. (cid:40)anagement has determined that no such events have occurred subsequent to the annual evaluation and as of (cid:37)une 30(cid:11) 2022. Other Intangible Assets, (cid:38)et: Contractual or separable intangible assets that have finite useful lives are amorti(cid:79)ed against income using the straight(cid:12)line method over their estimated useful lives(cid:11) (cid:76)hich range from 1 to 20 years. (cid:47)he straight(cid:12)line method of amorti(cid:79)ation reflects an appropriate allocation of the costs of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. Costs incurred to develop soft(cid:76)are programs to be used solely to meet the Company(cid:6)s internal needs have been capitali(cid:79)ed as computer soft(cid:76)are (cid:76)ithin other intangible assets. Fair Value (cid:37)easurements: (cid:47)he fair values of the Company(cid:6)s financial assets and financial liabilities reflect the amounts that (cid:76)ould be received to sell the assets or paid to transfer the liabilities in an orderly transaction bet(cid:76)een mar(cid:64)et participants at the measurement date (e(cid:77)it price). (cid:47)he Company determines fair value based on a three(cid:12)tiered fair value hierarchy. (cid:47)he hierarchy consists of(cid:25) (cid:82) (cid:82) (cid:82) Level 1(cid:25) fair value measurements represent e(cid:77)change(cid:12)traded securities (cid:76)hich are valued at quoted prices (unad(cid:63)usted) in active mar(cid:64)ets for identical assets or liabilities that the Company has the ability to access as of the reporting date(cid:26) Level 2(cid:25) fair value measurements are determined using input prices that are directly observable for the asset or liability or indirectly observable through corroboration (cid:76)ith observable mar(cid:64)et data(cid:26) and Level 3(cid:25) fair value measurements are determined using unobservable inputs(cid:11) such as internally developed pricing models for the asset or liability due to little or no mar(cid:64)et activity for the asset or liability. Derivative Instruments: (cid:47)he Company recogni(cid:79)es all derivative instruments on the consolidated balance sheets at fair value. (cid:47)he impact on earnings from recogni(cid:79)ing the fair values of these instruments depends on their intended use(cid:11) their hedge designation and their effectiveness in offsetting changes in the fair values of the e(cid:77)posures they are hedging. (cid:31)erivatives not designated as hedging instruments are ad(cid:63)usted to fair value through income. (cid:31)epending on the nature of derivatives designated as hedging instruments(cid:11) changes in the fair value are either offset against the change in fair value of the hedged assets(cid:11) liabilities(cid:11) or firm commitments through earnings or recogni(cid:79)ed in shareholders(cid:89) equity through other comprehensive income(cid:14) (loss) until the hedged item is recogni(cid:79)ed. (cid:34)ains or losses(cid:11) if any(cid:11) related to the ineffective portion of any hedge are recogni(cid:79)ed through earnings over the life of the hedging relationship. See (cid:41)ote 12(cid:11) "(cid:31)erivative Instruments(cid:11)" for more information regarding specific derivative instruments included on the Company(cid:89)s consolidated balance sheets(cid:11) such as for(cid:76)ard foreign currency e(cid:77)change contracts(cid:11) currency s(cid:76)ap contracts(cid:11) and interest rate s(cid:76)ap arrangements(cid:11) among other derivative instruments. Employee Benefit Plans: (cid:47)he Company sponsors various defined contribution plans to (cid:76)hich it ma(cid:64)es contributions on behalf of employees. (cid:47)he e(cid:77)pense under such plans (cid:76)as $7(cid:24) million(cid:11) $68 million(cid:11) and $64 million for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (cid:47)he Company sponsors a number of defined benefit plans that provide benefits to current and former employees. For the company(cid:12)sponsored plans(cid:11) the relevant accounting guidance requires that management ma(cid:64)e certain assumptions relating to the long(cid:12)term rate of return on plan assets(cid:11) discount rates used to determine the present value of future obligations and e(cid:77)penses(cid:11) salary inflation rates(cid:11) mortality rates(cid:11) and other assumptions. (cid:47)he Company believes that the accounting estimates related to its pension plans are critical accounting estimates because they are highly susceptible to change from period to period based on the performance of plan assets(cid:11) actuarial valuations(cid:11) mar(cid:64)et conditions(cid:11) and contracted benefit changes. (cid:47)he selection of assumptions is based on historical trends and (cid:64)no(cid:76)n economic and mar(cid:64)et conditions at the time of valuation(cid:11) as (cid:76)ell as independent studies of trends performed by the Company(cid:89)s actuaries. (cid:35)o(cid:76)ever(cid:11) actual results may differ substantially from the estimates that (cid:76)ere based on the critical assumptions. (cid:47)he Company recogni(cid:79)es the funded status of each defined benefit pension plan in the consolidated balance sheets. Each overfunded plan is recogni(cid:79)ed as an asset in employee benefit assets and each underfunded plan is recogni(cid:79)ed as a liability in employee benefit obligations. (cid:43)ension plan liabilities are revalued annually(cid:11) or (cid:76)hen an event occurs that requires remeasurement(cid:11) based on updated assumptions and information about the individuals covered by the plan. Accumulated actuarial gains and losses in e(cid:77)cess of a 10 percent corridor and the prior service cost are amorti(cid:79)ed on a straight(cid:12)line basis from the date recogni(cid:79)ed over the average remaining service period of active participants or over the average life e(cid:77)pectancy for plans (cid:76)ith significant inactive participants. (cid:47)he service costs related to defined benefits are included in operating income. (cid:47)he other components of net benefit cost other than service cost are recorded (cid:76)ithin other non(cid:12)operating income(cid:11) net in the consolidated statements of income. E(cid:67)uity (cid:37)ethod and Other Investments: Investments in ordinary shares of companies(cid:11) in (cid:76)hich the Company believes it e(cid:77)ercises significant influence over operating and financial policies(cid:11) are accounted for using the equity method of accounting. (cid:48)nder this method(cid:11) the investment is carried at cost and is ad(cid:63)usted to recogni(cid:79)e the investor(cid:89)s share of earnings or losses of the investee after the date of acquisition and is ad(cid:63)usted for impairment (cid:76)henever it is determined that a decline in the fair value belo(cid:76) the cost basis is other than temporary. (cid:47)he fair value of the investment then becomes the ne(cid:76) cost basis of the investment and it is not ad(cid:63)usted for subsequent recoveries in fair value. (cid:47)he Company sold its equity investment in A(cid:40)(cid:49)I(cid:34) (cid:35)oldings Limited ("A(cid:40)(cid:49)I(cid:34)") in the first quarter of fiscal year 2021(cid:11) refer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments." All equity investments that do not result in consolidation and are not accounted for under the equity method are measured at fair value (cid:76)ith unreali(cid:79)ed gains and losses related to mar(cid:64)(cid:12)to(cid:12)mar(cid:64)et ad(cid:63)ustments included in net income. (cid:47)he Company utili(cid:79)es the measurement alternative for equity investments that do not have readily determinable fair values and measures these investments at cost ad(cid:63)usted for impairments and observable price changes in orderly transactions. (cid:47)o date(cid:11) investments not accounted for under the equity method are not material. 5(cid:24) Amcor Annual Report 2022 60 59 Form 10-K (cid:25)0 Certain leases require variable payments that are dependent on usage(cid:11) output(cid:11) or other factors. (cid:49)ariable lease payments that do not depend on an inde(cid:77) or rate are e(cid:77)cluded from lease payments in the measurement of the (cid:45)O(cid:48) lease asset and lease liability and recogni(cid:79)ed as an e(cid:77)pense in the period in (cid:76)hich the obligation for the payments occur. (cid:31)oodwill: (cid:34)ood(cid:76)ill represents the e(cid:77)cess of cost over the fair value of net assets acquired in a business combination. (cid:34)ood(cid:76)ill is not amorti(cid:79)ed(cid:11) but instead tested annually or (cid:76)henever events and circumstances indicate an impairment may have occurred during the fiscal year. Among the factors that could trigger an impairment revie(cid:76) are a reporting unit(cid:89)s operating results significantly declining relative to its operating plan or historical performance(cid:11) and competitive pressures and changes in the general mar(cid:64)ets in (cid:76)hich it operates. All good(cid:76)ill is assigned to a reporting unit(cid:11) (cid:76)hich is defined as the operating segment. In con(cid:63)unction (cid:76)ith the acquisition of Bemis(cid:11) the Company reassessed its segment reporting structure in the first fiscal quarter of 2020 and elected to disaggregate the Fle(cid:77)ibles Americas operating segment into Fle(cid:77)ibles (cid:41)orth America and Fle(cid:77)ibles Latin America. (cid:50)ith this change(cid:11) the Company has si(cid:77) reporting units (cid:76)ith good(cid:76)ill that are assessed for potential impairment. In performing the required impairment tests(cid:11) the Company has the option to first assess qualitative factors to determine if it is necessary to perform a quantitative assessment for good(cid:76)ill impairment. If the qualitative assessment concludes that it is more(cid:12)li(cid:64)ely(cid:12)than(cid:12)not that the fair value of a reporting unit is less than its carrying value(cid:11) a quantitative assessment is performed. (cid:47)he Company(cid:6)s quantitative assessment utili(cid:79)es present value (discounted cash flo(cid:76)) methods to determine the fair value of the reporting units (cid:76)ith good(cid:76)ill. (cid:31)etermining fair value using discounted cash flo(cid:76)s requires considerable (cid:63)udgment and is sensitive to changes in underlying assumptions and mar(cid:64)et factors. (cid:38)ey assumptions relate to revenue gro(cid:76)th(cid:11) pro(cid:63)ected operating income gro(cid:76)th(cid:11) terminal values(cid:11) and discount rates. If current e(cid:77)pectations of future gro(cid:76)th rates and margins are not met(cid:11) or if mar(cid:64)et factors outside of Amcor(cid:89)s control(cid:11) such as factors impacting the applicable discount rate(cid:11) or economic or political conditions in (cid:64)ey mar(cid:64)ets change significantly(cid:11) then good(cid:76)ill allocated to one or more reporting units may be impaired. (cid:47)he Company performs its annual impairment analysis in the fourth fiscal quarter of each fiscal year. A qualitative impairment analysis (cid:76)as performed in the fourth fiscal quarter for five of the Company(cid:6)s si(cid:77) reporting units in fiscal year 2022 and 2021. (cid:47)he Company elected to perform a quantitative good(cid:76)ill impairment test for one Fle(cid:77)ibles reporting unit in fiscal year 2022 and 2021(cid:11) and performed a quantitative impairment test for all of its reporting units in fiscal year 2020. (cid:47)he Company(cid:89)s annual impairment analyses for all three fiscal years concluded that good(cid:76)ill (cid:76)as not impaired. (cid:44)uantitative impairment analyses performed during the last three fiscal years concluded that the fair values of the reporting units substantially e(cid:77)ceeded their carrying values. (cid:41)o reporting units failed the assessments noted above in the annual impairment analysis for 2022. (cid:47)he Company(cid:6)s decision to sell its three manufacturing facilities in (cid:45)ussia ((cid:86)(cid:45)ussian business(cid:87)) in the fourth quarter of fiscal year 2022 and subsequent classification as held for sale (cid:76)as considered a triggering event (cid:76)hich required an additional quantitative impairment test for one Fle(cid:77)ibles reporting unit to assess if good(cid:76)ill is impaired. Based on the quantitative impairment test performed for this Fle(cid:77)ibles reporting unit(cid:11) the Company concluded that good(cid:76)ill (cid:76)as not impaired. Additionally(cid:11) the Company considered (cid:76)hether any other events and(cid:14)or changes in circumstances had resulted in the li(cid:64)elihood that the good(cid:76)ill of any of its other reporting units may have been impaired. (cid:40)anagement has determined that no such events have occurred subsequent to the annual evaluation and as of (cid:37)une 30(cid:11) 2022. Other Intangible Assets, (cid:38)et: Contractual or separable intangible assets that have finite useful lives are amorti(cid:79)ed against income using the straight(cid:12)line method over their estimated useful lives(cid:11) (cid:76)hich range from 1 to 20 years. (cid:47)he straight(cid:12)line method of amorti(cid:79)ation reflects an appropriate allocation of the costs of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. Costs incurred to develop soft(cid:76)are programs to be used solely to meet the Company(cid:6)s internal needs have been capitali(cid:79)ed as computer soft(cid:76)are (cid:76)ithin other intangible assets. Fair Value (cid:37)easurements: (cid:47)he fair values of the Company(cid:6)s financial assets and financial liabilities reflect the amounts that (cid:76)ould be received to sell the assets or paid to transfer the liabilities in an orderly transaction bet(cid:76)een mar(cid:64)et participants at the measurement date (e(cid:77)it price). (cid:47)he Company determines fair value based on a three(cid:12)tiered fair value hierarchy. (cid:47)he hierarchy consists of(cid:25) (cid:82) (cid:82) (cid:82) Level 1(cid:25) fair value measurements represent e(cid:77)change(cid:12)traded securities (cid:76)hich are valued at quoted prices (unad(cid:63)usted) in active mar(cid:64)ets for identical assets or liabilities that the Company has the ability to access as of the reporting date(cid:26) Level 2(cid:25) fair value measurements are determined using input prices that are directly observable for the asset or liability or indirectly observable through corroboration (cid:76)ith observable mar(cid:64)et data(cid:26) and Level 3(cid:25) fair value measurements are determined using unobservable inputs(cid:11) such as internally developed pricing models for the asset or liability due to little or no mar(cid:64)et activity for the asset or liability. Derivative Instruments: (cid:47)he Company recogni(cid:79)es all derivative instruments on the consolidated balance sheets at fair value. (cid:47)he impact on earnings from recogni(cid:79)ing the fair values of these instruments depends on their intended use(cid:11) their hedge designation and their effectiveness in offsetting changes in the fair values of the e(cid:77)posures they are hedging. (cid:31)erivatives not designated as hedging instruments are ad(cid:63)usted to fair value through income. (cid:31)epending on the nature of derivatives designated as hedging instruments(cid:11) changes in the fair value are either offset against the change in fair value of the hedged assets(cid:11) liabilities(cid:11) or firm commitments through earnings or recogni(cid:79)ed in shareholders(cid:89) equity through other comprehensive income(cid:14) (loss) until the hedged item is recogni(cid:79)ed. (cid:34)ains or losses(cid:11) if any(cid:11) related to the ineffective portion of any hedge are recogni(cid:79)ed through earnings over the life of the hedging relationship. See (cid:41)ote 12(cid:11) "(cid:31)erivative Instruments(cid:11)" for more information regarding specific derivative instruments included on the Company(cid:89)s consolidated balance sheets(cid:11) such as for(cid:76)ard foreign currency e(cid:77)change contracts(cid:11) currency s(cid:76)ap contracts(cid:11) and interest rate s(cid:76)ap arrangements(cid:11) among other derivative instruments. Employee Benefit Plans: (cid:47)he Company sponsors various defined contribution plans to (cid:76)hich it ma(cid:64)es contributions on behalf of employees. (cid:47)he e(cid:77)pense under such plans (cid:76)as $7(cid:24) million(cid:11) $68 million(cid:11) and $64 million for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (cid:47)he Company sponsors a number of defined benefit plans that provide benefits to current and former employees. For the company(cid:12)sponsored plans(cid:11) the relevant accounting guidance requires that management ma(cid:64)e certain assumptions relating to the long(cid:12)term rate of return on plan assets(cid:11) discount rates used to determine the present value of future obligations and e(cid:77)penses(cid:11) salary inflation rates(cid:11) mortality rates(cid:11) and other assumptions. (cid:47)he Company believes that the accounting estimates related to its pension plans are critical accounting estimates because they are highly susceptible to change from period to period based on the performance of plan assets(cid:11) actuarial valuations(cid:11) mar(cid:64)et conditions(cid:11) and contracted benefit changes. (cid:47)he selection of assumptions is based on historical trends and (cid:64)no(cid:76)n economic and mar(cid:64)et conditions at the time of valuation(cid:11) as (cid:76)ell as independent studies of trends performed by the Company(cid:89)s actuaries. (cid:35)o(cid:76)ever(cid:11) actual results may differ substantially from the estimates that (cid:76)ere based on the critical assumptions. (cid:47)he Company recogni(cid:79)es the funded status of each defined benefit pension plan in the consolidated balance sheets. Each overfunded plan is recogni(cid:79)ed as an asset in employee benefit assets and each underfunded plan is recogni(cid:79)ed as a liability in employee benefit obligations. (cid:43)ension plan liabilities are revalued annually(cid:11) or (cid:76)hen an event occurs that requires remeasurement(cid:11) based on updated assumptions and information about the individuals covered by the plan. Accumulated actuarial gains and losses in e(cid:77)cess of a 10 percent corridor and the prior service cost are amorti(cid:79)ed on a straight(cid:12)line basis from the date recogni(cid:79)ed over the average remaining service period of active participants or over the average life e(cid:77)pectancy for plans (cid:76)ith significant inactive participants. (cid:47)he service costs related to defined benefits are included in operating income. (cid:47)he other components of net benefit cost other than service cost are recorded (cid:76)ithin other non(cid:12)operating income(cid:11) net in the consolidated statements of income. E(cid:67)uity (cid:37)ethod and Other Investments: Investments in ordinary shares of companies(cid:11) in (cid:76)hich the Company believes it e(cid:77)ercises significant influence over operating and financial policies(cid:11) are accounted for using the equity method of accounting. (cid:48)nder this method(cid:11) the investment is carried at cost and is ad(cid:63)usted to recogni(cid:79)e the investor(cid:89)s share of earnings or losses of the investee after the date of acquisition and is ad(cid:63)usted for impairment (cid:76)henever it is determined that a decline in the fair value belo(cid:76) the cost basis is other than temporary. (cid:47)he fair value of the investment then becomes the ne(cid:76) cost basis of the investment and it is not ad(cid:63)usted for subsequent recoveries in fair value. (cid:47)he Company sold its equity investment in A(cid:40)(cid:49)I(cid:34) (cid:35)oldings Limited ("A(cid:40)(cid:49)I(cid:34)") in the first quarter of fiscal year 2021(cid:11) refer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments." All equity investments that do not result in consolidation and are not accounted for under the equity method are measured at fair value (cid:76)ith unreali(cid:79)ed gains and losses related to mar(cid:64)(cid:12)to(cid:12)mar(cid:64)et ad(cid:63)ustments included in net income. (cid:47)he Company utili(cid:79)es the measurement alternative for equity investments that do not have readily determinable fair values and measures these investments at cost ad(cid:63)usted for impairments and observable price changes in orderly transactions. (cid:47)o date(cid:11) investments not accounted for under the equity method are not material. 5(cid:24) 60 Amcor Annual Report 2022 Form 10-K 61 Contingencies: (cid:47)he Company is sub(cid:63)ect to numerous contingencies arising in the ordinary course of business(cid:11) such as legal and administrative proceedings(cid:11) environmental claims and proceedings(cid:11) (cid:76)or(cid:64)ers(cid:6) compensation(cid:11) and other claims. Accruals for estimated losses are recorded by the Company at the time information becomes available indicating that losses are probable and that the amounts can be reasonably estimated. (cid:50)hen management can reasonably estimate a range of losses it may incur(cid:11) it records an accrual for the amount (cid:76)ithin the range that constitutes its best estimate. If no amount (cid:76)ithin a range appears to be a better estimate than any other(cid:11) the lo(cid:76) end of the range is accrued. (cid:47)he Company records anticipated recoveries under e(cid:77)isting insurance contracts (cid:76)hen recovery is probable. Share-based Compensation: Amcor has a variety of equity incentive plans. For employee a(cid:76)ards (cid:76)ith a service or mar(cid:64)et condition(cid:11) compensation e(cid:77)pense is recogni(cid:79)ed over the vesting period on a straight(cid:12)line basis using the grant date fair value of the a(cid:76)ard and the estimated number of a(cid:76)ards that are e(cid:77)pected to vest. For a(cid:76)ards (cid:76)ith a performance condition(cid:11) the Company reassesses the probability of vesting at each reporting period and ad(cid:63)usts compensation cost based on its probability assessment. (cid:47)he Company also has immaterial cash(cid:12)settled share(cid:12)based compensation plans (cid:76)hich are accounted for as liabilities. Such share(cid:12)based a(cid:76)ards are remeasured to fair value at each reporting date. (cid:47)he Company estimates forfeitures based on employee level(cid:11) time remaining to vest(cid:11) and historical forfeiture e(cid:77)perience. Income (cid:44)a(cid:74)es: (cid:47)he Company uses the asset and liability method to account for income ta(cid:77)es. (cid:31)eferred income ta(cid:77)es reflect the future ta(cid:77) consequences of temporary differences bet(cid:76)een the ta(cid:77) bases of assets and liabilities and their financial reporting amounts at each balance sheet date(cid:11) based upon enacted income ta(cid:77) la(cid:76)s and ta(cid:77) rates. Income ta(cid:77) e(cid:77)pense or benefit is provided based on earnings reported in the consolidated financial statements. (cid:47)he provision for income ta(cid:77) e(cid:77)pense or benefit differs from the amounts of income ta(cid:77)es currently payable because certain items of income and e(cid:77)pense included in the consolidated financial statements are recogni(cid:79)ed in different time periods by ta(cid:77)ing authorities. (cid:31)eferred ta(cid:77) assets(cid:11) including operating losses(cid:11) capital losses(cid:11) and ta(cid:77) credit carryfor(cid:76)ards(cid:11) are reduced by a valuation allo(cid:76)ance (cid:76)hen it is more li(cid:64)ely than not that any portion of these ta(cid:77) attributes (cid:76)ill not be reali(cid:79)ed. In addition(cid:11) from time to time(cid:11) management assesses the need to accrue or disclose uncertain ta(cid:77) positions. In ma(cid:64)ing these assessments(cid:11) management must often analy(cid:79)e comple(cid:77) ta(cid:77) la(cid:76)s of multiple (cid:63)urisdictions. Accounting guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a ta(cid:77) position ta(cid:64)en or e(cid:77)pected to be ta(cid:64)en in a ta(cid:77) return. (cid:47)he Company records the related interest e(cid:77)pense and penalties(cid:11) if any(cid:11) as ta(cid:77) e(cid:77)pense in the ta(cid:77) provision. See (cid:41)ote 17(cid:11) "Income (cid:47)a(cid:77)es(cid:11)" for more information on the Company(cid:6)s income ta(cid:77)es. (cid:38)ote 3 - (cid:38)ew Accounting (cid:31)uidance Recently Adopted Accounting Standards In (cid:31)ecember 201(cid:24)(cid:11) the FASB issued updated guidance to simplify the accounting for income ta(cid:77)es by removing certain e(cid:77)ceptions and improving the consistent application of (cid:48).S. (cid:34)AA(cid:43) in other ta(cid:77) accounting areas. (cid:47)his guidance is effective for annual reporting periods(cid:11) and any interim periods (cid:76)ithin those annual periods(cid:11) that begin after (cid:31)ecember 15(cid:11) 2020 (cid:76)ith early adoption permitted. (cid:47)he guidance became effective for the Company on (cid:37)uly 1(cid:11) 2021 and the adoption did not have a material impact on the Company(cid:6)s consolidated financial statements. Accounting Standards (cid:38)ot Yet Adopted In (cid:41)ovember 2021(cid:11) the FASB issued an Accounting Standards (cid:48)pdate ("AS(cid:48)") 2021(cid:12)10 that adds certain disclosure requirements for entities that receive government assistance. (cid:47)he standard is effective for annual periods beginning after (cid:31)ecember 15(cid:11) 2021 (cid:76)ith early application permitted. (cid:47)he Company (cid:76)ill adopt this guidance on (cid:37)uly 1(cid:11) 2022 and does not e(cid:77)pect the adoption to have a material impact on the Company(cid:6)s consolidated financial statements. (cid:47)he Company considers the applicability and impact of all AS(cid:48)s issued by the FASB. (cid:47)he Company determined at this time that all other AS(cid:48)s not yet adopted are either not applicable or are e(cid:77)pected to have minimal impact on the Company(cid:6)s consolidated financial statements. 61 Amcor Annual Report 2022 62 Contingencies: (cid:47)he Company is sub(cid:63)ect to numerous contingencies arising in the ordinary course of business(cid:11) such as legal and (cid:38)ote 3 - (cid:38)ew Accounting (cid:31)uidance administrative proceedings(cid:11) environmental claims and proceedings(cid:11) (cid:76)or(cid:64)ers(cid:6) compensation(cid:11) and other claims. Accruals for estimated losses are recorded by the Company at the time information becomes available indicating that losses are probable and Recently Adopted Accounting Standards 61 Form 10-K (cid:25)2 that the amounts can be reasonably estimated. (cid:50)hen management can reasonably estimate a range of losses it may incur(cid:11) it records an accrual for the amount (cid:76)ithin the range that constitutes its best estimate. If no amount (cid:76)ithin a range appears to be a better estimate than any other(cid:11) the lo(cid:76) end of the range is accrued. (cid:47)he Company records anticipated recoveries under e(cid:77)isting insurance contracts (cid:76)hen recovery is probable. Share-based Compensation: Amcor has a variety of equity incentive plans. For employee a(cid:76)ards (cid:76)ith a service or mar(cid:64)et condition(cid:11) compensation e(cid:77)pense is recogni(cid:79)ed over the vesting period on a straight(cid:12)line basis using the grant date fair value of the a(cid:76)ard and the estimated number of a(cid:76)ards that are e(cid:77)pected to vest. For a(cid:76)ards (cid:76)ith a performance condition(cid:11) the Company reassesses the probability of vesting at each reporting period and ad(cid:63)usts compensation cost based on its probability assessment. (cid:47)he Company also has immaterial cash(cid:12)settled share(cid:12)based compensation plans (cid:76)hich are accounted for as liabilities. Such share(cid:12)based a(cid:76)ards are remeasured to fair value at each reporting date. (cid:47)he Company estimates forfeitures based on employee level(cid:11) time remaining to vest(cid:11) and historical forfeiture e(cid:77)perience. Income (cid:44)a(cid:74)es: (cid:47)he Company uses the asset and liability method to account for income ta(cid:77)es. (cid:31)eferred income ta(cid:77)es reflect the future ta(cid:77) consequences of temporary differences bet(cid:76)een the ta(cid:77) bases of assets and liabilities and their financial reporting amounts at each balance sheet date(cid:11) based upon enacted income ta(cid:77) la(cid:76)s and ta(cid:77) rates. Income ta(cid:77) e(cid:77)pense or benefit is provided based on earnings reported in the consolidated financial statements. (cid:47)he provision for income ta(cid:77) e(cid:77)pense or benefit differs from the amounts of income ta(cid:77)es currently payable because certain items of income and e(cid:77)pense included in the consolidated financial statements are recogni(cid:79)ed in different time periods by ta(cid:77)ing authorities. (cid:31)eferred ta(cid:77) assets(cid:11) including operating losses(cid:11) capital losses(cid:11) and ta(cid:77) credit carryfor(cid:76)ards(cid:11) are reduced by a valuation allo(cid:76)ance (cid:76)hen it is more li(cid:64)ely than not that any portion of these ta(cid:77) attributes (cid:76)ill not be reali(cid:79)ed. In addition(cid:11) from time to time(cid:11) management assesses the need to accrue or disclose uncertain ta(cid:77) positions. In ma(cid:64)ing these assessments(cid:11) management must often analy(cid:79)e comple(cid:77) ta(cid:77) la(cid:76)s of multiple (cid:63)urisdictions. Accounting guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a ta(cid:77) position ta(cid:64)en or e(cid:77)pected to be ta(cid:64)en in a ta(cid:77) return. (cid:47)he Company records the related interest e(cid:77)pense and penalties(cid:11) if any(cid:11) as ta(cid:77) e(cid:77)pense in the ta(cid:77) provision. See (cid:41)ote 17(cid:11) "Income (cid:47)a(cid:77)es(cid:11)" for more information on the Company(cid:6)s income ta(cid:77)es. In (cid:31)ecember 201(cid:24)(cid:11) the FASB issued updated guidance to simplify the accounting for income ta(cid:77)es by removing certain e(cid:77)ceptions and improving the consistent application of (cid:48).S. (cid:34)AA(cid:43) in other ta(cid:77) accounting areas. (cid:47)his guidance is effective for annual reporting periods(cid:11) and any interim periods (cid:76)ithin those annual periods(cid:11) that begin after (cid:31)ecember 15(cid:11) 2020 (cid:76)ith early adoption permitted. (cid:47)he guidance became effective for the Company on (cid:37)uly 1(cid:11) 2021 and the adoption did not have a material impact on the Company(cid:6)s consolidated financial statements. Accounting Standards (cid:38)ot Yet Adopted In (cid:41)ovember 2021(cid:11) the FASB issued an Accounting Standards (cid:48)pdate ("AS(cid:48)") 2021(cid:12)10 that adds certain disclosure requirements for entities that receive government assistance. (cid:47)he standard is effective for annual periods beginning after (cid:31)ecember 15(cid:11) 2021 (cid:76)ith early application permitted. (cid:47)he Company (cid:76)ill adopt this guidance on (cid:37)uly 1(cid:11) 2022 and does not e(cid:77)pect the adoption to have a material impact on the Company(cid:6)s consolidated financial statements. (cid:47)he Company considers the applicability and impact of all AS(cid:48)s issued by the FASB. (cid:47)he Company determined at this time that all other AS(cid:48)s not yet adopted are either not applicable or are e(cid:77)pected to have minimal impact on the Company(cid:6)s consolidated financial statements. 61 62 Amcor Annual Report 2022 (cid:38)ote (cid:18) - Restructuring, Impairment, and Related E(cid:74)penses, (cid:38)et (cid:38)ote (cid:19) - Divestitures (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net(cid:11) as reported on the consolidated statements of income are Year ended June 30, 2022 summari(cid:79)ed as follo(cid:76)s(cid:25) Form 10-K 63 ((cid:3) in millions) (cid:45)estructuring and related e(cid:77)penses(cid:11) net Impairment e(cid:77)penses Restructuring, impairment, and related e(cid:74)penses, net Years ended June 30, 2021 2020 2022 $ (cid:3) ((cid:24)6) $ (138) (23(cid:18)) (cid:3) ((cid:24)4) $ (cid:85) ((cid:23)(cid:18)) (cid:3) (115) (cid:85) (11(cid:19)) (cid:45)estructuring and related e(cid:77)penses(cid:11) net includes e(cid:77)penses related to the Company(cid:6)s 201(cid:24) plan focused on the integration of acquired Bemis operations (cid:76)hich (cid:76)as complete at the end of fiscal year 2022(cid:11) e(cid:77)penses related to the 2018 plan to restructure the Company(cid:6)s rigid pac(cid:64)aging operations(cid:11) and restructuring e(cid:77)penses associated (cid:76)ith the Company(cid:6)s decision to sell its (cid:45)ussian business. For further information(cid:11) refer to (cid:41)ote 7(cid:11) "(cid:45)estructuring." Impairment e(cid:77)penses of $138 million (cid:76)ere incurred in the fourth quarter of fiscal year 2022 as a result of the (cid:45)ussia(cid:12) (cid:48)(cid:64)raine Conflict. In the fourth quarter(cid:11) the Company approved a plan to sell its (cid:45)ussian operations (cid:76)hich resulted in a non(cid:12)cash impairment charge of $(cid:24)0 million. For further information(cid:11) refer to (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations." In addition(cid:11) the Company recogni(cid:79)ed other e(cid:77)penses of $48 million(cid:11) given the e(cid:77)pectation that certain assets not held for sale in the conflict region (cid:76)ill not be recoverable. (cid:47)he Company(cid:6)s manufacturing plant in (cid:48)(cid:64)raine ceased operations in February 2022 and has not resumed operations given the ongoing conflict in the region has displaced the Company(cid:6)s employees(cid:11) destroyed nearby manufacturing facilities(cid:11) and impaired the region(cid:6)s supporting infrastructure. Other asset impairment e(cid:77)penses in the last three fiscal years (cid:76)ere not material and (cid:76)ere primarily reported in restructuring and related e(cid:77)penses(cid:11) net. (cid:31)uring the third quarter of fiscal year 2022(cid:11) the Company completed the disposal of non(cid:12)core assets in the Fle(cid:77)ibles reporting segment. (cid:47)he Company recorded an e(cid:77)pense of $10 million during the fiscal year ended (cid:37)une 30(cid:11) 2022 to ad(cid:63)ust the long(cid:12)lived assets to their fair value less cost to sell. Year ended June 30, 2021 As part of optimi(cid:79)ing its portfolio under the 201(cid:24) Bemis Integration (cid:43)lan(cid:11) the Company completed the disposal of a non(cid:12)core European hospital supplies business(cid:11) (cid:76)hich (cid:76)as part of the Fle(cid:77)ibles reportable segment. (cid:47)he resulting gain from the sale has been recorded in the line restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net(cid:11) in the consolidated statements of income. (cid:45)efer to (cid:41)ote 4(cid:11) "(cid:45)estructuring(cid:11) Impairment(cid:11) and (cid:45)elated E(cid:77)penses(cid:11) (cid:41)et" and (cid:41)ote 7(cid:11) "(cid:45)estructuring." (cid:47)he Company also completed the disposal of t(cid:76)o non(cid:12)core businesses in India and Argentina in the Fle(cid:77)ibles segment during the first quarter of fiscal year 2021(cid:11) recording a loss on sale of $6 million(cid:11) (cid:76)hich (cid:76)as primarily driven by the reclassification of cumulative translation ad(cid:63)ustments through the income statements that had previously been recorded in other comprehensive income(cid:14)(loss). (cid:47)he Company sold its equity investment in A(cid:40)(cid:49)I(cid:34) (cid:35)oldings Limited ("A(cid:40)(cid:49)I(cid:34)") in the first quarter of fiscal year 2021. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments." Year ended June 30, 2020 Closing of the Bemis acquisition (cid:76)as conditional upon the receipt of regulatory approvals(cid:11) approval by both Amcor and Bemis shareholders(cid:11) and satisfaction of other customary conditions. In order to satisfy certain regulatory approvals(cid:11) the Company (cid:76)as required to divest three of Bemis(cid:6) medical pac(cid:64)aging facilities located in the (cid:48)nited (cid:38)ingdom and Ireland ("EC (cid:45)emedy") and three Amcor medical pac(cid:64)aging facilities in the (cid:48)nited States ("(cid:48).S. (cid:45)emedy"). (cid:47)he (cid:48).S. (cid:45)emedy (cid:76)as completed during the fourth quarter of fiscal year 201(cid:24) and the Company received $214 million resulting in a gain of $15(cid:24) million. (cid:47)he EC (cid:45)emedy (cid:76)as completed during the first quarter of fiscal year 2020 and the Company received $3(cid:24)7 million and recorded a loss on the sale of $(cid:24) million (cid:76)hich is the result of the reclassification of accumulated foreign currency translation amounts from accumulated other comprehensive loss to earnings from discontinued operations upon sale of the EC (cid:45)emedy. In addition(cid:11) the Company sold an equity method investment acquired through the Bemis acquisition in the third quarter of fiscal year 2020 for proceeds of $28 million. (cid:47)here (cid:76)as no gain or loss on sale as the investment (cid:76)as recorded at fair value upon acquisition. 63 Amcor Annual Report 2022 64 (cid:38)ote (cid:18) - Restructuring, Impairment, and Related E(cid:74)penses, (cid:38)et (cid:38)ote (cid:19) - Divestitures (cid:45)estructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net(cid:11) as reported on the consolidated statements of income are Year ended June 30, 2022 summari(cid:79)ed as follo(cid:76)s(cid:25) 63 Form 10-K 64 ((cid:3) in millions) (cid:45)estructuring and related e(cid:77)penses(cid:11) net Impairment e(cid:77)penses Restructuring, impairment, and related e(cid:74)penses, net Years ended June 30, 2022 2021 2020 $ (cid:3) ((cid:24)6) $ (138) (23(cid:18)) (cid:3) ((cid:24)4) $ (cid:85) ((cid:23)(cid:18)) (cid:3) (115) (cid:85) (11(cid:19)) (cid:45)estructuring and related e(cid:77)penses(cid:11) net includes e(cid:77)penses related to the Company(cid:6)s 201(cid:24) plan focused on the integration of acquired Bemis operations (cid:76)hich (cid:76)as complete at the end of fiscal year 2022(cid:11) e(cid:77)penses related to the 2018 plan to restructure the Company(cid:6)s rigid pac(cid:64)aging operations(cid:11) and restructuring e(cid:77)penses associated (cid:76)ith the Company(cid:6)s decision to sell its (cid:45)ussian business. For further information(cid:11) refer to (cid:41)ote 7(cid:11) "(cid:45)estructuring." Impairment e(cid:77)penses of $138 million (cid:76)ere incurred in the fourth quarter of fiscal year 2022 as a result of the (cid:45)ussia(cid:12) (cid:48)(cid:64)raine Conflict. In the fourth quarter(cid:11) the Company approved a plan to sell its (cid:45)ussian operations (cid:76)hich resulted in a non(cid:12)cash impairment charge of $(cid:24)0 million. For further information(cid:11) refer to (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations." In addition(cid:11) the Company recogni(cid:79)ed other e(cid:77)penses of $48 million(cid:11) given the e(cid:77)pectation that certain assets not held for sale in the conflict region (cid:76)ill not be recoverable. (cid:47)he Company(cid:6)s manufacturing plant in (cid:48)(cid:64)raine ceased operations in February 2022 and has not resumed operations given the ongoing conflict in the region has displaced the Company(cid:6)s employees(cid:11) destroyed nearby manufacturing facilities(cid:11) and impaired the region(cid:6)s supporting infrastructure. Other asset impairment e(cid:77)penses in the last three fiscal years (cid:76)ere not material and (cid:76)ere primarily reported in restructuring and related e(cid:77)penses(cid:11) net. (cid:31)uring the third quarter of fiscal year 2022(cid:11) the Company completed the disposal of non(cid:12)core assets in the Fle(cid:77)ibles reporting segment. (cid:47)he Company recorded an e(cid:77)pense of $10 million during the fiscal year ended (cid:37)une 30(cid:11) 2022 to ad(cid:63)ust the long(cid:12)lived assets to their fair value less cost to sell. Year ended June 30, 2021 As part of optimi(cid:79)ing its portfolio under the 201(cid:24) Bemis Integration (cid:43)lan(cid:11) the Company completed the disposal of a non(cid:12)core European hospital supplies business(cid:11) (cid:76)hich (cid:76)as part of the Fle(cid:77)ibles reportable segment. (cid:47)he resulting gain from the sale has been recorded in the line restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net(cid:11) in the consolidated statements of income. (cid:45)efer to (cid:41)ote 4(cid:11) "(cid:45)estructuring(cid:11) Impairment(cid:11) and (cid:45)elated E(cid:77)penses(cid:11) (cid:41)et" and (cid:41)ote 7(cid:11) "(cid:45)estructuring." (cid:47)he Company also completed the disposal of t(cid:76)o non(cid:12)core businesses in India and Argentina in the Fle(cid:77)ibles segment during the first quarter of fiscal year 2021(cid:11) recording a loss on sale of $6 million(cid:11) (cid:76)hich (cid:76)as primarily driven by the reclassification of cumulative translation ad(cid:63)ustments through the income statements that had previously been recorded in other comprehensive income(cid:14)(loss). (cid:47)he Company sold its equity investment in A(cid:40)(cid:49)I(cid:34) (cid:35)oldings Limited ("A(cid:40)(cid:49)I(cid:34)") in the first quarter of fiscal year 2021. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments." Year ended June 30, 2020 Closing of the Bemis acquisition (cid:76)as conditional upon the receipt of regulatory approvals(cid:11) approval by both Amcor and Bemis shareholders(cid:11) and satisfaction of other customary conditions. In order to satisfy certain regulatory approvals(cid:11) the Company (cid:76)as required to divest three of Bemis(cid:6) medical pac(cid:64)aging facilities located in the (cid:48)nited (cid:38)ingdom and Ireland ("EC (cid:45)emedy") and three Amcor medical pac(cid:64)aging facilities in the (cid:48)nited States ("(cid:48).S. (cid:45)emedy"). (cid:47)he (cid:48).S. (cid:45)emedy (cid:76)as completed during the fourth quarter of fiscal year 201(cid:24) and the Company received $214 million resulting in a gain of $15(cid:24) million. (cid:47)he EC (cid:45)emedy (cid:76)as completed during the first quarter of fiscal year 2020 and the Company received $3(cid:24)7 million and recorded a loss on the sale of $(cid:24) million (cid:76)hich is the result of the reclassification of accumulated foreign currency translation amounts from accumulated other comprehensive loss to earnings from discontinued operations upon sale of the EC (cid:45)emedy. In addition(cid:11) the Company sold an equity method investment acquired through the Bemis acquisition in the third quarter of fiscal year 2020 for proceeds of $28 million. (cid:47)here (cid:76)as no gain or loss on sale as the investment (cid:76)as recorded at fair value upon acquisition. 63 64 Amcor Annual Report 2022 Form 10-K 65 (cid:38)ote (cid:20) - (cid:32)eld for Sale and Discontinued Operations (cid:38)ote (cid:21) - Restructuring (cid:31)uring the fourth quarter of fiscal year 2022(cid:11) the Company classified the assets and liabilities of its (cid:45)ussian business 201(cid:23) Bemis Integration Plan as held for sale as a result of the Company(cid:6)s decision to sell its (cid:45)ussian business. (cid:47)he (cid:45)ussian business is part of the Company(cid:89)s Fle(cid:77)ibles segment and is e(cid:77)pected to be sold (cid:76)ithin one year. (cid:47)he Company has recorded an impairment of $(cid:24)0 million as of (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ithin the line item restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net on the consolidated statements of income. (cid:47)he disposal of the (cid:45)ussian business (cid:76)ill not represent a strategic shift that (cid:76)ill have a ma(cid:63)or effect on the Company(cid:6)s operations and financial results(cid:11) and therefore does not qualify for reporting as a discontinued operation. (cid:40)a(cid:63)or classes of assets and liabilities of the (cid:45)ussian business classified as held for sale as of (cid:37)une 30(cid:11) 2022 (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) Cash and cash equivalents (cid:47)rade receivables(cid:11) net Inventories(cid:11) net (cid:43)repaid e(cid:77)penses and other current assets (cid:43)roperty(cid:11) plant(cid:11) and equipment(cid:11) net (cid:34)ood(cid:76)ill (cid:44)otal assets held for sale Less impairment (1) (cid:44)otal assets held for sale, net (cid:47)rade payables (cid:44)otal current liabilities held for sale June 30, 2022 $ (cid:3) (cid:3) 75 66 40 36 4(cid:24) 16 2(cid:22)2 ((cid:24)0) 1(cid:23)2 65 (cid:20)(cid:19) (1) Impairment inclusive of accumulated other comprehensive loss related to the (cid:45)ussian business. (cid:47)his table e(cid:77)cludes other assets and liabilities held for sale but not part of the (cid:45)ussian business and that are not material for disclosure. On February 11(cid:11) 201(cid:24)(cid:11) the Company received approval from the European Commission ("EC") for the acquisition of Bemis Company(cid:11) Inc. ("Bemis"). A condition of the approval (cid:76)as an agreement to divest three Bemis medical pac(cid:64)aging facilities located in the (cid:48)nited (cid:38)ingdom and Ireland ("EC (cid:45)emedy"). (cid:48)pon completion of the Bemis acquisition on (cid:37)une 11(cid:11) 201(cid:24)(cid:11) the Company determined that the EC (cid:45)emedy met the criteria to be classified as a discontinued operation(cid:11) in accordance (cid:76)ith ASC 205(cid:12)20(cid:11) "(cid:31)iscontinued Operations." (cid:47)he sale of the EC (cid:45)emedy closed on August 8(cid:11) 201(cid:24). (cid:47)he Company recorded a loss on the sale of $(cid:24) million(cid:11) (cid:76)hich is the result of the reclassification of accumulated foreign currency translation amounts from accumulated other comprehensive loss to earnings from discontinued operations upon sale of the EC (cid:45)emedy. (cid:47)he follo(cid:76)ing table summari(cid:79)es the results of the Company(cid:6)s discontinued operations(cid:25) ((cid:3) in millions) (cid:41)et sales Loss from discontinued operations (cid:47)a(cid:77) e(cid:77)pense from discontinued operations Loss from discontinued operations(cid:11) net of ta(cid:77) Years ended June 30, 2021 2020 2022 (cid:85) $ (cid:85) $ 16 (cid:85) (cid:85) (cid:77) (cid:3) (cid:85) (cid:85) (cid:77) (cid:3) (7) (1) ((cid:22)) $ (cid:3) In connection (cid:76)ith the acquisition of Bemis Company(cid:11) Inc. ("Bemis")(cid:11) the Company initiated restructuring activities in the fourth quarter of 201(cid:24) aimed at integrating and optimi(cid:79)ing the combined organi(cid:79)ation. (cid:47)he 201(cid:24) Bemis Integration (cid:43)lan (cid:76)as completed by (cid:37)une 30(cid:11) 2022 (cid:76)ith final pre(cid:12)ta(cid:77) integration cost amounting to $253 million. (cid:47)he total 201(cid:24) Bemis Integration (cid:43)lan cost includes $213 million of restructuring and related e(cid:77)penses(cid:11) net(cid:11) and $40 million of general integration e(cid:77)penses. (cid:47)he net cash e(cid:77)penditures for the plan(cid:11) including disposal proceeds(cid:11) are $170 million(cid:11) of (cid:76)hich $40 million relates to general integration e(cid:77)penses. As part of this (cid:43)lan the Company has incurred $144 million in employee related e(cid:77)penses(cid:11) $36 million in fi(cid:77)ed asset related e(cid:77)penses(cid:11) $3(cid:24) million in other restructuring and $45 million in restructuring related e(cid:77)penses(cid:11) partially offset by a gain on disposal of a business of $51 million. In fiscal year 2022(cid:11) the (cid:43)lan resulted in net cash outflo(cid:76)s of $4(cid:24) million of (cid:76)hich $47 million (cid:76)ere payments related to restructuring and related e(cid:77)penditures. (cid:47)he remaining cash outflo(cid:76) (cid:76)ill be primarily incurred in fiscal year 2023. (cid:45)estructuring related costs are directly attributable to restructuring activities(cid:26) ho(cid:76)ever(cid:11) they do not qualify for special accounting treatment as e(cid:77)it or disposal activities. (cid:34)eneral integration costs are not lin(cid:64)ed to restructuring. (cid:47)he Company believes the disclosure of restructuring related costs provides more information on the total cost of the 201(cid:24) Bemis Integration (cid:43)lan. (cid:47)he restructuring related costs relate primarily to the closure of facilities and include costs to replace graphics(cid:11) train ne(cid:76) employees on relocated equipment(cid:11) and losses on sale of closed facilities. 201(cid:22) Rigid Pac(cid:61)aging Restructuring Plan On August 21(cid:11) 2018(cid:11) the Company announced a restructuring plan in Amcor (cid:45)igid (cid:43)ac(cid:64)aging ("2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan") aimed at reducing structural costs and optimi(cid:79)ing the footprint. (cid:47)he (cid:43)lan included the closures of manufacturing facilities and headcount reductions to achieve manufacturing footprint optimi(cid:79)ation and productivity improvements as (cid:76)ell as overhead cost reductions. (cid:47)he 2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan (cid:76)as completed by (cid:37)une 30(cid:11) 2021 (cid:76)ith total pre(cid:12)ta(cid:77) restructuring costs of $121 million(cid:11) of (cid:76)hich $78 million resulted in cash e(cid:77)penditures(cid:11) (cid:76)ith the main component being the cost to e(cid:77)it manufacturing facilities and employee related costs. Other Restructuring Plans (cid:45)ussian sale. Consolidated Amcor Restructuring Plans (cid:47)he Company has entered into other restructuring plans ("Other (cid:45)estructuring (cid:43)lans"). (cid:47)he Company(cid:6)s restructuring charges related to these plans (cid:76)ere $5(cid:24) million(cid:11) $6 million(cid:11) and $18 million for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (cid:31)uring the fourth quarter of fiscal year 2022(cid:11) the Company recorded $57 million in restructuring and related e(cid:77)penses classified (cid:76)ithin Other (cid:45)estructuring (cid:43)lans triggered by the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict to help mitigate the impact of the (cid:47)he total e(cid:77)penses incurred from the beginning of the Company(cid:6)s material restructuring plans are as follo(cid:76)s(cid:25) ((cid:3) in millions) 201(cid:22) Rigid Pac(cid:61)aging 201(cid:23) Bemis Other Restructuring Integration Plan Restructuring Plan (1) Plans (2) (cid:44)otal Restructuring and Related E(cid:74)penses, (cid:38)et (1) Fiscal year 201(cid:24) net charges to earnings $ 64 $ 48 $ 1(cid:24) $ Fiscal year 2020 net charges to earnings Fiscal year 2021 net charges to earnings Fiscal year 2022 net charges to earnings 37 20 (cid:85) 60 68 37 18 6 5(cid:24) E(cid:74)pense incurred to date (cid:3) 121 (cid:3) 213 (cid:3) 102 (cid:3) 131 115 (cid:24)4 (cid:24)6 (cid:18)3(cid:20) (1) (cid:47)otal restructuring and related e(cid:77)penses(cid:11) net(cid:11) include restructuring related costs from the 201(cid:24) Bemis Integration (cid:43)lan of $17 million(cid:11) $13 million(cid:11) and $15 million for the fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (2) Fiscal year 2022 includes $55 million in restructuring e(cid:77)penses and $2 million of restructuring related e(cid:77)penses that pertain to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict as discussed above in section "Other (cid:45)estructuring (cid:43)lans". 65 Amcor Annual Report 2022 66 as held for sale as a result of the Company(cid:6)s decision to sell its (cid:45)ussian business. (cid:47)he (cid:45)ussian business is part of the Company(cid:89)s Fle(cid:77)ibles segment and is e(cid:77)pected to be sold (cid:76)ithin one year. (cid:47)he Company has recorded an impairment of $(cid:24)0 million as of income. (cid:47)he disposal of the (cid:45)ussian business (cid:76)ill not represent a strategic shift that (cid:76)ill have a ma(cid:63)or effect on the Company(cid:6)s operations and financial results(cid:11) and therefore does not qualify for reporting as a discontinued operation. (cid:40)a(cid:63)or classes of assets and liabilities of the (cid:45)ussian business classified as held for sale as of (cid:37)une 30(cid:11) 2022 (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) Cash and cash equivalents (cid:47)rade receivables(cid:11) net Inventories(cid:11) net (cid:43)repaid e(cid:77)penses and other current assets (cid:43)roperty(cid:11) plant(cid:11) and equipment(cid:11) net (cid:34)ood(cid:76)ill (cid:44)otal assets held for sale Less impairment (1) (cid:44)otal assets held for sale, net (cid:47)rade payables (cid:44)otal current liabilities held for sale June 30, 2022 75 66 40 36 4(cid:24) 16 2(cid:22)2 ((cid:24)0) 1(cid:23)2 65 (cid:20)(cid:19) $ (cid:3) (cid:3) $ (cid:3) (1) Impairment inclusive of accumulated other comprehensive loss related to the (cid:45)ussian business. (cid:47)his table e(cid:77)cludes other assets and liabilities held for sale but not part of the (cid:45)ussian business and that are not material for disclosure. On February 11(cid:11) 201(cid:24)(cid:11) the Company received approval from the European Commission ("EC") for the acquisition of Bemis Company(cid:11) Inc. ("Bemis"). A condition of the approval (cid:76)as an agreement to divest three Bemis medical pac(cid:64)aging facilities located in the (cid:48)nited (cid:38)ingdom and Ireland ("EC (cid:45)emedy"). (cid:48)pon completion of the Bemis acquisition on (cid:37)une 11(cid:11) 201(cid:24)(cid:11) the Company determined that the EC (cid:45)emedy met the criteria to be classified as a discontinued operation(cid:11) in accordance (cid:76)ith ASC 205(cid:12)20(cid:11) "(cid:31)iscontinued Operations." (cid:47)he sale of the EC (cid:45)emedy closed on August 8(cid:11) 201(cid:24). (cid:47)he Company recorded a loss on the sale of $(cid:24) million(cid:11) (cid:76)hich is the result of the reclassification of accumulated foreign currency translation amounts from accumulated other comprehensive loss to earnings from discontinued operations upon sale of the EC (cid:45)emedy. (cid:47)he follo(cid:76)ing table summari(cid:79)es the results of the Company(cid:6)s discontinued operations(cid:25) ((cid:3) in millions) (cid:41)et sales Loss from discontinued operations (cid:47)a(cid:77) e(cid:77)pense from discontinued operations Loss from discontinued operations(cid:11) net of ta(cid:77) Years ended June 30, 2022 2021 2020 (cid:85) $ (cid:85) $ 16 (cid:85) (cid:85) (cid:85) (cid:85) (cid:77) (cid:3) (cid:77) (cid:3) (7) (1) ((cid:22)) 65 Form 10-K 66 (cid:38)ote (cid:20) - (cid:32)eld for Sale and Discontinued Operations (cid:38)ote (cid:21) - Restructuring (cid:31)uring the fourth quarter of fiscal year 2022(cid:11) the Company classified the assets and liabilities of its (cid:45)ussian business 201(cid:23) Bemis Integration Plan (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ithin the line item restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net on the consolidated statements of the fourth quarter of 201(cid:24) aimed at integrating and optimi(cid:79)ing the combined organi(cid:79)ation. In connection (cid:76)ith the acquisition of Bemis Company(cid:11) Inc. ("Bemis")(cid:11) the Company initiated restructuring activities in (cid:47)he 201(cid:24) Bemis Integration (cid:43)lan (cid:76)as completed by (cid:37)une 30(cid:11) 2022 (cid:76)ith final pre(cid:12)ta(cid:77) integration cost amounting to $253 million. (cid:47)he total 201(cid:24) Bemis Integration (cid:43)lan cost includes $213 million of restructuring and related e(cid:77)penses(cid:11) net(cid:11) and $40 million of general integration e(cid:77)penses. (cid:47)he net cash e(cid:77)penditures for the plan(cid:11) including disposal proceeds(cid:11) are $170 million(cid:11) of (cid:76)hich $40 million relates to general integration e(cid:77)penses. As part of this (cid:43)lan the Company has incurred $144 million in employee related e(cid:77)penses(cid:11) $36 million in fi(cid:77)ed asset related e(cid:77)penses(cid:11) $3(cid:24) million in other restructuring and $45 million in restructuring related e(cid:77)penses(cid:11) partially offset by a gain on disposal of a business of $51 million. In fiscal year 2022(cid:11) the (cid:43)lan resulted in net cash outflo(cid:76)s of $4(cid:24) million of (cid:76)hich $47 million (cid:76)ere payments related to restructuring and related e(cid:77)penditures. (cid:47)he remaining cash outflo(cid:76) (cid:76)ill be primarily incurred in fiscal year 2023. (cid:45)estructuring related costs are directly attributable to restructuring activities(cid:26) ho(cid:76)ever(cid:11) they do not qualify for special accounting treatment as e(cid:77)it or disposal activities. (cid:34)eneral integration costs are not lin(cid:64)ed to restructuring. (cid:47)he Company believes the disclosure of restructuring related costs provides more information on the total cost of the 201(cid:24) Bemis Integration (cid:43)lan. (cid:47)he restructuring related costs relate primarily to the closure of facilities and include costs to replace graphics(cid:11) train ne(cid:76) employees on relocated equipment(cid:11) and losses on sale of closed facilities. 201(cid:22) Rigid Pac(cid:61)aging Restructuring Plan On August 21(cid:11) 2018(cid:11) the Company announced a restructuring plan in Amcor (cid:45)igid (cid:43)ac(cid:64)aging ("2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan") aimed at reducing structural costs and optimi(cid:79)ing the footprint. (cid:47)he (cid:43)lan included the closures of manufacturing facilities and headcount reductions to achieve manufacturing footprint optimi(cid:79)ation and productivity improvements as (cid:76)ell as overhead cost reductions. (cid:47)he 2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan (cid:76)as completed by (cid:37)une 30(cid:11) 2021 (cid:76)ith total pre(cid:12)ta(cid:77) restructuring costs of $121 million(cid:11) of (cid:76)hich $78 million resulted in cash e(cid:77)penditures(cid:11) (cid:76)ith the main component being the cost to e(cid:77)it manufacturing facilities and employee related costs. Other Restructuring Plans (cid:47)he Company has entered into other restructuring plans ("Other (cid:45)estructuring (cid:43)lans"). (cid:47)he Company(cid:6)s restructuring charges related to these plans (cid:76)ere $5(cid:24) million(cid:11) $6 million(cid:11) and $18 million for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (cid:31)uring the fourth quarter of fiscal year 2022(cid:11) the Company recorded $57 million in restructuring and related e(cid:77)penses classified (cid:76)ithin Other (cid:45)estructuring (cid:43)lans triggered by the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict to help mitigate the impact of the (cid:45)ussian sale. Consolidated Amcor Restructuring Plans (cid:47)he total e(cid:77)penses incurred from the beginning of the Company(cid:6)s material restructuring plans are as follo(cid:76)s(cid:25) ((cid:3) in millions) 201(cid:22) Rigid Pac(cid:61)aging Restructuring Plan 201(cid:23) Bemis Integration Plan (1) Other Restructuring Plans (2) (cid:44)otal Restructuring and Related E(cid:74)penses, (cid:38)et (1) Fiscal year 201(cid:24) net charges to earnings $ 64 $ 48 $ 1(cid:24) $ Fiscal year 2020 net charges to earnings Fiscal year 2021 net charges to earnings Fiscal year 2022 net charges to earnings E(cid:74)pense incurred to date (cid:3) 37 20 (cid:85) 121 (cid:3) 60 68 37 213 (cid:3) 18 6 5(cid:24) 102 (cid:3) 131 115 (cid:24)4 (cid:24)6 (cid:18)3(cid:20) (1) (cid:47)otal restructuring and related e(cid:77)penses(cid:11) net(cid:11) include restructuring related costs from the 201(cid:24) Bemis Integration (cid:43)lan of $17 million(cid:11) $13 million(cid:11) and $15 million for the fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (2) Fiscal year 2022 includes $55 million in restructuring e(cid:77)penses and $2 million of restructuring related e(cid:77)penses that pertain to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict as discussed above in section "Other (cid:45)estructuring (cid:43)lans". 65 66 Amcor Annual Report 2022 An analysis of the restructuring e(cid:77)penses by type incurred follo(cid:76)s(cid:25) (cid:38)ote (cid:22) - E(cid:67)uity (cid:37)ethod and Other Investments Form 10-K 67 ((cid:3) in millions) Employee related e(cid:77)penses Fi(cid:77)ed asset related e(cid:77)penses Other e(cid:77)penses (cid:34)ain on sale of business (cid:44)otal restructuring e(cid:74)penses, net Years ended June 30, 2021 2020 2022 58 $ 76 $ 4 15 (cid:85) (cid:21)(cid:21) (cid:3) 23 34 (51) (cid:22)2 (cid:3) 45 24 2(cid:24) (cid:85) (cid:23)(cid:22) $ (cid:3) An analysis of the Company(cid:6)s restructuring plan liability(cid:11) not including restructuring related liabilities(cid:11) is as follo(cid:76)s(cid:25) changes in circumstances indicate the carrying amount may not be recoverable. (cid:31)ue to impairment indicators present in fiscal ((cid:3) in millions) Liability balance at June 30, 201(cid:23) (cid:3) (cid:41)et charges to earnings Cash paid (cid:41)on(cid:12)cash and other Liability balance at June 30, 2020 (cid:41)et charges to earnings Cash paid (cid:41)on(cid:12)cash and other Foreign currency translation Liability balance at June 30, 2021 (cid:41)et charges to earnings Cash received(cid:14)(paid)(cid:11) net (cid:41)on(cid:12)cash and other Foreign currency translation Liability balance at June 30, 2022 (cid:3) Employee Costs Fi(cid:74)ed Asset Related Costs Other Costs (cid:44)otal Restructuring Costs (cid:21)3 (cid:3) 45 (48) (cid:85) (cid:21)0 76 (61) ((cid:24)) 2 (cid:21)(cid:22) 58 (27) (3) ((cid:24)) (cid:23)(cid:21) (cid:3) (cid:21) (cid:3) 24 (5) (23) 3 23 (5) (23) 2 (cid:77) 4 4 (5) (cid:85) 3 (cid:3) (cid:22) (cid:3) 2(cid:24) (25) (cid:85) 12 34 (30) (cid:85) 1 1(cid:21) 15 (14) (cid:85) (cid:85) 1(cid:22) (cid:3) (cid:22)(cid:22) (cid:24)8 (78) (23) (cid:22)(cid:19) 133 ((cid:24)6) (32) 5 (cid:23)(cid:19) 77 (37) (8) ((cid:24)) 11(cid:22) (cid:47)he e(cid:77)penses related to restructuring activities(cid:11) including restructuring related activities(cid:11) have been presented on the consolidated statements of income as restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net. (cid:47)he accruals related to restructuring activities have been recorded on the consolidated balance sheets under other current liabilities. Investments accounted for under the equity method generally include all entities in (cid:76)hich the Company or its subsidiaries have significant influence(cid:11) (cid:76)ith usually not more than 50(cid:4) voting interest. (cid:47)he Company sold its only significant equity method investment(cid:11) a 47.6(cid:4) interest in A(cid:40)(cid:49)I(cid:34) (cid:35)oldings Limited ("A(cid:40)(cid:49)I(cid:34)") on September 30(cid:11) 2020(cid:11) reali(cid:79)ing a net gain of $15 million(cid:11) (cid:76)hich (cid:76)as recorded in equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77) in the consolidated statements of income. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) investments accounted for under the equity method and other investments carried at cost are immaterial. (cid:47)he Company received no dividends from equity method investments in the fiscal years ended (cid:37)une 30(cid:11) 2022 and 2021. (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2020(cid:11) the Company received dividends of $10 million from A(cid:40)(cid:49)I(cid:34). (cid:47)he Company revie(cid:76)s its investments accounted for under the equity method for impairment (cid:76)henever events or year ended (cid:37)une 30(cid:11) 2020(cid:11) the Company performed impairment tests by comparing the carrying value of its investment in A(cid:40)(cid:49)I(cid:34) to its fair value(cid:11) (cid:76)hich (cid:76)as determined based on A(cid:40)(cid:49)I(cid:34)(cid:6)s quoted share price. (cid:47)he fair value of the investment dropped belo(cid:76) its carrying value during fiscal year ended (cid:37)une 30(cid:11) 2020(cid:11) and therefore the Company recorded an other(cid:12)than(cid:12) temporary impairment of $26 million to bring the value of its investment to fair value. (cid:47)he impairment charge (cid:76)as included in equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77)(cid:11) in the consolidated statements of income. 67 Amcor Annual Report 2022 68 An analysis of the restructuring e(cid:77)penses by type incurred follo(cid:76)s(cid:25) (cid:38)ote (cid:22) - E(cid:67)uity (cid:37)ethod and Other Investments 67 Form 10-K 68 Investments accounted for under the equity method generally include all entities in (cid:76)hich the Company or its subsidiaries have significant influence(cid:11) (cid:76)ith usually not more than 50(cid:4) voting interest. (cid:47)he Company sold its only significant equity method investment(cid:11) a 47.6(cid:4) interest in A(cid:40)(cid:49)I(cid:34) (cid:35)oldings Limited ("A(cid:40)(cid:49)I(cid:34)") on September 30(cid:11) 2020(cid:11) reali(cid:79)ing a net gain of $15 million(cid:11) (cid:76)hich (cid:76)as recorded in equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77) in the consolidated statements of income. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) investments accounted for under the equity method and other investments carried at cost are immaterial. (cid:47)he Company received no dividends from equity method investments in the fiscal years ended (cid:37)une 30(cid:11) 2022 and 2021. (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2020(cid:11) the Company received dividends of $10 million from A(cid:40)(cid:49)I(cid:34). (cid:47)he Company revie(cid:76)s its investments accounted for under the equity method for impairment (cid:76)henever events or changes in circumstances indicate the carrying amount may not be recoverable. (cid:31)ue to impairment indicators present in fiscal year ended (cid:37)une 30(cid:11) 2020(cid:11) the Company performed impairment tests by comparing the carrying value of its investment in A(cid:40)(cid:49)I(cid:34) to its fair value(cid:11) (cid:76)hich (cid:76)as determined based on A(cid:40)(cid:49)I(cid:34)(cid:6)s quoted share price. (cid:47)he fair value of the investment dropped belo(cid:76) its carrying value during fiscal year ended (cid:37)une 30(cid:11) 2020(cid:11) and therefore the Company recorded an other(cid:12)than(cid:12) temporary impairment of $26 million to bring the value of its investment to fair value. (cid:47)he impairment charge (cid:76)as included in equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77)(cid:11) in the consolidated statements of income. An analysis of the Company(cid:6)s restructuring plan liability(cid:11) not including restructuring related liabilities(cid:11) is as follo(cid:76)s(cid:25) Liability balance at June 30, 201(cid:23) (cid:3) (cid:21)3 (cid:3) ((cid:3) in millions) Employee related e(cid:77)penses Fi(cid:77)ed asset related e(cid:77)penses Other e(cid:77)penses (cid:34)ain on sale of business (cid:44)otal restructuring e(cid:74)penses, net ((cid:3) in millions) (cid:41)et charges to earnings Cash paid (cid:41)on(cid:12)cash and other (cid:41)et charges to earnings Cash paid (cid:41)on(cid:12)cash and other Liability balance at June 30, 2020 Foreign currency translation Liability balance at June 30, 2021 (cid:41)et charges to earnings Cash received(cid:14)(paid)(cid:11) net (cid:41)on(cid:12)cash and other Foreign currency translation Years ended June 30, 2022 2021 2020 58 $ 76 $ 4 15 (cid:85) (cid:21)(cid:21) (cid:3) 23 34 (51) (cid:22)2 (cid:3) 45 24 2(cid:24) (cid:85) (cid:23)(cid:22) $ (cid:3) Employee Costs Fi(cid:74)ed Asset Related Costs Other Costs Restructuring (cid:44)otal Costs (48) 45 (cid:85) (cid:21)0 76 (61) ((cid:24)) 2 (cid:21)(cid:22) 58 (27) (3) ((cid:24)) (cid:23)(cid:21) (cid:3) (cid:21) (cid:3) 24 (5) (23) (5) (23) 3 23 2 (cid:77) 4 4 (5) (cid:85) 3 (cid:3) (cid:22) (cid:3) (25) (30) 2(cid:24) (cid:85) 12 34 (cid:85) 1 1(cid:21) 15 (cid:85) (cid:85) (14) 1(cid:22) (cid:3) (cid:22)(cid:22) (cid:24)8 (78) (23) (cid:22)(cid:19) 133 ((cid:24)6) (32) 5 (cid:23)(cid:19) 77 (37) (8) ((cid:24)) 11(cid:22) Liability balance at June 30, 2022 (cid:3) (cid:47)he e(cid:77)penses related to restructuring activities(cid:11) including restructuring related activities(cid:11) have been presented on the consolidated statements of income as restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net. (cid:47)he accruals related to restructuring activities have been recorded on the consolidated balance sheets under other current liabilities. 67 68 Amcor Annual Report 2022 (cid:38)ote (cid:23) - Property, Plant, and E(cid:67)uipment, (cid:38)et (cid:38)ote 10 - (cid:31)oodwill and Other Intangible Assets (cid:47)he components of property(cid:11) plant(cid:11) and equipment(cid:11) net(cid:11) (cid:76)ere as follo(cid:76)s(cid:25) Changes in the carrying amount of good(cid:76)ill attributable to each reportable segment (cid:76)ere as follo(cid:76)s(cid:25) Form 10-K 69 ((cid:3) in millions) Land and land improvements Buildings and improvements (cid:43)lant and equipment (cid:47)otal property(cid:11) plant(cid:11) and equipment Accumulated depreciation Accumulated impairment June 30, 2022 June 30, 2021 $ 201 $ 1(cid:11)323 5(cid:11)7(cid:24)7 7(cid:11)321 (3(cid:11)617) (58) 221 1(cid:11)355 5(cid:11)(cid:24)37 7(cid:11)513 (3(cid:11)712) (40) (cid:44)otal property, plant, and e(cid:67)uipment, net (cid:3) 3,(cid:20)(cid:18)(cid:20) (cid:3) 3,(cid:21)(cid:20)1 (cid:34)ood(cid:76)ill reclassified to assets held for sale(cid:11) net during fiscal year 2022 is related to the (cid:45)ussian business. (cid:45)efer to (cid:31)epreciation e(cid:77)pense amounted to $3(cid:24)8 million(cid:11) $38(cid:24) million(cid:11) and $403 million for fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. Amorti(cid:79)ation of assets under finance leases is included in depreciation e(cid:77)pense. (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations." Other Intangible Assets, (cid:38)et Other intangible assets(cid:11) net is comprised of the follo(cid:76)ing(cid:25) ((cid:3) in millions) Balance as of June 30, 2020 (cid:31)isposals Foreign currency translation Balance as of June 30, 2021 (cid:35)eld for sale reclassification Foreign currency translation Balance as of June 30, 2022 ((cid:3) in millions) Customer relationships Computer soft(cid:76)are Other (2) (cid:44)otal other intangible assets ((cid:3) in millions) Customer relationships Computer soft(cid:76)are Other (2) (cid:44)otal other intangible assets intangible assets. ((cid:3) in millions) Fiscal year 2023 Fiscal year 2024 Fiscal year 2025 Fiscal year 2026 Fiscal year 2027 Fle(cid:74)ibles Segment Rigid Pac(cid:61)aging Segment (cid:44)otal (cid:3) (cid:18),3(cid:20)(cid:23) (cid:3) (cid:23)(cid:21)0 (cid:3) (cid:19),33(cid:23) (5) 73 (cid:18),(cid:18)3(cid:21) (16) (114) (cid:3) (cid:18),30(cid:21) (cid:3) (cid:85) 12 (cid:23)(cid:22)2 (cid:85) (4) (cid:23)(cid:21)(cid:22) (cid:3) (5) 85 (cid:19),(cid:18)1(cid:23) (16) (118) (cid:19),2(cid:22)(cid:19) (cid:31)ross Carrying Amount (cid:38)et Carrying Amount June 30, 2022 Accumulated Amorti(cid:76)ation and Impairment (1) $ (cid:3) $ (cid:3) 1(cid:11)(cid:24)70 $ 235 323 2,(cid:19)2(cid:22) (cid:3) 1(cid:11)(cid:24)86 $ 233 321 2,(cid:19)(cid:18)0 (cid:3) (52(cid:24)) $ (162) (180) ((cid:22)(cid:21)1) (cid:3) (405) $ (156) (144) ((cid:21)0(cid:19)) (cid:3) (cid:31)ross Carrying Amount (cid:38)et Carrying Amount June 30, 2021 Accumulated Amorti(cid:76)ation and Impairment (1) 1(cid:11)441 73 143 1,(cid:20)(cid:19)(cid:21) 1(cid:11)581 77 177 1,(cid:22)3(cid:19) 173 16(cid:24) 156 152 138 (1) Accumulated amorti(cid:79)ation and impairment includes $33 million and $34 million for (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:11) of accumulated impairment in the Other category. (2) Other includes $16 million and $17 million for (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:11) of acquired intellectual property assets not yet being amorti(cid:79)ed as the related (cid:45)(cid:5)(cid:31) pro(cid:63)ects have not yet been completed. Amorti(cid:79)ation e(cid:77)pense for intangible assets during the fiscal years 2022(cid:11) 2021(cid:11) and 2020 (cid:76)as $180 million(cid:11) $182 million(cid:11) and $204 million(cid:11) respectively. (cid:31)uring the last three fiscal years(cid:11) there (cid:76)ere no impairment charges recorded on Estimated future amorti(cid:79)ation e(cid:77)pense for intangible assets is as follo(cid:76)s(cid:25) Amorti(cid:76)ation $ 6(cid:24) Amcor Annual Report 2022 70 69 Form 10-K (cid:26)0 (cid:38)ote (cid:23) - Property, Plant, and E(cid:67)uipment, (cid:38)et (cid:38)ote 10 - (cid:31)oodwill and Other Intangible Assets (cid:47)he components of property(cid:11) plant(cid:11) and equipment(cid:11) net(cid:11) (cid:76)ere as follo(cid:76)s(cid:25) Changes in the carrying amount of good(cid:76)ill attributable to each reportable segment (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) Land and land improvements Buildings and improvements (cid:43)lant and equipment (cid:47)otal property(cid:11) plant(cid:11) and equipment Accumulated depreciation Accumulated impairment June 30, 2022 June 30, 2021 $ 201 $ 1(cid:11)323 5(cid:11)7(cid:24)7 7(cid:11)321 (3(cid:11)617) (58) 221 1(cid:11)355 5(cid:11)(cid:24)37 7(cid:11)513 (3(cid:11)712) (40) ((cid:3) in millions) Balance as of June 30, 2020 (cid:31)isposals Foreign currency translation Balance as of June 30, 2021 (cid:35)eld for sale reclassification Foreign currency translation Balance as of June 30, 2022 Fle(cid:74)ibles Segment Rigid Pac(cid:61)aging Segment (cid:44)otal (cid:3) (cid:18),3(cid:20)(cid:23) (cid:3) (cid:23)(cid:21)0 (cid:3) (5) 73 (cid:18),(cid:18)3(cid:21) (16) (114) (cid:18),30(cid:21) (cid:3) (cid:3) (cid:85) 12 (cid:23)(cid:22)2 (cid:85) (4) (cid:23)(cid:21)(cid:22) (cid:3) (cid:19),33(cid:23) (5) 85 (cid:19),(cid:18)1(cid:23) (16) (118) (cid:19),2(cid:22)(cid:19) (cid:44)otal property, plant, and e(cid:67)uipment, net (cid:3) 3,(cid:20)(cid:18)(cid:20) (cid:3) 3,(cid:21)(cid:20)1 (cid:34)ood(cid:76)ill reclassified to assets held for sale(cid:11) net during fiscal year 2022 is related to the (cid:45)ussian business. (cid:45)efer to (cid:31)epreciation e(cid:77)pense amounted to $3(cid:24)8 million(cid:11) $38(cid:24) million(cid:11) and $403 million for fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. Amorti(cid:79)ation of assets under finance leases is included in depreciation e(cid:77)pense. (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations." Other Intangible Assets, (cid:38)et Other intangible assets(cid:11) net is comprised of the follo(cid:76)ing(cid:25) ((cid:3) in millions) Customer relationships Computer soft(cid:76)are Other (2) (cid:44)otal other intangible assets ((cid:3) in millions) Customer relationships Computer soft(cid:76)are Other (2) (cid:44)otal other intangible assets (cid:31)ross Carrying Amount June 30, 2022 Accumulated Amorti(cid:76)ation and Impairment (1) (cid:38)et Carrying Amount 1(cid:11)(cid:24)70 $ 235 323 2,(cid:19)2(cid:22) (cid:3) (52(cid:24)) $ (162) (180) ((cid:22)(cid:21)1) (cid:3) 1(cid:11)441 73 143 1,(cid:20)(cid:19)(cid:21) (cid:31)ross Carrying Amount June 30, 2021 Accumulated Amorti(cid:76)ation and Impairment (1) (cid:38)et Carrying Amount 1(cid:11)(cid:24)86 $ 233 321 2,(cid:19)(cid:18)0 (cid:3) (405) $ (156) (144) ((cid:21)0(cid:19)) (cid:3) 1(cid:11)581 77 177 1,(cid:22)3(cid:19) $ (cid:3) $ (cid:3) (1) Accumulated amorti(cid:79)ation and impairment includes $33 million and $34 million for (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:11) of accumulated impairment in the Other category. (2) Other includes $16 million and $17 million for (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:11) of acquired intellectual property assets not yet being amorti(cid:79)ed as the related (cid:45)(cid:5)(cid:31) pro(cid:63)ects have not yet been completed. Amorti(cid:79)ation e(cid:77)pense for intangible assets during the fiscal years 2022(cid:11) 2021(cid:11) and 2020 (cid:76)as $180 million(cid:11) $182 million(cid:11) and $204 million(cid:11) respectively. (cid:31)uring the last three fiscal years(cid:11) there (cid:76)ere no impairment charges recorded on intangible assets. Estimated future amorti(cid:79)ation e(cid:77)pense for intangible assets is as follo(cid:76)s(cid:25) ((cid:3) in millions) Fiscal year 2023 Fiscal year 2024 Fiscal year 2025 Fiscal year 2026 Fiscal year 2027 Amorti(cid:76)ation $ 173 16(cid:24) 156 152 138 6(cid:24) 70 Amcor Annual Report 2022 Form 10-K 71 (cid:38)ote 11 - Fair Value (cid:37)easurements (cid:47)he fair values of the Company(cid:6)s financial assets and financial liabilities listed belo(cid:76) reflect the amounts that (cid:76)ould be received to sell the assets or paid to transfer the liabilities in an orderly transaction bet(cid:76)een mar(cid:64)et participants at the measurement date (e(cid:77)it price). (cid:47)he Company(cid:6)s non(cid:12)derivative financial instruments primarily include cash and cash equivalents(cid:11) trade receivables(cid:11) trade payables(cid:11) short(cid:12)term debt(cid:11) and long(cid:12)term debt. At (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the carrying value of these financial instruments(cid:11) e(cid:77)cluding long(cid:12)term debt(cid:11) appro(cid:77)imated fair value because of the short(cid:12)term nature of these instruments. ((cid:3) in millions) Assets Commodity contracts For(cid:76)ard e(cid:77)change contracts Interest rate s(cid:76)aps Level 1 Level 2 Level 3 (cid:44)otal June 30, 2021 (cid:85) $ 14 $ (cid:85) $ (cid:85) (cid:85) 7 1(cid:24) (cid:85) (cid:85) (cid:44)otal assets measured at fair value (cid:77) (cid:3) (cid:18)0 (cid:3) (cid:77) (cid:3) Fair value disclosures are classified based on the fair value hierarchy. See (cid:41)ote 2(cid:11) "Significant Accounting (cid:43)olicies(cid:11)" Liabilities for information about the Company(cid:6)s fair value hierarchy. (cid:47)he carrying value of long(cid:12)term debt (cid:76)ith variable interest rates appro(cid:77)imates its fair value. (cid:47)he fair value of the Company(cid:6)s long(cid:12)term debt (cid:76)ith fi(cid:77)ed interest rates is based on mar(cid:64)et prices(cid:11) if available(cid:11) or e(cid:77)pected future cash flo(cid:76)s discounted at the current interest rate for financial liabilities (cid:76)ith similar ris(cid:64) profiles. (cid:47)he carrying values and estimated fair values of long(cid:12)term debt (cid:76)ith fi(cid:77)ed interest rates (including fi(cid:77)ed(cid:12)rate debt (cid:76)ith designated receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)aps(cid:11) e(cid:77)cluding finance leases) (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) (cid:47)otal long(cid:12)term debt (cid:76)ith fi(cid:77)ed interest rates (e(cid:77)cluding commercial paper and finance leases) June 30, 2022 June 30, 2021 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) $ 3(cid:11)(cid:24)52 $ 3(cid:11)6(cid:24)4 $ 4(cid:11)325 $ 4(cid:11)558 Assets and Liabilities (cid:37)easured and Recorded at Fair Value on a Recurring Basis Additionally(cid:11) the Company measures and records certain assets and liabilities(cid:11) including derivative instruments and contingent purchase consideration liabilities(cid:11) at fair value. (cid:47)he follo(cid:76)ing table summari(cid:79)es the fair value of these instruments(cid:11) (cid:76)hich are measured at fair value on a recurring basis(cid:11) by level(cid:11) (cid:76)ithin the fair value hierarchy(cid:25) ((cid:3) in millions) Assets Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:44)otal assets measured at fair value Liabilities Contingent purchase consideration liabilities Commodity contracts For(cid:76)ard e(cid:77)change contracts Interest rate s(cid:76)aps (cid:44)otal liabilities measured at fair value $ (cid:3) $ (cid:3) Level 1 Level 2 Level 3 (cid:44)otal June 30, 2022 (cid:85) $ (cid:85) (cid:77) (cid:3) 6 $ 7 13 (cid:3) (cid:85) $ (cid:85) (cid:77) (cid:3) (cid:85) $ (cid:85) $ 16 $ (cid:85) (cid:85) (cid:85) 3 17 6(cid:24) (cid:85) (cid:85) (cid:85) (cid:77) (cid:3) (cid:22)(cid:23) (cid:3) 1(cid:20) (cid:3) 6 7 13 16 3 17 6(cid:24) 10(cid:19) $ (cid:3) $ (cid:3) 14 7 1(cid:24) (cid:18)0 18 4 22 Contingent purchase consideration liabilities For(cid:76)ard e(cid:77)change contracts (cid:44)otal liabilities measured at fair value (cid:85) $ (cid:85) (cid:77) (cid:3) (cid:85) $ 4 (cid:18) (cid:3) 18 $ (cid:85) 1(cid:22) (cid:3) (cid:47)he fair value of the commodity contracts (cid:76)as determined using a discounted cash flo(cid:76) analysis based on the terms of the contracts and observed mar(cid:64)et for(cid:76)ard prices discounted at a currency specific rate. For(cid:76)ard e(cid:77)change contract fair values (cid:76)ere determined based on quoted prices for similar assets and liabilities in active mar(cid:64)ets using inputs such as currency rates and for(cid:76)ard points. (cid:47)he fair value of the interest rate s(cid:76)aps (cid:76)as determined using a discounted cash flo(cid:76) method based on mar(cid:64)et based s(cid:76)ap yield curves(cid:11) ta(cid:64)ing into account current interest rates. Contingent purchase consideration obligations arise from business acquisitions. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company(cid:6)s contingent purchase consideration liabilities consist of a $10 million liability that is contingent on future royalty income generated by (cid:31)iscma A(cid:34)(cid:11) a subsidiary acquired in (cid:40)arch 2017(cid:11) (cid:76)ith the $6 million balance relating to consideration for small business acquisitions (cid:76)here payments are contingent on the Company vacating a certain property or performance criteria. (cid:47)he fair value of the contingent purchase consideration liabilities (cid:76)as determined for each arrangement individually. (cid:47)he fair value (cid:76)as determined using the income approach (cid:76)ith significant inputs that are not observable in the mar(cid:64)et. (cid:38)ey assumptions include the discount rates consistent (cid:76)ith the level of ris(cid:64) of achievement and probability ad(cid:63)usted financial pro(cid:63)ections. (cid:47)he e(cid:77)pected outcomes are recorded at net present value(cid:11) (cid:76)hich requires ad(cid:63)ustment over the life for changes in ris(cid:64)s and probabilities. Changes arising from modifications in forecasts related to contingent consideration are e(cid:77)pected to be immaterial. (cid:47)he fair value of contingent purchase consideration liabilities is included in other current liabilities and other non(cid:12) current liabilities in the consolidated balance sheets. (cid:47)he change in fair value of the contingent purchase consideration liabilities(cid:11) (cid:76)hich (cid:76)as included in other income(cid:11) net is due to the passage of time and changes in the probability of achievement used to develop the estimate. (cid:47)he follo(cid:76)ing table sets forth a summary of changes in the value of the Company(cid:6)s Level 3 financial liabilities(cid:25) ((cid:3) in millions) Fair value at the beginning of the year Changes in fair value of Level 3 liabilities (cid:43)ayments Foreign currency translation Fair value at the end of the year June 30, 2021 2022 2020 1(cid:22) (cid:3) 1(cid:19) (cid:3) (cid:85) (1) (1) 2 (cid:85) 1 1(cid:20) (cid:3) 1(cid:22) (cid:3) 1(cid:18) 1 (cid:85) (cid:85) 1(cid:19) (cid:3) (cid:3) Assets and Liabilities (cid:37)easured and Recorded at Fair Value on a (cid:38)onrecurring Basis In addition to assets and liabilities that are recorded at fair value on a recurring basis(cid:11) the Company records assets and liabilities at fair value on a nonrecurring basis. (cid:47)he Company measures certain assets(cid:11) including technology intangible assets(cid:11) equity method and other investments(cid:11) long(cid:12)lived assets held for sale(cid:11) and other long(cid:12)lived and intangible assets at fair value on a nonrecurring basis (cid:76)hen they are deemed to be other than temporarily impaired. (cid:47)he fair values of these assets are determined(cid:11) (cid:76)hen applicable(cid:11) based on valuation techniques using the best information available(cid:11) and may include quoted mar(cid:64)et prices(cid:11) mar(cid:64)et comparables(cid:11) and discounted cash flo(cid:76) pro(cid:63)ections. 71 Amcor Annual Report 2022 72 71 Form 10-K (cid:26)2 (cid:38)ote 11 - Fair Value (cid:37)easurements (cid:47)he fair values of the Company(cid:6)s financial assets and financial liabilities listed belo(cid:76) reflect the amounts that (cid:76)ould be received to sell the assets or paid to transfer the liabilities in an orderly transaction bet(cid:76)een mar(cid:64)et participants at the measurement date (e(cid:77)it price). (cid:47)he Company(cid:6)s non(cid:12)derivative financial instruments primarily include cash and cash equivalents(cid:11) trade receivables(cid:11) trade payables(cid:11) short(cid:12)term debt(cid:11) and long(cid:12)term debt. At (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the carrying value of these financial instruments(cid:11) e(cid:77)cluding long(cid:12)term debt(cid:11) appro(cid:77)imated fair value because of the short(cid:12)term nature of these instruments. ((cid:3) in millions) Assets Commodity contracts For(cid:76)ard e(cid:77)change contracts Interest rate s(cid:76)aps (cid:44)otal assets measured at fair value Fair value disclosures are classified based on the fair value hierarchy. See (cid:41)ote 2(cid:11) "Significant Accounting (cid:43)olicies(cid:11)" Liabilities Contingent purchase consideration liabilities For(cid:76)ard e(cid:77)change contracts (cid:44)otal liabilities measured at fair value Level 1 Level 2 Level 3 (cid:44)otal June 30, 2021 $ (cid:3) $ (cid:3) (cid:85) $ 14 $ (cid:85) $ (cid:85) (cid:85) 7 1(cid:24) (cid:85) (cid:85) (cid:77) (cid:3) (cid:18)0 (cid:3) (cid:77) (cid:3) (cid:85) $ (cid:85) (cid:77) (cid:3) (cid:85) $ 4 (cid:18) (cid:3) 18 $ (cid:85) 1(cid:22) (cid:3) 14 7 1(cid:24) (cid:18)0 18 4 22 (cid:47)he fair value of the commodity contracts (cid:76)as determined using a discounted cash flo(cid:76) analysis based on the terms of the contracts and observed mar(cid:64)et for(cid:76)ard prices discounted at a currency specific rate. For(cid:76)ard e(cid:77)change contract fair values (cid:76)ere determined based on quoted prices for similar assets and liabilities in active mar(cid:64)ets using inputs such as currency rates and for(cid:76)ard points. (cid:47)he fair value of the interest rate s(cid:76)aps (cid:76)as determined using a discounted cash flo(cid:76) method based on mar(cid:64)et based s(cid:76)ap yield curves(cid:11) ta(cid:64)ing into account current interest rates. Contingent purchase consideration obligations arise from business acquisitions. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company(cid:6)s contingent purchase consideration liabilities consist of a $10 million liability that is contingent on future royalty income generated by (cid:31)iscma A(cid:34)(cid:11) a subsidiary acquired in (cid:40)arch 2017(cid:11) (cid:76)ith the $6 million balance relating to consideration for small business acquisitions (cid:76)here payments are contingent on the Company vacating a certain property or performance criteria. (cid:47)he fair value of the contingent purchase consideration liabilities (cid:76)as determined for each arrangement individually. (cid:47)he fair value (cid:76)as determined using the income approach (cid:76)ith significant inputs that are not observable in the mar(cid:64)et. (cid:38)ey assumptions include the discount rates consistent (cid:76)ith the level of ris(cid:64) of achievement and probability ad(cid:63)usted financial pro(cid:63)ections. (cid:47)he e(cid:77)pected outcomes are recorded at net present value(cid:11) (cid:76)hich requires ad(cid:63)ustment over the life for changes in ris(cid:64)s and probabilities. Changes arising from modifications in forecasts related to contingent consideration are e(cid:77)pected to be immaterial. (cid:47)he fair value of contingent purchase consideration liabilities is included in other current liabilities and other non(cid:12) current liabilities in the consolidated balance sheets. (cid:47)he change in fair value of the contingent purchase consideration liabilities(cid:11) (cid:76)hich (cid:76)as included in other income(cid:11) net is due to the passage of time and changes in the probability of achievement used to develop the estimate. (cid:47)he follo(cid:76)ing table sets forth a summary of changes in the value of the Company(cid:6)s Level 3 financial liabilities(cid:25) ((cid:3) in millions) Fair value at the beginning of the year Changes in fair value of Level 3 liabilities (cid:43)ayments Foreign currency translation Fair value at the end of the year 2022 June 30, 2021 2020 (cid:3) (cid:3) 1(cid:22) (cid:3) (cid:85) (1) (1) 1(cid:20) (cid:3) 1(cid:19) (cid:3) 2 (cid:85) 1 1(cid:22) (cid:3) 1(cid:18) 1 (cid:85) (cid:85) 1(cid:19) Assets and Liabilities (cid:37)easured and Recorded at Fair Value on a (cid:38)onrecurring Basis In addition to assets and liabilities that are recorded at fair value on a recurring basis(cid:11) the Company records assets and liabilities at fair value on a nonrecurring basis. (cid:47)he Company measures certain assets(cid:11) including technology intangible assets(cid:11) equity method and other investments(cid:11) long(cid:12)lived assets held for sale(cid:11) and other long(cid:12)lived and intangible assets at fair value on a nonrecurring basis (cid:76)hen they are deemed to be other than temporarily impaired. (cid:47)he fair values of these assets are determined(cid:11) (cid:76)hen applicable(cid:11) based on valuation techniques using the best information available(cid:11) and may include quoted mar(cid:64)et prices(cid:11) mar(cid:64)et comparables(cid:11) and discounted cash flo(cid:76) pro(cid:63)ections. 71 72 Amcor Annual Report 2022 for information about the Company(cid:6)s fair value hierarchy. (cid:47)he carrying value of long(cid:12)term debt (cid:76)ith variable interest rates appro(cid:77)imates its fair value. (cid:47)he fair value of the Company(cid:6)s long(cid:12)term debt (cid:76)ith fi(cid:77)ed interest rates is based on mar(cid:64)et prices(cid:11) if available(cid:11) or e(cid:77)pected future cash flo(cid:76)s discounted at the current interest rate for financial liabilities (cid:76)ith similar ris(cid:64) profiles. (cid:47)he carrying values and estimated fair values of long(cid:12)term debt (cid:76)ith fi(cid:77)ed interest rates (including fi(cid:77)ed(cid:12)rate debt (cid:76)ith designated receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)aps(cid:11) e(cid:77)cluding finance leases) (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) (cid:47)otal long(cid:12)term debt (cid:76)ith fi(cid:77)ed interest rates (e(cid:77)cluding commercial paper and finance leases) June 30, 2022 June 30, 2021 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) $ 3(cid:11)(cid:24)52 $ 3(cid:11)6(cid:24)4 $ 4(cid:11)325 $ 4(cid:11)558 Assets and Liabilities (cid:37)easured and Recorded at Fair Value on a Recurring Basis Additionally(cid:11) the Company measures and records certain assets and liabilities(cid:11) including derivative instruments and contingent purchase consideration liabilities(cid:11) at fair value. (cid:47)he follo(cid:76)ing table summari(cid:79)es the fair value of these instruments(cid:11) (cid:76)hich are measured at fair value on a recurring basis(cid:11) by level(cid:11) (cid:76)ithin the fair value hierarchy(cid:25) Level 1 Level 2 Level 3 (cid:44)otal June 30, 2022 (cid:85) $ (cid:85) (cid:77) (cid:3) 6 $ 7 13 (cid:3) (cid:85) $ (cid:85) (cid:77) (cid:3) ((cid:3) in millions) Assets Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:44)otal assets measured at fair value Liabilities Commodity contracts For(cid:76)ard e(cid:77)change contracts Interest rate s(cid:76)aps $ (cid:3) $ (cid:3) Contingent purchase consideration liabilities (cid:85) $ (cid:85) $ 16 $ (cid:85) (cid:85) (cid:85) 3 17 6(cid:24) (cid:85) (cid:85) (cid:85) (cid:44)otal liabilities measured at fair value (cid:77) (cid:3) (cid:22)(cid:23) (cid:3) 1(cid:20) (cid:3) 6 7 13 16 3 17 6(cid:24) 10(cid:19) Form 10-K 73 As further discussed in (cid:41)ote 6 (cid:84) (cid:86)(cid:35)eld for Sale and (cid:31)iscontinued Operations(cid:11)(cid:87) during the fourth quarter of fiscal year 2022(cid:11) the Company met the criteria to recogni(cid:79)e the related assets and liabilities of its (cid:45)ussian operations as held for sale (cid:76)hich resulted in the Company remeasuring the disposal group at its fair value(cid:11) less cost to sell(cid:11) (cid:76)hich is considered a Level 3 fair value measurement. (cid:38)ote 12 - Derivative Instruments In addition(cid:11) resulting from the effective disposal of non(cid:12)core businesses during the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) the the instruments as a fair value hedge or a cash flo(cid:76) hedge of a specific underlying e(cid:77)posure. On an ongoing basis(cid:11) the Company Company has recorded a total loss of $34 million(cid:11) predominantly to ad(cid:63)ust the long(cid:12)lived assets to their fair value less cost to sell. Of these losses(cid:11) $24 million are included (cid:76)ithin restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net as relating to the (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict (cid:76)ith the balance recorded in other income(cid:11) net in the consolidated statements of income. (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) further long(cid:12)lived assets (cid:76)ith a carrying value of $12 million (cid:76)ere (cid:76)ritten do(cid:76)n to a fair value of (cid:79)ero as the Company(cid:6)s (cid:31)urban(cid:11) South Africa(cid:11) manufacturing facility (cid:76)as destroyed in a fire as the result of general civil unrest. In addition(cid:11) other long(cid:12)lived assets in South Africa(cid:11) (cid:76)ith a carrying amount of $8 million(cid:11) (cid:76)ere (cid:76)ritten do(cid:76)n to their estimated fair value of $4 million using level 3 inputs. (cid:47)he Company sold its equity method investment in A(cid:40)(cid:49)I(cid:34) on September 30(cid:11) 2020. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments." (cid:47)he Company tests indefinite(cid:12)lived intangibles for impairment (cid:76)hen facts and circumstances indicate the carrying value may not be recoverable from their undiscounted cash flo(cid:76)s. (cid:31)uring fiscal years 2022(cid:11) 2021 and 2020(cid:11) there (cid:76)ere no indefinite(cid:12)lived intangible impairment charges recorded. (cid:47)he Company periodically uses derivatives and other financial instruments to hedge e(cid:77)posures to interest rate(cid:11) commodity price(cid:11) and currency ris(cid:64)s. (cid:47)he Company does not hold or issue derivative instruments for speculative or trading purposes. For hedges that meet the hedge accounting criteria(cid:11) the Company(cid:11) at inception(cid:11) formally designates and documents assesses and documents that its hedges have been and are e(cid:77)pected to continue to be highly effective. Interest Rate Ris(cid:61) (cid:47)he Company(cid:6)s policy is to manage e(cid:77)posure to interest rate ris(cid:64) by maintaining a mi(cid:77)ture of fi(cid:77)ed(cid:12)rate and variable(cid:12) rate debt(cid:11) monitoring global interest rates(cid:11) and(cid:11) (cid:76)here appropriate(cid:11) hedging floating interest rate e(cid:77)posure or debt at fi(cid:77)ed interest rates through various interest rate derivative instruments including(cid:11) but not limited to(cid:11) interest rate s(cid:76)aps(cid:11) cross(cid:12) currency interest rate s(cid:76)aps(cid:11) and interest rate loc(cid:64)s. For interest rate s(cid:76)aps that are accounted for as fair value hedges(cid:11) the gains and losses related to the changes in the fair value of the interest rate s(cid:76)aps are included in interest e(cid:77)pense and offset changes in the fair value of the hedged portion of the underlying debt that are attributable to the changes in mar(cid:64)et interest rates. Changes in the fair value of interest rate s(cid:76)aps that have not been designated as hedging instruments are reported in the accompanying consolidated statements of income in other non(cid:12)operating income(cid:11) net. (cid:31)uring (cid:31)ecember 2021(cid:11) the Company entered into an aggregate $250 million notional amount of receive(cid:12)fi(cid:77)ed(cid:14)pay variable interest rate s(cid:76)aps(cid:11) (cid:76)hich (cid:76)ill mature on (cid:40)ay 15(cid:11) 2028. (cid:47)hese s(cid:76)aps (cid:76)ere designated as a fair value hedge against 50(cid:4) of $500 million of principal on the 4.50(cid:4) (cid:48).S. dollar notes due in (cid:40)ay 2028. Also during (cid:31)ecember 2021(cid:11) the Company settled $100 million of a receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)ap as a result of the full redemption of $275 million 5.(cid:24)5(cid:4) (cid:48).S. private placement notes at maturity. (cid:47)his interest rate s(cid:76)ap (cid:76)as designated as a fair value hedge at inception. In (cid:37)uly 2021(cid:11) the Company terminated $400 million of its receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)aps that (cid:76)ere designated as fair value hedges and received $2 million in net proceeds. (cid:47)his termination (cid:76)as in association (cid:76)ith the full redemption of the $400 million 4.50(cid:4) (cid:48).S. dollar notes due October 2021(cid:11) completed on (cid:37)uly 15(cid:11) 2021. In (cid:37)uly 2021(cid:11) the Company also terminated an aggregate amount of (cid:90)300 million (equivalent of $357 million) receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)aps and received (cid:90)13 million (equivalent of $15 million) in net proceeds. (cid:47)hese interest rate s(cid:76)aps(cid:11) (cid:76)hich (cid:76)ere to mature in (cid:40)arch 2023(cid:11) (cid:76)ere designated as fair value hedges against (cid:90)300 million of principal on the 2.75(cid:4) Euro bonds due (cid:40)arch 2023. (cid:47)he gain on the termination of the aforementioned s(cid:76)aps is deferred and is being amorti(cid:79)ed to interest income over the remaining contractual term of the 2.75(cid:4) Euro bonds due (cid:40)arch 2023. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the total notional amount of the Company(cid:6)s receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)aps (cid:76)as $650 million and $1(cid:11)257 million(cid:11) respectively. Foreign Currency Ris(cid:61) (cid:47)he Company manufactures and sells its products and finances operations in a number of countries throughout the (cid:76)orld and(cid:11) as a result(cid:11) is e(cid:77)posed to movements in foreign currency e(cid:77)change rates. (cid:47)he purpose of the Company(cid:6)s foreign currency hedging program is to manage the volatility associated (cid:76)ith the changes in e(cid:77)change rates. (cid:47)o manage this e(cid:77)change rate ris(cid:64)(cid:11) the Company utili(cid:79)es for(cid:76)ard contracts. Contracts that qualify for hedge accounting are designated as cash flo(cid:76) hedges of certain forecasted transactions denominated in foreign currencies. (cid:47)he effective portion of the changes in fair value of these instruments is reported in accumulated other comprehensive loss ("AOCI") and reclassified into earnings in the same financial statement line item and in the same period or periods during (cid:76)hich the related hedged transactions affect earnings. (cid:47)he ineffective portion is recogni(cid:79)ed in earnings over the life of the hedging relationship in the same consolidated statements of income line item as the underlying hedged item. Changes in the fair value of for(cid:76)ard contracts that have not been designated as hedging instruments are reported in the accompanying consolidated As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the notional amount of the outstanding for(cid:76)ard contracts (cid:76)as $1.0 billion and $1.1 statements of income. billion(cid:11) respectively. Commodity Ris(cid:61) Certain ra(cid:76) materials used in the Company(cid:6)s production processes are sub(cid:63)ect to price volatility caused by (cid:76)eather(cid:11) supply conditions(cid:11) political and economic variables(cid:11) and other unpredictable factors. (cid:47)he Company(cid:6)s policy is to minimi(cid:79)e e(cid:77)posure to price volatility by passing through the commodity price ris(cid:64) to customers(cid:11) including the use of fi(cid:77)ed price s(cid:76)aps. 73 Amcor Annual Report 2022 74 2022(cid:11) the Company met the criteria to recogni(cid:79)e the related assets and liabilities of its (cid:45)ussian operations as held for sale (cid:76)hich resulted in the Company remeasuring the disposal group at its fair value(cid:11) less cost to sell(cid:11) (cid:76)hich is considered a Level 3 fair value measurement. In addition(cid:11) resulting from the effective disposal of non(cid:12)core businesses during the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) the Company has recorded a total loss of $34 million(cid:11) predominantly to ad(cid:63)ust the long(cid:12)lived assets to their fair value less cost to sell. Of these losses(cid:11) $24 million are included (cid:76)ithin restructuring(cid:11) impairment(cid:11) and related e(cid:77)penses(cid:11) net as relating to the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) further long(cid:12)lived assets (cid:76)ith a carrying value of $12 million (cid:76)ere (cid:76)ritten do(cid:76)n to a fair value of (cid:79)ero as the Company(cid:6)s (cid:31)urban(cid:11) South Africa(cid:11) manufacturing facility (cid:76)as destroyed in a fire as the result of general civil unrest. In addition(cid:11) other long(cid:12)lived assets in South Africa(cid:11) (cid:76)ith a carrying amount of $8 million(cid:11) (cid:76)ere (cid:76)ritten do(cid:76)n to their estimated fair value of $4 million using level 3 inputs. (cid:47)he Company sold its equity method investment in A(cid:40)(cid:49)I(cid:34) on September 30(cid:11) 2020. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments." (cid:47)he Company tests indefinite(cid:12)lived intangibles for impairment (cid:76)hen facts and circumstances indicate the carrying value may not be recoverable from their undiscounted cash flo(cid:76)s. (cid:31)uring fiscal years 2022(cid:11) 2021 and 2020(cid:11) there (cid:76)ere no indefinite(cid:12)lived intangible impairment charges recorded. 73 Form 10-K 74 As further discussed in (cid:41)ote 6 (cid:84) (cid:86)(cid:35)eld for Sale and (cid:31)iscontinued Operations(cid:11)(cid:87) during the fourth quarter of fiscal year (cid:38)ote 12 - Derivative Instruments (cid:47)he Company periodically uses derivatives and other financial instruments to hedge e(cid:77)posures to interest rate(cid:11) commodity price(cid:11) and currency ris(cid:64)s. (cid:47)he Company does not hold or issue derivative instruments for speculative or trading purposes. For hedges that meet the hedge accounting criteria(cid:11) the Company(cid:11) at inception(cid:11) formally designates and documents the instruments as a fair value hedge or a cash flo(cid:76) hedge of a specific underlying e(cid:77)posure. On an ongoing basis(cid:11) the Company assesses and documents that its hedges have been and are e(cid:77)pected to continue to be highly effective. (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict (cid:76)ith the balance recorded in other income(cid:11) net in the consolidated statements of income. (cid:31)uring the Interest Rate Ris(cid:61) (cid:47)he Company(cid:6)s policy is to manage e(cid:77)posure to interest rate ris(cid:64) by maintaining a mi(cid:77)ture of fi(cid:77)ed(cid:12)rate and variable(cid:12) rate debt(cid:11) monitoring global interest rates(cid:11) and(cid:11) (cid:76)here appropriate(cid:11) hedging floating interest rate e(cid:77)posure or debt at fi(cid:77)ed interest rates through various interest rate derivative instruments including(cid:11) but not limited to(cid:11) interest rate s(cid:76)aps(cid:11) cross(cid:12) currency interest rate s(cid:76)aps(cid:11) and interest rate loc(cid:64)s. For interest rate s(cid:76)aps that are accounted for as fair value hedges(cid:11) the gains and losses related to the changes in the fair value of the interest rate s(cid:76)aps are included in interest e(cid:77)pense and offset changes in the fair value of the hedged portion of the underlying debt that are attributable to the changes in mar(cid:64)et interest rates. Changes in the fair value of interest rate s(cid:76)aps that have not been designated as hedging instruments are reported in the accompanying consolidated statements of income in other non(cid:12)operating income(cid:11) net. (cid:31)uring (cid:31)ecember 2021(cid:11) the Company entered into an aggregate $250 million notional amount of receive(cid:12)fi(cid:77)ed(cid:14)pay variable interest rate s(cid:76)aps(cid:11) (cid:76)hich (cid:76)ill mature on (cid:40)ay 15(cid:11) 2028. (cid:47)hese s(cid:76)aps (cid:76)ere designated as a fair value hedge against 50(cid:4) of $500 million of principal on the 4.50(cid:4) (cid:48).S. dollar notes due in (cid:40)ay 2028. Also during (cid:31)ecember 2021(cid:11) the Company settled $100 million of a receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)ap as a result of the full redemption of $275 million 5.(cid:24)5(cid:4) (cid:48).S. private placement notes at maturity. (cid:47)his interest rate s(cid:76)ap (cid:76)as designated as a fair value hedge at inception. In (cid:37)uly 2021(cid:11) the Company terminated $400 million of its receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)aps that (cid:76)ere designated as fair value hedges and received $2 million in net proceeds. (cid:47)his termination (cid:76)as in association (cid:76)ith the full redemption of the $400 million 4.50(cid:4) (cid:48).S. dollar notes due October 2021(cid:11) completed on (cid:37)uly 15(cid:11) 2021. In (cid:37)uly 2021(cid:11) the Company also terminated an aggregate amount of (cid:90)300 million (equivalent of $357 million) receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)aps and received (cid:90)13 million (equivalent of $15 million) in net proceeds. (cid:47)hese interest rate s(cid:76)aps(cid:11) (cid:76)hich (cid:76)ere to mature in (cid:40)arch 2023(cid:11) (cid:76)ere designated as fair value hedges against (cid:90)300 million of principal on the 2.75(cid:4) Euro bonds due (cid:40)arch 2023. (cid:47)he gain on the termination of the aforementioned s(cid:76)aps is deferred and is being amorti(cid:79)ed to interest income over the remaining contractual term of the 2.75(cid:4) Euro bonds due (cid:40)arch 2023. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the total notional amount of the Company(cid:6)s receive(cid:12)fi(cid:77)ed(cid:14)pay(cid:12)variable interest rate s(cid:76)aps (cid:76)as $650 million and $1(cid:11)257 million(cid:11) respectively. Foreign Currency Ris(cid:61) (cid:47)he Company manufactures and sells its products and finances operations in a number of countries throughout the (cid:76)orld and(cid:11) as a result(cid:11) is e(cid:77)posed to movements in foreign currency e(cid:77)change rates. (cid:47)he purpose of the Company(cid:6)s foreign currency hedging program is to manage the volatility associated (cid:76)ith the changes in e(cid:77)change rates. (cid:47)o manage this e(cid:77)change rate ris(cid:64)(cid:11) the Company utili(cid:79)es for(cid:76)ard contracts. Contracts that qualify for hedge accounting are designated as cash flo(cid:76) hedges of certain forecasted transactions denominated in foreign currencies. (cid:47)he effective portion of the changes in fair value of these instruments is reported in accumulated other comprehensive loss ("AOCI") and reclassified into earnings in the same financial statement line item and in the same period or periods during (cid:76)hich the related hedged transactions affect earnings. (cid:47)he ineffective portion is recogni(cid:79)ed in earnings over the life of the hedging relationship in the same consolidated statements of income line item as the underlying hedged item. Changes in the fair value of for(cid:76)ard contracts that have not been designated as hedging instruments are reported in the accompanying consolidated statements of income. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the notional amount of the outstanding for(cid:76)ard contracts (cid:76)as $1.0 billion and $1.1 billion(cid:11) respectively. Commodity Ris(cid:61) Certain ra(cid:76) materials used in the Company(cid:6)s production processes are sub(cid:63)ect to price volatility caused by (cid:76)eather(cid:11) supply conditions(cid:11) political and economic variables(cid:11) and other unpredictable factors. (cid:47)he Company(cid:6)s policy is to minimi(cid:79)e e(cid:77)posure to price volatility by passing through the commodity price ris(cid:64) to customers(cid:11) including the use of fi(cid:77)ed price s(cid:76)aps. 73 74 Amcor Annual Report 2022 Form 10-K 75 (cid:47)he Company purchases on behalf of customers fi(cid:77)ed price commodity s(cid:76)aps to offset the e(cid:77)posure of price volatility on the underlying sales contracts. (cid:47)hese instruments are cash closed out on maturity and the related cost or benefit is passed through to customers. Information about commodity price e(cid:77)posure is derived from supply forecasts submitted by customers and these e(cid:77)posures are hedged by central treasury units. Changes in the fair value of commodity hedges are recogni(cid:79)ed in AOCI. (cid:47)he cumulative amount of the hedge is recogni(cid:79)ed in the consolidated statements of income (cid:76)hen the forecasted transaction is reali(cid:79)ed. (cid:47)he Company had the follo(cid:76)ing outstanding commodity contracts to hedge forecasted purchases(cid:25) Commodity Aluminum (cid:43)E(cid:47) resin June 30, 2022 Volume June 30, 2021 Volume 17(cid:11)040 tons 22(cid:11)62(cid:24) tons 16(cid:11)886(cid:11)520 lbs. 6(cid:11)312(cid:11)764 lbs. (cid:47)he follo(cid:76)ing table provides the location of derivative instruments in the consolidated balance sheets(cid:25) Balance Sheet Location June 30, 2022 June 30, 2021 ((cid:3) in millions) Assets Derivatives in cash flow hedging relationships: Commodity contracts For(cid:76)ard e(cid:77)change contracts For(cid:76)ard e(cid:77)change contracts Derivatives in fair value hedging relationships: Interest rate s(cid:76)aps Derivatives not designated as hedging instruments: For(cid:76)ard e(cid:77)change contracts (cid:44)otal current derivative contracts Derivatives in fair value hedging relationships: Interest rate s(cid:76)aps (cid:44)otal non-current derivative contracts (cid:44)otal derivative asset contracts Liabilities Derivatives in cash flow hedging relationships: Commodity contracts For(cid:76)ard e(cid:77)change contracts Derivatives not designated as hedging instruments: For(cid:76)ard e(cid:77)change contracts (cid:44)otal current derivative contracts Derivatives in cash flow hedging relationships: Other current assets Other current assets Assets held for sale(cid:11) net $ 6 $ 3 3 Other current assets Other current assets Other non(cid:12)current assets (cid:85) 1 13 (cid:85) (cid:85) (cid:3) 13 (cid:3) Other current liabilities $ Other current liabilities 3 $ 5 Other current liabilities 11 1(cid:24) 1 6(cid:24) 70 (cid:3) (cid:22)(cid:23) (cid:3) 14 3 (cid:85) 15 4 36 4 4 (cid:18)0 (cid:85) 2 2 4 (cid:85) (cid:85) (cid:85) (cid:18) For(cid:76)ard e(cid:77)change contracts Other non(cid:12)current liabilities Derivatives in fair value hedging relationships: Interest rate s(cid:76)aps Other non(cid:12)current liabilities (cid:44)otal non-current derivative contracts (cid:44)otal derivative liability contracts Certain derivative financial instruments are sub(cid:63)ect to netting arrangements and are eligible for offset. (cid:47)he Company has made an accounting policy election not to offset the fair values of these instruments (cid:76)ithin the consolidated balance sheets. 75 Amcor Annual Report 2022 76 (cid:47)he follo(cid:76)ing tables provide the effects of derivative instruments on AOCI and in the consolidated statements of income(cid:25) ((cid:3) in millions) Derivatives in cash flow hedging relationships Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:47)reasury loc(cid:64)s (cid:44)otal ((cid:3) in millions) Derivatives not designated as hedging instruments For(cid:76)ard e(cid:77)change contracts Cross currency interest rate s(cid:76)aps (cid:44)otal ((cid:3) in millions) Derivatives in fair value hedging relationships Interest rate s(cid:76)aps For(cid:76)ard e(cid:77)change contracts (cid:44)otal (cid:47)he changes in AOCI for effective derivatives (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) Amounts reclassified into earnings Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:47)reasury loc(cid:64)s Change in fair value Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:47)reasury loc(cid:64)s (cid:47)a(cid:77) effect (cid:44)otal Location of (cid:31)ain (cid:13) (Loss) Reclassified from AOCI into Income (Effective Portion) (cid:31)ain (cid:13) (Loss) Reclassified from AOCI into Income (Effective Portion) Years ended June 30, 2022 2021 2020 Cost of sales (cid:41)et sales Interest e(cid:77)pense 20 $ (cid:85) (3) 1(cid:21) (cid:3) 1 $ (cid:85) (2) (1) (cid:3) (6) (1) (cid:85) ((cid:21)) Location of (cid:31)ain (cid:13) (Loss) Recogni(cid:76)ed in the Consolidated Income Statements Other income(cid:11) net Other income(cid:11) net (cid:31)ain (cid:13) (Loss) Recogni(cid:76)ed in Income for Derivatives not Designated as (cid:32)edging Instruments Years ended June 30, 2022 2021 2020 (45) $ (cid:85) ((cid:18)(cid:19)) (cid:3) 11 $ (4) (cid:21) (cid:3) (6) (cid:85) ((cid:20)) Location of Loss Recogni(cid:76)ed in the Consolidated Income Statements Interest e(cid:77)pense Other income(cid:11) net Loss Recogni(cid:76)ed in Income for Derivatives in Fair Value (cid:32)edging Relationships Years ended June 30, 2022 2021 2020 (75) $ (11) ((cid:22)(cid:20)) (cid:3) (14) $ (cid:85) (1(cid:18)) (cid:3) (1) (cid:85) (1) $ (cid:3) $ (cid:3) $ (cid:3) Years ended June 30, 2022 2021 2020 $ (20) $ (1) $ (cid:85) 3 (cid:24) (1) (cid:85) 2 (cid:85) 2 22 3 (cid:85) (cid:85) (cid:3) ((cid:21)) (cid:3) 2(cid:20) (cid:3) 6 1 (cid:85) (7) (2) (20) (cid:85) (22) (cid:47)he Company purchases on behalf of customers fi(cid:77)ed price commodity s(cid:76)aps to offset the e(cid:77)posure of price volatility on the (cid:47)he follo(cid:76)ing tables provide the effects of derivative instruments on AOCI and in the consolidated statements of 75 Form 10-K 76 2022 2020 (cid:31)ain (cid:13) (Loss) Reclassified from AOCI into Income (Effective Portion) Years ended June 30, 2021 $ (cid:3) 20 $ (cid:85) (3) 1(cid:21) (cid:3) 1 $ (cid:85) (2) (1) (cid:3) (6) (1) (cid:85) ((cid:21)) (cid:31)ain (cid:13) (Loss) Recogni(cid:76)ed in Income for Derivatives not Designated as (cid:32)edging Instruments Years ended June 30, 2021 underlying sales contracts. (cid:47)hese instruments are cash closed out on maturity and the related cost or benefit is passed through to income(cid:25) customers. Information about commodity price e(cid:77)posure is derived from supply forecasts submitted by customers and these e(cid:77)posures are hedged by central treasury units. Changes in the fair value of commodity hedges are recogni(cid:79)ed in AOCI. (cid:47)he cumulative amount of the hedge is recogni(cid:79)ed in the consolidated statements of income (cid:76)hen the forecasted transaction is (cid:47)he Company had the follo(cid:76)ing outstanding commodity contracts to hedge forecasted purchases(cid:25) June 30, 2022 June 30, 2021 Volume Volume 17(cid:11)040 tons 22(cid:11)62(cid:24) tons 16(cid:11)886(cid:11)520 lbs. 6(cid:11)312(cid:11)764 lbs. ((cid:3) in millions) Derivatives in cash flow hedging relationships Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:47)reasury loc(cid:64)s (cid:44)otal (cid:47)he follo(cid:76)ing table provides the location of derivative instruments in the consolidated balance sheets(cid:25) Balance Sheet Location June 30, 2022 June 30, 2021 reali(cid:79)ed. Commodity Aluminum (cid:43)E(cid:47) resin ((cid:3) in millions) Assets ((cid:3) in millions) Derivatives not designated as hedging instruments For(cid:76)ard e(cid:77)change contracts Cross currency interest rate s(cid:76)aps (cid:44)otal ((cid:3) in millions) Derivatives in fair value hedging relationships Interest rate s(cid:76)aps For(cid:76)ard e(cid:77)change contracts (cid:44)otal Location of (cid:31)ain (cid:13) (Loss) Reclassified from AOCI into Income (Effective Portion) Cost of sales (cid:41)et sales Interest e(cid:77)pense Location of (cid:31)ain (cid:13) (Loss) Recogni(cid:76)ed in the Consolidated Income Statements Other income(cid:11) net Other income(cid:11) net Location of Loss Recogni(cid:76)ed in the Consolidated Income Statements Interest e(cid:77)pense Other income(cid:11) net Derivatives in cash flow hedging relationships: Commodity contracts For(cid:76)ard e(cid:77)change contracts For(cid:76)ard e(cid:77)change contracts Derivatives in fair value hedging relationships: Interest rate s(cid:76)aps Derivatives not designated as hedging instruments: For(cid:76)ard e(cid:77)change contracts (cid:44)otal current derivative contracts Derivatives in fair value hedging relationships: Interest rate s(cid:76)aps (cid:44)otal non-current derivative contracts (cid:44)otal derivative asset contracts Liabilities Derivatives in cash flow hedging relationships: Commodity contracts For(cid:76)ard e(cid:77)change contracts Derivatives not designated as hedging instruments: For(cid:76)ard e(cid:77)change contracts (cid:44)otal current derivative contracts Derivatives in cash flow hedging relationships: Other current assets $ 6 $ Other current assets Assets held for sale(cid:11) net Other current assets Other current assets Other non(cid:12)current assets (cid:3) 13 (cid:3) Other current liabilities $ Other current liabilities 3 $ 5 Other current liabilities 3 3 (cid:85) 1 13 (cid:85) (cid:85) 11 1(cid:24) 1 6(cid:24) 70 14 3 (cid:85) 15 4 36 4 4 (cid:18)0 (cid:85) 2 2 4 (cid:85) (cid:85) (cid:85) (cid:18) For(cid:76)ard e(cid:77)change contracts Other non(cid:12)current liabilities Derivatives in fair value hedging relationships: Interest rate s(cid:76)aps Other non(cid:12)current liabilities (cid:44)otal non-current derivative contracts (cid:44)otal derivative liability contracts (cid:3) (cid:22)(cid:23) (cid:3) Certain derivative financial instruments are sub(cid:63)ect to netting arrangements and are eligible for offset. (cid:47)he Company has made an accounting policy election not to offset the fair values of these instruments (cid:76)ithin the consolidated balance sheets. (cid:47)he changes in AOCI for effective derivatives (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) Amounts reclassified into earnings Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:47)reasury loc(cid:64)s Change in fair value Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:47)reasury loc(cid:64)s (cid:47)a(cid:77) effect (cid:44)otal Years ended June 30, 2021 2020 2022 $ (20) $ (1) $ (cid:85) 3 (cid:24) (1) (cid:85) 2 (cid:85) 2 22 3 (cid:85) (cid:85) (cid:3) ((cid:21)) (cid:3) 2(cid:20) (cid:3) 6 1 (cid:85) (7) (2) (20) (cid:85) (22) 75 76 Amcor Annual Report 2022 Loss Recogni(cid:76)ed in Income for Derivatives in Fair Value (cid:32)edging Relationships Years ended June 30, 2021 (75) $ (11) ((cid:22)(cid:20)) (cid:3) (14) $ (cid:85) (1(cid:18)) (cid:3) (1) (cid:85) (1) (45) $ (cid:85) ((cid:18)(cid:19)) (cid:3) 11 $ (4) (cid:21) (cid:3) (6) (cid:85) ((cid:20)) $ (cid:3) $ (cid:3) 2022 2020 2022 2020 (cid:38)ote 13 - Pension and Other Post-Retirement Plans Changes in benefit obligations and plan assets (cid:76)ere as follo(cid:76)s(cid:25) Form 10-K 77 (cid:47)he Company sponsors both funded and unfunded defined benefit pension plans that include statutory and mandated benefit provision in some countries as (cid:76)ell as voluntary plans (generally closed to ne(cid:76) (cid:63)oiners). (cid:31)uring fiscal year 2022(cid:11) the Company maintained 20 statutory and mandated defined benefit arrangements and 57 voluntary defined benefit plans. (cid:47)he principal defined benefit plans are structured as follo(cid:76)s(cid:25) Country Canada France (1) (cid:34)ermany (1) S(cid:76)it(cid:79)erland (cid:48)nited (cid:38)ingdom (cid:48)nited States of America (cid:38)umber of Funded Plans (cid:38)umber of (cid:45)nfunded Plans Comment 2 3 2 1 2 3 1 Closed to ne(cid:76) entrants 3 plans are closed to ne(cid:76) entrants(cid:11) 2 plans are open to ne(cid:76) entrants(cid:26) 2 plans are partially indemnified by (cid:45)io (cid:47)into Limited 12 plans are closed to ne(cid:76) entrants(cid:11) 1 is open to ne(cid:76) entrants(cid:26) 6 plans are partially indemnified by (cid:45)io (cid:47)into Limited 2 11 (cid:85) Open to ne(cid:76) entrants (cid:85) Closed to ne(cid:76) entrants 2 Closed to ne(cid:76) entrants (1) (cid:45)io (cid:47)into Limited assumes responsibility for its former employees(cid:6) retirement entitlements as of February 1(cid:11) 2010 (cid:76)hen Amcor acquired Alcan (cid:43)ac(cid:64)aging from (cid:45)io (cid:47)into Limited. (cid:41)et periodic benefit cost for benefit plans includes the follo(cid:76)ing components(cid:25) ((cid:3) in millions) Service cost Interest cost E(cid:77)pected return on plan assets Amorti(cid:79)ation of net loss Amorti(cid:79)ation of prior service credit Curtailment credit Settlement costs (cid:38)et periodic benefit cost Years ended June 30, 2021 2020 2022 $ 24 $ 3(cid:24) (61) 5 (3) (cid:85) 8 27 $ 40 (60) 8 (2) (1) 3 (cid:3) 12 (cid:3) 1(cid:19) (cid:3) 23 4(cid:24) (72) 6 (2) (cid:85) 6 10 On October 12(cid:11) 2021(cid:11) the Company contracted (cid:76)ith (cid:43)acific Life Insurance Company to purchase a group annuity contract and transfer $186 million of its pension plan assets and related benefit obligations. (cid:47)his transaction required a remeasurement of the pension plan assets and obligations and resulted in the recognition of a $3 million non(cid:12)cash pension settlement loss in the t(cid:76)elve months ended (cid:37)une 30(cid:11) 2022. Benefit obligation at the beginning of the year (cid:3) 2,022 (cid:3) 2,0(cid:19)1 June 30, 2022 June 30, 2021 ((cid:3) in millions) Change in benefit obligation: Service cost Interest cost (cid:43)articipant contributions Actuarial gain (cid:43)lan curtailments Settlements Benefits paid Administrative e(cid:77)penses (cid:43)lan amendments (cid:31)ivestitures Foreign currency translation Change in plan assets: Actual return on plan assets Employer contributions (cid:43)articipant contributions Benefits paid Settlements Administrative e(cid:77)penses Foreign currency translation sum transfers and payments. assets(cid:25) ((cid:3) in millions) (cid:43)ro(cid:63)ected benefit obligation Fair value of plan assets plan assets(cid:25) ((cid:3) in millions) Accumulated benefit obligation Fair value of plan assets Benefit obligation at the end of the year Accumulated benefit obligation at the end of the year (113) 1,31(cid:18) (cid:3) 1,2(cid:20)(cid:23) (cid:3) 102 2,022 1,(cid:23)(cid:19)(cid:18) Fair value of plan assets at the beginning of the year 1,(cid:21)(cid:19)(cid:23) (cid:3) 1,(cid:20)(cid:23)1 Fair value of plan assets at the end of the year Funded status at the end of the year (cid:3) (cid:3) 1,1(cid:23)(cid:19) (cid:3) (11(cid:23)) (cid:3) 1,(cid:21)(cid:19)(cid:23) (2(cid:20)3) Actuarial gains resulting in a decrease to the benefit obligation for the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ere primarily due to a (cid:76)eighted average increase in discount rates for our pension plans of 1.7 percentage points. Settlement impact is attributed to group annuity contracts(cid:11) primarily a $186 million contract (cid:76)ith (cid:43)acific Life Insurance Company(cid:11) and other lump (cid:47)he follo(cid:76)ing table provides information for defined benefit plans (cid:76)ith a pro(cid:63)ected benefit obligation in e(cid:77)cess of plan (cid:47)he follo(cid:76)ing table provides information for defined benefit plans (cid:76)ith an accumulated benefit obligation in e(cid:77)cess of 24 3(cid:24) 6 (cid:85) (341) (244) (70) (6) 1 (4) (18(cid:24)) 35 6 (70) (244) (6) ((cid:24)6) 27 40 6 (58) (4) (40) (7(cid:24)) (7) (15) (1) 57 41 6 (7(cid:24)) (40) (7) (cid:24)0 June 30, 2022 June 30, 2021 3(cid:24)8 $ 18(cid:24) 1(cid:11)387 1(cid:11)072 June 30, 2022 June 30, 2021 357 $ 177 1(cid:11)351 1(cid:11)070 (cid:3) (cid:3) (cid:3) $ $ 77 Amcor Annual Report 2022 78 (cid:38)ote 13 - Pension and Other Post-Retirement Plans Changes in benefit obligations and plan assets (cid:76)ere as follo(cid:76)s(cid:25) (cid:47)he Company sponsors both funded and unfunded defined benefit pension plans that include statutory and mandated ((cid:3) in millions) benefit provision in some countries as (cid:76)ell as voluntary plans (generally closed to ne(cid:76) (cid:63)oiners). (cid:31)uring fiscal year 2022(cid:11) the Change in benefit obligation: June 30, 2022 June 30, 2021 Company maintained 20 statutory and mandated defined benefit arrangements and 57 voluntary defined benefit plans. Benefit obligation at the beginning of the year (cid:3) 2,022 (cid:3) 2,0(cid:19)1 77 Form 10-K 78 (cid:47)he principal defined benefit plans are structured as follo(cid:76)s(cid:25) (cid:38)umber of Funded Plans (cid:38)umber of (cid:45)nfunded Plans Country Canada France (1) (cid:34)ermany (1) S(cid:76)it(cid:79)erland (cid:48)nited (cid:38)ingdom (cid:48)nited States of America 2 3 2 1 2 3 Comment 1 Closed to ne(cid:76) entrants 3 plans are closed to ne(cid:76) entrants(cid:11) 2 plans are open to ne(cid:76) 2 entrants(cid:26) 2 plans are partially indemnified by (cid:45)io (cid:47)into Limited 12 plans are closed to ne(cid:76) entrants(cid:11) 1 is open to ne(cid:76) entrants(cid:26) 6 11 plans are partially indemnified by (cid:45)io (cid:47)into Limited (cid:85) Open to ne(cid:76) entrants (cid:85) Closed to ne(cid:76) entrants 2 Closed to ne(cid:76) entrants (1) (cid:45)io (cid:47)into Limited assumes responsibility for its former employees(cid:6) retirement entitlements as of February 1(cid:11) 2010 (cid:76)hen Amcor acquired Alcan (cid:43)ac(cid:64)aging from (cid:45)io (cid:47)into Limited. (cid:41)et periodic benefit cost for benefit plans includes the follo(cid:76)ing components(cid:25) ((cid:3) in millions) Service cost Interest cost E(cid:77)pected return on plan assets Amorti(cid:79)ation of net loss Amorti(cid:79)ation of prior service credit Curtailment credit Settlement costs (cid:38)et periodic benefit cost Years ended June 30, 2022 2021 2020 $ 24 $ 3(cid:24) (61) 5 (3) (cid:85) 8 27 $ 40 (60) 8 (2) (1) 3 (cid:3) 12 (cid:3) 1(cid:19) (cid:3) 23 4(cid:24) (72) 6 (2) (cid:85) 6 10 On October 12(cid:11) 2021(cid:11) the Company contracted (cid:76)ith (cid:43)acific Life Insurance Company to purchase a group annuity contract and transfer $186 million of its pension plan assets and related benefit obligations. (cid:47)his transaction required a remeasurement of the pension plan assets and obligations and resulted in the recognition of a $3 million non(cid:12)cash pension settlement loss in the t(cid:76)elve months ended (cid:37)une 30(cid:11) 2022. Service cost Interest cost (cid:43)articipant contributions Actuarial gain (cid:43)lan curtailments Settlements Benefits paid Administrative e(cid:77)penses (cid:43)lan amendments (cid:31)ivestitures Foreign currency translation Benefit obligation at the end of the year Accumulated benefit obligation at the end of the year Change in plan assets: Fair value of plan assets at the beginning of the year Actual return on plan assets Employer contributions (cid:43)articipant contributions Benefits paid Settlements Administrative e(cid:77)penses Foreign currency translation 24 3(cid:24) 6 (341) (cid:85) (244) (70) (6) 1 (4) 27 40 6 (58) (4) (40) (7(cid:24)) (7) (15) (1) (113) 1,31(cid:18) (cid:3) 1,2(cid:20)(cid:23) (cid:3) 102 2,022 1,(cid:23)(cid:19)(cid:18) 1,(cid:21)(cid:19)(cid:23) (cid:3) 1,(cid:20)(cid:23)1 (cid:3) (cid:3) (cid:3) (18(cid:24)) 35 6 (70) (244) (6) ((cid:24)6) 57 41 6 (7(cid:24)) (40) (7) (cid:24)0 Fair value of plan assets at the end of the year Funded status at the end of the year (cid:3) (cid:3) 1,1(cid:23)(cid:19) (cid:3) (11(cid:23)) (cid:3) 1,(cid:21)(cid:19)(cid:23) (2(cid:20)3) Actuarial gains resulting in a decrease to the benefit obligation for the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) (cid:76)ere primarily due to a (cid:76)eighted average increase in discount rates for our pension plans of 1.7 percentage points. Settlement impact is attributed to group annuity contracts(cid:11) primarily a $186 million contract (cid:76)ith (cid:43)acific Life Insurance Company(cid:11) and other lump sum transfers and payments. (cid:47)he follo(cid:76)ing table provides information for defined benefit plans (cid:76)ith a pro(cid:63)ected benefit obligation in e(cid:77)cess of plan assets(cid:25) ((cid:3) in millions) (cid:43)ro(cid:63)ected benefit obligation Fair value of plan assets June 30, 2022 June 30, 2021 $ 3(cid:24)8 $ 18(cid:24) 1(cid:11)387 1(cid:11)072 (cid:47)he follo(cid:76)ing table provides information for defined benefit plans (cid:76)ith an accumulated benefit obligation in e(cid:77)cess of plan assets(cid:25) ((cid:3) in millions) Accumulated benefit obligation Fair value of plan assets June 30, 2022 June 30, 2021 $ 357 $ 177 1(cid:11)351 1(cid:11)070 77 78 Amcor Annual Report 2022 $ ((cid:24)1) $ (cid:44)otal recogni(cid:76)ed in other comprehensive (income)(cid:13)loss (cid:3) Years ended June 30, 2021 2020 2022 1 (5) (8) 3 (1) (14) 21 ((cid:23)(cid:18)) (cid:3) (58) $ (16) (8) (2) 2 (cid:85) 16 14 ((cid:19)2) (cid:3) 41 (cid:85) (6) (6) 2 (cid:85) (3) (12) 1(cid:20) ((cid:3) in millions) Changes in plan assets and benefit obligations recogni(cid:76)ed in other comprehensive (income)(cid:13)loss: (cid:41)et actuarial loss(cid:14)(gain) occurring during the year (cid:41)et prior service loss(cid:14)(gain) occurring during the year Amorti(cid:79)ation of actuarial loss (cid:34)ain recogni(cid:79)ed due to settlement(cid:14)curtailment Amorti(cid:79)ation of prior service credit Acquisition(cid:14)disposal loss Foreign currency translation (cid:47)a(cid:77) effect Form 10-K 79 (cid:47)he follo(cid:76)ing table provides information as to ho(cid:76) the funded status is recogni(cid:79)ed in the consolidated balance sheets(cid:25) over the ne(cid:77)t fiscal year. Contributions to the Company(cid:6)s defined benefit pension plans(cid:11) not including unfunded plans(cid:11) are e(cid:77)pected to be $18 million ((cid:3) in millions) (cid:41)on(cid:12)current assets (cid:12) Employee benefit assets Current liabilities (cid:12) Other current liabilities (cid:41)on(cid:12)current liabilities (cid:12) Employee benefit obligations Funded status June 30, 2022 June 30, 2021 $ (cid:3) 8(cid:24) $ (7) (201) (11(cid:23)) (cid:3) 52 (8) (307) (2(cid:20)3) Amounts recogni(cid:79)ed in other comprehensive (income)(cid:14)loss for the fiscal years ended are as follo(cid:76)s(cid:25) (cid:47)he follo(cid:76)ing benefit payments for the succeeding five fiscal years and thereafter(cid:11) (cid:76)hich reflect e(cid:77)pected future service(cid:11) as appropriate(cid:11) are e(cid:77)pected to be paid(cid:25) $ 70 75 73 76 76 408 (cid:47)he E(cid:45)ISA Benefit (cid:43)lan Committee in the (cid:48)nited States(cid:11) the (cid:43)ension (cid:43)lan Committee in S(cid:76)it(cid:79)erland(cid:11) and the (cid:47)rustees of the pension plans in Canada(cid:11) Ireland(cid:11) and (cid:48)(cid:38) establish investment policies(cid:11) investment strategies(cid:11) allocation strategies(cid:11) and investment ris(cid:64) profiles for the Company(cid:6)s pension plan assets and are required to consult (cid:76)ith the Company on changes to their investment policy. In developing the e(cid:77)pected long(cid:12)term rate of return on plan assets at each measurement date(cid:11) the Company considers the plan assets(cid:6) historical returns(cid:11) asset allocations(cid:11) and the anticipated future economic environment and long(cid:12)term performance of the asset classes. (cid:50)hile appropriate consideration is given to recent and historical investment performance(cid:11) the assumption represents management(cid:6)s best estimate of the long(cid:12)term prospective return. (cid:47)he pension plan assets measured at fair value (cid:76)ere as follo(cid:76)s(cid:25) June 30, 2022 Level 1 Level 2 Level 3 (cid:44)otal $ 111 $ (cid:24)8 $ (cid:85) $ (cid:3) $ June 30, 2021 Level 1 Level 2 Level 3 (cid:44)otal 13(cid:24) $ 186 $ (cid:85) $ 40 33 7 (cid:85) 21 5 61 74 53 (cid:85) 32 12 278 100 121 (cid:85) 3 26 457 180 57 (cid:85) 8 15 (cid:85) (cid:85) 2 216 (cid:85) 134 (cid:85) (cid:85) 3 301 (cid:85) 181 20(cid:24) 318 133 130 216 24 165 325 518 254 113 301 40 208 ((cid:3) in millions) 2023 2024 2025 2026 2027 2028(cid:12)2032 ((cid:3) in millions) Equity securities (cid:34)overnment debt securities Corporate debt securities (cid:45)eal estate Insurance contracts Cash and cash equivalents Other (cid:44)otal ((cid:3) in millions) Equity securities (cid:34)overnment debt securities Corporate debt securities (cid:45)eal estate Insurance contracts Cash and cash equivalents Other (cid:44)otal (Level 2). E(cid:67)uity securities: (cid:49)alued primarily at the closing prices reported in the active mar(cid:64)et in (cid:76)hich the individual securities are traded (Level 1)(cid:26) or based on significant observable inputs such as fund values provided by the independent fund administrators (cid:3) 3(cid:21)1 (cid:3) (cid:23)03 (cid:3) (cid:18)(cid:22)(cid:19) (cid:3) 1,(cid:21)(cid:19)(cid:23) Amounts in AOCI that have not yet been recogni(cid:79)ed as net periodic benefit cost(cid:11) as of fiscal year(cid:12)ends(cid:11) are as follo(cid:76)s(cid:25) ((cid:3) in millions) (cid:41)et prior service credit (cid:41)et actuarial loss Accumulated other comprehensive loss at the end of the year 2022 June 30, 2021 2020 $ (cid:3) (15) $ (20) $ 65 185 (cid:19)0 (cid:3) 1(cid:20)(cid:19) (cid:3) (6) 237 231 (cid:50)eighted(cid:12)average assumptions used to determine benefit obligations at fiscal year(cid:12)end (cid:76)ere(cid:25) 21(cid:21) (cid:3) (cid:20)2(cid:20) (cid:3) 3(cid:19)2 (cid:3) 1,1(cid:23)(cid:19) (cid:31)iscount rate (cid:45)ate of compensation increase 2022 3.8 (cid:4) 2.3 (cid:4) June 30, 2021 2.1 (cid:4) 1.7 (cid:4) 2020 2.0 (cid:4) 1.(cid:24) (cid:4) (cid:50)eighted(cid:12)average assumptions used to determine net periodic benefit cost for the fiscal years ended (cid:76)ere(cid:25) (cid:31)iscount rate (cid:45)ate of compensation increase E(cid:77)pected long(cid:12)term rate of return on plan assets 2022 2.1 (cid:4) 1.7 (cid:4) 3.8 (cid:4) June 30, 2021 2.0 (cid:4) 1.(cid:24) (cid:4) 3.5 (cid:4) 2020 2.5 (cid:4) 2.1 (cid:4) 4.5 (cid:4) (cid:50)here funded(cid:11) the Company and(cid:11) in some countries(cid:11) the employees ma(cid:64)e cash contributions into the pension fund. In the case of unfunded plans(cid:11) the Company is responsible for benefit payments as they fall due. (cid:43)lan funding requirements are generally determined by local regulation and(cid:14)or best practice and differ bet(cid:76)een countries. (cid:47)he local statutory funding positions are not necessarily consistent (cid:76)ith the funded status disclosed on the consolidated balance sheets. For any funded plans in deficit (as measured under local country guidelines)(cid:11) the Company agrees (cid:76)ith the trustees and plan fiduciaries to underta(cid:64)e suitable funding programs to provide additional contributions over time in accordance (cid:76)ith local country requirements. 7(cid:24) Amcor Annual Report 2022 80 (cid:47)he follo(cid:76)ing table provides information as to ho(cid:76) the funded status is recogni(cid:79)ed in the consolidated balance sheets(cid:25) ((cid:3) in millions) (cid:41)on(cid:12)current assets (cid:12) Employee benefit assets Current liabilities (cid:12) Other current liabilities (cid:41)on(cid:12)current liabilities (cid:12) Employee benefit obligations Funded status June 30, 2022 June 30, 2021 $ (cid:3) 8(cid:24) $ (7) (201) (11(cid:23)) (cid:3) 52 (8) (307) (2(cid:20)3) Amounts recogni(cid:79)ed in other comprehensive (income)(cid:14)loss for the fiscal years ended are as follo(cid:76)s(cid:25) ((cid:3) in millions) Changes in plan assets and benefit obligations recogni(cid:76)ed in other comprehensive (income)(cid:13)loss: (cid:41)et actuarial loss(cid:14)(gain) occurring during the year (cid:41)et prior service loss(cid:14)(gain) occurring during the year Amorti(cid:79)ation of actuarial loss (cid:34)ain recogni(cid:79)ed due to settlement(cid:14)curtailment Amorti(cid:79)ation of prior service credit Acquisition(cid:14)disposal loss Foreign currency translation (cid:47)a(cid:77) effect Years ended June 30, 2022 2021 2020 $ ((cid:24)1) $ 1 (5) (8) 3 (1) (14) 21 (58) $ (16) (8) (2) 2 (cid:85) 16 14 41 (cid:85) (6) (6) 2 (cid:85) (3) (12) 1(cid:20) 2022 2020 June 30, 2021 $ (cid:3) (15) $ (20) $ 65 185 (cid:19)0 (cid:3) 1(cid:20)(cid:19) (cid:3) (6) 237 231 2022 3.8 (cid:4) 2.3 (cid:4) June 30, 2021 2.1 (cid:4) 1.7 (cid:4) 2020 2.0 (cid:4) 1.(cid:24) (cid:4) 2022 2.1 (cid:4) 1.7 (cid:4) 3.8 (cid:4) June 30, 2021 2.0 (cid:4) 1.(cid:24) (cid:4) 3.5 (cid:4) 2020 2.5 (cid:4) 2.1 (cid:4) 4.5 (cid:4) (cid:44)otal recogni(cid:76)ed in other comprehensive (income)(cid:13)loss (cid:3) ((cid:23)(cid:18)) (cid:3) ((cid:19)2) (cid:3) Amounts in AOCI that have not yet been recogni(cid:79)ed as net periodic benefit cost(cid:11) as of fiscal year(cid:12)ends(cid:11) are as follo(cid:76)s(cid:25) ((cid:3) in millions) (cid:41)et prior service credit (cid:41)et actuarial loss Accumulated other comprehensive loss at the end of the year (cid:50)eighted(cid:12)average assumptions used to determine benefit obligations at fiscal year(cid:12)end (cid:76)ere(cid:25) (cid:50)eighted(cid:12)average assumptions used to determine net periodic benefit cost for the fiscal years ended (cid:76)ere(cid:25) (cid:31)iscount rate (cid:45)ate of compensation increase (cid:31)iscount rate (cid:45)ate of compensation increase E(cid:77)pected long(cid:12)term rate of return on plan assets (cid:50)here funded(cid:11) the Company and(cid:11) in some countries(cid:11) the employees ma(cid:64)e cash contributions into the pension fund. In the case of unfunded plans(cid:11) the Company is responsible for benefit payments as they fall due. (cid:43)lan funding requirements are generally determined by local regulation and(cid:14)or best practice and differ bet(cid:76)een countries. (cid:47)he local statutory funding positions are not necessarily consistent (cid:76)ith the funded status disclosed on the consolidated balance sheets. For any funded plans in deficit (as measured under local country guidelines)(cid:11) the Company agrees (cid:76)ith the trustees and plan fiduciaries to underta(cid:64)e suitable funding programs to provide additional contributions over time in accordance (cid:76)ith local country requirements. 79 Form 10-K (cid:27)0 Contributions to the Company(cid:6)s defined benefit pension plans(cid:11) not including unfunded plans(cid:11) are e(cid:77)pected to be $18 million over the ne(cid:77)t fiscal year. (cid:47)he follo(cid:76)ing benefit payments for the succeeding five fiscal years and thereafter(cid:11) (cid:76)hich reflect e(cid:77)pected future service(cid:11) as appropriate(cid:11) are e(cid:77)pected to be paid(cid:25) ((cid:3) in millions) 2023 2024 2025 2026 2027 2028(cid:12)2032 $ 70 75 73 76 76 408 (cid:47)he E(cid:45)ISA Benefit (cid:43)lan Committee in the (cid:48)nited States(cid:11) the (cid:43)ension (cid:43)lan Committee in S(cid:76)it(cid:79)erland(cid:11) and the (cid:47)rustees of the pension plans in Canada(cid:11) Ireland(cid:11) and (cid:48)(cid:38) establish investment policies(cid:11) investment strategies(cid:11) allocation strategies(cid:11) and investment ris(cid:64) profiles for the Company(cid:6)s pension plan assets and are required to consult (cid:76)ith the Company on changes to their investment policy. In developing the e(cid:77)pected long(cid:12)term rate of return on plan assets at each measurement date(cid:11) the Company considers the plan assets(cid:6) historical returns(cid:11) asset allocations(cid:11) and the anticipated future economic environment and long(cid:12)term performance of the asset classes. (cid:50)hile appropriate consideration is given to recent and historical investment performance(cid:11) the assumption represents management(cid:6)s best estimate of the long(cid:12)term prospective return. (cid:47)he pension plan assets measured at fair value (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) Equity securities (cid:34)overnment debt securities Corporate debt securities (cid:45)eal estate Insurance contracts Cash and cash equivalents Other (cid:44)otal ((cid:3) in millions) Equity securities (cid:34)overnment debt securities Corporate debt securities (cid:45)eal estate Insurance contracts Cash and cash equivalents Other (cid:44)otal June 30, 2022 Level 1 Level 2 Level 3 (cid:44)otal $ 111 $ (cid:24)8 $ (cid:85) $ 40 33 7 (cid:85) 21 5 278 100 121 (cid:85) 3 26 (cid:85) (cid:85) 2 216 (cid:85) 134 20(cid:24) 318 133 130 216 24 165 (cid:3) $ 21(cid:21) (cid:3) (cid:20)2(cid:20) (cid:3) 3(cid:19)2 (cid:3) 1,1(cid:23)(cid:19) June 30, 2021 Level 1 Level 2 Level 3 (cid:44)otal 13(cid:24) $ 186 $ (cid:85) $ 61 74 53 (cid:85) 32 12 457 180 57 (cid:85) 8 15 (cid:85) (cid:85) 3 301 (cid:85) 181 325 518 254 113 301 40 208 (cid:3) 3(cid:21)1 (cid:3) (cid:23)03 (cid:3) (cid:18)(cid:22)(cid:19) (cid:3) 1,(cid:21)(cid:19)(cid:23) E(cid:67)uity securities: (cid:49)alued primarily at the closing prices reported in the active mar(cid:64)et in (cid:76)hich the individual securities are traded (Level 1)(cid:26) or based on significant observable inputs such as fund values provided by the independent fund administrators (Level 2). 7(cid:24) 80 Amcor Annual Report 2022 (cid:31)overnment debt securities: (cid:49)alued at the closing prices reported in the active mar(cid:64)et in (cid:76)hich the individual securities are traded (Level 1)(cid:26) or based on observable inputs such as fund values provided by independent fund administrators(cid:11) pricing of similar agency issues(cid:11) live trading feeds from several vendors(cid:11) and benchmar(cid:64) yield (Level 2). (cid:38)ote 1(cid:18) - Debt Long-(cid:44)erm Debt Form 10-K 81 Corporate debt securities: (cid:49)alued at the closing prices reported in the active mar(cid:64)et in (cid:76)hich the individual securities are traded (Level 1)(cid:26) or based on observable inputs such as fund values provided by independent fund administrators(cid:11) or benchmar(cid:64) yields(cid:11) reported trades(cid:11) bro(cid:64)er(cid:14)dealer quotes(cid:11) and issuer spreads. Inputs may be prioriti(cid:79)ed differently at certain times based on mar(cid:64)et conditions (Level 2). Real estate: (cid:49)alued at the closing prices reported in the active mar(cid:64)et in (cid:76)hich the individual securities are traded (Level 1)(cid:26) or based on observable inputs such as fund values provided by independent fund administrators (Level 2). Insurance contracts: (cid:49)alued based on the value of the associated insured liabilities. Cash and cash e(cid:67)uivalents: Consist of cash on deposit (cid:76)ith bro(cid:64)ers and short(cid:12)term money mar(cid:64)et funds and are sho(cid:76)n net of receivables and payables for securities traded at period end but not yet settled (Level 1) and cash indirectly held across investment funds (Level 2). All cash and cash equivalents are stated at cost(cid:11) (cid:76)hich appro(cid:77)imates fair value. Other: Level 1: (cid:31)erivatives valued as closing prices reported in the active mar(cid:64)et. Level 2: Assets held in diversified gro(cid:76)th funds(cid:11) pooled funds(cid:11) financing funds(cid:11) and derivatives(cid:11) (cid:76)here the value of the assets are determined by the investment managers or other independent third parties(cid:11) based on observable inputs. Level 3: Indemnified plan assets and pooled funds (equity(cid:11) credit(cid:11) macro(cid:12)orientated(cid:11) multi(cid:12)strategy(cid:11) cash(cid:11) and other). (cid:47)he value of indemnified plan assets are determined based on the value of the liabilities that the assets cover. (cid:47)he value of the pooled funds is calculated by the investment managers based on the net asset values of the underlying portfolios. (cid:47)he follo(cid:76)ing table sets forth a summary of changes in the value of the Company(cid:6)s Level 3 assets(cid:25) ((cid:3) in millions) Balance as of June 30, 2021 Actual return on plan assets (cid:43)urchases(cid:11) sales(cid:11) and settlements (cid:47)ransfer out of Level 3 Foreign currency translation Balance as of June 30, 2022 (cid:3) (cid:18)(cid:22)(cid:19) (61) (17) (5) (50) 3(cid:19)2 (cid:3) (cid:20),3(cid:18)0 (cid:3) (1) Indicates debt (cid:76)hich has been classified as long(cid:12)term liabilities in accordance (cid:76)ith the Company(cid:89)s ability and intent to refinance such obligations on a long(cid:12)term basis. (2) On (cid:37)uly 15(cid:11) 2021(cid:11) the Company redeemed all $400 million outstanding amount of the 4.50(cid:4) senior notes due October 2021. (3) On (cid:31)ecember 15(cid:11) 2021(cid:11) the Company redeemed (cid:48).S. private placement notes of a principal amount of $275 million at maturity using proceeds from the commercial paper program. (cid:47)he notes carried an interest rate of 5.(cid:24)5(cid:4). (4) On (cid:40)ay 17(cid:11) 2022(cid:11) the Company issued (cid:48).S. dollar notes (cid:76)ith an aggregate principal amount of $500 million and a contractual maturity in (cid:40)ay 2025. (cid:47)he notes pay a coupon of 4.00(cid:4) per annum(cid:11) payable semi(cid:12)annually in arrears. (cid:47)he notes are unsecured senior obligations of the Company and are fully and unconditionally guaranteed by the Company and certain of its subsidiaries. (5) (cid:45)elates to fair value hedge basis ad(cid:63)ustments relating to interest rate hedging. (cid:47)he follo(cid:76)ing table summari(cid:79)es the contractual maturities of the Company(cid:6)s long(cid:12)term debt(cid:11) including current maturities (e(cid:77)cluding payments for finance leases) at (cid:37)une 30(cid:11) 2022 for the succeeding five fiscal years(cid:25) ((cid:3) in millions) 2023 2024 2025 (1) 2026 2027 (2) (1) Commercial paper denominated in (cid:48).S. dollars is classified as maturing in 2025(cid:11) supported by the 3(cid:12)year syndicated facility(cid:11) (cid:76)ith a (2) Commercial paper denominated in Euros is classified as maturing in 2027(cid:11) supported by the 5(cid:12)year syndicated facility(cid:11) (cid:76)ith a 1(cid:12)year 1(cid:12)year option to e(cid:77)tend. option to e(cid:77)tend. 81 Amcor Annual Report 2022 82 (cid:47)he follo(cid:76)ing table summari(cid:79)es the carrying value of long(cid:12)term debt at (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:25) (cid:37)aturities Interest rates 2022 2021 June 30, ((cid:3) in millions) (cid:44)erm debt (cid:48).S. dollar notes(cid:11) $400 million (1)(2) Oct 2021 (cid:48).S. private placement notes(cid:11) $275 million (1)(3) (cid:31)ec 2021 4.50 (cid:4) 5.(cid:24)5 (cid:4) 2.75 (cid:4) 4.00 (cid:4) 3.63 (cid:4) 3.10 (cid:4) 1.13 (cid:4) 4.50 (cid:4) 2.63 (cid:4) 2.6(cid:24) (cid:4) (cid:40)ar 2023 (cid:40)ay 2025 Apr 2026 Sep 2026 (cid:37)un 2027 (cid:40)ay 2028 (cid:37)un 2030 (cid:40)ay 2031 Euro bonds(cid:11) (cid:90)300 million (1) (cid:48).S. dollar notes(cid:11) $500 million (4) (cid:48).S. dollar notes(cid:11) $600 million (cid:48).S. dollar notes(cid:11) $300 million Euro bonds(cid:11) (cid:90)500 million (cid:48).S. dollar notes(cid:11) $500 million (cid:48).S. dollar notes(cid:11) $500 million (cid:48).S. dollar notes(cid:11) $800 million (cid:44)otal term debt Ban(cid:64) loans Commercial paper (1) Other loans Finance lease obligations (cid:44)otal debt Less(cid:25) current portion (cid:44)otal long-term debt Fair value hedge accounting ad(cid:63)ustments (5) (cid:48)namorti(cid:79)ed discounts and debt issuance costs (cid:85) (cid:85) 313 500 600 300 522 500 500 800 (cid:18),03(cid:19) 22 2(cid:11)310 18 62 (6(cid:24)) (24) (cid:20),3(cid:19)(cid:18) (14) 400 275 357 (cid:85) 600 300 5(cid:24)5 500 500 800 (cid:18),32(cid:21) 4 1(cid:11)817 22 32 1(cid:24) (30) (cid:20),1(cid:23)1 (5) (cid:20),1(cid:22)(cid:20) $ 317 (cid:85) 1(cid:11)755 600 1(cid:11)878 Insurance contracts: (cid:49)alued based on the value of the associated insured liabilities. Cash and cash e(cid:67)uivalents: Consist of cash on deposit (cid:76)ith bro(cid:64)ers and short(cid:12)term money mar(cid:64)et funds and are sho(cid:76)n net of receivables and payables for securities traded at period end but not yet settled (Level 1) and cash indirectly held across investment funds (Level 2). All cash and cash equivalents are stated at cost(cid:11) (cid:76)hich appro(cid:77)imates fair value. Other: Level 1: (cid:31)erivatives valued as closing prices reported in the active mar(cid:64)et. Level 2: Assets held in diversified gro(cid:76)th funds(cid:11) pooled funds(cid:11) financing funds(cid:11) and derivatives(cid:11) (cid:76)here the value of the assets are determined by the investment managers or other independent third parties(cid:11) based on observable inputs. Level 3: Indemnified plan assets and pooled funds (equity(cid:11) credit(cid:11) macro(cid:12)orientated(cid:11) multi(cid:12)strategy(cid:11) cash(cid:11) and other). (cid:47)he value of indemnified plan assets are determined based on the value of the liabilities that the assets cover. (cid:47)he value of the pooled funds is calculated by the investment managers based on the net asset values of the underlying portfolios. (cid:47)he follo(cid:76)ing table sets forth a summary of changes in the value of the Company(cid:6)s Level 3 assets(cid:25) ((cid:3) in millions) Balance as of June 30, 2021 Actual return on plan assets (cid:43)urchases(cid:11) sales(cid:11) and settlements (cid:47)ransfer out of Level 3 Foreign currency translation Balance as of June 30, 2022 (cid:3) (cid:18)(cid:22)(cid:19) (61) (17) (5) (50) 3(cid:19)2 81 Form 10-K (cid:27)2 (cid:31)overnment debt securities: (cid:49)alued at the closing prices reported in the active mar(cid:64)et in (cid:76)hich the individual securities are (cid:38)ote 1(cid:18) - Debt traded (Level 1)(cid:26) or based on observable inputs such as fund values provided by independent fund administrators(cid:11) pricing of similar agency issues(cid:11) live trading feeds from several vendors(cid:11) and benchmar(cid:64) yield (Level 2). Long-(cid:44)erm Debt Corporate debt securities: (cid:49)alued at the closing prices reported in the active mar(cid:64)et in (cid:76)hich the individual securities are traded (Level 1)(cid:26) or based on observable inputs such as fund values provided by independent fund administrators(cid:11) or benchmar(cid:64) yields(cid:11) reported trades(cid:11) bro(cid:64)er(cid:14)dealer quotes(cid:11) and issuer spreads. Inputs may be prioriti(cid:79)ed differently at certain times based on mar(cid:64)et conditions (Level 2). (cid:47)he follo(cid:76)ing table summari(cid:79)es the carrying value of long(cid:12)term debt at (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:25) ((cid:3) in millions) (cid:44)erm debt (cid:37)aturities Interest rates 2022 2021 June 30, Real estate: (cid:49)alued at the closing prices reported in the active mar(cid:64)et in (cid:76)hich the individual securities are traded (Level 1)(cid:26) or based on observable inputs such as fund values provided by independent fund administrators (Level 2). (cid:48).S. dollar notes(cid:11) $400 million (1)(2) Oct 2021 (cid:48).S. private placement notes(cid:11) $275 million (1)(3) (cid:31)ec 2021 (cid:40)ar 2023 (cid:40)ay 2025 Apr 2026 Sep 2026 (cid:37)un 2027 (cid:40)ay 2028 (cid:37)un 2030 (cid:40)ay 2031 Euro bonds(cid:11) (cid:90)300 million (1) (cid:48).S. dollar notes(cid:11) $500 million (4) (cid:48).S. dollar notes(cid:11) $600 million (cid:48).S. dollar notes(cid:11) $300 million Euro bonds(cid:11) (cid:90)500 million (cid:48).S. dollar notes(cid:11) $500 million (cid:48).S. dollar notes(cid:11) $500 million (cid:48).S. dollar notes(cid:11) $800 million (cid:44)otal term debt Ban(cid:64) loans Commercial paper (1) Other loans Finance lease obligations Fair value hedge accounting ad(cid:63)ustments (5) (cid:48)namorti(cid:79)ed discounts and debt issuance costs (cid:44)otal debt Less(cid:25) current portion (cid:44)otal long-term debt 4.50 (cid:4) 5.(cid:24)5 (cid:4) 2.75 (cid:4) 4.00 (cid:4) 3.63 (cid:4) 3.10 (cid:4) 1.13 (cid:4) 4.50 (cid:4) 2.63 (cid:4) 2.6(cid:24) (cid:4) (cid:85) (cid:85) 313 500 600 300 522 500 500 800 (cid:18),03(cid:19) 22 2(cid:11)310 18 62 (6(cid:24)) (24) (cid:20),3(cid:19)(cid:18) (14) (cid:3) (cid:20),3(cid:18)0 (cid:3) 400 275 357 (cid:85) 600 300 5(cid:24)5 500 500 800 (cid:18),32(cid:21) 4 1(cid:11)817 22 32 1(cid:24) (30) (cid:20),1(cid:23)1 (5) (cid:20),1(cid:22)(cid:20) (1) Indicates debt (cid:76)hich has been classified as long(cid:12)term liabilities in accordance (cid:76)ith the Company(cid:89)s ability and intent to refinance such obligations on a long(cid:12)term basis. (2) On (cid:37)uly 15(cid:11) 2021(cid:11) the Company redeemed all $400 million outstanding amount of the 4.50(cid:4) senior notes due October 2021. (3) On (cid:31)ecember 15(cid:11) 2021(cid:11) the Company redeemed (cid:48).S. private placement notes of a principal amount of $275 million at maturity using proceeds from the commercial paper program. (cid:47)he notes carried an interest rate of 5.(cid:24)5(cid:4). (4) On (cid:40)ay 17(cid:11) 2022(cid:11) the Company issued (cid:48).S. dollar notes (cid:76)ith an aggregate principal amount of $500 million and a contractual maturity in (cid:40)ay 2025. (cid:47)he notes pay a coupon of 4.00(cid:4) per annum(cid:11) payable semi(cid:12)annually in arrears. (cid:47)he notes are unsecured senior obligations of the Company and are fully and unconditionally guaranteed by the Company and certain of its subsidiaries. (5) (cid:45)elates to fair value hedge basis ad(cid:63)ustments relating to interest rate hedging. (cid:47)he follo(cid:76)ing table summari(cid:79)es the contractual maturities of the Company(cid:6)s long(cid:12)term debt(cid:11) including current maturities (e(cid:77)cluding payments for finance leases) at (cid:37)une 30(cid:11) 2022 for the succeeding five fiscal years(cid:25) ((cid:3) in millions) 2023 2024 2025 (1) 2026 2027 (2) $ 317 (cid:85) 1(cid:11)755 600 1(cid:11)878 (1) Commercial paper denominated in (cid:48).S. dollars is classified as maturing in 2025(cid:11) supported by the 3(cid:12)year syndicated facility(cid:11) (cid:76)ith a 1(cid:12)year option to e(cid:77)tend. (2) Commercial paper denominated in Euros is classified as maturing in 2027(cid:11) supported by the 5(cid:12)year syndicated facility(cid:11) (cid:76)ith a 1(cid:12)year option to e(cid:77)tend. 81 82 Amcor Annual Report 2022 Short-(cid:44)erm Debt basis. ((cid:3) in millions) Ban(cid:64) loans Ban(cid:64) overdrafts (cid:44)otal short-term debt maturity. Short(cid:12)term debt is generally used to fund (cid:76)or(cid:64)ing capital requirements. (cid:47)he Company has classified commercial paper as long(cid:12)term at (cid:37)une 30(cid:11) 2022 in accordance (cid:76)ith the Company(cid:89)s ability and intent to refinance such obligations on a long(cid:12)term (cid:47)he follo(cid:76)ing table summari(cid:79)es the carrying value of short(cid:12)term debt at (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:25) As of (cid:37)une 30(cid:11) 2022(cid:11) the Company paid a (cid:76)eighted(cid:12)average interest rate of 1.40(cid:4) per annum on short(cid:12)term debt(cid:11) payable at maturity. As of (cid:37)une 30(cid:11) 2021(cid:11) the Company paid a (cid:76)eighted(cid:12)average interest rate of 6.10(cid:4) per annum(cid:11) payable at June 30, 2022 2021 $ (cid:3) 32 $ 104 13(cid:20) (cid:3) 45 53 (cid:23)(cid:22) Form 10-K 83 (cid:16)a(cid:50)(cid:47) a(cid:50)(cid:40) o(cid:56)(cid:44)er (cid:48)oa(cid:50)s (cid:47)he Company has entered into syndicated and bilateral multi(cid:12)currency credit facilities (cid:76)ith financial institutions. On April 26(cid:11) 2022(cid:11) the Company terminated the three(cid:12)(cid:11) four(cid:12)(cid:11) and five(cid:12)year syndicated facility agreements(cid:11) (cid:76)hich collectively provided for $3.8 billion of credit facilities. On the same day(cid:11) the Company entered into three(cid:12) and five(cid:12)year syndicated facility agreements that each provide a revolving credit facility of $1.(cid:24) billion or $3.8 billion in total. (cid:47)he facilities are unsecured and have contractual maturities in April 2025 and April 2027(cid:11) respectively. (cid:47)he agreements include customary terms and conditions for a syndicated facility of this nature(cid:11) and the revolving tranches have t(cid:76)o 12(cid:12)month options available to management to e(cid:77)tend the maturity date. Interest charged on borro(cid:76)ings under the credit facilities is based on the applicable mar(cid:64)et rate plus the applicable margin. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company(cid:6)s credit facilities amounted to $3.8 billion. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company has $1.4 billion and $2.0 billion of undra(cid:76)n commitments(cid:11) respectively. (cid:47)he Company incurs facility fees of 0.125(cid:4) on the undra(cid:76)n commitments. Such facility fees incurred (cid:76)ere immaterial in the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. At (cid:37)une 30(cid:11) 2022 and 2021(cid:11) land and buildings (cid:76)ith a carrying value of $38 million and $1(cid:24) million(cid:11) respectively(cid:11) have been pledged as security for ban(cid:64) and other loans. Re(cid:40)em(cid:52)(cid:56)io(cid:50) of (cid:56)erm (cid:40)e(cid:38)(cid:56) (cid:47)he Company may redeem its long(cid:12)term debt(cid:11) in (cid:76)hole or in part(cid:11) at any time or from time to time prior to its maturity. (cid:47)he redemption prices typically represent 100(cid:4) of the principal amount of the relevant debt plus any accrued and unpaid interest. In addition(cid:11) for notes that are redeemed by the Company before their stated permitted redemption date(cid:11) a ma(cid:64)e(cid:12)(cid:76)hole premium is payable. On (cid:31)ecember 15(cid:11) 2021(cid:11) the Company redeemed (cid:48).S. private placement notes of a principal amount of $275 million at maturity using the proceeds from the commercial paper program. (cid:47)he notes carried an interest rate of 5.(cid:24)5(cid:4). On (cid:37)uly 15(cid:11) 2021(cid:11) the Company redeemed all $400 million outstanding amount of the 4.50(cid:4) senior notes due in October 2021 at a price equal to the principal plus accrued interest. (cid:30)riori(cid:56)(cid:61)(cid:6) (cid:21)(cid:57)ara(cid:50)(cid:56)ees(cid:6) a(cid:50)(cid:40) (cid:20)i(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:17)o(cid:58)e(cid:50)a(cid:50)(cid:56)s All the notes are general unsecured senior obligations of the Company and are fully and unconditionally guaranteed on a (cid:63)oint and several basis by certain e(cid:77)isting subsidiaries that guarantee its other indebtedness. (cid:47)he Company(cid:6)s primary ban(cid:64) debt facilities and notes are unsecured and sub(cid:63)ect to negative pledge arrangements limiting the amount of secured indebtedness the Company can incur to 10.0(cid:4) of total tangible assets(cid:11) sub(cid:63)ect to some e(cid:77)ceptions and variations by facility. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company is required to satisfy certain financial covenants pursuant to its ban(cid:64) debt facilities(cid:11) (cid:76)hich are tested as of the last day of each quarterly and annual financial period. (cid:47)he covenants require the Company to maintain a leverage ratio of not higher than 3.(cid:24) times(cid:11) (cid:76)hich is calculated as total net debt divided by Ad(cid:63)usted EBI(cid:47)(cid:31)A. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company (cid:76)as in compliance (cid:76)ith all debt covenants. 83 Amcor Annual Report 2022 84 (cid:16)a(cid:50)(cid:47) a(cid:50)(cid:40) o(cid:56)(cid:44)er (cid:48)oa(cid:50)s Short-(cid:44)erm Debt 83 Form 10-K 84 Short(cid:12)term debt is generally used to fund (cid:76)or(cid:64)ing capital requirements. (cid:47)he Company has classified commercial paper as long(cid:12)term at (cid:37)une 30(cid:11) 2022 in accordance (cid:76)ith the Company(cid:89)s ability and intent to refinance such obligations on a long(cid:12)term basis. (cid:47)he follo(cid:76)ing table summari(cid:79)es the carrying value of short(cid:12)term debt at (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively(cid:25) ((cid:3) in millions) Ban(cid:64) loans Ban(cid:64) overdrafts (cid:44)otal short-term debt June 30, 2022 2021 $ (cid:3) 32 $ 104 13(cid:20) (cid:3) 45 53 (cid:23)(cid:22) As of (cid:37)une 30(cid:11) 2022(cid:11) the Company paid a (cid:76)eighted(cid:12)average interest rate of 1.40(cid:4) per annum on short(cid:12)term debt(cid:11) payable at maturity. As of (cid:37)une 30(cid:11) 2021(cid:11) the Company paid a (cid:76)eighted(cid:12)average interest rate of 6.10(cid:4) per annum(cid:11) payable at maturity. (cid:47)he Company has entered into syndicated and bilateral multi(cid:12)currency credit facilities (cid:76)ith financial institutions. On April 26(cid:11) 2022(cid:11) the Company terminated the three(cid:12)(cid:11) four(cid:12)(cid:11) and five(cid:12)year syndicated facility agreements(cid:11) (cid:76)hich collectively provided for $3.8 billion of credit facilities. On the same day(cid:11) the Company entered into three(cid:12) and five(cid:12)year syndicated facility agreements that each provide a revolving credit facility of $1.(cid:24) billion or $3.8 billion in total. (cid:47)he facilities are unsecured and have contractual maturities in April 2025 and April 2027(cid:11) respectively. (cid:47)he agreements include customary terms and conditions for a syndicated facility of this nature(cid:11) and the revolving tranches have t(cid:76)o 12(cid:12)month options available to management to e(cid:77)tend the maturity date. Interest charged on borro(cid:76)ings under the credit facilities is based on the applicable mar(cid:64)et rate plus the applicable margin. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company(cid:6)s credit facilities amounted to $3.8 billion. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company has $1.4 billion and $2.0 billion of undra(cid:76)n commitments(cid:11) respectively. (cid:47)he Company incurs facility fees of 0.125(cid:4) on the undra(cid:76)n commitments. Such facility fees incurred (cid:76)ere immaterial in the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. At (cid:37)une 30(cid:11) 2022 and 2021(cid:11) land and buildings (cid:76)ith a carrying value of $38 million and $1(cid:24) million(cid:11) respectively(cid:11) have been pledged as security for ban(cid:64) and other loans. Re(cid:40)em(cid:52)(cid:56)io(cid:50) of (cid:56)erm (cid:40)e(cid:38)(cid:56) (cid:47)he Company may redeem its long(cid:12)term debt(cid:11) in (cid:76)hole or in part(cid:11) at any time or from time to time prior to its maturity. (cid:47)he redemption prices typically represent 100(cid:4) of the principal amount of the relevant debt plus any accrued and unpaid interest. In addition(cid:11) for notes that are redeemed by the Company before their stated permitted redemption date(cid:11) a ma(cid:64)e(cid:12)(cid:76)hole premium is payable. On (cid:31)ecember 15(cid:11) 2021(cid:11) the Company redeemed (cid:48).S. private placement notes of a principal amount of $275 million at maturity using the proceeds from the commercial paper program. (cid:47)he notes carried an interest rate of 5.(cid:24)5(cid:4). On (cid:37)uly 15(cid:11) 2021(cid:11) the Company redeemed all $400 million outstanding amount of the 4.50(cid:4) senior notes due in October 2021 at a price equal to the principal plus accrued interest. (cid:30)riori(cid:56)(cid:61)(cid:6) (cid:21)(cid:57)ara(cid:50)(cid:56)ees(cid:6) a(cid:50)(cid:40) (cid:20)i(cid:50)a(cid:50)(cid:39)ia(cid:48) (cid:17)o(cid:58)e(cid:50)a(cid:50)(cid:56)s All the notes are general unsecured senior obligations of the Company and are fully and unconditionally guaranteed on a (cid:63)oint and several basis by certain e(cid:77)isting subsidiaries that guarantee its other indebtedness. (cid:47)he Company(cid:6)s primary ban(cid:64) debt facilities and notes are unsecured and sub(cid:63)ect to negative pledge arrangements limiting the amount of secured indebtedness the Company can incur to 10.0(cid:4) of total tangible assets(cid:11) sub(cid:63)ect to some e(cid:77)ceptions and variations by facility. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company is required to satisfy certain financial covenants pursuant to its ban(cid:64) debt facilities(cid:11) (cid:76)hich are tested as of the last day of each quarterly and annual financial period. (cid:47)he covenants require the Company to maintain a leverage ratio of not higher than 3.(cid:24) times(cid:11) (cid:76)hich is calculated as total net debt divided by Ad(cid:63)usted EBI(cid:47)(cid:31)A. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company (cid:76)as in compliance (cid:76)ith all debt covenants. 83 84 Amcor Annual Report 2022 Form 10-K 85 (cid:38)ote 1(cid:19) - Leases (cid:47)he components of lease e(cid:77)penses are as follo(cid:76)s(cid:25) ((cid:3) in millions) Operating lease e(cid:77)pense (1) Short(cid:12)term and variable lease e(cid:77)pense (2) Finance lease e(cid:77)pense Amorti(cid:79)ation of right(cid:12)of(cid:12)use assets (2) Interest on lease liabilities (3) 2022 $ Years ended June 30, 2021 2020 130 $ 17 113 $ 20 2 1 2 1 112 (cid:85) 2 1 Supplemental cash flo(cid:76) information related to leases (cid:76)as as follo(cid:76)s(cid:25) ((cid:3) in millions) Cash paid for amounts included in the measurement of lease liabilities(cid:25) Operating cash flo(cid:76)s from operating leases Operating cash flo(cid:76)s from finance leases Financing cash flo(cid:76)s from finance leases Lease assets obtained in e(cid:77)change for ne(cid:76) lease obligations(cid:25) Years ended June 30, 2022 2021 2020 $ 122 $ 111 $ 1 5 55 34 1 2 55 1 (cid:44)otal lease e(cid:74)pense (1) (cid:3) 1(cid:19)0 (cid:3) 13(cid:20) (cid:3) 11(cid:19) (cid:47)he follo(cid:76)ing table presents the maturities of the Company(cid:6)s lease liabilities recorded on the consolidated balance (1) (2) (3) Included in cost of sales and selling(cid:11) general(cid:11) and administrative e(cid:77)penses. Included in cost of sales. Included in interest e(cid:77)pense. (cid:47)he Company(cid:6)s leases do not contain any material residual value guarantees or material restrictive covenants. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company does not have material lease commitments that have not commenced. Supplemental balance sheet information related to leases (cid:76)as as follo(cid:76)s(cid:25) ((cid:3) in millions) Assets Balance Sheet Location 2022 2021 June 30, Operating lease right(cid:12)of(cid:12)use assets(cid:11) net Operating lease assets (cid:43)roperty(cid:11) plant(cid:11) and equipment(cid:11) net Finance lease assets (1) (cid:44)otal lease assets Liabilities Operating leases(cid:25) Current operating lease liabilities Other current liabilities (cid:41)on(cid:12)current operating lease liabilities Operating lease liabilities Finance leases(cid:25) Current finance lease liabilities Current portion of long(cid:12)term debt (cid:41)on(cid:12)current finance lease liabilities Long(cid:12)term debt(cid:11) less current portion (cid:44)otal lease liabilities $ (cid:3) $ (cid:3) 560 $ 62 (cid:20)22 (cid:3) 101 $ 4(cid:24)3 10 52 (cid:20)(cid:19)(cid:20) (cid:3) 532 30 (cid:19)(cid:20)2 (cid:24)6 462 2 30 (cid:19)(cid:23)0 (1) Finance lease assets are recorded net of accumulated amorti(cid:79)ation of $(cid:24) million and $8 million at (cid:37)une 30(cid:11) 2022 and 2021(cid:11) respectively. Operating leases Finance leases sheets as of (cid:37)une 30(cid:11) 2022(cid:25) ((cid:3) in millions) Fiscal year 2023 Fiscal year 2024 Fiscal year 2025 Fiscal year 2026 Fiscal year 2027 (cid:47)hereafter (cid:47)otal lease payments Less(cid:25) imputed interest (cid:44)otal lease liabilities (cid:47)he (cid:76)eighted(cid:12)average remaining lease term and discount rate are as follo(cid:76)s(cid:25) (cid:50)eighted(cid:12)average remaining lease term (in years)(cid:25) Operating leases Finance leases (cid:50)eighted(cid:12)average discount rate(cid:25) Operating Leases Finance leases 108 1 2 63 31 12 12 11 7 2 2(cid:24) 73 (11) (cid:20)2 8.5 17.2 3.5 (cid:4) 3.8 (cid:4) Operating Leases Finance Leases $ 114 $ (cid:3) (cid:19)(cid:23)(cid:18) (cid:3) June 30, 2022 2021 103 82 74 60 263 6(cid:24)6 (102) (cid:24).0 10.1 3.3 (cid:4) 2.(cid:24) (cid:4) 85 Amcor Annual Report 2022 86 (cid:38)ote 1(cid:19) - Leases (cid:47)he components of lease e(cid:77)penses are as follo(cid:76)s(cid:25) ((cid:3) in millions) Operating lease e(cid:77)pense (1) Short(cid:12)term and variable lease e(cid:77)pense (2) Finance lease e(cid:77)pense Amorti(cid:79)ation of right(cid:12)of(cid:12)use assets (2) Interest on lease liabilities (3) Years ended June 30, 2022 2021 2020 $ 130 $ 17 113 $ 20 2 1 2 1 (cid:44)otal lease e(cid:74)pense (1) (cid:3) 1(cid:19)0 (cid:3) 13(cid:20) (cid:3) 11(cid:19) Included in cost of sales and selling(cid:11) general(cid:11) and administrative e(cid:77)penses. (1) (2) (3) Included in cost of sales. Included in interest e(cid:77)pense. (cid:47)he Company(cid:6)s leases do not contain any material residual value guarantees or material restrictive covenants. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company does not have material lease commitments that have not commenced. Supplemental balance sheet information related to leases (cid:76)as as follo(cid:76)s(cid:25) Balance Sheet Location 2022 2021 June 30, Operating lease right(cid:12)of(cid:12)use assets(cid:11) net Operating lease assets (cid:43)roperty(cid:11) plant(cid:11) and equipment(cid:11) net Current operating lease liabilities Other current liabilities (cid:41)on(cid:12)current operating lease liabilities Operating lease liabilities Current finance lease liabilities Current portion of long(cid:12)term debt (cid:41)on(cid:12)current finance lease liabilities Long(cid:12)term debt(cid:11) less current portion (1) Finance lease assets are recorded net of accumulated amorti(cid:79)ation of $(cid:24) million and $8 million at (cid:37)une 30(cid:11) 2022 and 2021(cid:11) $ (cid:3) $ (cid:3) 560 $ 62 (cid:20)22 (cid:3) 101 $ 4(cid:24)3 10 52 (cid:20)(cid:19)(cid:20) (cid:3) ((cid:3) in millions) Assets Finance lease assets (1) (cid:44)otal lease assets Liabilities Operating leases(cid:25) Finance leases(cid:25) (cid:44)otal lease liabilities respectively. 112 (cid:85) 2 1 532 30 (cid:19)(cid:20)2 (cid:24)6 462 2 30 (cid:19)(cid:23)0 85 Form 10-K 86 Supplemental cash flo(cid:76) information related to leases (cid:76)as as follo(cid:76)s(cid:25) ((cid:3) in millions) Cash paid for amounts included in the measurement of lease liabilities(cid:25) Operating cash flo(cid:76)s from operating leases Operating cash flo(cid:76)s from finance leases Financing cash flo(cid:76)s from finance leases Lease assets obtained in e(cid:77)change for ne(cid:76) lease obligations(cid:25) Operating leases Finance leases Years ended June 30, 2021 2020 2022 $ 122 $ 111 $ 1 5 55 34 1 2 55 1 108 1 2 63 31 (cid:47)he follo(cid:76)ing table presents the maturities of the Company(cid:6)s lease liabilities recorded on the consolidated balance sheets as of (cid:37)une 30(cid:11) 2022(cid:25) ((cid:3) in millions) Fiscal year 2023 Fiscal year 2024 Fiscal year 2025 Fiscal year 2026 Fiscal year 2027 (cid:47)hereafter (cid:47)otal lease payments Less(cid:25) imputed interest (cid:44)otal lease liabilities Operating Leases Finance Leases $ 114 $ 103 82 74 60 263 6(cid:24)6 (cid:3) (102) (cid:19)(cid:23)(cid:18) (cid:3) 12 12 11 7 2 2(cid:24) 73 (11) (cid:20)2 8.5 17.2 3.5 (cid:4) 3.8 (cid:4) (cid:47)he (cid:76)eighted(cid:12)average remaining lease term and discount rate are as follo(cid:76)s(cid:25) June 30, 2022 2021 (cid:50)eighted(cid:12)average remaining lease term (in years)(cid:25) Operating leases Finance leases (cid:50)eighted(cid:12)average discount rate(cid:25) Operating Leases Finance leases (cid:24).0 10.1 3.3 (cid:4) 2.(cid:24) (cid:4) 85 86 Amcor Annual Report 2022 (cid:38)ote 1(cid:20) - Shareholders(cid:6) E(cid:67)uity (cid:47)he changes in the components of accumulated other comprehensive loss during the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) (cid:47)he changes in ordinary and treasury shares during fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) (cid:76)ere as follo(cid:76)s(cid:25) Form 10-K 87 (shares and dollars in millions) Balance as of June 30, 201(cid:23) Share buybac(cid:64)(cid:14)cancellations Options e(cid:77)ercised and shares vested (cid:43)urchase of treasury shares Balance as of June 30, 2020 Share buybac(cid:64)(cid:14)cancellations Options e(cid:77)ercised and shares vested (cid:43)urchase of treasury shares Balance as of June 30, 2021 Share buybac(cid:64)(cid:14)cancellations Options e(cid:77)ercised and shares vested (cid:43)urchase of treasury shares Balance as of June 30, 2022 Ordinary Shares (cid:44)reasury Shares (cid:38)umber of Shares Amount (cid:38)umber of Shares Amount 1,(cid:20)2(cid:20) (cid:3) (57) (cid:85) (cid:85) 1,(cid:19)(cid:20)(cid:23) 1(cid:20) (cid:85) (cid:85) (cid:85) 1(cid:20) (31) (1) (cid:85) (cid:85) 1,(cid:19)3(cid:22) (4(cid:24)) (cid:85) (cid:85) 1,(cid:18)(cid:22)(cid:23) (cid:3) (cid:85) (cid:85) 1(cid:19) (cid:85) (cid:85) (cid:85) 1(cid:19) 1 (cid:3) (cid:85) (1) 7 (cid:21) (cid:85) (5) 1 3 (cid:85) (13) 12 2 (cid:3) (1(cid:20)) (cid:85) 16 (67) ((cid:20)(cid:21)) (cid:85) 46 (8) (2(cid:23)) (cid:85) 154 (143) (1(cid:22)) 2021(cid:11) and 2020 (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) ((cid:38)et of (cid:44)a(cid:74)) ((cid:38)et of (cid:44)a(cid:74)) ((cid:38)et of (cid:44)a(cid:74)) ((cid:38)et of (cid:44)a(cid:74)) Balance as of June 30, 201(cid:23) (cid:3) ((cid:20)0(cid:23)) (cid:3) (11) (cid:3) ((cid:23)0) (cid:3) (12) (cid:3) Foreign Currency (cid:44)ranslation (cid:38)et Investment (cid:32)edge Pension Effective Derivatives (cid:44)otal Accumulated Comprehensive Other Loss Other comprehensive loss before reclassifications Amounts reclassified from accumulated other comprehensive loss (cid:41)et current period other comprehensive loss Balance as of June 30, 2020 Other comprehensive income before reclassifications Amounts reclassified from accumulated other comprehensive loss (cid:41)et current period other comprehensive income Balance as of June 30, 2021 Other comprehensive income(cid:14)(loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss (cid:41)et current period other comprehensive income(cid:14)(loss) (2(cid:24)8) (2) (25) (28) 11 (287) ((cid:22)(cid:23)(cid:20)) 17(cid:24) 26 205 ((cid:20)(cid:23)1) (220) 1(cid:24) (201) ((cid:22)(cid:23)2) (cid:3) (cid:85) (2) (13) (cid:24) (16) (10(cid:20)) (13) ((cid:19)(cid:18)) 44 8 52 85 (cid:24) (cid:24)4 (cid:85) (cid:85) (cid:85) (cid:85) (cid:85) (cid:85) 6 (22) (3(cid:18)) 25 1 26 ((cid:22)) 6 (13) (7) (1(cid:19)) (cid:3) Balance as of June 30, 2022 (cid:3) (13) (cid:3) (cid:18)0 (cid:3) ((cid:21)22) (353) 26 (327) (1,0(cid:18)(cid:23)) 248 35 283 ((cid:21)(cid:20)(cid:20)) (12(cid:24)) 15 (114) ((cid:22)(cid:22)0) 87 Amcor Annual Report 2022 88 (cid:38)ote 1(cid:20) - Shareholders(cid:6) E(cid:67)uity (cid:47)he changes in the components of accumulated other comprehensive loss during the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 87 Form 10-K 88 (cid:47)he changes in ordinary and treasury shares during fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) (cid:76)ere as follo(cid:76)s(cid:25) (shares and dollars in millions) Balance as of June 30, 201(cid:23) Share buybac(cid:64)(cid:14)cancellations Options e(cid:77)ercised and shares vested (cid:43)urchase of treasury shares Balance as of June 30, 2020 Share buybac(cid:64)(cid:14)cancellations Options e(cid:77)ercised and shares vested (cid:43)urchase of treasury shares Balance as of June 30, 2021 Share buybac(cid:64)(cid:14)cancellations Options e(cid:77)ercised and shares vested (cid:43)urchase of treasury shares Balance as of June 30, 2022 Ordinary Shares (cid:44)reasury Shares (cid:38)umber of Shares Amount (cid:38)umber of Shares Amount 1,(cid:20)2(cid:20) (cid:3) (57) 1,(cid:19)(cid:20)(cid:23) (31) 1,(cid:19)3(cid:22) (4(cid:24)) (cid:85) (cid:85) (cid:85) (cid:85) (cid:85) (cid:85) 1,(cid:18)(cid:22)(cid:23) (cid:3) (1) 1(cid:20) (cid:85) (cid:85) (cid:85) 1(cid:20) (cid:85) (cid:85) 1(cid:19) (cid:85) (cid:85) (cid:85) 1(cid:19) 1 (cid:3) (cid:85) (1) (5) 7 (cid:21) (cid:85) 1 3 (cid:85) 12 (13) 2 (cid:3) (1(cid:20)) (cid:85) 16 (67) ((cid:20)(cid:21)) (cid:85) 46 (8) (2(cid:23)) (cid:85) 154 (143) (1(cid:22)) 2021(cid:11) and 2020 (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) Balance as of June 30, 201(cid:23) Other comprehensive loss before reclassifications Amounts reclassified from accumulated other comprehensive loss (cid:41)et current period other comprehensive loss Balance as of June 30, 2020 Other comprehensive income before reclassifications Amounts reclassified from accumulated other comprehensive loss (cid:41)et current period other comprehensive income Balance as of June 30, 2021 Other comprehensive income(cid:14)(loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss (cid:41)et current period other comprehensive income(cid:14)(loss) Balance as of June 30, 2022 Foreign Currency (cid:44)ranslation ((cid:38)et of (cid:44)a(cid:74)) (cid:3) (cid:38)et Investment (cid:32)edge ((cid:38)et of (cid:44)a(cid:74)) Pension ((cid:38)et of (cid:44)a(cid:74)) Effective Derivatives ((cid:38)et of (cid:44)a(cid:74)) (cid:44)otal Accumulated Other Comprehensive Loss ((cid:20)0(cid:23)) (cid:3) (11) (cid:3) ((cid:23)0) (cid:3) (12) (cid:3) (2(cid:24)8) (2) (25) (28) 11 (287) ((cid:22)(cid:23)(cid:20)) 17(cid:24) 26 205 ((cid:20)(cid:23)1) (220) 1(cid:24) (201) ((cid:22)(cid:23)2) (cid:3) (cid:3) (cid:85) (2) (13) (cid:85) (cid:85) (cid:24) (16) (10(cid:20)) 44 8 (cid:85) (13) 52 ((cid:19)(cid:18)) (cid:85) (cid:85) 85 (cid:24) (cid:85) (13) (cid:3) (cid:24)4 (cid:18)0 (cid:3) 6 (22) (3(cid:18)) 25 1 26 ((cid:22)) 6 (13) (7) (1(cid:19)) (cid:3) ((cid:21)22) (353) 26 (327) (1,0(cid:18)(cid:23)) 248 35 283 ((cid:21)(cid:20)(cid:20)) (12(cid:24)) 15 (114) ((cid:22)(cid:22)0) 87 88 Amcor Annual Report 2022 (cid:47)he follo(cid:76)ing tables provide details of amounts reclassified from accumulated other comprehensive loss(cid:25) (cid:38)ote 1(cid:21) - Income (cid:44)a(cid:74)es Form 10-K 89 ((cid:3) in millions) Amorti(cid:79)ation of pension(cid:25) Amorti(cid:79)ation of prior service credit Amorti(cid:79)ation of actuarial loss Acquisition(cid:14)disposal loss Effect of pension settlement(cid:14)curtailment (cid:47)otal before ta(cid:77) effect (cid:47)a(cid:77) effect on amounts reclassified into earnings (cid:44)otal net of ta(cid:74) ((cid:34)ains)(cid:14)losses on cash flo(cid:76) hedges(cid:25) Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:47)reasury loc(cid:64)s (cid:47)otal before ta(cid:77) effect (cid:47)a(cid:77) effect on amounts reclassified into earnings (cid:44)otal net of ta(cid:74) Losses on foreign currency translation(cid:25) Foreign currency translation ad(cid:63)ustment (1) (cid:47)otal before ta(cid:77) effect (cid:47)a(cid:77) effect on amounts reclassified into earnings (cid:44)otal net of ta(cid:74) For the years ended June 30, 2021 2020 2022 $ (3) $ (2) $ 5 1 8 11 (2) (cid:23) (cid:3) 8 (cid:85) 2 8 (cid:85) (cid:22) (cid:3) (20) $ (1) $ (cid:85) 3 (17) 4 (cid:85) 2 1 (cid:85) (13) (cid:3) 1 (cid:3) 1(cid:24) $ 26 $ 1(cid:24) (cid:85) 26 (cid:85) 1(cid:23) (cid:3) 2(cid:20) (cid:3) (cid:3) $ (cid:3) $ (cid:3) (2) 6 (cid:85) 6 10 (1) (cid:23) 6 1 (cid:85) 7 (1) (cid:20) 11 11 (cid:85) 11 companies (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) (cid:31)omestic ((cid:48)(cid:38)) Foreign ((cid:3) in millions) Current ta(cid:74) (cid:31)omestic ((cid:48)(cid:38)) Foreign (cid:44)otal current ta(cid:74) Deferred ta(cid:74) (cid:31)omestic ((cid:48)(cid:38)) Foreign (cid:44)otal deferred ta(cid:74) Income ta(cid:74) e(cid:74)pense (1) (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) the Company effectively disposed of a non(cid:12)core business and transferred $1(cid:24) million of accumulated foreign currency translation from accumulated other comprehensive loss to earnings. (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2021(cid:11) the Company recorded a gain on disposal of A(cid:40)(cid:49)I(cid:34) and other non(cid:12)core businesses. (cid:48)pon completion of the sales(cid:11) $26 million of accumulated foreign currency translation (cid:76)as transferred from accumulated other comprehensive loss to earnings. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments" for further information on the disposal of A(cid:40)(cid:49)I(cid:34) and (cid:41)ote 5(cid:11) "(cid:31)ivestitures" for more information about the Company(cid:6)s other disposals. (cid:47)he fiscal year ended (cid:37)une 30(cid:11) 2020 includes the loss on sale of the EC (cid:45)emedy of $(cid:24) million(cid:11) (cid:76)hich is the result of the reclassification of accumulated foreign currency translation amounts from accumulated other comprehensive loss to earnings. (cid:45)efer to (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations" for more information. Forward contracts to purchase own shares (cid:47)he Company(cid:6)s employee share plans require the delivery of shares to employees in the future (cid:76)hen rights vest or vested options are e(cid:77)ercised. (cid:47)he Company currently acquires shares on the open mar(cid:64)et to deliver shares to employees to satisfy vesting or e(cid:77)ercising commitments. (cid:47)his e(cid:77)poses the Company to mar(cid:64)et price ris(cid:64). (cid:47)o manage the mar(cid:64)et price ris(cid:64)(cid:11) the Company has entered into for(cid:76)ard contracts for the purchase of its ordinary shares. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company has entered into for(cid:76)ard contracts that mature bet(cid:76)een (cid:41)ovember 2022 and (cid:37)une 2023 to purchase 14 million shares at a (cid:76)eighted average price of $12.67. As of (cid:37)une 30(cid:11) 2021(cid:11) the Company had outstanding for(cid:76)ard contracts for 8 million shares at a (cid:76)eighted average price of $11.65 that matured in (cid:37)une 2022. (cid:47)he for(cid:76)ard contracts to purchase the Company(cid:6)s o(cid:76)n shares are classified as a current liability. Equity is reduced by an amount equal to the fair value of the shares at inception. (cid:47)he carrying value of the for(cid:76)ard contracts at each reporting period (cid:76)as determined based on the present value of the cost required to settle the contracts. 8(cid:24) Amcor Annual Report 2022 (cid:24)0 Amcor plc is a ta(cid:77) resident of the (cid:48)nited (cid:38)ingdom of (cid:34)reat Britain and (cid:41)orthern Ireland ("(cid:48)(cid:38)"). (cid:47)he components of income from continuing operations before income ta(cid:77)es and equity in income(cid:14)(loss) of affiliated (cid:44)otal income from continuing operations before income ta(cid:74)es and e(cid:67)uity in income(cid:13)(loss) of affiliated companies (cid:3) 1,11(cid:19) (cid:3) 1,1(cid:23)3 (cid:3) (cid:22)2(cid:19) Income ta(cid:77) e(cid:77)pense consisted of the follo(cid:76)ing(cid:25) Years ended June 30, 2022 2021 2020 $ (58) $ (25) $ 1(cid:11)173 1(cid:11)218 (36) 861 Years ended June 30, 2022 2021 2020 $ 2 $ 11 $ 331 333 (10) (23) (33) 246 257 (1) 5 (cid:18) (cid:3) 300 (cid:3) 2(cid:20)1 (cid:3) Years ended June 30, 2022 2021 2020 $ 212 $ 227 $ 43 (2) (1) 4 62 18 2 40 32 (1) (18) 300 (cid:3) (57) 2(cid:20)1 (cid:3) (cid:3) 1 300 301 1 (115) (11(cid:18)) 1(cid:22)(cid:21) 153 70 13 (30) (17) (cid:85) (2) 1(cid:22)(cid:21) (cid:47)he deferred ta(cid:77) benefit in fiscal year 2020 related to undistributed foreign earnings and included the ta(cid:77) impact of the EC (cid:45)emedy sale of $83 million. (cid:47)he follo(cid:76)ing is a reconciliation of income ta(cid:77) computed at the (cid:48)(cid:38) statutory ta(cid:77) rate of 1(cid:24).0(cid:4)(cid:11) 1(cid:24).0(cid:4)(cid:11) and 18.5(cid:4) for fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively(cid:11) to income ta(cid:77) e(cid:77)pense. ((cid:3) in millions) Income ta(cid:77) e(cid:77)pense at statutory rate Foreign ta(cid:77) rate differential (cid:41)on(cid:12)deductible e(cid:77)penses(cid:11) non(cid:12)ta(cid:77)able items(cid:11) net (cid:47)a(cid:77) la(cid:76) changes Change in valuation allo(cid:76)ance (cid:48)ncertain ta(cid:77) positions(cid:11) net Other (1) Income ta(cid:74) e(cid:74)pense (1) In fiscal year 2022(cid:11) Other is comprised of ad(cid:63)ustments to prior year(cid:11) movements in deferred ta(cid:77) positions of $13 million(cid:11) and other individually immaterial items. In fiscal year 2021(cid:11) Other is comprised of ad(cid:63)ustments to prior fiscal year(cid:11) including one related to the crystalli(cid:79)ation of benefits from business restructuring of $45 million and other individually immaterial items. Amcor operates in over forty different (cid:63)urisdictions (cid:76)ith a (cid:76)ide range of statutory ta(cid:77) rates. (cid:47)he ta(cid:77) e(cid:77)pense from operating in non(cid:12)(cid:48)(cid:38) (cid:63)urisdictions in e(cid:77)cess of the (cid:48)(cid:38) statutory ta(cid:77) rate is included in the line "Foreign ta(cid:77) rate differential" in the above ta(cid:77) rate reconciliation table. For fiscal year 2022(cid:11) the Company(cid:6)s effective ta(cid:77) rate (cid:76)as 26.(cid:24)(cid:4) as compared to the effective ta(cid:77) rates of 21.(cid:24)(cid:4) and 22.6(cid:4) for fiscal years 2021 and 2020(cid:11) respectively(cid:11) (cid:76)ith the increase in fiscal year 2022 predominantly attributable to an increase in ta(cid:77) provisions for uncertain ta(cid:77) positions. For fiscal year 2021(cid:11) the Company(cid:6)s effective ta(cid:77) rate (cid:76)as higher than its (cid:48)(cid:38) statutory ta(cid:77) rate primarily due to preta(cid:77) income being earned in (cid:63)urisdictions outside 89 Form 10-K (cid:28)0 (cid:47)he follo(cid:76)ing tables provide details of amounts reclassified from accumulated other comprehensive loss(cid:25) (cid:38)ote 1(cid:21) - Income (cid:44)a(cid:74)es For the years ended June 30, 2022 2021 2020 Amcor plc is a ta(cid:77) resident of the (cid:48)nited (cid:38)ingdom of (cid:34)reat Britain and (cid:41)orthern Ireland ("(cid:48)(cid:38)"). (cid:47)he components of income from continuing operations before income ta(cid:77)es and equity in income(cid:14)(loss) of affiliated $ (3) $ (2) $ companies (cid:76)ere as follo(cid:76)s(cid:25) ((cid:3) in millions) (cid:31)omestic ((cid:48)(cid:38)) Foreign (cid:44)otal income from continuing operations before income ta(cid:74)es and e(cid:67)uity in income(cid:13)(loss) of affiliated companies Income ta(cid:77) e(cid:77)pense consisted of the follo(cid:76)ing(cid:25) ((cid:3) in millions) Current ta(cid:74) (cid:31)omestic ((cid:48)(cid:38)) Foreign (cid:44)otal current ta(cid:74) Deferred ta(cid:74) (cid:31)omestic ((cid:48)(cid:38)) Foreign (cid:44)otal deferred ta(cid:74) Income ta(cid:74) e(cid:74)pense Years ended June 30, 2021 2020 2022 $ (58) $ (25) $ 1(cid:11)173 1(cid:11)218 (36) 861 (cid:3) 1,11(cid:19) (cid:3) 1,1(cid:23)3 (cid:3) (cid:22)2(cid:19) Years ended June 30, 2021 2020 2022 $ 2 $ 11 $ 331 333 (10) (23) (33) 246 257 (1) 5 (cid:18) (cid:3) 300 (cid:3) 2(cid:20)1 (cid:3) 1 300 301 1 (115) (11(cid:18)) 1(cid:22)(cid:21) 1(cid:23) (cid:3) 2(cid:20) (cid:3) (cid:47)he deferred ta(cid:77) benefit in fiscal year 2020 related to undistributed foreign earnings and included the ta(cid:77) impact of the EC (cid:45)emedy sale of $83 million. (cid:47)he follo(cid:76)ing is a reconciliation of income ta(cid:77) computed at the (cid:48)(cid:38) statutory ta(cid:77) rate of 1(cid:24).0(cid:4)(cid:11) 1(cid:24).0(cid:4)(cid:11) and 18.5(cid:4) for fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively(cid:11) to income ta(cid:77) e(cid:77)pense. ((cid:3) in millions) Income ta(cid:77) e(cid:77)pense at statutory rate Foreign ta(cid:77) rate differential (cid:41)on(cid:12)deductible e(cid:77)penses(cid:11) non(cid:12)ta(cid:77)able items(cid:11) net (cid:47)a(cid:77) la(cid:76) changes Change in valuation allo(cid:76)ance (cid:48)ncertain ta(cid:77) positions(cid:11) net Other (1) Income ta(cid:74) e(cid:74)pense Years ended June 30, 2021 2020 2022 $ 212 $ 227 $ 43 (2) (1) 4 62 18 2 (1) 40 32 (18) 300 (cid:3) (57) 2(cid:20)1 (cid:3) (cid:3) 153 70 13 (30) (17) (cid:85) (2) 1(cid:22)(cid:21) (1) In fiscal year 2022(cid:11) Other is comprised of ad(cid:63)ustments to prior year(cid:11) movements in deferred ta(cid:77) positions of $13 million(cid:11) and other individually immaterial items. In fiscal year 2021(cid:11) Other is comprised of ad(cid:63)ustments to prior fiscal year(cid:11) including one related to the crystalli(cid:79)ation of benefits from business restructuring of $45 million and other individually immaterial items. an amount equal to the fair value of the shares at inception. (cid:47)he carrying value of the for(cid:76)ard contracts at each reporting period Amcor operates in over forty different (cid:63)urisdictions (cid:76)ith a (cid:76)ide range of statutory ta(cid:77) rates. (cid:47)he ta(cid:77) e(cid:77)pense from operating in non(cid:12)(cid:48)(cid:38) (cid:63)urisdictions in e(cid:77)cess of the (cid:48)(cid:38) statutory ta(cid:77) rate is included in the line "Foreign ta(cid:77) rate differential" in the above ta(cid:77) rate reconciliation table. For fiscal year 2022(cid:11) the Company(cid:6)s effective ta(cid:77) rate (cid:76)as 26.(cid:24)(cid:4) as compared to the effective ta(cid:77) rates of 21.(cid:24)(cid:4) and 22.6(cid:4) for fiscal years 2021 and 2020(cid:11) respectively(cid:11) (cid:76)ith the increase in fiscal year 2022 predominantly attributable to an increase in ta(cid:77) provisions for uncertain ta(cid:77) positions. For fiscal year 2021(cid:11) the Company(cid:6)s effective ta(cid:77) rate (cid:76)as higher than its (cid:48)(cid:38) statutory ta(cid:77) rate primarily due to preta(cid:77) income being earned in (cid:63)urisdictions outside 8(cid:24) (cid:24)0 Amcor Annual Report 2022 ((cid:3) in millions) Amorti(cid:79)ation of pension(cid:25) Amorti(cid:79)ation of prior service credit Amorti(cid:79)ation of actuarial loss Acquisition(cid:14)disposal loss Effect of pension settlement(cid:14)curtailment (cid:47)otal before ta(cid:77) effect (cid:47)a(cid:77) effect on amounts reclassified into earnings (cid:44)otal net of ta(cid:74) ((cid:34)ains)(cid:14)losses on cash flo(cid:76) hedges(cid:25) Commodity contracts For(cid:76)ard e(cid:77)change contracts (cid:47)reasury loc(cid:64)s (cid:47)otal before ta(cid:77) effect (cid:47)a(cid:77) effect on amounts reclassified into earnings (cid:44)otal net of ta(cid:74) Losses on foreign currency translation(cid:25) Foreign currency translation ad(cid:63)ustment (1) (cid:47)otal before ta(cid:77) effect (cid:47)a(cid:77) effect on amounts reclassified into earnings (cid:44)otal net of ta(cid:74) 5 1 8 11 (2) (cid:23) (cid:3) (cid:85) 3 (17) 4 1(cid:24) (cid:85) (20) $ (1) $ (13) (cid:3) 1 (cid:3) 1(cid:24) $ 26 $ (cid:22) (cid:3) 8 (cid:85) 2 8 (cid:85) (cid:85) 2 1 (cid:85) 26 (cid:85) (cid:3) $ (cid:3) $ (cid:3) (2) 6 (cid:85) 6 10 (1) (cid:23) 6 1 (cid:85) 7 (1) (cid:20) 11 11 (cid:85) 11 (1) (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2022(cid:11) the Company effectively disposed of a non(cid:12)core business and transferred $1(cid:24) million of accumulated foreign currency translation from accumulated other comprehensive loss to earnings. (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2021(cid:11) the Company recorded a gain on disposal of A(cid:40)(cid:49)I(cid:34) and other non(cid:12)core businesses. (cid:48)pon completion of the sales(cid:11) $26 million of accumulated foreign currency translation (cid:76)as transferred from accumulated other comprehensive loss to earnings. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments" for further information on the disposal of A(cid:40)(cid:49)I(cid:34) and (cid:41)ote 5(cid:11) "(cid:31)ivestitures" for more information about the Company(cid:6)s other disposals. (cid:47)he fiscal year ended (cid:37)une 30(cid:11) 2020 includes the loss on sale of the EC (cid:45)emedy of $(cid:24) million(cid:11) (cid:76)hich is the result of the reclassification of accumulated foreign currency translation amounts from accumulated other comprehensive loss to earnings. (cid:45)efer to (cid:41)ote 6(cid:11) "(cid:35)eld for Sale and (cid:31)iscontinued Operations" for more information. Forward contracts to purchase own shares (cid:47)he Company(cid:6)s employee share plans require the delivery of shares to employees in the future (cid:76)hen rights vest or vested options are e(cid:77)ercised. (cid:47)he Company currently acquires shares on the open mar(cid:64)et to deliver shares to employees to satisfy vesting or e(cid:77)ercising commitments. (cid:47)his e(cid:77)poses the Company to mar(cid:64)et price ris(cid:64). (cid:47)o manage the mar(cid:64)et price ris(cid:64)(cid:11) the Company has entered into for(cid:76)ard contracts for the purchase of its ordinary shares. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company has entered into for(cid:76)ard contracts that mature bet(cid:76)een (cid:41)ovember 2022 and (cid:37)une 2023 to purchase 14 million shares at a (cid:76)eighted average price of $12.67. As of (cid:37)une 30(cid:11) 2021(cid:11) the Company had outstanding for(cid:76)ard contracts for 8 million shares at a (cid:76)eighted average price of $11.65 that matured in (cid:37)une 2022. (cid:47)he for(cid:76)ard contracts to purchase the Company(cid:6)s o(cid:76)n shares are classified as a current liability. Equity is reduced by (cid:76)as determined based on the present value of the cost required to settle the contracts. Form 10-K 91 of the (cid:48)(cid:38) (cid:76)here the applicable ta(cid:77) rates are higher than the (cid:48)(cid:38) statutory ta(cid:77) rate. (cid:47)he fiscal year 2020 foreign ta(cid:77) rate differential reflects a benefit related to S(cid:76)iss ta(cid:77) la(cid:76) changes(cid:11) (cid:76)hich (cid:76)as mostly offset by current period ta(cid:77) charges related to true(cid:12)up ad(cid:63)ustments. (cid:45)efer to the section "S(cid:76)iss (cid:47)a(cid:77) (cid:45)eform" in this footnote for a discussion of the impacts of the S(cid:76)iss ta(cid:77) la(cid:76) changes (cid:76)hich the Company recogni(cid:79)ed in the last three fiscal years. Significant components of deferred ta(cid:77) assets and liabilities are as follo(cid:76)s(cid:25) ((cid:3) in millions) Deferred ta(cid:74) assets Inventories Accrued employee benefits (cid:43)rovisions (cid:41)et operating loss carryfor(cid:76)ards (cid:47)a(cid:77) credit carryfor(cid:76)ards Accruals and other (cid:44)otal deferred ta(cid:74) assets (cid:49)aluation allo(cid:76)ance (cid:38)et deferred ta(cid:74) assets Deferred ta(cid:74) liabilities (cid:43)roperty(cid:11) plant(cid:11) and equipment Other intangible assets(cid:11) including gross impacts from S(cid:76)iss ta(cid:77) reform (cid:47)rade receivables (cid:31)erivatives (cid:48)ndistributed foreign earnings (cid:44)otal deferred ta(cid:74) liabilities (cid:38)et deferred ta(cid:74) liability Balance sheet location(cid:25) (cid:31)eferred ta(cid:77) assets (cid:31)eferred ta(cid:77) liabilities (cid:38)et deferred ta(cid:74) liability June 30, 2022 2021 $ 15 $ 62 18 325 3(cid:24) 48 (cid:19)0(cid:21) (407) 100 (31(cid:24)) (304) (cid:85) (4) (20) ((cid:20)(cid:18)(cid:21)) ((cid:19)(cid:18)(cid:21)) 130 (677) ((cid:19)(cid:18)(cid:21)) (cid:3) (cid:3) 22 101 10 2(cid:24)3 40 63 (cid:19)2(cid:23) (403) 12(cid:20) (325) (326) (7) (cid:85) (25) ((cid:20)(cid:22)3) ((cid:19)(cid:19)(cid:21)) 13(cid:24) (6(cid:24)6) ((cid:19)(cid:19)(cid:21)) (cid:47)he Company maintains a valuation allo(cid:76)ance on net operating losses and other deferred ta(cid:77) assets in (cid:63)urisdictions for (cid:76)hich it does not believe it is more li(cid:64)ely than not to reali(cid:79)e those deferred ta(cid:77) assets based upon all available positive and negative evidence(cid:11) including historical operating performance(cid:11) carry(cid:12)bac(cid:64) periods(cid:11) reversal of ta(cid:77)able temporary differences(cid:11) ta(cid:77) planning strategies(cid:11) and earnings e(cid:77)pectations. (cid:47)he Company(cid:6)s valuation allo(cid:76)ance increased by $4 million(cid:11) by $40 million(cid:11) and by $73 million for fiscal year 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company had total net operating loss carry for(cid:76)ards(cid:11) including capital losses(cid:11) in the amount of $1(cid:11)178 million and $1(cid:11)085 million(cid:11) respectively(cid:11) and ta(cid:77) credits in the amount of $3(cid:24) million and $40 million(cid:11) respectively. (cid:47)he vast ma(cid:63)ority of the losses and ta(cid:77) credits do not e(cid:77)pire. (cid:47)he Company considers the follo(cid:76)ing factors(cid:11) among others(cid:11) in evaluating its plans for indefinite reinvestment of its subsidiaries(cid:6) earnings(cid:25) (i) the forecasts(cid:11) budgets(cid:11) and financial requirements of the Company and its subsidiaries(cid:11) both for the long(cid:12)term and for the short(cid:12)term(cid:26) and (ii) the ta(cid:77) consequences of any decision to repatriate or reinvest earnings of any subsidiary. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company has not provided deferred ta(cid:77)es on appro(cid:77)imately $1(cid:11)0(cid:24)3 million of earnings in certain foreign subsidiaries because such earnings are indefinitely reinvested in its international operations. (cid:48)pon distribution of such earnings in the form of dividends or other(cid:76)ise(cid:11) the Company may be sub(cid:63)ect to incremental foreign ta(cid:77). It is not practicable to estimate the amount of foreign ta(cid:77) that might be payable. As of (cid:37)une 30(cid:11) 2022(cid:11) a cumulative deferred ta(cid:77) liability of $20 million has been recorded attributable to undistributed earnings that the Company has deemed are no longer indefinitely reinvested. (cid:47)he remaining undistributed earnings of the Company(cid:6)s subsidiaries are not deemed to be indefinitely reinvested and can be repatriated at no ta(cid:77) cost. Accordingly(cid:11) there is no provision for income or (cid:76)ithholding ta(cid:77)es on these earnings. (cid:47)he Company accounts for its uncertain ta(cid:77) positions in accordance (cid:76)ith ASC 740(cid:11) "Income (cid:47)a(cid:77)es." At (cid:37)une 30(cid:11) 2022 and 2021(cid:11) unrecogni(cid:79)ed ta(cid:77) benefits totaled $1(cid:24)5 million and $133 million(cid:11) respectively(cid:11) all of (cid:76)hich (cid:76)ould favorably impact the effective ta(cid:77) rate if recogni(cid:79)ed. (cid:47)he Company recogni(cid:79)es interest and penalties accrued related to unrecogni(cid:79)ed ta(cid:77) benefits in income ta(cid:77) e(cid:77)pense. (cid:31)uring the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) the Company(cid:6)s accrual for interest and penalties for these uncertain ta(cid:77) positions (cid:76)as $12 million(cid:11) $12 million(cid:11) and $7 million(cid:11) respectively. (cid:47)he Company does not currently anticipate that the total amount of unrecogni(cid:79)ed ta(cid:77) benefits (cid:76)ill result in material changes to its financial position (cid:76)ithin the ne(cid:77)t 12 A reconciliation of the beginning and ending amount of unrecogni(cid:79)ed ta(cid:77) benefits for the fiscal years presented is as months. follo(cid:76)s(cid:25) ((cid:3) in millions) Balance at the beginning of the year Additions based on ta(cid:77) positions related to the current year Additions for ta(cid:77) positions of prior years (cid:45)eductions for ta(cid:77) positions from prior years (cid:45)eductions for settlements (cid:45)eductions due to lapse of statute of limitations Balance at the end of the year 2022 2020 June 30, 2021 (cid:3) 133 (cid:3) 101 (cid:3) 50 1(cid:24) (6) (cid:85) (1) 3(cid:24) 7 (12) (cid:85) (2) (cid:3) 1(cid:23)(cid:19) (cid:3) 133 (cid:3) 102 1(cid:24) 2 (13) (7) (2) 101 (cid:47)he Company conducts business in a number of ta(cid:77) (cid:63)urisdictions and(cid:11) as such(cid:11) is required to file income ta(cid:77) returns in multiple (cid:63)urisdictions globally. (cid:47)he fiscal years 2016 through 2021 remain open for e(cid:77)amination by the (cid:48)nited States Internal (cid:45)evenue Service ("I(cid:45)S")(cid:11) the fiscal year 2020 remains open for e(cid:77)amination by (cid:35)er (cid:40)a(cid:63)esty(cid:89)s (cid:45)evenue (cid:5) Customs ("(cid:35)(cid:40)(cid:45)C")(cid:11) and the fiscal years 2011 through 2021 are currently sub(cid:63)ect to audit or remain open for e(cid:77)amination in various ta(cid:77) (cid:63)urisdictions. (cid:47)he Company believes that its income ta(cid:77) reserves are adequately maintained ta(cid:64)ing into consideration both the technical merits of its ta(cid:77) return positions and ongoing developments in its income ta(cid:77) audits. (cid:35)o(cid:76)ever(cid:11) the final determination of the Company(cid:6)s ta(cid:77) return positions(cid:11) if audited(cid:11) is uncertain and therefore there is a possibility that final resolution of these matters could have a material impact on the Company(cid:6)s results of operations or cash flo(cid:76)s. Swiss Tax Reform (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2020(cid:11) S(cid:76)iss ta(cid:77) la(cid:76)s (cid:76)ere changed in order to remove certain ta(cid:77) regimes and replace these (cid:76)ith ne(cid:76) measures that are hereafter referred to as "S(cid:76)iss (cid:47)a(cid:77) (cid:45)eform." In the fourth quarter of fiscal year 2020(cid:11) the Company obtained confirmation from local authorities as to the methodology to calculate the future benefits and recorded the impact. (cid:47)he Company recorded a benefit of $22 million at (cid:37)une 30(cid:11) 2020 related to a reduction in deferred ta(cid:77) e(cid:77)pense from an allo(cid:76)ed step(cid:12)up of intangible assets for ta(cid:77) purposes(cid:11) an additional benefit of $2 million during fiscal year 2021(cid:11) and a decrease of $2 million during fiscal year 2022. (cid:24)1 Amcor Annual Report 2022 (cid:24)2 91 Form 10-K (cid:28)2 of the (cid:48)(cid:38) (cid:76)here the applicable ta(cid:77) rates are higher than the (cid:48)(cid:38) statutory ta(cid:77) rate. (cid:47)he fiscal year 2020 foreign ta(cid:77) rate differential reflects a benefit related to S(cid:76)iss ta(cid:77) la(cid:76) changes(cid:11) (cid:76)hich (cid:76)as mostly offset by current period ta(cid:77) charges related to true(cid:12)up ad(cid:63)ustments. (cid:45)efer to the section "S(cid:76)iss (cid:47)a(cid:77) (cid:45)eform" in this footnote for a discussion of the impacts of the S(cid:76)iss ta(cid:77) (cid:47)he Company accounts for its uncertain ta(cid:77) positions in accordance (cid:76)ith ASC 740(cid:11) "Income (cid:47)a(cid:77)es." At (cid:37)une 30(cid:11) 2022 and 2021(cid:11) unrecogni(cid:79)ed ta(cid:77) benefits totaled $1(cid:24)5 million and $133 million(cid:11) respectively(cid:11) all of (cid:76)hich (cid:76)ould favorably impact the effective ta(cid:77) rate if recogni(cid:79)ed. la(cid:76) changes (cid:76)hich the Company recogni(cid:79)ed in the last three fiscal years. Significant components of deferred ta(cid:77) assets and liabilities are as follo(cid:76)s(cid:25) June 30, 2022 2021 (cid:47)he Company recogni(cid:79)es interest and penalties accrued related to unrecogni(cid:79)ed ta(cid:77) benefits in income ta(cid:77) e(cid:77)pense. (cid:31)uring the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) the Company(cid:6)s accrual for interest and penalties for these uncertain ta(cid:77) positions (cid:76)as $12 million(cid:11) $12 million(cid:11) and $7 million(cid:11) respectively. (cid:47)he Company does not currently anticipate that the total amount of unrecogni(cid:79)ed ta(cid:77) benefits (cid:76)ill result in material changes to its financial position (cid:76)ithin the ne(cid:77)t 12 months. $ 15 $ A reconciliation of the beginning and ending amount of unrecogni(cid:79)ed ta(cid:77) benefits for the fiscal years presented is as follo(cid:76)s(cid:25) ((cid:3) in millions) 2022 June 30, 2021 2020 Balance at the beginning of the year (cid:3) 133 (cid:3) 101 (cid:3) Additions based on ta(cid:77) positions related to the current year Additions for ta(cid:77) positions of prior years (cid:45)eductions for ta(cid:77) positions from prior years (cid:45)eductions for settlements (cid:45)eductions due to lapse of statute of limitations Balance at the end of the year 50 1(cid:24) (6) (cid:85) (1) 3(cid:24) 7 (12) (cid:85) (2) (cid:3) 1(cid:23)(cid:19) (cid:3) 133 (cid:3) 102 1(cid:24) 2 (13) (7) (2) 101 (cid:47)he Company conducts business in a number of ta(cid:77) (cid:63)urisdictions and(cid:11) as such(cid:11) is required to file income ta(cid:77) returns in multiple (cid:63)urisdictions globally. (cid:47)he fiscal years 2016 through 2021 remain open for e(cid:77)amination by the (cid:48)nited States Internal (cid:45)evenue Service ("I(cid:45)S")(cid:11) the fiscal year 2020 remains open for e(cid:77)amination by (cid:35)er (cid:40)a(cid:63)esty(cid:89)s (cid:45)evenue (cid:5) Customs ("(cid:35)(cid:40)(cid:45)C")(cid:11) and the fiscal years 2011 through 2021 are currently sub(cid:63)ect to audit or remain open for e(cid:77)amination in various ta(cid:77) (cid:63)urisdictions. (cid:47)he Company believes that its income ta(cid:77) reserves are adequately maintained ta(cid:64)ing into consideration both the technical merits of its ta(cid:77) return positions and ongoing developments in its income ta(cid:77) audits. (cid:35)o(cid:76)ever(cid:11) the final determination of the Company(cid:6)s ta(cid:77) return positions(cid:11) if audited(cid:11) is uncertain and therefore there is a possibility that final resolution of these matters could have a material impact on the Company(cid:6)s results of operations or cash flo(cid:76)s. Swiss Tax Reform (cid:31)uring the fiscal year ended (cid:37)une 30(cid:11) 2020(cid:11) S(cid:76)iss ta(cid:77) la(cid:76)s (cid:76)ere changed in order to remove certain ta(cid:77) regimes and replace these (cid:76)ith ne(cid:76) measures that are hereafter referred to as "S(cid:76)iss (cid:47)a(cid:77) (cid:45)eform." In the fourth quarter of fiscal year 2020(cid:11) the Company obtained confirmation from local authorities as to the methodology to calculate the future benefits and recorded the impact. (cid:47)he Company recorded a benefit of $22 million at (cid:37)une 30(cid:11) 2020 related to a reduction in deferred ta(cid:77) e(cid:77)pense from an allo(cid:76)ed step(cid:12)up of intangible assets for ta(cid:77) purposes(cid:11) an additional benefit of $2 million during fiscal year 2021(cid:11) and a decrease of $2 million during fiscal year 2022. ((cid:3) in millions) Deferred ta(cid:74) assets Inventories Accrued employee benefits (cid:43)rovisions (cid:41)et operating loss carryfor(cid:76)ards (cid:47)a(cid:77) credit carryfor(cid:76)ards Accruals and other (cid:44)otal deferred ta(cid:74) assets (cid:49)aluation allo(cid:76)ance (cid:38)et deferred ta(cid:74) assets Deferred ta(cid:74) liabilities (cid:43)roperty(cid:11) plant(cid:11) and equipment (cid:47)rade receivables (cid:31)erivatives (cid:48)ndistributed foreign earnings (cid:44)otal deferred ta(cid:74) liabilities (cid:38)et deferred ta(cid:74) liability Balance sheet location(cid:25) (cid:31)eferred ta(cid:77) assets (cid:31)eferred ta(cid:77) liabilities (cid:38)et deferred ta(cid:74) liability Other intangible assets(cid:11) including gross impacts from S(cid:76)iss ta(cid:77) reform 62 18 325 3(cid:24) 48 (cid:19)0(cid:21) (407) 100 (31(cid:24)) (304) (cid:85) (4) (20) ((cid:20)(cid:18)(cid:21)) ((cid:19)(cid:18)(cid:21)) 130 (677) ((cid:19)(cid:18)(cid:21)) (cid:3) (cid:3) 22 101 10 2(cid:24)3 40 63 (cid:19)2(cid:23) (403) 12(cid:20) (325) (326) (7) (cid:85) (25) ((cid:20)(cid:22)3) ((cid:19)(cid:19)(cid:21)) 13(cid:24) (6(cid:24)6) ((cid:19)(cid:19)(cid:21)) (cid:47)he Company maintains a valuation allo(cid:76)ance on net operating losses and other deferred ta(cid:77) assets in (cid:63)urisdictions for (cid:76)hich it does not believe it is more li(cid:64)ely than not to reali(cid:79)e those deferred ta(cid:77) assets based upon all available positive and negative evidence(cid:11) including historical operating performance(cid:11) carry(cid:12)bac(cid:64) periods(cid:11) reversal of ta(cid:77)able temporary differences(cid:11) ta(cid:77) planning strategies(cid:11) and earnings e(cid:77)pectations. (cid:47)he Company(cid:6)s valuation allo(cid:76)ance increased by $4 million(cid:11) by $40 million(cid:11) and by $73 million for fiscal year 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. As of (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company had total net operating loss carry for(cid:76)ards(cid:11) including capital losses(cid:11) in the amount of $1(cid:11)178 million and $1(cid:11)085 million(cid:11) respectively(cid:11) and ta(cid:77) credits in the amount of $3(cid:24) million and $40 million(cid:11) respectively. (cid:47)he vast ma(cid:63)ority of the losses and ta(cid:77) credits do not e(cid:77)pire. (cid:47)he Company considers the follo(cid:76)ing factors(cid:11) among others(cid:11) in evaluating its plans for indefinite reinvestment of its subsidiaries(cid:6) earnings(cid:25) (i) the forecasts(cid:11) budgets(cid:11) and financial requirements of the Company and its subsidiaries(cid:11) both for the long(cid:12)term and for the short(cid:12)term(cid:26) and (ii) the ta(cid:77) consequences of any decision to repatriate or reinvest earnings of any subsidiary. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company has not provided deferred ta(cid:77)es on appro(cid:77)imately $1(cid:11)0(cid:24)3 million of earnings in certain foreign subsidiaries because such earnings are indefinitely reinvested in its international operations. (cid:48)pon distribution of such earnings in the form of dividends or other(cid:76)ise(cid:11) the Company may be sub(cid:63)ect to incremental foreign ta(cid:77). It is not practicable to estimate the amount of foreign ta(cid:77) that might be payable. As of (cid:37)une 30(cid:11) 2022(cid:11) a cumulative deferred ta(cid:77) liability of $20 million has been recorded attributable to undistributed earnings that the Company has deemed are no longer indefinitely reinvested. (cid:47)he remaining undistributed earnings of the Company(cid:6)s subsidiaries are not deemed to be indefinitely reinvested and can be repatriated at no ta(cid:77) cost. Accordingly(cid:11) there is no provision for income or (cid:76)ithholding ta(cid:77)es on these earnings. (cid:24)1 (cid:24)2 Amcor Annual Report 2022 (cid:38)ote 1(cid:22) - Share-based Compensation Changes in outstanding share options (cid:76)ere as follo(cid:76)s(cid:25) Form 10-K 93 (cid:47)he Company(cid:6)s equity incentive plans include grants of share options(cid:11) restricted shares(cid:14)units(cid:11) performance shares(cid:11) performance rights(cid:11) and share rights. In fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) share options and performance rights or performance shares (a(cid:76)arded to (cid:48).S. participants in place of performance rights) (cid:76)ere granted to officers and employees. (cid:47)he e(cid:77)ercise price for share options (cid:76)as set at the time of grant. (cid:47)he requisite service period for outstanding share options(cid:11) performance rights(cid:11) or performance shares ranges from t(cid:76)o to three years. (cid:47)he a(cid:76)ards are also sub(cid:63)ect to performance and mar(cid:64)et conditions. At vesting(cid:11) share options can be e(cid:77)ercised and converted to ordinary shares on a one(cid:12)for(cid:12)one basis(cid:11) sub(cid:63)ect to payment of the e(cid:77)ercise price. (cid:47)he contractual term of the share options ranges from five to si(cid:77) years from the grant date. At vesting(cid:11) performance rights can be e(cid:77)ercised and converted to ordinary shares on a one(cid:12)for(cid:12)one basis. (cid:43)erformance shares vest automatically and convert to ordinary shares on a one(cid:12)for(cid:12)one basis. (cid:45)estricted shares(cid:14)units may be granted to directors(cid:11) officers(cid:11) and employees of the Company and vest on terms as described in the a(cid:76)ard. (cid:47)he restrictions prevent the participant from disposing of the restricted shares(cid:14)units during the vesting period. (cid:47)he fair value of restricted shares(cid:14)units is determined based on the closing price of the Company(cid:6)s shares on the grant date. Share rights may be granted to directors(cid:11) officers(cid:11) and employees of the Company and vest on terms as described in the a(cid:76)ard. (cid:47)he restrictions prevent the participant from disposing of the share rights during the vesting period. (cid:47)he fair value of share rights is determined based on the closing price of the Company(cid:6)s shares on the grant date(cid:11) ad(cid:63)usted for dividend yield. As of (cid:37)une 30(cid:11) 2022(cid:11) 47 million shares (cid:76)ere reserved for future grants. (cid:47)he Company uses treasury shares to settle share(cid:12)based compensation obligations. (cid:47)reasury shares are acquired through mar(cid:64)et purchases throughout the fiscal year for the required number of shares. Share(cid:12)based compensation e(cid:77)pense (cid:76)as primarily recorded in selling(cid:11) general(cid:11) and administrative e(cid:77)penses in the consolidated statements of income. (cid:47)he total share(cid:12)based compensation e(cid:77)pense (cid:76)as as follo(cid:76)s(cid:25) ((cid:3) in millions) For the years ended June 30, 2021 2020 2022 Share(cid:12)based compensation e(cid:77)pense $ 63 $ 58 $ 34 As of (cid:37)une 30(cid:11) 2022(cid:11) there (cid:76)as $87 million of total unrecogni(cid:79)ed compensation cost related to all unvested share options and other equity incentive plans. (cid:47)hat cost is e(cid:77)pected to be recogni(cid:79)ed over a (cid:76)eighted(cid:12)average period of 1.8 years. (cid:47)he (cid:76)eighted(cid:12)average grant date fair values by type of equity incentive plan for a(cid:76)ards granted in fiscal years 2022(cid:11) Share options (cid:38)umber Weighted- average (in millions) E(cid:74)ercise Price (in years) ((cid:3) in millions) Remaining Weighted- average Contract Life Intrinsic Value Share options outstanding at June 30, 2021 (cid:34)ranted E(cid:77)ercised Forfeited (cid:19)(cid:19) (cid:3) (cid:24) (11) (8) (cid:18)(cid:19) 3 (cid:3) 10(cid:12)(cid:18)(cid:23) 12.40 11.00 10.(cid:24)5 10(cid:12)(cid:20)(cid:20) 11(cid:12)1(cid:18) Share options outstanding at June 30, 2022 Vested and e(cid:74)ercisable at June 30, 2022 3(cid:12)(cid:23) (cid:3) 2(cid:12)2 (cid:3) (cid:22)0 3 (cid:47)he Company received $114 million(cid:11) $30 million(cid:11) and $1 million on the e(cid:77)ercise of stoc(cid:64) options during the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (cid:31)uring the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) the intrinsic value associated (cid:76)ith the e(cid:77)ercise of share options (cid:76)as $15 million(cid:11) $6 million(cid:11) and $1 million(cid:11) respectively. (cid:47)he grant date fair value of share options vested (cid:76)as $13 million(cid:11) $2 million(cid:11) and $0 million for fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. Changes in outstanding other equity incentive plans and the fair values vested are presented belo(cid:76)(cid:25) Restricted shares(cid:13)units Performance rights(cid:13)shares Share rights (cid:38)umber (in millions) Weighted- average (cid:31)rant Date Fair Value (cid:38)umber (in millions) Weighted- average (cid:31)rant Date Fair Value (cid:38)umber (in millions) Weighted- average (cid:31)rant Date Fair Value Outstanding at June 30, 2021 (cid:34)ranted E(cid:77)ercised Forfeited 1 (cid:3) 1 (1) (cid:77) 11(cid:12)1(cid:21) 11.62 10.32 (cid:85) Outstanding at June 30, 2022 1 (cid:3) 11(cid:12)(cid:18)1 (cid:23) (cid:3) 4 (1) (1) 11 (cid:3) (cid:20)(cid:12)(cid:23)3 (cid:24).40 6.7(cid:24) 6.(cid:24)6 (cid:21)(cid:12)(cid:21)(cid:23) 3 (cid:3) 2 (1) (cid:85) (cid:18) (cid:3) (cid:23)(cid:12)(cid:22)3 11.44 8.(cid:24)(cid:24) 10.50 10(cid:12)(cid:23)0 Fair value vested ((cid:3) in millions) (cid:52)ear Ended (cid:37)une 30(cid:11) 2021 (cid:52)ear Ended (cid:37)une 30(cid:11) 2020 (cid:52)ear Ended (cid:37)une 30(cid:11) 2022 $ $ $ Restricted shares(cid:13)units Performance rights(cid:13)shares Share rights 3 3 2 8 3 2 7 5 11 For the years ended June 30, 2021 2022 2020 2021 and 2020 (cid:76)ere as follo(cid:76)s(cid:25) (in (cid:3) per unit of award) Share options (1) (cid:45)estricted shares(cid:14)units (cid:43)erformance rights(cid:14)shares (2) Share rights 1.2(cid:24) 11.62 (cid:24).40 11.44 1.08 11.06 7.22 10.22 0.74 10.15 6.70 8.80 (1) (cid:47)he fair value of share options (cid:76)as determined using Blac(cid:64)(cid:12)Scholes option pricing model (cid:76)ith the follo(cid:76)ing (cid:64)ey assumptions for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021 and 2020(cid:11) respectively(cid:25) ris(cid:64)(cid:12)free interest rate of 1.0(cid:4) (2021(cid:25) 0.2(cid:4)(cid:11) 2020(cid:25) 1.8(cid:4))(cid:11) e(cid:77)pected share(cid:12)price volatility of 22.0(cid:4) (2021(cid:25) 25.0(cid:4)(cid:11) 2020(cid:25) 18.0(cid:4))(cid:11) e(cid:77)pected dividend yield of 4.1(cid:4) (2021(cid:25) 4.7(cid:4)(cid:11) 2020(cid:25) 4.6(cid:4))(cid:11) and e(cid:77)pected life of options of 6.1 years (2021(cid:25) 6.1 years(cid:11) 2020(cid:25) 5.7 years). (2) (cid:47)he fair value of performance rights(cid:14)shares (cid:76)as determined using a combination of Blac(cid:64)(cid:12)Scholes option pricing model and (cid:40)onte Carlo simulation. (cid:47)he (cid:64)ey assumptions for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021 and 2020(cid:11) respectively(cid:11) (cid:76)ere(cid:25) ris(cid:64)(cid:12)free interest rate of 0.4(cid:4) (2021(cid:25) 0.2(cid:4)(cid:11) 2020(cid:25) 1.8(cid:4))(cid:11) e(cid:77)pected share(cid:12)price volatility of 22.0(cid:4) (2021(cid:25) 25.0(cid:4)(cid:11) 2020(cid:25) 18.0(cid:4))(cid:11) and e(cid:77)pected dividend yield of 4.1(cid:4) (2021(cid:25) 4.7(cid:4)(cid:11) 2020(cid:25) 4.6(cid:4)). (cid:24)3 Amcor Annual Report 2022 (cid:24)4 93 Form 10-K 94 Changes in outstanding share options (cid:76)ere as follo(cid:76)s(cid:25) Share options (cid:38)umber (in millions) Weighted- average E(cid:74)ercise Price Remaining Weighted- average Contract Life (in years) Intrinsic Value ((cid:3) in millions) Share options outstanding at June 30, 2021 (cid:34)ranted E(cid:77)ercised Forfeited Share options outstanding at June 30, 2022 Vested and e(cid:74)ercisable at June 30, 2022 (cid:19)(cid:19) (cid:3) (cid:24) (11) (8) (cid:18)(cid:19) 3 (cid:3) 10(cid:12)(cid:18)(cid:23) 12.40 11.00 10.(cid:24)5 10(cid:12)(cid:20)(cid:20) 11(cid:12)1(cid:18) 3(cid:12)(cid:23) (cid:3) 2(cid:12)2 (cid:3) (cid:22)0 3 (cid:47)he Company received $114 million(cid:11) $30 million(cid:11) and $1 million on the e(cid:77)ercise of stoc(cid:64) options during the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. (cid:31)uring the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) the intrinsic value associated (cid:76)ith the e(cid:77)ercise of share options (cid:76)as $15 million(cid:11) $6 million(cid:11) and $1 million(cid:11) respectively. (cid:47)he grant date fair value of share options vested (cid:76)as $13 million(cid:11) $2 million(cid:11) and $0 million for fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. Changes in outstanding other equity incentive plans and the fair values vested are presented belo(cid:76)(cid:25) Restricted shares(cid:13)units Performance rights(cid:13)shares Share rights (cid:38)umber (in millions) Weighted- average (cid:31)rant Date Fair Value (cid:38)umber (in millions) Weighted- average (cid:31)rant Date Fair Value (cid:38)umber (in millions) Weighted- average (cid:31)rant Date Fair Value Outstanding at June 30, 2021 (cid:34)ranted E(cid:77)ercised Forfeited 1 (cid:3) 1 (1) (cid:77) 11(cid:12)1(cid:21) 11.62 10.32 (cid:85) Outstanding at June 30, 2022 1 (cid:3) 11(cid:12)(cid:18)1 (cid:23) (cid:3) 4 (1) (1) 11 (cid:3) (cid:20)(cid:12)(cid:23)3 (cid:24).40 6.7(cid:24) 6.(cid:24)6 (cid:21)(cid:12)(cid:21)(cid:23) 3 (cid:3) 2 (1) (cid:85) (cid:18) (cid:3) (cid:23)(cid:12)(cid:22)3 11.44 8.(cid:24)(cid:24) 10.50 10(cid:12)(cid:23)0 Fair value vested ((cid:3) in millions) Restricted shares(cid:13)units Performance rights(cid:13)shares Share rights (cid:52)ear Ended (cid:37)une 30(cid:11) 2022 $ (cid:52)ear Ended (cid:37)une 30(cid:11) 2021 (cid:52)ear Ended (cid:37)une 30(cid:11) 2020 3 3 2 $ 8 3 2 $ 7 5 11 (cid:38)ote 1(cid:22) - Share-based Compensation performance rights(cid:11) and share rights. (cid:47)he Company(cid:6)s equity incentive plans include grants of share options(cid:11) restricted shares(cid:14)units(cid:11) performance shares(cid:11) In fiscal years 2022(cid:11) 2021(cid:11) and 2020(cid:11) share options and performance rights or performance shares (a(cid:76)arded to (cid:48).S. participants in place of performance rights) (cid:76)ere granted to officers and employees. (cid:47)he e(cid:77)ercise price for share options (cid:76)as set at the time of grant. (cid:47)he requisite service period for outstanding share options(cid:11) performance rights(cid:11) or performance shares ranges from t(cid:76)o to three years. (cid:47)he a(cid:76)ards are also sub(cid:63)ect to performance and mar(cid:64)et conditions. At vesting(cid:11) share options can be e(cid:77)ercised and converted to ordinary shares on a one(cid:12)for(cid:12)one basis(cid:11) sub(cid:63)ect to payment of the e(cid:77)ercise price. (cid:47)he contractual term of the share options ranges from five to si(cid:77) years from the grant date. At vesting(cid:11) performance rights can be e(cid:77)ercised and converted to ordinary shares on a one(cid:12)for(cid:12)one basis. (cid:43)erformance shares vest automatically and convert to ordinary shares on a one(cid:12)for(cid:12)one basis. date. (cid:45)estricted shares(cid:14)units may be granted to directors(cid:11) officers(cid:11) and employees of the Company and vest on terms as described in the a(cid:76)ard. (cid:47)he restrictions prevent the participant from disposing of the restricted shares(cid:14)units during the vesting period. (cid:47)he fair value of restricted shares(cid:14)units is determined based on the closing price of the Company(cid:6)s shares on the grant Share rights may be granted to directors(cid:11) officers(cid:11) and employees of the Company and vest on terms as described in the a(cid:76)ard. (cid:47)he restrictions prevent the participant from disposing of the share rights during the vesting period. (cid:47)he fair value of share rights is determined based on the closing price of the Company(cid:6)s shares on the grant date(cid:11) ad(cid:63)usted for dividend yield. As of (cid:37)une 30(cid:11) 2022(cid:11) 47 million shares (cid:76)ere reserved for future grants. (cid:47)he Company uses treasury shares to settle share(cid:12)based compensation obligations. (cid:47)reasury shares are acquired through mar(cid:64)et purchases throughout the fiscal year for the required number of shares. Share(cid:12)based compensation e(cid:77)pense (cid:76)as primarily recorded in selling(cid:11) general(cid:11) and administrative e(cid:77)penses in the consolidated statements of income. (cid:47)he total share(cid:12)based compensation e(cid:77)pense (cid:76)as as follo(cid:76)s(cid:25) ((cid:3) in millions) For the years ended June 30, 2022 2021 2020 Share(cid:12)based compensation e(cid:77)pense $ 63 $ 58 $ 34 As of (cid:37)une 30(cid:11) 2022(cid:11) there (cid:76)as $87 million of total unrecogni(cid:79)ed compensation cost related to all unvested share options and other equity incentive plans. (cid:47)hat cost is e(cid:77)pected to be recogni(cid:79)ed over a (cid:76)eighted(cid:12)average period of 1.8 years. (cid:47)he (cid:76)eighted(cid:12)average grant date fair values by type of equity incentive plan for a(cid:76)ards granted in fiscal years 2022(cid:11) 2021 and 2020 (cid:76)ere as follo(cid:76)s(cid:25) (in (cid:3) per unit of award) Share options (1) (cid:45)estricted shares(cid:14)units (cid:43)erformance rights(cid:14)shares (2) Share rights For the years ended June 30, 2022 2021 2020 1.2(cid:24) 11.62 (cid:24).40 11.44 1.08 11.06 7.22 10.22 0.74 10.15 6.70 8.80 (1) (cid:47)he fair value of share options (cid:76)as determined using Blac(cid:64)(cid:12)Scholes option pricing model (cid:76)ith the follo(cid:76)ing (cid:64)ey assumptions for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021 and 2020(cid:11) respectively(cid:25) ris(cid:64)(cid:12)free interest rate of 1.0(cid:4) (2021(cid:25) 0.2(cid:4)(cid:11) 2020(cid:25) 1.8(cid:4))(cid:11) e(cid:77)pected share(cid:12)price volatility of 22.0(cid:4) (2021(cid:25) 25.0(cid:4)(cid:11) 2020(cid:25) 18.0(cid:4))(cid:11) e(cid:77)pected dividend yield of 4.1(cid:4) (2021(cid:25) 4.7(cid:4)(cid:11) 2020(cid:25) 4.6(cid:4))(cid:11) and e(cid:77)pected life of options of 6.1 years (2021(cid:25) 6.1 years(cid:11) 2020(cid:25) 5.7 years). (2) (cid:47)he fair value of performance rights(cid:14)shares (cid:76)as determined using a combination of Blac(cid:64)(cid:12)Scholes option pricing model and (cid:40)onte Carlo simulation. (cid:47)he (cid:64)ey assumptions for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021 and 2020(cid:11) respectively(cid:11) (cid:76)ere(cid:25) ris(cid:64)(cid:12)free interest rate of 0.4(cid:4) (2021(cid:25) 0.2(cid:4)(cid:11) 2020(cid:25) 1.8(cid:4))(cid:11) e(cid:77)pected share(cid:12)price volatility of 22.0(cid:4) (2021(cid:25) 25.0(cid:4)(cid:11) 2020(cid:25) 18.0(cid:4))(cid:11) and e(cid:77)pected dividend yield of 4.1(cid:4) (2021(cid:25) 4.7(cid:4)(cid:11) 2020(cid:25) 4.6(cid:4)). (cid:24)3 (cid:24)4 Amcor Annual Report 2022 Form 10-K 95 (cid:38)ote 1(cid:23) - Earnings Per Share Computations (cid:47)he Company applies the t(cid:76)o(cid:12)class method (cid:76)hen computing its earnings per share ("E(cid:43)S")(cid:11) (cid:76)hich requires that net income per share for each class of share be calculated assuming all of the Company(cid:6)s net income is distributed as dividends to each class of share based on their contractual rights. (cid:38)ote 20 - Contingencies and Legal Proceedings Contingencies - Bra(cid:76)il Basic E(cid:43)S is computed by dividing net income available to ordinary shareholders by the (cid:76)eighted(cid:12)average number of most(cid:11) if not all(cid:11) of these matters. (cid:47)he Company does not believe that the ultimate resolution of these matters (cid:76)ill materially ordinary shares outstanding after e(cid:77)cluding the ordinary shares to be repurchased using for(cid:76)ard contracts. (cid:31)iluted E(cid:43)S includes the effects of share options(cid:11) restricted shares(cid:11) performance rights(cid:11) performance shares(cid:11) and share rights(cid:11) if dilutive. ((cid:3) in millions, e(cid:74)cept per share amounts) (cid:38)umerator (cid:41)et income attributable to Amcor plc (cid:31)istributed and undistributed earnings attributable to shares to be repurchased (cid:41)et income available to ordinary shareholders of Amcor plc(cid:85)basic and diluted (cid:41)et income available to ordinary shareholders of Amcor plc from continuing operations(cid:85)basic and diluted (cid:41)et loss available to ordinary shareholders of Amcor plc from discontinued operations(cid:85)basic and diluted Denominator (cid:50)eighted(cid:12)average ordinary shares outstanding (cid:50)eighted(cid:12)average ordinary shares to be repurchased by Amcor plc (cid:50)eighted(cid:12)average ordinary shares outstanding for E(cid:43)S(cid:85)basic Effect of dilutive shares (cid:50)eighted(cid:12)average ordinary shares outstanding for E(cid:43)S(cid:85)diluted Per ordinary share income Income from continuing operations Loss from discontinued operations Basic earnings per ordinary share Income from continuing operations Loss from discontinued operations (cid:31)iluted earnings per ordinary share $ $ $ $ $ $ $ $ Years ended June 30, 2021 2020 2022 805 $ (cid:24)3(cid:24) $ (3) (2) 802 $ (cid:24)37 $ 802 $ (cid:24)37 $ 612 (cid:85) 612 620 (cid:85) $ (cid:85) $ (8) deposited cash of $12 million (cid:76)ith the courts to continue to defend the cases referenced above. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company provided letters of credit of $36 million(cid:11) (cid:63)udicial insurance of $1 million and 1(cid:11)514 1(cid:11)553 (5) (2) 1(cid:11)50(cid:24) 6 1(cid:11)516 1(cid:11)551 5 1(cid:11)556 1(cid:11)601 (1) 1(cid:11)600 2 1(cid:11)602 0.532 $ 0.604 $ 0.387 (cid:85) (cid:85) (0.005) 0.532 $ 0.604 $ 0.382 0.52(cid:24) $ 0.602 $ 0.387 (cid:85) (cid:85) (0.005) 0.52(cid:24) $ 0.602 $ 0.382 Certain stoc(cid:64) a(cid:76)ards outstanding (cid:76)ere not included in the computation of diluted earnings per share above because they (cid:76)ould not have had a dilutive effect. (cid:47)he e(cid:77)cluded stoc(cid:64) a(cid:76)ards represented an aggregate of 7 million(cid:11) 6 million(cid:11) and 37 million shares at (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. Basic and diluted (cid:76)eighted average ordinary shares outstanding have decreased in fiscal years 2022 and 2021 due to share repurchases. operations(cid:11) or financial condition. Other (cid:37)atters (cid:47)he Company(cid:6)s operations in Bra(cid:79)il are involved in various governmental assessments and litigation(cid:11) principally related to claims for e(cid:77)cise and income ta(cid:77)es. (cid:47)he Company vigorously defends its positions and believes it (cid:76)ill prevail on impact the Company(cid:6)s consolidated results of operations(cid:11) financial position or cash flo(cid:76)s. (cid:48)nder customary local regulations(cid:11) the Company(cid:6)s Bra(cid:79)ilian subsidiaries may need to post cash or other collateral if a challenge to any administrative assessment proceeds to the Bra(cid:79)ilian court system(cid:26) ho(cid:76)ever(cid:11) the level of cash or collateral already pledged or potentially required to be pledged (cid:76)ould not significantly impact the Company(cid:6)s liquidity. At (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company has recorded accruals of $12 million and $11 million(cid:11) respectively(cid:11) included in other non(cid:12)current liabilities in the consolidated balance sheets(cid:11) and has estimated a reasonably possible loss e(cid:77)posure in e(cid:77)cess of the accrual of $20 million and $17 million(cid:11) respectively. (cid:47)he litigation process is sub(cid:63)ect to many uncertainties and the outcome of individual matters cannot be accurately predicted. (cid:47)he Company routinely assesses these matters as to the probability of ultimately incurring a liability and records the best estimate of the ultimate loss in situations (cid:76)here the li(cid:64)elihood of an ultimate loss is probable. (cid:47)he Company(cid:6)s assessments are based on its (cid:64)no(cid:76)ledge and e(cid:77)perience(cid:11) but the ultimate outcome of any of these matters may differ from the Company(cid:6)s estimates. Contingencies - Environmental (cid:37)atters (cid:47)he Company(cid:11) along (cid:76)ith others(cid:11) has been identified as a potentially responsible party ("(cid:43)(cid:45)(cid:43)") at several (cid:76)aste disposal sites under (cid:48).S. federal and related state environmental statutes and regulations and may face potentially material environmental remediation obligations. (cid:50)hile the Company benefits from various forms of insurance policies(cid:11) actual coverage may not(cid:11) or only partially(cid:11) cover the total potential e(cid:77)posures. (cid:47)he Company has recorded $17 million aggregate accruals for its share of estimated future remediation costs at these sites. In addition to the matters described above(cid:11) the Company has also recorded aggregate accruals of $43 million for potential liabilities for remediation obligations at various (cid:76)orld(cid:76)ide locations that are o(cid:76)ned or operated by the Company(cid:11) or (cid:76)ere formerly o(cid:76)ned or operated. (cid:47)he SEC requires the Company to disclose certain information about proceedings arising under federal(cid:11) state(cid:11) or local environmental provisions if the Company reasonably believes that such proceedings may result in monetary sanctions above a stated threshold. (cid:43)ursuant to SEC regulations(cid:11) the Company uses a threshold of $1 million or more for purposes of determining (cid:76)hether disclosure of any such proceedings is required. Applying this threshold(cid:11) there are no environmental matters required to be disclosed for the fiscal year ended (cid:37)une 30(cid:11) 2022. (cid:50)hile the Company believes that its accruals are adequate to cover its future obligations(cid:11) there can be no assurance that the ultimate payments (cid:76)ill not e(cid:77)ceed the accrued amounts. (cid:41)evertheless(cid:11) based on the available information(cid:11) the Company does not believe that its potential environmental obligations (cid:76)ill have a material adverse effect upon its liquidity(cid:11) results of In the normal course of business(cid:11) the Company is sub(cid:63)ect to legal proceedings(cid:11) la(cid:76)suits(cid:11) and other claims. (cid:50)hile the potential financial impact (cid:76)ith respect to these ordinary course matters is sub(cid:63)ect to many factors and uncertainties(cid:11) management believes that any financial impact to the Company from these matters(cid:11) individually and in the aggregate(cid:11) (cid:76)ould not have a material adverse effect on the Company(cid:6)s financial position or results of operation. (cid:24)5 Amcor Annual Report 2022 (cid:24)6 each class of share based on their contractual rights. Basic E(cid:43)S is computed by dividing net income available to ordinary shareholders by the (cid:76)eighted(cid:12)average number of ordinary shares outstanding after e(cid:77)cluding the ordinary shares to be repurchased using for(cid:76)ard contracts. (cid:31)iluted E(cid:43)S includes the effects of share options(cid:11) restricted shares(cid:11) performance rights(cid:11) performance shares(cid:11) and share rights(cid:11) if dilutive. ((cid:3) in millions, e(cid:74)cept per share amounts) (cid:38)umerator (cid:41)et income attributable to Amcor plc (cid:31)istributed and undistributed earnings attributable to shares to be repurchased (cid:41)et income available to ordinary shareholders of Amcor plc(cid:85)basic and diluted (cid:41)et income available to ordinary shareholders of Amcor plc from continuing operations(cid:85)basic and diluted operations(cid:85)basic and diluted (cid:41)et loss available to ordinary shareholders of Amcor plc from discontinued Denominator (cid:50)eighted(cid:12)average ordinary shares outstanding (cid:50)eighted(cid:12)average ordinary shares to be repurchased by Amcor plc (cid:50)eighted(cid:12)average ordinary shares outstanding for E(cid:43)S(cid:85)basic Effect of dilutive shares (cid:50)eighted(cid:12)average ordinary shares outstanding for E(cid:43)S(cid:85)diluted Per ordinary share income Income from continuing operations Loss from discontinued operations Basic earnings per ordinary share Income from continuing operations Loss from discontinued operations (cid:31)iluted earnings per ordinary share Years ended June 30, 2022 2021 2020 805 $ (cid:24)3(cid:24) $ (3) (2) 802 $ (cid:24)37 $ 802 $ (cid:24)37 $ 612 (cid:85) 612 620 1(cid:11)514 1(cid:11)553 (5) (2) 1(cid:11)50(cid:24) 6 1(cid:11)516 1(cid:11)551 5 1(cid:11)556 1(cid:11)601 (1) 1(cid:11)600 2 1(cid:11)602 0.532 $ 0.604 $ 0.387 (cid:85) (cid:85) (0.005) 0.532 $ 0.604 $ 0.382 0.52(cid:24) $ 0.602 $ 0.387 (cid:85) (cid:85) (0.005) 0.52(cid:24) $ 0.602 $ 0.382 $ $ $ $ $ $ $ $ Certain stoc(cid:64) a(cid:76)ards outstanding (cid:76)ere not included in the computation of diluted earnings per share above because they (cid:76)ould not have had a dilutive effect. (cid:47)he e(cid:77)cluded stoc(cid:64) a(cid:76)ards represented an aggregate of 7 million(cid:11) 6 million(cid:11) and 37 million shares at (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) respectively. Basic and diluted (cid:76)eighted average ordinary shares outstanding have decreased in fiscal years 2022 and 2021 due to share repurchases. (cid:38)ote 1(cid:23) - Earnings Per Share Computations (cid:38)ote 20 - Contingencies and Legal Proceedings (cid:47)he Company applies the t(cid:76)o(cid:12)class method (cid:76)hen computing its earnings per share ("E(cid:43)S")(cid:11) (cid:76)hich requires that net Contingencies - Bra(cid:76)il income per share for each class of share be calculated assuming all of the Company(cid:6)s net income is distributed as dividends to 95 Form 10-K 96 (cid:47)he Company(cid:6)s operations in Bra(cid:79)il are involved in various governmental assessments and litigation(cid:11) principally related to claims for e(cid:77)cise and income ta(cid:77)es. (cid:47)he Company vigorously defends its positions and believes it (cid:76)ill prevail on most(cid:11) if not all(cid:11) of these matters. (cid:47)he Company does not believe that the ultimate resolution of these matters (cid:76)ill materially impact the Company(cid:6)s consolidated results of operations(cid:11) financial position or cash flo(cid:76)s. (cid:48)nder customary local regulations(cid:11) the Company(cid:6)s Bra(cid:79)ilian subsidiaries may need to post cash or other collateral if a challenge to any administrative assessment proceeds to the Bra(cid:79)ilian court system(cid:26) ho(cid:76)ever(cid:11) the level of cash or collateral already pledged or potentially required to be pledged (cid:76)ould not significantly impact the Company(cid:6)s liquidity. At (cid:37)une 30(cid:11) 2022 and 2021(cid:11) the Company has recorded accruals of $12 million and $11 million(cid:11) respectively(cid:11) included in other non(cid:12)current liabilities in the consolidated balance sheets(cid:11) and has estimated a reasonably possible loss e(cid:77)posure in e(cid:77)cess of the accrual of $20 million and $17 million(cid:11) respectively. (cid:47)he litigation process is sub(cid:63)ect to many uncertainties and the outcome of individual matters cannot be accurately predicted. (cid:47)he Company routinely assesses these matters as to the probability of ultimately incurring a liability and records the best estimate of the ultimate loss in situations (cid:76)here the li(cid:64)elihood of an ultimate loss is probable. (cid:47)he Company(cid:6)s assessments are based on its (cid:64)no(cid:76)ledge and e(cid:77)perience(cid:11) but the ultimate outcome of any of these matters may differ from the Company(cid:6)s estimates. (cid:85) $ (cid:85) $ (8) deposited cash of $12 million (cid:76)ith the courts to continue to defend the cases referenced above. As of (cid:37)une 30(cid:11) 2022(cid:11) the Company provided letters of credit of $36 million(cid:11) (cid:63)udicial insurance of $1 million and Contingencies - Environmental (cid:37)atters (cid:47)he Company(cid:11) along (cid:76)ith others(cid:11) has been identified as a potentially responsible party ("(cid:43)(cid:45)(cid:43)") at several (cid:76)aste disposal sites under (cid:48).S. federal and related state environmental statutes and regulations and may face potentially material environmental remediation obligations. (cid:50)hile the Company benefits from various forms of insurance policies(cid:11) actual coverage may not(cid:11) or only partially(cid:11) cover the total potential e(cid:77)posures. (cid:47)he Company has recorded $17 million aggregate accruals for its share of estimated future remediation costs at these sites. In addition to the matters described above(cid:11) the Company has also recorded aggregate accruals of $43 million for potential liabilities for remediation obligations at various (cid:76)orld(cid:76)ide locations that are o(cid:76)ned or operated by the Company(cid:11) or (cid:76)ere formerly o(cid:76)ned or operated. (cid:47)he SEC requires the Company to disclose certain information about proceedings arising under federal(cid:11) state(cid:11) or local environmental provisions if the Company reasonably believes that such proceedings may result in monetary sanctions above a stated threshold. (cid:43)ursuant to SEC regulations(cid:11) the Company uses a threshold of $1 million or more for purposes of determining (cid:76)hether disclosure of any such proceedings is required. Applying this threshold(cid:11) there are no environmental matters required to be disclosed for the fiscal year ended (cid:37)une 30(cid:11) 2022. (cid:50)hile the Company believes that its accruals are adequate to cover its future obligations(cid:11) there can be no assurance that the ultimate payments (cid:76)ill not e(cid:77)ceed the accrued amounts. (cid:41)evertheless(cid:11) based on the available information(cid:11) the Company does not believe that its potential environmental obligations (cid:76)ill have a material adverse effect upon its liquidity(cid:11) results of operations(cid:11) or financial condition. Other (cid:37)atters In the normal course of business(cid:11) the Company is sub(cid:63)ect to legal proceedings(cid:11) la(cid:76)suits(cid:11) and other claims. (cid:50)hile the potential financial impact (cid:76)ith respect to these ordinary course matters is sub(cid:63)ect to many factors and uncertainties(cid:11) management believes that any financial impact to the Company from these matters(cid:11) individually and in the aggregate(cid:11) (cid:76)ould not have a material adverse effect on the Company(cid:6)s financial position or results of operation. (cid:24)5 (cid:24)6 Amcor Annual Report 2022 (cid:38)ote 21 - Segments (cid:47)he follo(cid:76)ing table presents information about reportable segments(cid:25) Form 10-K 97 (cid:47)he Company(cid:6)s business is organi(cid:79)ed and presented in the t(cid:76)o reportable segments outlined belo(cid:76)(cid:25) Fle(cid:74)ibles: Consists of operations that manufacture fle(cid:77)ible and film pac(cid:64)aging in the food and beverage(cid:11) medical and pharmaceutical(cid:11) fresh produce(cid:11) snac(cid:64) food(cid:11) personal care(cid:11) and other industries. Rigid Pac(cid:61)aging: Consists of operations that manufacture rigid containers for a broad range of predominantly beverage and food products(cid:11) including carbonated soft drin(cid:64)s(cid:11) (cid:76)ater(cid:11) (cid:63)uices(cid:11) sports drin(cid:64)s(cid:11) mil(cid:64)(cid:12)based beverages(cid:11) spirits and beer(cid:11) sauces(cid:11) dressings(cid:11) spreads and personal care items(cid:11) and plastic caps for a (cid:76)ide variety of applications. Other consists of the Company(cid:6)s undistributed corporate e(cid:77)penses including e(cid:77)ecutive and functional compensation costs(cid:11) equity method and other investments(cid:11) intercompany eliminations(cid:11) and other business activities. Operating segments are organi(cid:79)ed along the Company(cid:6)s product lines and geographical areas. (cid:47)he Company(cid:6)s five Fle(cid:77)ibles operating segments (Fle(cid:77)ibles Europe(cid:11) (cid:40)iddle East and Africa(cid:26) Fle(cid:77)ibles (cid:41)orth America(cid:26) Fle(cid:77)ibles Latin America(cid:26) Fle(cid:77)ibles Asia (cid:43)acific(cid:26) and Specialty Cartons) have been aggregated in the Fle(cid:77)ibles reportable segment as they e(cid:77)hibit similarity in economic characteristics and future prospects(cid:11) similarity in the products they offer(cid:11) their production technologies(cid:11) the customers they serve(cid:11) the nature of their service delivery models(cid:11) and their regulatory environments. (cid:47)he Company evaluates performance and allocates resources based on ad(cid:63)usted earnings before interest and ta(cid:77)es ("Ad(cid:63)usted EBI(cid:47)") from continuing operations. (cid:47)he Company defines Ad(cid:63)usted EBI(cid:47) as operating income ad(cid:63)usted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing operating performance and to include equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77). (cid:47)he accounting policies of the reportable segments are the same as those in the consolidated financial statements. (cid:31)uring the first quarter of fiscal year 2021(cid:11) the Company revised the presentation of ad(cid:63)usted earnings before interest and ta(cid:77) ("Ad(cid:63)usted EBI(cid:47)") from continuing operations in the reportable segments to include an allocation of certain research and development and selling(cid:11) general(cid:11) and administrative e(cid:77)penses that management previously reflected in Other. (cid:47)he Company refines its e(cid:77)pense allocation methodologies to the reportable segments periodically as more relevant information becomes available and to align (cid:76)ith industry or mar(cid:64)et changes. Corporate e(cid:77)penses are allocated to the reportable segments based primarily on direct attribution. (cid:43)rior period has been recast to conform to the ne(cid:76) cost allocation methodology. Ad(cid:60)usted earnings before interest and ta(cid:74)es ((cid:2)Ad(cid:60)usted EBI(cid:44)(cid:2)) from (cid:3) 1(cid:18),(cid:19)(cid:18)(cid:18) (cid:3) 12,(cid:22)(cid:20)1 (cid:3) 12,(cid:18)(cid:20)(cid:22) Sales including intersegment sales ((cid:3) in millions) Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other (cid:44)otal sales including intersegment sales Intersegment sales Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other (cid:44)otal intersegment sales (cid:38)et sales continuing operations Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other Ad(cid:63)usted EBI(cid:47) from continuing operations Less(cid:25) (cid:40)aterial restructuring programs (1) Less(cid:25) Impairments in equity method investments (2) Less(cid:25) (cid:40)aterial acquisition costs and other (3) Less(cid:25) Amorti(cid:79)ation of acquired intangible assets from business combinations (4) Less(cid:25) Impact of hyperinflation (5) Less(cid:25) (cid:43)ension settlements (6) Add(cid:14)(Less)(cid:25) (cid:41)et gain(cid:14)(loss) on disposals (7) Less(cid:25) (cid:43)roperty and other losses(cid:11) net (8) Less(cid:25) (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict impacts ((cid:24)) EBI(cid:47) from continuing operations Interest income Interest e(cid:77)pense Years ended June 30, 2022 2021 2020 $ 11(cid:11)151 $ 10(cid:11)040 $ 3(cid:11)3(cid:24)3 (cid:85) 14(cid:11)544 2(cid:11)823 (cid:85) 12(cid:11)863 (cid:24)(cid:11)755 2(cid:11)716 (cid:85) 12(cid:11)471 3 (cid:85) (cid:85) 3 1(cid:11)2(cid:24)6 284 (83) 1(cid:11)4(cid:24)7 (106) (26) (145) (1(cid:24)1) (28) (5) (cid:85) (cid:85) (cid:85) (cid:24)(cid:24)6 22 (207) 14 (cid:85) (cid:85) (cid:85) (cid:85) 2 (cid:85) (cid:85) 2 1(cid:11)517 28(cid:24) 1(cid:11)427 2(cid:24)(cid:24) (105) (105) 1(cid:11)701 1(cid:11)621 (37) (cid:85) (4) (163) (16) (8) (10) (13) (200) 1(cid:11)250 (15(cid:24)) 24 (cid:85) (88) (cid:85) (7) (165) (1(cid:24)) (cid:85) (cid:24) (cid:85) (cid:85) 14 1(cid:11)351 (153) (1(cid:24)) Equity in income (loss) of affiliated companies(cid:11) net of ta(cid:77) Income from continuing operations before income ta(cid:74)es and e(cid:67)uity in income (loss) of affiliated companies (cid:3) 1,11(cid:19) (cid:3) 1,1(cid:23)3 (cid:3) (cid:22)2(cid:19) (1) (cid:40)aterial restructuring programs includes restructuring and related e(cid:77)penses for the 201(cid:24) Bemis Integration (cid:43)lan for fiscal year 2022 and 2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan and the 201(cid:24) Bemis Integration (cid:43)lan for fiscal years 2021 and 2020. (cid:45)efer to (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for more information about the Company(cid:6)s restructuring activities. (2) Impairments in equity method investments include the impairment charges related to other(cid:12)than(cid:12)temporary impairments related to the investment in A(cid:40)(cid:49)I(cid:34). (cid:31)uring the fiscal year 2021(cid:11) the Company sold its interest in A(cid:40)(cid:49)I(cid:34). (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments(cid:11)" for more information about the Company(cid:6)s equity method investments. (3) Includes costs associated (cid:76)ith the Bemis transaction. Fiscal year 2021 includes a $1(cid:24) million benefit related to Bra(cid:79)il indirect ta(cid:77)es resulting from a (cid:40)ay 2021 Bra(cid:79)il Supreme Court decision. (cid:31)uring fiscal year 2020(cid:11) material acquisition costs and other includes $58 million amorti(cid:79)ation of Bemis acquisition related inventory fair value step(cid:12)up and $88 million of Bemis transaction related costs and integration costs not qualifying as e(cid:77)it costs(cid:11) including certain advisory(cid:11) legal(cid:11) audit(cid:11) and audit related fees. (4) Amorti(cid:79)ation of acquired intangible assets from business combinations includes amorti(cid:79)ation e(cid:77)penses related to all acquired intangible assets from past acquisitions(cid:11) including $26 million of sales bac(cid:64)log amorti(cid:79)ation for the fiscal year 2020 from the Bemis (5) Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina (cid:76)here the acquisition. functional currency (cid:76)as the Argentine (cid:43)eso. (cid:24)7 Amcor Annual Report 2022 (cid:24)8 (cid:38)ote 21 - Segments (cid:47)he follo(cid:76)ing table presents information about reportable segments(cid:25) 97 Form 10-K 98 (cid:47)he Company(cid:6)s business is organi(cid:79)ed and presented in the t(cid:76)o reportable segments outlined belo(cid:76)(cid:25) Fle(cid:74)ibles: Consists of operations that manufacture fle(cid:77)ible and film pac(cid:64)aging in the food and beverage(cid:11) medical and pharmaceutical(cid:11) fresh produce(cid:11) snac(cid:64) food(cid:11) personal care(cid:11) and other industries. Rigid Pac(cid:61)aging: Consists of operations that manufacture rigid containers for a broad range of predominantly beverage and food products(cid:11) including carbonated soft drin(cid:64)s(cid:11) (cid:76)ater(cid:11) (cid:63)uices(cid:11) sports drin(cid:64)s(cid:11) mil(cid:64)(cid:12)based beverages(cid:11) spirits and beer(cid:11) sauces(cid:11) dressings(cid:11) spreads and personal care items(cid:11) and plastic caps for a (cid:76)ide variety of applications. Other consists of the Company(cid:6)s undistributed corporate e(cid:77)penses including e(cid:77)ecutive and functional compensation costs(cid:11) equity method and other investments(cid:11) intercompany eliminations(cid:11) and other business activities. Operating segments are organi(cid:79)ed along the Company(cid:6)s product lines and geographical areas. (cid:47)he Company(cid:6)s five Fle(cid:77)ibles operating segments (Fle(cid:77)ibles Europe(cid:11) (cid:40)iddle East and Africa(cid:26) Fle(cid:77)ibles (cid:41)orth America(cid:26) Fle(cid:77)ibles Latin America(cid:26) Fle(cid:77)ibles Asia (cid:43)acific(cid:26) and Specialty Cartons) have been aggregated in the Fle(cid:77)ibles reportable segment as they e(cid:77)hibit similarity in economic characteristics and future prospects(cid:11) similarity in the products they offer(cid:11) their production technologies(cid:11) the customers they serve(cid:11) the nature of their service delivery models(cid:11) and their regulatory environments. (cid:47)he Company evaluates performance and allocates resources based on ad(cid:63)usted earnings before interest and ta(cid:77)es ("Ad(cid:63)usted EBI(cid:47)") from continuing operations. (cid:47)he Company defines Ad(cid:63)usted EBI(cid:47) as operating income ad(cid:63)usted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing operating performance and to include equity in income(cid:14)(loss) of affiliated companies(cid:11) net of ta(cid:77). (cid:47)he accounting policies of the reportable segments are the same as those in the consolidated financial statements. (cid:31)uring the first quarter of fiscal year 2021(cid:11) the Company revised the presentation of ad(cid:63)usted earnings before interest and ta(cid:77) ("Ad(cid:63)usted EBI(cid:47)") from continuing operations in the reportable segments to include an allocation of certain research and development and selling(cid:11) general(cid:11) and administrative e(cid:77)penses that management previously reflected in Other. (cid:47)he Company refines its e(cid:77)pense allocation methodologies to the reportable segments periodically as more relevant information becomes available and to align (cid:76)ith industry or mar(cid:64)et changes. Corporate e(cid:77)penses are allocated to the reportable segments based primarily on direct attribution. (cid:43)rior period has been recast to conform to the ne(cid:76) cost allocation methodology. ((cid:3) in millions) Sales including intersegment sales Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other (cid:44)otal sales including intersegment sales Intersegment sales Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other (cid:44)otal intersegment sales (cid:38)et sales Ad(cid:60)usted earnings before interest and ta(cid:74)es ((cid:2)Ad(cid:60)usted EBI(cid:44)(cid:2)) from continuing operations Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other Ad(cid:63)usted EBI(cid:47) from continuing operations Less(cid:25) (cid:40)aterial restructuring programs (1) Less(cid:25) Impairments in equity method investments (2) Less(cid:25) (cid:40)aterial acquisition costs and other (3) Less(cid:25) Amorti(cid:79)ation of acquired intangible assets from business combinations (4) Less(cid:25) Impact of hyperinflation (5) Less(cid:25) (cid:43)ension settlements (6) Add(cid:14)(Less)(cid:25) (cid:41)et gain(cid:14)(loss) on disposals (7) Less(cid:25) (cid:43)roperty and other losses(cid:11) net (8) Less(cid:25) (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict impacts ((cid:24)) EBI(cid:47) from continuing operations Interest income Interest e(cid:77)pense Equity in income (loss) of affiliated companies(cid:11) net of ta(cid:77) Income from continuing operations before income ta(cid:74)es and e(cid:67)uity in income (loss) of affiliated companies Years ended June 30, 2021 2020 2022 $ 11(cid:11)151 $ 10(cid:11)040 $ 3(cid:11)3(cid:24)3 (cid:85) 14(cid:11)544 2(cid:11)823 (cid:85) 12(cid:11)863 (cid:85) (cid:85) (cid:85) (cid:85) 2 (cid:85) (cid:85) 2 (cid:24)(cid:11)755 2(cid:11)716 (cid:85) 12(cid:11)471 3 (cid:85) (cid:85) 3 (cid:3) 1(cid:18),(cid:19)(cid:18)(cid:18) (cid:3) 12,(cid:22)(cid:20)1 (cid:3) 12,(cid:18)(cid:20)(cid:22) 1(cid:11)517 28(cid:24) 1(cid:11)427 2(cid:24)(cid:24) (105) (105) 1(cid:11)701 1(cid:11)621 (37) (cid:85) (4) (163) (16) (8) (10) (13) (200) 1(cid:11)250 24 (15(cid:24)) (cid:85) (88) (cid:85) (7) (165) (1(cid:24)) (cid:85) (cid:24) (cid:85) (cid:85) 1(cid:11)351 14 (153) (1(cid:24)) 1(cid:11)2(cid:24)6 284 (83) 1(cid:11)4(cid:24)7 (106) (26) (145) (1(cid:24)1) (28) (5) (cid:85) (cid:85) (cid:85) (cid:24)(cid:24)6 22 (207) 14 (cid:3) 1,11(cid:19) (cid:3) 1,1(cid:23)3 (cid:3) (cid:22)2(cid:19) (2) (1) (cid:40)aterial restructuring programs includes restructuring and related e(cid:77)penses for the 201(cid:24) Bemis Integration (cid:43)lan for fiscal year 2022 and 2018 (cid:45)igid (cid:43)ac(cid:64)aging (cid:45)estructuring (cid:43)lan and the 201(cid:24) Bemis Integration (cid:43)lan for fiscal years 2021 and 2020. (cid:45)efer to (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for more information about the Company(cid:6)s restructuring activities. Impairments in equity method investments include the impairment charges related to other(cid:12)than(cid:12)temporary impairments related to the investment in A(cid:40)(cid:49)I(cid:34). (cid:31)uring the fiscal year 2021(cid:11) the Company sold its interest in A(cid:40)(cid:49)I(cid:34). (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments(cid:11)" for more information about the Company(cid:6)s equity method investments. Includes costs associated (cid:76)ith the Bemis transaction. Fiscal year 2021 includes a $1(cid:24) million benefit related to Bra(cid:79)il indirect ta(cid:77)es resulting from a (cid:40)ay 2021 Bra(cid:79)il Supreme Court decision. (cid:31)uring fiscal year 2020(cid:11) material acquisition costs and other includes $58 million amorti(cid:79)ation of Bemis acquisition related inventory fair value step(cid:12)up and $88 million of Bemis transaction related costs and integration costs not qualifying as e(cid:77)it costs(cid:11) including certain advisory(cid:11) legal(cid:11) audit(cid:11) and audit related fees. (3) (cid:24)7 (cid:24)8 Amcor Annual Report 2022 (4) Amorti(cid:79)ation of acquired intangible assets from business combinations includes amorti(cid:79)ation e(cid:77)penses related to all acquired intangible assets from past acquisitions(cid:11) including $26 million of sales bac(cid:64)log amorti(cid:79)ation for the fiscal year 2020 from the Bemis acquisition. Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina (cid:76)here the functional currency (cid:76)as the Argentine (cid:43)eso. (5) (cid:47)he follo(cid:76)ing tables disaggregate net sales information by geography in (cid:76)hich the Company operates based on manufacturing or selling operations(cid:25) Year Ended June 30, 2022 Fle(cid:74)ibles Rigid Pac(cid:61)aging (cid:44)otal $ 4(cid:11)2(cid:24)6 $ 2(cid:11)656 $ (cid:3) 11,1(cid:19)1 (cid:3) 3,3(cid:23)3 (cid:3) 1(cid:18),(cid:19)(cid:18)(cid:18) Year Ended June 30, 2021 Fle(cid:74)ibles Rigid Pac(cid:61)aging (cid:44)otal $ 3(cid:11)71(cid:24) $ 2(cid:11)31(cid:24) $ (cid:3) 10,03(cid:22) (cid:3) 2,(cid:22)23 (cid:3) 12,(cid:22)(cid:20)1 Year Ended June 30, 2020 Fle(cid:74)ibles Rigid Pac(cid:61)aging (cid:44)otal $ 3(cid:11)637 $ 2(cid:11)21(cid:24) $ 1(cid:11)060 4(cid:11)062 1(cid:11)733 (cid:24)14 3(cid:11)828 1(cid:11)577 (cid:24)57 3(cid:11)665 1(cid:11)4(cid:24)3 737 (cid:85) (cid:85) 504 (cid:85) (cid:85) 4(cid:24)7 (cid:85) (cid:85) 6(cid:11)(cid:24)52 1(cid:11)7(cid:24)7 4(cid:11)062 1(cid:11)733 6(cid:11)038 1(cid:11)418 3(cid:11)828 1(cid:11)577 5(cid:11)856 1(cid:11)454 3(cid:11)665 1(cid:11)4(cid:24)3 (1) Includes the Company(cid:6)s country of domicile(cid:11) (cid:37)ersey. (cid:47)he Company had no sales in (cid:37)ersey in the period sho(cid:76)n. (1) Includes the Company(cid:6)s country of domicile(cid:11) (cid:37)ersey. (cid:47)he Company had no sales in (cid:37)ersey in the period sho(cid:76)n. (cid:3) (cid:23),(cid:21)(cid:19)2 (cid:3) 2,(cid:21)1(cid:20) (cid:3) 12,(cid:18)(cid:20)(cid:22) ((cid:3) in millions) (cid:41)orth America Latin America Europe (1) Asia (cid:43)acific (cid:38)et sales ((cid:3) in millions) (cid:41)orth America Latin America Europe (1) Asia (cid:43)acific (cid:38)et sales ((cid:3) in millions) (cid:41)orth America Latin America Europe (1) Asia (cid:43)acific (cid:38)et sales Form 10-K 99 (6) (cid:43)ension settlements in fiscal year 2022 relate to the purchases of group annuity contracts and transfer of pension plan assets and related benefit obligations. (cid:45)efer to (cid:41)ote 13(cid:11) "(cid:43)ension and Other (cid:43)ost(cid:12)(cid:45)etirement (cid:43)lans(cid:11)" for more information. For fiscal year 2020(cid:11) impact of pension settlements includes the amount of actuarial losses recogni(cid:79)ed in the consolidated income statements related to the settlement of certain defined benefit plans(cid:11) not including related ta(cid:77) effects. (7) (cid:41)et gain(cid:14)(loss) on disposals includes an e(cid:77)pense of $10 million from the disposal of non(cid:12)core assets for fiscal year 2022. (cid:45)efer to (cid:41)ote 11(cid:11) "Fair (cid:49)alue (cid:40)easurements(cid:11)" for more information. Fiscal year 2021 includes the gain reali(cid:79)ed upon the disposal of A(cid:40)(cid:49)I(cid:34) and the loss upon disposal of other non(cid:12)core businesses not part of material restructuring programs. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments(cid:11)" for further information on the disposal of A(cid:40)(cid:49)I(cid:34) and (cid:41)ote 5(cid:11) "(cid:31)ivestitures(cid:11)" for more information about the Company(cid:6)s other disposals. (8) (cid:43)roperty and other losses(cid:11) net includes property and related business losses primarily associated (cid:76)ith the destruction of the Company(cid:6)s (cid:31)urban(cid:11) South Africa(cid:11) facility during general civil unrest in (cid:37)uly 2021(cid:11) net of insurance recovery. ((cid:24)) (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict impacts include $138 million of impairment charges(cid:11) $57 million of restructuring and related e(cid:77)penses(cid:11) and $5 million of other e(cid:77)penses for fiscal year 2022. (cid:45)efer to (cid:41)ote 4(cid:11)"(cid:45)estructuring(cid:11) Impairment(cid:11) and (cid:45)elated E(cid:77)penses(cid:11) (cid:41)et(cid:11) " and (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for further information. (cid:47)he tables belo(cid:76) present additional financial information by reportable segments(cid:25) (1) Includes the Company(cid:6)s country of domicile(cid:11) (cid:37)ersey. (cid:47)he Company had no sales in (cid:37)ersey in the period sho(cid:76)n. ((cid:3) in millions) Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other (cid:44)otal capital e(cid:74)penditures for the ac(cid:67)uisition of long-lived assets ((cid:3) in millions) Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other (cid:44)otal depreciation and amorti(cid:76)ation Years ended June 30, 2021 2020 2022 376 $ 336 $ 136 15 127 5 (cid:19)2(cid:21) (cid:3) (cid:18)(cid:20)(cid:22) (cid:3) Years ended June 30, 2021 2020 2022 450 $ 447 $ 120 (cid:24) 115 10 (cid:19)(cid:21)(cid:23) (cid:3) (cid:19)(cid:21)2 (cid:3) 271 125 4 (cid:18)00 478 111 18 (cid:20)0(cid:21) $ (cid:3) $ (cid:3) (cid:47)otal assets by segment is not disclosed as the Company does not use total assets by segment to evaluate segment performance or allocate resources and capital. (cid:47)he Company did not have sales to a single customer that e(cid:77)ceeded 10(cid:4) of consolidated net sales for the fiscal years ended (cid:37)une 30(cid:11) 2022(cid:11) 2021 and 2020(cid:11) respectively. Sales by ma(cid:63)or product (cid:76)ere(cid:25) ((cid:3) in millions) Films and other fle(cid:77)ible products Specialty fle(cid:77)ible folding cartons Containers(cid:11) preforms(cid:11) and closures (cid:38)et sales Segment Fle(cid:77)ibles Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Years ended June 30, 2021 2020 2022 $ 10(cid:11)033 $ 8(cid:11)(cid:24)34 $ 1(cid:11)118 1(cid:11)104 3(cid:11)3(cid:24)3 1(cid:18),(cid:19)(cid:18)(cid:18) (cid:3) 2(cid:11)823 12,(cid:22)(cid:20)1 (cid:3) (cid:3) 8(cid:11)637 1(cid:11)115 2(cid:11)716 12,(cid:18)(cid:20)(cid:22) (cid:47)he follo(cid:76)ing table provides long(cid:12)lived asset information for the ma(cid:63)or countries in (cid:76)hich the Company operates. Long(cid:12)lived assets include property(cid:11) plant(cid:11) and equipment(cid:11) net of accumulated depreciation and impairments. ((cid:3) in millions) (cid:48)nited States of America Other countries (1) Long-lived assets June 30, 2022 2021 $ (cid:3) 1(cid:11)720 $ 1(cid:11)(cid:24)26 3,(cid:20)(cid:18)(cid:20) (cid:3) 1(cid:11)673 2(cid:11)088 3,(cid:21)(cid:20)1 (1) Includes the Company(cid:6)s country of domicile(cid:11) (cid:37)ersey. (cid:47)he Company had no long(cid:12)lived assets in (cid:37)ersey in any period sho(cid:76)n. (cid:41)o individual country represented more than 10(cid:4) of the respective totals. (cid:24)(cid:24) Amcor Annual Report 2022 100 99 Form 10-K (cid:20)00 (cid:47)he follo(cid:76)ing tables disaggregate net sales information by geography in (cid:76)hich the Company operates based on manufacturing or selling operations(cid:25) (cid:44)otal Fle(cid:74)ibles Year Ended June 30, 2022 Rigid Pac(cid:61)aging ((cid:3) in millions) (cid:41)orth America Latin America Europe (1) Asia (cid:43)acific (cid:38)et sales $ 4(cid:11)2(cid:24)6 $ 2(cid:11)656 $ 1(cid:11)060 4(cid:11)062 1(cid:11)733 737 (cid:85) (cid:85) 6(cid:11)(cid:24)52 1(cid:11)7(cid:24)7 4(cid:11)062 1(cid:11)733 (cid:3) 11,1(cid:19)1 (cid:3) 3,3(cid:23)3 (cid:3) 1(cid:18),(cid:19)(cid:18)(cid:18) (6) (cid:43)ension settlements in fiscal year 2022 relate to the purchases of group annuity contracts and transfer of pension plan assets and related benefit obligations. (cid:45)efer to (cid:41)ote 13(cid:11) "(cid:43)ension and Other (cid:43)ost(cid:12)(cid:45)etirement (cid:43)lans(cid:11)" for more information. For fiscal year 2020(cid:11) impact of pension settlements includes the amount of actuarial losses recogni(cid:79)ed in the consolidated income statements related to the settlement of certain defined benefit plans(cid:11) not including related ta(cid:77) effects. (7) (cid:41)et gain(cid:14)(loss) on disposals includes an e(cid:77)pense of $10 million from the disposal of non(cid:12)core assets for fiscal year 2022. (cid:45)efer to (cid:41)ote 11(cid:11) "Fair (cid:49)alue (cid:40)easurements(cid:11)" for more information. Fiscal year 2021 includes the gain reali(cid:79)ed upon the disposal of A(cid:40)(cid:49)I(cid:34) and the loss upon disposal of other non(cid:12)core businesses not part of material restructuring programs. (cid:45)efer to (cid:41)ote 8(cid:11) "Equity (cid:40)ethod and Other Investments(cid:11)" for further information on the disposal of A(cid:40)(cid:49)I(cid:34) and (cid:41)ote 5(cid:11) "(cid:31)ivestitures(cid:11)" for more information about the Company(cid:6)s other disposals. (8) (cid:43)roperty and other losses(cid:11) net includes property and related business losses primarily associated (cid:76)ith the destruction of the Company(cid:6)s (cid:31)urban(cid:11) South Africa(cid:11) facility during general civil unrest in (cid:37)uly 2021(cid:11) net of insurance recovery. ((cid:24)) (cid:45)ussia(cid:12)(cid:48)(cid:64)raine conflict impacts include $138 million of impairment charges(cid:11) $57 million of restructuring and related e(cid:77)penses(cid:11) and $5 million of other e(cid:77)penses for fiscal year 2022. (cid:45)efer to (cid:41)ote 4(cid:11)"(cid:45)estructuring(cid:11) Impairment(cid:11) and (cid:45)elated E(cid:77)penses(cid:11) (cid:41)et(cid:11) " and (cid:41)ote 7(cid:11) "(cid:45)estructuring(cid:11)" for further information. (cid:44)otal capital e(cid:74)penditures for the ac(cid:67)uisition of long-lived assets (cid:19)2(cid:21) (cid:3) (cid:18)(cid:20)(cid:22) (cid:3) ((cid:3) in millions) Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other ((cid:3) in millions) Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Other Years ended June 30, 2022 2021 2020 376 $ 336 $ $ (cid:3) $ (cid:3) 136 15 120 (cid:24) 127 5 115 10 271 125 4 (cid:18)00 478 111 18 (cid:20)0(cid:21) Years ended June 30, 2022 2021 2020 450 $ 447 $ ended (cid:37)une 30(cid:11) 2022(cid:11) 2021 and 2020(cid:11) respectively. Sales by ma(cid:63)or product (cid:76)ere(cid:25) ((cid:3) in millions) Films and other fle(cid:77)ible products Specialty fle(cid:77)ible folding cartons Containers(cid:11) preforms(cid:11) and closures (cid:38)et sales Segment Fle(cid:77)ibles Fle(cid:77)ibles (cid:45)igid (cid:43)ac(cid:64)aging Years ended June 30, 2022 2021 2020 $ 10(cid:11)033 $ 8(cid:11)(cid:24)34 $ 1(cid:11)118 3(cid:11)3(cid:24)3 1(cid:11)104 2(cid:11)823 8(cid:11)637 1(cid:11)115 2(cid:11)716 (cid:3) 1(cid:18),(cid:19)(cid:18)(cid:18) (cid:3) 12,(cid:22)(cid:20)1 (cid:3) 12,(cid:18)(cid:20)(cid:22) (cid:47)he follo(cid:76)ing table provides long(cid:12)lived asset information for the ma(cid:63)or countries in (cid:76)hich the Company operates. Long(cid:12)lived assets include property(cid:11) plant(cid:11) and equipment(cid:11) net of accumulated depreciation and impairments. ((cid:3) in millions) (cid:48)nited States of America Other countries (1) Long-lived assets June 30, 2022 2021 $ (cid:3) 1(cid:11)720 $ 1(cid:11)(cid:24)26 3,(cid:20)(cid:18)(cid:20) (cid:3) 1(cid:11)673 2(cid:11)088 3,(cid:21)(cid:20)1 (1) Includes the Company(cid:6)s country of domicile(cid:11) (cid:37)ersey. (cid:47)he Company had no long(cid:12)lived assets in (cid:37)ersey in any period sho(cid:76)n. (cid:41)o individual country represented more than 10(cid:4) of the respective totals. (cid:47)he tables belo(cid:76) present additional financial information by reportable segments(cid:25) (1) Includes the Company(cid:6)s country of domicile(cid:11) (cid:37)ersey. (cid:47)he Company had no sales in (cid:37)ersey in the period sho(cid:76)n. ((cid:3) in millions) (cid:41)orth America Latin America Europe (1) Asia (cid:43)acific (cid:38)et sales Year Ended June 30, 2021 Rigid Pac(cid:61)aging (cid:44)otal Fle(cid:74)ibles $ 3(cid:11)71(cid:24) $ 2(cid:11)31(cid:24) $ (cid:24)14 3(cid:11)828 1(cid:11)577 504 (cid:85) (cid:85) 6(cid:11)038 1(cid:11)418 3(cid:11)828 1(cid:11)577 (cid:3) 10,03(cid:22) (cid:3) 2,(cid:22)23 (cid:3) 12,(cid:22)(cid:20)1 (1) Includes the Company(cid:6)s country of domicile(cid:11) (cid:37)ersey. (cid:47)he Company had no sales in (cid:37)ersey in the period sho(cid:76)n. (cid:44)otal depreciation and amorti(cid:76)ation (cid:19)(cid:21)(cid:23) (cid:3) (cid:19)(cid:21)2 (cid:3) (cid:47)otal assets by segment is not disclosed as the Company does not use total assets by segment to evaluate segment performance or allocate resources and capital. (cid:47)he Company did not have sales to a single customer that e(cid:77)ceeded 10(cid:4) of consolidated net sales for the fiscal years ((cid:3) in millions) (cid:41)orth America Latin America Europe (1) Asia (cid:43)acific (cid:38)et sales Year Ended June 30, 2020 Rigid Pac(cid:61)aging (cid:44)otal Fle(cid:74)ibles $ 3(cid:11)637 $ 2(cid:11)21(cid:24) $ (cid:24)57 3(cid:11)665 1(cid:11)4(cid:24)3 4(cid:24)7 (cid:85) (cid:85) 5(cid:11)856 1(cid:11)454 3(cid:11)665 1(cid:11)4(cid:24)3 (cid:3) (cid:23),(cid:21)(cid:19)2 (cid:3) 2,(cid:21)1(cid:20) (cid:3) 12,(cid:18)(cid:20)(cid:22) (1) Includes the Company(cid:6)s country of domicile(cid:11) (cid:37)ersey. (cid:47)he Company had no sales in (cid:37)ersey in the period sho(cid:76)n. (cid:24)(cid:24) 100 Amcor Annual Report 2022 (cid:38)ote 22 - Deed of Cross (cid:31)uarantee (cid:47)he parent entity(cid:11) Amcor plc(cid:11) and its (cid:76)holly o(cid:76)ned subsidiaries listed belo(cid:76) are sub(cid:63)ect to a (cid:31)eed of Cross (cid:34)uarantee dated (cid:37)une 24(cid:11) 201(cid:24) (the "(cid:31)eed") under (cid:76)hich each company guarantees the debts of the others(cid:25) Deed of Cross (cid:31)uarantee Statements of Income ((cid:3) in millions) Form 10-K (cid:20)0(cid:20) (cid:16)m(cid:38)or (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or (cid:32)er(cid:56)(cid:44)(cid:38)e(cid:53) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or In(cid:56)e(cid:53)tment(cid:53) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or (cid:22)old(cid:44)ng(cid:53) (cid:3)(cid:16)(cid:55)(cid:53)tral(cid:44)a(cid:4) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or Fle(cid:58)(cid:44)(cid:37)le(cid:53) (cid:21)ro(cid:55)(cid:51) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or Fle(cid:58)(cid:44)(cid:37)le(cid:53) (cid:3)(cid:16)(cid:55)(cid:53)tral(cid:44)a(cid:4) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or F(cid:44)nan(cid:38)e (cid:16)(cid:55)(cid:53)tral(cid:44)a (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or Fle(cid:58)(cid:44)(cid:37)le(cid:53) (cid:3)(cid:30)ort (cid:27)el(cid:37)o(cid:55)rne(cid:4) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or (cid:19)(cid:55)ro(cid:51)ean (cid:22)old(cid:44)ng(cid:53) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or (cid:30)a(cid:38)kag(cid:44)ng (cid:3)(cid:16)(cid:53)(cid:44)a(cid:4) (cid:30)t(cid:59) (cid:26)td (cid:16)(cid:31)(cid:30) (cid:28)ort(cid:43) (cid:16)mer(cid:44)(cid:38)a (cid:22)old(cid:38)o (cid:26)td (cid:16)(cid:31)(cid:30) (cid:26)(cid:16)(cid:33)(cid:16)(cid:27) (cid:22)old(cid:38)o (cid:26)td (cid:47)he entities above (cid:76)ere the only parties to the (cid:31)eed at (cid:37)une 30(cid:11) 2022 and comprise the closed group for the purposes of the (cid:31)eed (and also the e(cid:77)tended closed group). A(cid:45)(cid:43) (cid:41)orth America (cid:35)oldco Ltd and A(cid:45)(cid:43) LA(cid:47)A(cid:40) (cid:35)oldco Ltd (cid:76)ere ne(cid:76)ly incorporated entities and (cid:76)ere added to the deed on September 25(cid:11) 201(cid:24). By a (cid:45)evocation (cid:31)eed(cid:11) dated September (cid:24)(cid:11) 2021(cid:11) the (cid:31)eed (cid:76)as revo(cid:64)ed in respect of Amcor Fle(cid:77)ibles ((cid:31)andenong) (cid:43)ty Ltd(cid:11) (cid:43)ac(cid:64)sys (cid:43)ty Ltd(cid:11) (cid:43)ac(cid:64)sys (cid:35)oldings (Aus) (cid:43)ty Ltd(cid:11) and (cid:47)echni(cid:12)Chem Australia (cid:43)ty Ltd. (cid:41)o other parties have been added(cid:11) removed or the sub(cid:63)ect to a notice of disposal since September (cid:24)(cid:11) 2021. By entering into the (cid:31)eed(cid:11) the (cid:76)holly o(cid:76)ned subsidiaries have been relieved from the requirement to prepare a financial report and directors(cid:89) report under ASIC Corporations ((cid:50)holly(cid:12)o(cid:76)ned Companies) Instrument 2016(cid:14)785. (cid:47)he follo(cid:76)ing financial statements are additional disclosure items specifically required by ASIC and represent the consolidated results of the entities sub(cid:63)ect to the (cid:31)eed only. For the year ended June 30, (cid:41)et sales Cost of sales (cid:34)ross profit Operating e(cid:77)penses Other income(cid:11) net Operating income Interest income Interest e(cid:77)pense Other non(cid:12)operating loss(cid:11) net Income before income ta(cid:77)es Income ta(cid:77) (e(cid:77)pense)(cid:14)credit (cid:38)et income 2022 2021 $ 3(cid:24)1 $ (337) 54 (1(cid:11)251) 2(cid:11)355 12 (14) 1 335 (282) 53 (2(cid:11)441) 3(cid:11)8(cid:24)8 18 (11) (5) 1(cid:11)158 1(cid:11)510 1(cid:11)157 1(cid:11)512 (4) 17 (cid:3) 1,1(cid:19)3 (cid:3) 1,(cid:19)2(cid:23) 101 Amcor Annual Report 2022 102 (cid:38)ote 22 - Deed of Cross (cid:31)uarantee (cid:47)he parent entity(cid:11) Amcor plc(cid:11) and its (cid:76)holly o(cid:76)ned subsidiaries listed belo(cid:76) are sub(cid:63)ect to a (cid:31)eed of Cross (cid:34)uarantee dated (cid:37)une 24(cid:11) 201(cid:24) (the "(cid:31)eed") under (cid:76)hich each company guarantees the debts of the others(cid:25) Deed of Cross (cid:31)uarantee Statements of Income ((cid:3) in millions) For the year ended June 30, 2022 2021 (cid:20)0(cid:20) Form 10-K (cid:20)02 (cid:16)m(cid:38)or (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or (cid:32)er(cid:56)(cid:44)(cid:38)e(cid:53) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or In(cid:56)e(cid:53)tment(cid:53) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or (cid:22)old(cid:44)ng(cid:53) (cid:3)(cid:16)(cid:55)(cid:53)tral(cid:44)a(cid:4) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or Fle(cid:58)(cid:44)(cid:37)le(cid:53) (cid:21)ro(cid:55)(cid:51) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or Fle(cid:58)(cid:44)(cid:37)le(cid:53) (cid:3)(cid:16)(cid:55)(cid:53)tral(cid:44)a(cid:4) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or F(cid:44)nan(cid:38)e (cid:16)(cid:55)(cid:53)tral(cid:44)a (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or Fle(cid:58)(cid:44)(cid:37)le(cid:53) (cid:3)(cid:30)ort (cid:27)el(cid:37)o(cid:55)rne(cid:4) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or (cid:19)(cid:55)ro(cid:51)ean (cid:22)old(cid:44)ng(cid:53) (cid:30)t(cid:59) (cid:26)td (cid:16)m(cid:38)or (cid:30)a(cid:38)kag(cid:44)ng (cid:3)(cid:16)(cid:53)(cid:44)a(cid:4) (cid:30)t(cid:59) (cid:26)td (cid:16)(cid:31)(cid:30) (cid:28)ort(cid:43) (cid:16)mer(cid:44)(cid:38)a (cid:22)old(cid:38)o (cid:26)td (cid:16)(cid:31)(cid:30) (cid:26)(cid:16)(cid:33)(cid:16)(cid:27) (cid:22)old(cid:38)o (cid:26)td (cid:47)he entities above (cid:76)ere the only parties to the (cid:31)eed at (cid:37)une 30(cid:11) 2022 and comprise the closed group for the purposes of the (cid:31)eed (and also the e(cid:77)tended closed group). A(cid:45)(cid:43) (cid:41)orth America (cid:35)oldco Ltd and A(cid:45)(cid:43) LA(cid:47)A(cid:40) (cid:35)oldco Ltd (cid:76)ere ne(cid:76)ly incorporated entities and (cid:76)ere added to the deed on September 25(cid:11) 201(cid:24). By a (cid:45)evocation (cid:31)eed(cid:11) dated September (cid:24)(cid:11) 2021(cid:11) the (cid:31)eed (cid:76)as revo(cid:64)ed in respect of Amcor Fle(cid:77)ibles ((cid:31)andenong) (cid:43)ty Ltd(cid:11) (cid:43)ac(cid:64)sys (cid:43)ty Ltd(cid:11) (cid:43)ac(cid:64)sys (cid:35)oldings (Aus) (cid:43)ty Ltd(cid:11) and (cid:47)echni(cid:12)Chem Australia (cid:43)ty Ltd. (cid:41)o other parties have been added(cid:11) removed or the sub(cid:63)ect to a notice of disposal since September (cid:24)(cid:11) 2021. By entering into the (cid:31)eed(cid:11) the (cid:76)holly o(cid:76)ned subsidiaries have been relieved from the requirement to prepare a financial report and directors(cid:89) report under ASIC Corporations ((cid:50)holly(cid:12)o(cid:76)ned Companies) Instrument 2016(cid:14)785. (cid:47)he follo(cid:76)ing financial statements are additional disclosure items specifically required by ASIC and represent the consolidated results of the entities sub(cid:63)ect to the (cid:31)eed only. (cid:41)et sales Cost of sales (cid:34)ross profit Operating e(cid:77)penses Other income(cid:11) net Operating income Interest income Interest e(cid:77)pense Other non(cid:12)operating loss(cid:11) net Income before income ta(cid:77)es Income ta(cid:77) (e(cid:77)pense)(cid:14)credit (cid:38)et income $ 3(cid:24)1 $ (337) 54 (1(cid:11)251) 2(cid:11)355 335 (282) 53 (2(cid:11)441) 3(cid:11)8(cid:24)8 1(cid:11)158 1(cid:11)510 12 (14) 1 18 (11) (5) 1(cid:11)157 1(cid:11)512 (4) 17 (cid:3) 1,1(cid:19)3 (cid:3) 1,(cid:19)2(cid:23) 101 102 Amcor Annual Report 2022 Form 10-K (cid:20)0(cid:22) Deed of Cross (cid:31)uarantee Summari(cid:76)ed Statements of Comprehensive Income ((cid:3) in millions) Deed of Cross (cid:31)uarantee Balance Sheet ((cid:3) in millions) For the year ended June 30, (cid:41)et income Other comprehensive income(cid:14)(loss) (1) (cid:25) Foreign currency translation ad(cid:63)ustments(cid:11) net of ta(cid:77) (cid:41)et investment hedge of foreign operations(cid:11) net of ta(cid:77) Other comprehensive income(cid:13)(loss) Comprehensive (income)(cid:14)loss attributable to non(cid:12)controlling interests 2022 2021 $ 1(cid:11)153 $ 1(cid:11)52(cid:24) (30) (cid:85) (30) (cid:85) 32 (cid:85) 32 (cid:85) (cid:44)otal comprehensive income (cid:3) 1,123 (cid:3) 1,(cid:19)(cid:20)1 (1) All of the items in other comprehensive income(cid:14)(loss) may be reclassified subsequently to profit or loss. Assets As of June 30, Current assets: Cash and cash equivalents (cid:45)eceivables(cid:11) net Inventories (cid:43)repaid e(cid:77)penses and other current assets (cid:47)otal current assets (cid:38)on-current assets: (cid:43)roperty(cid:11) plant(cid:11) and equipment(cid:11) net Deed of Cross (cid:31)uarantee Summari(cid:76)ed Statements of Income and Accumulated Losses ((cid:3) in millions) For the year ended June 30, (cid:45)etained earnings(cid:11) beginning balance (cid:41)et income (cid:45)etained earnings before distribution $ 2022 2021 6(cid:11)737 $ 1(cid:11)153 7(cid:11)8(cid:24)0 5(cid:11)(cid:24)35 1(cid:11)52(cid:24) 7(cid:11)464 (cid:31)ividends recogni(cid:79)ed during the financial period (723) (727) Retained earnings at the end of the financial period (cid:3) (cid:21),1(cid:20)(cid:21) (cid:3) (cid:20),(cid:21)3(cid:21) (cid:31)eferred ta(cid:77) assets Other intangible assets(cid:11) net (cid:34)ood(cid:76)ill Other non(cid:12)current assets (cid:47)otal non(cid:12)current assets (cid:44)otal assets Current liabilities: Short(cid:12)term debt (cid:43)ayables Accrued employee costs Other current liabilities (cid:47)otal current liabilities (cid:38)on-current liabilities: Liabilities Long(cid:12)term debt(cid:11) less current portion Other non(cid:12)current liabilities (cid:44)otal liabilities Issued Additional paid(cid:12)in capital (cid:45)etained earnings Accumulated other comprehensive income (cid:44)otal shareholders(cid:6) e(cid:67)uity (cid:44)otal liabilities and shareholders(cid:6) e(cid:67)uity Shareholders(cid:6) E(cid:67)uity 2022 2021 $ 68 $ 14(cid:11)03(cid:24) 14(cid:11)231 1(cid:19),0(cid:19)1 (cid:3) (cid:24)01 $ (cid:3) $ 662 71 1(cid:24) 820 63 26 12 (cid:24)1 162 21 1(cid:24)1 1(cid:11)275 31(cid:24) 2 1,(cid:19)(cid:23)(cid:20) 15 5(cid:11)23(cid:24) 7(cid:11)167 1(cid:11)034 13,(cid:18)(cid:19)(cid:19) (cid:3) 1(cid:19),0(cid:19)1 (cid:3) 47 6(cid:24)0 66 32 835 74 3(cid:24) 12 100 13(cid:11)336 13(cid:11)561 1(cid:18),3(cid:23)(cid:20) 816 137 23 10(cid:24) 1(cid:11)085 370 3 1,(cid:18)(cid:19)(cid:22) 15 5(cid:11)122 6(cid:11)737 1(cid:11)064 12,(cid:23)3(cid:22) 1(cid:18),3(cid:23)(cid:20) 103 Amcor Annual Report 2022 104 For the year ended June 30, (cid:41)et income Other comprehensive income(cid:14)(loss) (1) (cid:25) Foreign currency translation ad(cid:63)ustments(cid:11) net of ta(cid:77) (cid:41)et investment hedge of foreign operations(cid:11) net of ta(cid:77) Other comprehensive income(cid:13)(loss) 2022 2021 $ 1(cid:11)153 $ 1(cid:11)52(cid:24) (30) (cid:85) (30) (cid:85) 32 (cid:85) 32 (cid:85) Comprehensive (income)(cid:14)loss attributable to non(cid:12)controlling interests (cid:44)otal comprehensive income (cid:3) 1,123 (cid:3) 1,(cid:19)(cid:20)1 (1) All of the items in other comprehensive income(cid:14)(loss) may be reclassified subsequently to profit or loss. Summari(cid:76)ed Statements of Income and Accumulated Losses Deed of Cross (cid:31)uarantee ((cid:3) in millions) For the year ended June 30, (cid:45)etained earnings(cid:11) beginning balance (cid:41)et income (cid:45)etained earnings before distribution 2022 2021 $ 6(cid:11)737 $ 1(cid:11)153 7(cid:11)8(cid:24)0 5(cid:11)(cid:24)35 1(cid:11)52(cid:24) 7(cid:11)464 (cid:31)ividends recogni(cid:79)ed during the financial period (723) (727) Retained earnings at the end of the financial period (cid:3) (cid:21),1(cid:20)(cid:21) (cid:3) (cid:20),(cid:21)3(cid:21) (cid:20)0(cid:22) Form 10-K (cid:20)0(cid:23) Deed of Cross (cid:31)uarantee Summari(cid:76)ed Statements of Comprehensive Income ((cid:3) in millions) Deed of Cross (cid:31)uarantee Balance Sheet ((cid:3) in millions) As of June 30, 2022 2021 Assets Current assets: Cash and cash equivalents (cid:45)eceivables(cid:11) net Inventories (cid:43)repaid e(cid:77)penses and other current assets (cid:47)otal current assets (cid:38)on-current assets: (cid:43)roperty(cid:11) plant(cid:11) and equipment(cid:11) net (cid:31)eferred ta(cid:77) assets Other intangible assets(cid:11) net (cid:34)ood(cid:76)ill Other non(cid:12)current assets (cid:47)otal non(cid:12)current assets (cid:44)otal assets Liabilities Current liabilities: Short(cid:12)term debt (cid:43)ayables Accrued employee costs Other current liabilities (cid:47)otal current liabilities (cid:38)on-current liabilities: Long(cid:12)term debt(cid:11) less current portion Other non(cid:12)current liabilities (cid:44)otal liabilities Shareholders(cid:6) E(cid:67)uity Issued Additional paid(cid:12)in capital (cid:45)etained earnings Accumulated other comprehensive income (cid:44)otal shareholders(cid:6) e(cid:67)uity (cid:44)otal liabilities and shareholders(cid:6) e(cid:67)uity $ (cid:3) $ (cid:3) 68 $ 662 71 1(cid:24) 820 63 26 12 (cid:24)1 14(cid:11)03(cid:24) 14(cid:11)231 1(cid:19),0(cid:19)1 (cid:3) (cid:24)01 $ 162 21 1(cid:24)1 1(cid:11)275 31(cid:24) 2 1,(cid:19)(cid:23)(cid:20) 15 5(cid:11)23(cid:24) 7(cid:11)167 1(cid:11)034 13,(cid:18)(cid:19)(cid:19) 1(cid:19),0(cid:19)1 (cid:3) 47 6(cid:24)0 66 32 835 74 3(cid:24) 12 100 13(cid:11)336 13(cid:11)561 1(cid:18),3(cid:23)(cid:20) 816 137 23 10(cid:24) 1(cid:11)085 370 3 1,(cid:18)(cid:19)(cid:22) 15 5(cid:11)122 6(cid:11)737 1(cid:11)064 12,(cid:23)3(cid:22) 1(cid:18),3(cid:23)(cid:20) 103 104 Amcor Annual Report 2022 Form 10-K (cid:20)0(cid:24) (cid:38)ote 23 - Supplemental Cash Flow Information (cid:38)ote 2(cid:18) - Subse(cid:67)uent Events Supplemental cash flo(cid:76) information is as follo(cid:76)s(cid:25) ((cid:3) in millions) Interest paid(cid:11) net of amounts capitali(cid:79)ed Income ta(cid:77)es paid For the years ended June 30, 2022 2021 2020 $ 155 $ 256 146 $ 321 212 304 (cid:41)on(cid:12)cash investing activities includes the purchase of property and equipment for (cid:76)hich payment has not been made. As of (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) purchase of property and equipment(cid:11) accrued but unpaid(cid:11) (cid:76)as $110 million(cid:11) $76 million(cid:11) and $78 million(cid:11) respectively. On August 17(cid:11) 2022(cid:11) the Company(cid:6)s Board of (cid:31)irectors declared a quarterly cash dividend of $0.12 per share to be paid on September 28(cid:11) 2022 to shareholders of record as of September 8(cid:11) 2022. Amcor has received a (cid:76)aiver from the Australian Securities E(cid:77)change ("AS(cid:51)") settlement operating rules(cid:11) (cid:76)hich (cid:76)ill allo(cid:76) Amcor to defer processing conversions bet(cid:76)een its ordinary share and C(cid:35)ESS (cid:31)epositary Instrument ("C(cid:31)I") registers from September 7(cid:11) 2022 to September 8(cid:11) 2022(cid:11) inclusive. On August 17(cid:11) 2022(cid:11) the Company(cid:6)s Board of (cid:31)irectors approved a $400 million buybac(cid:64) of ordinary shares and(cid:14)or C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is") in the ne(cid:77)t t(cid:76)elve months. (cid:43)ursuant to this program(cid:11) purchases of the Company(cid:6)s ordinary shares and(cid:14)or C(cid:31)Is (cid:76)ill be made sub(cid:63)ect to mar(cid:64)et conditions and at prevailing mar(cid:64)et prices(cid:11) through open mar(cid:64)et purchases. (cid:47)he Company e(cid:77)pects to complete the share buybac(cid:64) (cid:76)ithin t(cid:76)elve months(cid:11) ho(cid:76)ever(cid:11) the timing(cid:11) volume(cid:11) and nature of repurchase may be amended(cid:11) suspended(cid:11) or discontinued at any time. 105 Amcor Annual Report 2022 106 (cid:20)0(cid:24) Form 10-K (cid:20)0(cid:25) (cid:38)ote 23 - Supplemental Cash Flow Information (cid:38)ote 2(cid:18) - Subse(cid:67)uent Events Supplemental cash flo(cid:76) information is as follo(cid:76)s(cid:25) ((cid:3) in millions) Income ta(cid:77)es paid Interest paid(cid:11) net of amounts capitali(cid:79)ed For the years ended June 30, 2022 2021 2020 $ 155 $ 256 146 $ 321 212 304 (cid:41)on(cid:12)cash investing activities includes the purchase of property and equipment for (cid:76)hich payment has not been made. As of (cid:37)une 30(cid:11) 2022(cid:11) 2021(cid:11) and 2020(cid:11) purchase of property and equipment(cid:11) accrued but unpaid(cid:11) (cid:76)as $110 million(cid:11) $76 million(cid:11) and $78 million(cid:11) respectively. On August 17(cid:11) 2022(cid:11) the Company(cid:6)s Board of (cid:31)irectors declared a quarterly cash dividend of $0.12 per share to be paid on September 28(cid:11) 2022 to shareholders of record as of September 8(cid:11) 2022. Amcor has received a (cid:76)aiver from the Australian Securities E(cid:77)change ("AS(cid:51)") settlement operating rules(cid:11) (cid:76)hich (cid:76)ill allo(cid:76) Amcor to defer processing conversions bet(cid:76)een its ordinary share and C(cid:35)ESS (cid:31)epositary Instrument ("C(cid:31)I") registers from September 7(cid:11) 2022 to September 8(cid:11) 2022(cid:11) inclusive. On August 17(cid:11) 2022(cid:11) the Company(cid:6)s Board of (cid:31)irectors approved a $400 million buybac(cid:64) of ordinary shares and(cid:14)or C(cid:35)ESS (cid:31)epositary Instruments ("C(cid:31)Is") in the ne(cid:77)t t(cid:76)elve months. (cid:43)ursuant to this program(cid:11) purchases of the Company(cid:6)s ordinary shares and(cid:14)or C(cid:31)Is (cid:76)ill be made sub(cid:63)ect to mar(cid:64)et conditions and at prevailing mar(cid:64)et prices(cid:11) through open mar(cid:64)et purchases. (cid:47)he Company e(cid:77)pects to complete the share buybac(cid:64) (cid:76)ithin t(cid:76)elve months(cid:11) ho(cid:76)ever(cid:11) the timing(cid:11) volume(cid:11) and nature of repurchase may be amended(cid:11) suspended(cid:11) or discontinued at any time. 105 106 Amcor Annual Report 2022 Form 10-K (cid:20)0(cid:26) Item (cid:23)(cid:12) - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure PAR(cid:44) III (cid:41)one. Item (cid:23)A(cid:12) - Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management(cid:11) (cid:76)ith the participation of our Chief E(cid:77)ecutive Officer and Chief Financial Officer(cid:11) has evaluated the effectiveness of our disclosure controls and procedures as of (cid:37)une 30(cid:11) 2022. (cid:47)he term "disclosure controls and procedures(cid:11)" as defined in (cid:45)ules 13a(cid:12)15(e) and 15d(cid:12)15(e) under the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended (the (cid:86)E(cid:77)change Act(cid:87))(cid:11) means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the E(cid:77)change Act is recorded(cid:11) processed(cid:11) summari(cid:79)ed(cid:11) and reported(cid:11) (cid:76)ithin the time periods specified in the SEC(cid:6)s rules and forms. (cid:31)isclosure controls and procedures include(cid:11) (cid:76)ithout limitation(cid:11) controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the E(cid:77)change Act is accumulated and communicated to our management(cid:11) including its principal e(cid:77)ecutive and financial officers(cid:11) as appropriate(cid:11) to allo(cid:76) timely decisions regarding required disclosure. (cid:40)anagement recogni(cid:79)es that any controls and procedures(cid:11) no matter ho(cid:76) (cid:76)ell designed and operated(cid:11) can provide only report. reasonable assurance of achieving their ob(cid:63)ectives and management necessarily applies its (cid:63)udgment in evaluating the cost(cid:12) benefit relationship of possible controls and procedures. Based on this evaluation(cid:11) the Chief E(cid:77)ecutive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (cid:76)ere effective as of (cid:37)une 30(cid:11) 2022. Item 10(cid:12) - Directors, E(cid:74)ecutive Officers and Corporate (cid:31)overnance (cid:47)he information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. Information (cid:76)ith respect to our e(cid:77)ecutive officers appears in (cid:43)art I of this Annual (cid:45)eport on Form 10(cid:12)(cid:38). Our Board Committee Charters(cid:11) Corporate (cid:34)overnance (cid:34)uidelines(cid:11) and our Code of Conduct (cid:5) Ethics (cid:43)olicy can be electronically accessed at our (cid:76)ebsite (http(cid:25)(cid:14)(cid:14)(cid:76)(cid:76)(cid:76).amcor.com(cid:14)investors) under "Corporate (cid:34)overnance" or(cid:11) free of charge(cid:11) by (cid:76)riting directly to us(cid:11) Attention(cid:25) Corporate Secretary. Our Board of (cid:31)irectors has adopted a Code of Conduct that applies to our principal e(cid:77)ecutive officer(cid:11) principal financial officer(cid:11) principal accounting officer(cid:11) and other persons performing similar functions. (cid:50)e intend to satisfy the disclosure requirements under Item 5.05 of Form 8(cid:12)(cid:38) regarding amendments to or (cid:76)aivers from our Code of Conduct by posting such information on the Investor (cid:45)elations section of our (cid:76)ebsite promptly follo(cid:76)ing the date of such amendment or (cid:76)aiver. (cid:50)e are not including the information contained on our (cid:76)ebsite as part of(cid:11) or incorporating it by reference into(cid:11) this (cid:37)anagement(cid:6)s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in (cid:45)ules 13a(cid:12)15(f) and 15d(cid:12)15(f) under the E(cid:77)change Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for e(cid:77)ternal purposes in accordance (cid:76)ith generally accepted accounting principles. Our management evaluated the design and operating effectiveness of our internal control over financial reporting based on the criteria established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organi(cid:79)ations of the (cid:47)read(cid:76)ay Commission (the "COSO frame(cid:76)or(cid:64)" (2013)). All internal control systems(cid:11) no matter ho(cid:76) (cid:76)ell designed(cid:11) have inherent limitations. Accordingly(cid:11) even effective internal controls and procedures can provide only reasonable assurance (cid:76)ith respect to financial statement preparation and presentation. (cid:48)nder the supervision and (cid:76)ith the participation of our management(cid:11) including our Chief E(cid:77)ecutive Officer and Chief Financial Officer(cid:11) (cid:76)e conducted an evaluation of the effectiveness of our internal control over financial reporting as of (cid:37)une 30(cid:11) 2022. Based on this evaluation(cid:11) our management concluded that (cid:76)e maintained effective internal control over financial reporting as of (cid:37)une 30(cid:11) 2022. (cid:47)he effectiveness of our internal control over financial reporting as of (cid:37)une 30(cid:11) 2022(cid:11) has been audited by (cid:43)rice(cid:76)aterhouseCoopers A(cid:34)(cid:11) an independent registered public accounting firm(cid:11) as stated in their report(cid:11) (cid:76)hich appears on "Item 8. (cid:12) Financial Statements and Supplementary (cid:31)ata" of this Annual (cid:45)eport on Form 10(cid:12)(cid:38). Changes in Internal Control Over Financial Reporting (cid:47)here (cid:76)ere no changes in our internal control over financial reporting (as defined in (cid:45)ules 13a(cid:12)15(f) and 15d(cid:12)15(f) under the E(cid:77)change Act) that occurred during the fourth quarter of fiscal year 2022 that have materially affected(cid:11) or are reasonably li(cid:64)ely to materially affect(cid:11) our internal control over financial reporting. Item (cid:23)B(cid:12) - Other Information (cid:41)one. Item (cid:23)C(cid:12) - Disclosure Regarding Foreign Jurisdictions that Prevent Inspections (cid:41)ot applicable. 107 Amcor Annual Report 2022 108 (cid:20)0(cid:26) Form 10-K (cid:20)0(cid:27) Item (cid:23)(cid:12) - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure PAR(cid:44) III (cid:41)one. Item (cid:23)A(cid:12) - Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management(cid:11) (cid:76)ith the participation of our Chief E(cid:77)ecutive Officer and Chief Financial Officer(cid:11) has evaluated the effectiveness of our disclosure controls and procedures as of (cid:37)une 30(cid:11) 2022. (cid:47)he term "disclosure controls and procedures(cid:11)" as defined in (cid:45)ules 13a(cid:12)15(e) and 15d(cid:12)15(e) under the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended (the (cid:86)E(cid:77)change Act(cid:87))(cid:11) means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the E(cid:77)change Act is recorded(cid:11) processed(cid:11) summari(cid:79)ed(cid:11) and reported(cid:11) (cid:76)ithin the time periods specified in the SEC(cid:6)s rules and forms. (cid:31)isclosure controls and procedures include(cid:11) (cid:76)ithout limitation(cid:11) controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the E(cid:77)change Act is accumulated and communicated to our management(cid:11) including its principal e(cid:77)ecutive and financial officers(cid:11) as appropriate(cid:11) to allo(cid:76) timely decisions regarding required disclosure. Item 10(cid:12) - Directors, E(cid:74)ecutive Officers and Corporate (cid:31)overnance (cid:47)he information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. Information (cid:76)ith respect to our e(cid:77)ecutive officers appears in (cid:43)art I of this Annual (cid:45)eport on Form 10(cid:12)(cid:38). Our Board Committee Charters(cid:11) Corporate (cid:34)overnance (cid:34)uidelines(cid:11) and our Code of Conduct (cid:5) Ethics (cid:43)olicy can be electronically accessed at our (cid:76)ebsite (http(cid:25)(cid:14)(cid:14)(cid:76)(cid:76)(cid:76).amcor.com(cid:14)investors) under "Corporate (cid:34)overnance" or(cid:11) free of charge(cid:11) by (cid:76)riting directly to us(cid:11) Attention(cid:25) Corporate Secretary. Our Board of (cid:31)irectors has adopted a Code of Conduct that applies to our principal e(cid:77)ecutive officer(cid:11) principal financial officer(cid:11) principal accounting officer(cid:11) and other persons performing similar functions. (cid:50)e intend to satisfy the disclosure requirements under Item 5.05 of Form 8(cid:12)(cid:38) regarding amendments to or (cid:76)aivers from our Code of Conduct by posting such information on the Investor (cid:45)elations section of our (cid:76)ebsite promptly follo(cid:76)ing the date of such amendment or (cid:76)aiver. (cid:50)e are not including the information contained on our (cid:76)ebsite as part of(cid:11) or incorporating it by reference into(cid:11) this (cid:40)anagement recogni(cid:79)es that any controls and procedures(cid:11) no matter ho(cid:76) (cid:76)ell designed and operated(cid:11) can provide only report. reasonable assurance of achieving their ob(cid:63)ectives and management necessarily applies its (cid:63)udgment in evaluating the cost(cid:12) benefit relationship of possible controls and procedures. Based on this evaluation(cid:11) the Chief E(cid:77)ecutive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (cid:76)ere effective as of (cid:37)une 30(cid:11) 2022. (cid:37)anagement(cid:6)s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in (cid:45)ules 13a(cid:12)15(f) and 15d(cid:12)15(f) under the E(cid:77)change Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for e(cid:77)ternal purposes in accordance (cid:76)ith generally accepted accounting principles. Our management evaluated the design and operating effectiveness of our internal control over financial reporting based on the criteria established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organi(cid:79)ations of the (cid:47)read(cid:76)ay Commission (the "COSO frame(cid:76)or(cid:64)" (2013)). All internal control systems(cid:11) no matter ho(cid:76) (cid:76)ell designed(cid:11) have inherent limitations. Accordingly(cid:11) even effective internal controls and procedures can provide only reasonable assurance (cid:76)ith respect to financial statement preparation and presentation. (cid:48)nder the supervision and (cid:76)ith the participation of our management(cid:11) including our Chief E(cid:77)ecutive Officer and Chief Financial Officer(cid:11) (cid:76)e conducted an evaluation of the effectiveness of our internal control over financial reporting as of (cid:37)une 30(cid:11) 2022. Based on this evaluation(cid:11) our management concluded that (cid:76)e maintained effective internal control over financial reporting as of (cid:37)une 30(cid:11) 2022. (cid:47)he effectiveness of our internal control over financial reporting as of (cid:37)une 30(cid:11) 2022(cid:11) has been audited by (cid:43)rice(cid:76)aterhouseCoopers A(cid:34)(cid:11) an independent registered public accounting firm(cid:11) as stated in their report(cid:11) (cid:76)hich appears on "Item 8. (cid:12) Financial Statements and Supplementary (cid:31)ata" of this Annual (cid:45)eport on Form 10(cid:12)(cid:38). Changes in Internal Control Over Financial Reporting (cid:47)here (cid:76)ere no changes in our internal control over financial reporting (as defined in (cid:45)ules 13a(cid:12)15(f) and 15d(cid:12)15(f) under the E(cid:77)change Act) that occurred during the fourth quarter of fiscal year 2022 that have materially affected(cid:11) or are reasonably li(cid:64)ely to materially affect(cid:11) our internal control over financial reporting. Item (cid:23)B(cid:12) - Other Information (cid:41)one. (cid:41)ot applicable. Item (cid:23)C(cid:12) - Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 107 108 Amcor Annual Report 2022 Form 10-K (cid:20)0(cid:28) PAR(cid:44) IV Item 11(cid:12) - E(cid:74)ecutive Compensation Item 1(cid:19)(cid:12) - E(cid:74)hibits and Financial Statement Schedules Information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. Item 12(cid:12) - Security Ownership of Certain Beneficial Owners and (cid:37)anagement and Related Shareholder (cid:37)atters Equity compensation plans as of (cid:37)une 30(cid:11) 2022 (cid:76)ere as follo(cid:76)s(cid:25) (cid:38)umber of securities to be issued upon e(cid:74)ercise of outstanding options, warrants, and rights (a) Weighted-average e(cid:74)ercise price of outstanding options, warrants, and rights (b) (cid:38)umber of securities remaining available for future issuance under e(cid:67)uity compensation plans (e(cid:74)cluding securities reflected in column (a)) (c) 61(cid:11)152(cid:11)(cid:24)0(cid:24) (1) $ 10.66 (2) 47(cid:11)134(cid:11)428 (3) (cid:85) 61(cid:11)152(cid:11)(cid:24)0(cid:24) (1) $ (cid:85) 10.66 (2) (cid:85) 47(cid:11)134(cid:11)428 (3) Plan Category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders (cid:47)otal (1) Includes outstanding option a(cid:76)ards of 45(cid:11)354(cid:11)450(cid:11) (cid:76)hich have a (cid:76)eighted(cid:12)average e(cid:77)ercise price of $10.66(cid:11) 10(cid:11)676(cid:11)188 a(cid:76)ards of ordinary shares issuable upon vesting of performance shares(cid:14)rights(cid:11) 4(cid:11)230(cid:11)374 a(cid:76)ards of ordinary shares issuable upon vesting of share rights(cid:11) and 8(cid:24)1(cid:11)8(cid:24)8 restricted shares issued under the share retention plan. (2) (cid:43)erformance shares(cid:14)rights(cid:11) share rights(cid:11) restricted share a(cid:76)ards(cid:11) and non(cid:12)e(cid:77)ecutive director share plans are e(cid:77)cluded (cid:76)hen determining the (cid:76)eighted(cid:12)average e(cid:77)ercise price of outstanding options. (3) (cid:40)ay be issued as options(cid:11) performance shares(cid:14)rights(cid:11) share rights(cid:11) or restricted shares. (cid:47)he additional information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. Item 13(cid:12) - Certain Relationships and Related (cid:44)ransactions, and Director Independence (cid:47)he information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. Item 1(cid:18)(cid:12) - Principal Accountant Fees and Services (cid:47)he information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. 10(cid:24) Amcor Annual Report 2022 110 Pages in Form 10-(cid:35) 47 4(cid:24) 50 51 52 53 54 114 (a) Financial Statements, Financial Statement Schedule, and E(cid:74)hibits (1) Financial Statements (cid:45)eport of Independent (cid:45)egistered (cid:43)ublic Accounting Firm ((cid:43)CAOB I(cid:31) 1358) Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Balance Sheets Consolidated Statements of Cash Flo(cid:76)s Consolidated Statements of Equity (cid:41)otes to Consolidated Financial Statements (2) Financial Statement Schedule Schedule II (cid:12) (cid:49)aluation and (cid:44)ualifying Accounts and (cid:45)eserves All other schedules are omitted because they are not applicable(cid:11) or the required information is sho(cid:76)n in the financial statements or notes thereto. (3) E(cid:74)hibits E(cid:74)hibit Description Form of Filing (cid:47)ransaction Agreement(cid:11) dated as of August 6(cid:11) 2018(cid:11) by and among the Amcor plc(cid:11) Amcor Limited(cid:11) Arctic Corp. and Bemis Company(cid:11) Inc. ((cid:86)Bemis(cid:87)) (incorporated by reference to Anne(cid:77) A to Amcor plc(cid:6)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Incorporated by (cid:45)eference Articles of Association of Amcor plc (incorporated by reference to E(cid:77)hibit 3.1 to Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 13(cid:11) 201(cid:24)). Incorporated by (cid:45)eference (cid:40)emorandum of Association of Amcor plc (incorporated by reference to E(cid:77)hibit 3.1 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Incorporated by (cid:45)eference (cid:47)rust (cid:31)eed(cid:11) dated as of February 28(cid:11) 2011(cid:11) among Amcor Limited(cid:11) AF(cid:48)I(cid:11) Amcor (cid:48)(cid:38) Finance Limited and (cid:31)B (cid:47)rustees ((cid:35)ong (cid:38)ong) Limited (the (cid:86)(cid:43)rincipal (cid:47)rust (cid:31)eed(cid:87)) (incorporated by reference to E(cid:77)hibit 4.3 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). First Supplemental (cid:47)rust (cid:31)eed(cid:11) dated as of October 26(cid:11) 2012(cid:11) among Amcor Limited(cid:11) AF(cid:48)I(cid:11) Amcor (cid:48)(cid:38) Finance Limited and (cid:31)B (cid:47)rustees ((cid:35)ong (cid:38)ong) Limited (incorporated by reference to E(cid:77)hibit 4.5 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Second Supplemental (cid:47)rust (cid:31)eed dated as of (cid:37)uly 22(cid:11) 201(cid:24) to the (cid:43)rincipal (cid:47)rust (cid:31)eed(cid:11) among Amcor Limited(cid:11) AF(cid:48)I(cid:11) Amcor plc(cid:11) Bemis and the guarantors party thereto (incorporated by reference to E(cid:77)hibit 10.1 to Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)uly 26(cid:11) 201(cid:24)). Final (cid:47)erms(cid:11) dated as of (cid:40)arch 20(cid:11) 2013(cid:11) among Amcor Limited(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc. and Amcor (cid:48)(cid:38) Finance Limited(cid:11) relating to the 2.750(cid:4) (cid:41)otes due 2023 (incorporated by reference to E(cid:77)hibit 4.6 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Form of 3.625(cid:4) (cid:41)otes due 2026 (incorporated by reference to E(cid:77)hibit 4.8 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Form of 4.500(cid:4) (cid:41)otes due 2028 (incorporated by reference to E(cid:77)hibit 4.(cid:24) to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Form of 3.100(cid:4) (cid:41)otes due 2026 (incorporated by reference to E(cid:77)hibit 4.13 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Form of 2.630(cid:4) (cid:34)uaranteed Senior (cid:41)ote (cid:31)ue 2030 (incorporated by reference to E(cid:77)hibit 4.2 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 1(cid:24)(cid:11) 2020). Incorporated by (cid:45)eference 2 .1 3 .1 3 .2 4 .1 4 .2 4 .3 4 .4 4 .5 4 .6 4 .7 4 .8 Information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. Item 12(cid:12) - Security Ownership of Certain Beneficial Owners and (cid:37)anagement and Related Shareholder (cid:37)atters Equity compensation plans as of (cid:37)une 30(cid:11) 2022 (cid:76)ere as follo(cid:76)s(cid:25) (cid:38)umber of securities to be issued upon e(cid:74)ercise of outstanding options, warrants, and rights (a) Weighted-average e(cid:74)ercise price of outstanding options, warrants, and rights (b) (cid:38)umber of securities remaining available for future issuance under e(cid:67)uity compensation plans (e(cid:74)cluding securities reflected in column (a)) (c) 61(cid:11)152(cid:11)(cid:24)0(cid:24) (1) $ 10.66 (2) 47(cid:11)134(cid:11)428 (3) Plan Category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders (cid:47)otal (1) Includes outstanding option a(cid:76)ards of 45(cid:11)354(cid:11)450(cid:11) (cid:76)hich have a (cid:76)eighted(cid:12)average e(cid:77)ercise price of $10.66(cid:11) 10(cid:11)676(cid:11)188 a(cid:76)ards of ordinary shares issuable upon vesting of performance shares(cid:14)rights(cid:11) 4(cid:11)230(cid:11)374 a(cid:76)ards of ordinary shares issuable upon vesting of share rights(cid:11) and 8(cid:24)1(cid:11)8(cid:24)8 restricted shares issued under the share retention plan. (2) (cid:43)erformance shares(cid:14)rights(cid:11) share rights(cid:11) restricted share a(cid:76)ards(cid:11) and non(cid:12)e(cid:77)ecutive director share plans are e(cid:77)cluded (cid:76)hen determining the (cid:76)eighted(cid:12)average e(cid:77)ercise price of outstanding options. (3) (cid:40)ay be issued as options(cid:11) performance shares(cid:14)rights(cid:11) share rights(cid:11) or restricted shares. (cid:47)he additional information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. Item 13(cid:12) - Certain Relationships and Related (cid:44)ransactions, and Director Independence (cid:47)he information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. Item 1(cid:18)(cid:12) - Principal Accountant Fees and Services (cid:47)he information required to be submitted in response to this item is omitted because a definitive pro(cid:77)y statement containing such information (cid:76)ill be filed (cid:76)ith the Securities and E(cid:77)change Commission pursuant to (cid:45)egulation 14A (cid:76)ithin 120 days after (cid:37)une 30(cid:11) 2022(cid:11) and such information is e(cid:77)pressly incorporated herein by reference. Item 11(cid:12) - E(cid:74)ecutive Compensation Item 1(cid:19)(cid:12) - E(cid:74)hibits and Financial Statement Schedules PAR(cid:44) IV (cid:20)0(cid:28) Form 10-K (cid:20)(cid:20)0 (a) Financial Statements, Financial Statement Schedule, and E(cid:74)hibits (1) Financial Statements (cid:45)eport of Independent (cid:45)egistered (cid:43)ublic Accounting Firm ((cid:43)CAOB I(cid:31) 1358) Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Balance Sheets Consolidated Statements of Cash Flo(cid:76)s Consolidated Statements of Equity (cid:41)otes to Consolidated Financial Statements (2) Financial Statement Schedule Schedule II (cid:12) (cid:49)aluation and (cid:44)ualifying Accounts and (cid:45)eserves All other schedules are omitted because they are not applicable(cid:11) or the required information is sho(cid:76)n in the financial statements or notes thereto. Pages in Form 10-(cid:35) 47 4(cid:24) 50 51 52 53 54 114 (cid:85) 61(cid:11)152(cid:11)(cid:24)0(cid:24) (1) $ (cid:85) 10.66 (2) (cid:85) 47(cid:11)134(cid:11)428 (3) (3) E(cid:74)hibits E(cid:74)hibit Description Form of Filing 2 .1 3 .1 3 .2 4 .1 4 .2 4 .3 4 .4 4 .5 4 .6 4 .7 4 .8 (cid:47)ransaction Agreement(cid:11) dated as of August 6(cid:11) 2018(cid:11) by and among the Amcor plc(cid:11) Amcor Limited(cid:11) Arctic Corp. and Bemis Company(cid:11) Inc. ((cid:86)Bemis(cid:87)) (incorporated by reference to Anne(cid:77) A to Amcor plc(cid:6)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Articles of Association of Amcor plc (incorporated by reference to E(cid:77)hibit 3.1 to Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 13(cid:11) 201(cid:24)). (cid:40)emorandum of Association of Amcor plc (incorporated by reference to E(cid:77)hibit 3.1 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). (cid:47)rust (cid:31)eed(cid:11) dated as of February 28(cid:11) 2011(cid:11) among Amcor Limited(cid:11) AF(cid:48)I(cid:11) Amcor (cid:48)(cid:38) Finance Limited and (cid:31)B (cid:47)rustees ((cid:35)ong (cid:38)ong) Limited (the (cid:86)(cid:43)rincipal (cid:47)rust (cid:31)eed(cid:87)) (incorporated by reference to E(cid:77)hibit 4.3 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). First Supplemental (cid:47)rust (cid:31)eed(cid:11) dated as of October 26(cid:11) 2012(cid:11) among Amcor Limited(cid:11) AF(cid:48)I(cid:11) Amcor (cid:48)(cid:38) Finance Limited and (cid:31)B (cid:47)rustees ((cid:35)ong (cid:38)ong) Limited (incorporated by reference to E(cid:77)hibit 4.5 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Second Supplemental (cid:47)rust (cid:31)eed dated as of (cid:37)uly 22(cid:11) 201(cid:24) to the (cid:43)rincipal (cid:47)rust (cid:31)eed(cid:11) among Amcor Limited(cid:11) AF(cid:48)I(cid:11) Amcor plc(cid:11) Bemis and the guarantors party thereto (incorporated by reference to E(cid:77)hibit 10.1 to Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)uly 26(cid:11) 201(cid:24)). Final (cid:47)erms(cid:11) dated as of (cid:40)arch 20(cid:11) 2013(cid:11) among Amcor Limited(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc. and Amcor (cid:48)(cid:38) Finance Limited(cid:11) relating to the 2.750(cid:4) (cid:41)otes due 2023 (incorporated by reference to E(cid:77)hibit 4.6 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Form of 3.625(cid:4) (cid:41)otes due 2026 (incorporated by reference to E(cid:77)hibit 4.8 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Form of 4.500(cid:4) (cid:41)otes due 2028 (incorporated by reference to E(cid:77)hibit 4.(cid:24) to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Form of 3.100(cid:4) (cid:41)otes due 2026 (incorporated by reference to E(cid:77)hibit 4.13 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)). Form of 2.630(cid:4) (cid:34)uaranteed Senior (cid:41)ote (cid:31)ue 2030 (incorporated by reference to E(cid:77)hibit 4.2 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 1(cid:24)(cid:11) 2020). Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference 10(cid:24) 110 Amcor Annual Report 2022 E(cid:74)hibit 4 .(cid:24) 4 .10 4 .11 4 .12 4 .13 4 .14 4 .15 4 .16 4 .17 4 .18 4 .1(cid:24) 4 .20 10 .1 10 .2 10 .3 10 .4 10 .5 Form 10-K 111 Description Form of 1.125(cid:4) (cid:34)uaranteed Senior (cid:41)ote (cid:31)ue 2027 (incorporated by reference to E(cid:77)hibit 4.2 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 23(cid:11) 2020). Indenture(cid:11) dated as of (cid:37)une 13(cid:11) 201(cid:24)(cid:11) by and among AF(cid:48)I(cid:11) as issuer(cid:11) Amcor plc(cid:11) Amcor Limited(cid:11) Bemis(cid:11) Amcor (cid:48)(cid:38) Finance plc and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas(cid:11) as trustee (incorporated by reference to E(cid:77)hibit 10.4 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 17(cid:11) 201(cid:24)). Form of Filing Incorporated by (cid:45)eference Incorporated by (cid:45)eference Indenture(cid:11) dated as of (cid:37)une 1(cid:24)(cid:11) 2020(cid:11) by and among Bemis(cid:11) as issuer(cid:11) Amcor plc(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor (cid:48)(cid:38) Finance plc(cid:11) Amcor (cid:43)ty Ltd and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas(cid:11) the trustee (incorporated by reference to E(cid:77)hibit 4.1 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 1(cid:24)(cid:11) 2020). Indenture(cid:11) dated as of (cid:37)une 23(cid:11) 2020(cid:11) by and among Amcor (cid:48)(cid:38) Finance plc(cid:11) as issuer(cid:11) Amcor plc(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor (cid:43)ty Ltd(cid:11) Bemis Company(cid:11) Inc. and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas(cid:11) the trustee (incorporated by reference to E(cid:77)hibit 4.1 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 23(cid:11) 2020). (cid:45)egistration (cid:45)ights Agreement(cid:11) dated as of (cid:37)une 13(cid:11) 201(cid:24)(cid:11) by and among Bemis(cid:11) Amcor plc(cid:11) Amcor Limited(cid:11) AF(cid:48)I(cid:11) Amcor (cid:48)(cid:38) Finance plc and the (cid:31)ealer (cid:40)anagers(cid:11) relating to the Bemis(cid:89) 3.100(cid:4) 2026 (cid:41)otes (incorporated by reference to E(cid:77)hibit 10.6 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 17(cid:11) 201(cid:24)). (cid:45)egistration (cid:45)ights Agreement(cid:11) dated as of (cid:37)une 13(cid:11) 201(cid:24)(cid:11) by and among AF(cid:48)I(cid:11) Amcor plc(cid:11) Amcor Limited(cid:11) Bemis(cid:11) Amcor (cid:48)(cid:38) Finance plc and the (cid:31)ealer (cid:40)anagers(cid:11) relating to the Amcor(cid:89)s 3.625(cid:4) 2026 (cid:41)otes (incorporated by reference to E(cid:77)hibit 10.7 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 17(cid:11) 201(cid:24)). (cid:45)egistration (cid:45)ights Agreement(cid:11) dated as of (cid:37)une 13(cid:11) 201(cid:24)(cid:11) by and among AF(cid:48)I(cid:11) Amcor plc(cid:11) Amcor Limited(cid:11) Bemis(cid:11) Amcor (cid:48)(cid:38) Finance plc and the (cid:31)ealer (cid:40)anagers(cid:11) relating to the Amcor(cid:89)s 4.500(cid:4) 2028 (cid:41)otes (incorporated by reference to E(cid:77)hibit 10.8 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 17(cid:11) 201(cid:24)). (cid:31)escription of Securities of the (cid:45)egistrant. Form of 2.6(cid:24)0(cid:4) (cid:34)uaranteed Senior (cid:41)ote (cid:31)ue 2031 (incorporated by reference to E(cid:77)hibit 4.3 on Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:40)ay 25(cid:11) 2021). Form of 4.000(cid:4) (cid:34)uaranteed Senior (cid:41)ote due 2025 (incorporated by reference to E(cid:77)hibit 4.3 on Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:40)ay 17(cid:11) 2022). First Supplemental Indenture(cid:11) dated as of (cid:37)une 30(cid:11) 2022(cid:11) among Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas (incorporated by reference to E(cid:77)hibit 4.7 on Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)uly 1(cid:11) 2022). Second Supplemental Indenture(cid:11) dated as of (cid:37)une 30(cid:11) 2022(cid:11) among Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas (incorporated by reference to E(cid:77)hibit 4.6 on Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)uly 1(cid:11) 2022). Amcor plc 201(cid:24) Omnibus Incentive Share (cid:43)lan (incorporated by reference to E(cid:77)hibit (cid:24)(cid:24).1 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)8 filed on (cid:37)uly 22(cid:11) 201(cid:24)).(cid:9) Amcor Limited 2016(cid:14)17 Long (cid:47)erm Incentive (cid:43)lan (incorporated by reference to E(cid:77)hibit (cid:24)(cid:24).3 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)8 filed on (cid:37)uly 22(cid:11) 201(cid:24)).(cid:9) Amcor Limited 2017(cid:14)18 Long (cid:47)erm Incentive (cid:43)lan (incorporated by reference to E(cid:77)hibit (cid:24)(cid:24).4 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)8 filed on (cid:37)uly 22(cid:11) 201(cid:24)).(cid:9) Amcor (cid:45)igid (cid:43)lastics (cid:31)eferred Compensation (cid:43)lan(cid:11) as amended by that certain First Amendment(cid:11) dated (cid:31)ecember 11(cid:11) 2014(cid:11) that certain Second Amendment(cid:11) dated (cid:31)ecember 10(cid:11) 2018 and that certain (cid:47)hird Amendment(cid:11) dated (cid:31)ecember 16(cid:11) 201(cid:24) (incorporated by reference to E(cid:77)hibit 10.8 to Amcor plc(cid:6)s Form 10(cid:12)(cid:38) filed on August 27(cid:11) 2020).(cid:9) Employment Agreement bet(cid:76)een Amcor Limited and (cid:45)onald (cid:31)elia(cid:11) dated as of (cid:37)anuary 21(cid:11) 2015 (incorporated by reference to E(cid:77)hibit 10.3 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Form 10(cid:12)(cid:38) filed on August 24(cid:11) 2021).(cid:9) Incorporated by (cid:45)eference Incorporated by (cid:45)eference Filed (cid:35)ere(cid:76)ith Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Act of 2002. Incorporated by (cid:45)eference Incorporated by (cid:45)eference (cid:9) (cid:47)his e(cid:77)hibit is a management contract or compensatory plan or arrangement. Item 1(cid:20)(cid:12) - Form 10-(cid:35) Summary (cid:41)one. Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference 111 Amcor Annual Report 2022 112 E(cid:74)hibit 10 .6 10 .7 10 .8 10 .(cid:24) 10 .12 10 .13 22 23 31 .1 31 .2 32 101 104 Description Form of Filing Employment Agreement bet(cid:76)een Amcor Limited and (cid:40)ichael Casamento(cid:11) dated as of September 23(cid:11) 2015 (incorporated by reference to E(cid:77)hibit 10.4 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Incorporated by (cid:45)eference Employment Agreement bet(cid:76)een Amcor Limited and Ian (cid:50)ilson(cid:11) dated as of (cid:40)ay 22(cid:11) 2014 (incorporated by reference to E(cid:77)hibit 10.5 to Amcor plc(cid:89)s (cid:45)egistration Incorporated by (cid:45)eference Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Employment Agreement bet(cid:76)een Amcor Limited and (cid:43)eter (cid:38)oniec(cid:79)ny(cid:11) dated as of September 17(cid:11) 200(cid:24) (incorporated by reference to E(cid:77)hibit 10.6 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Employment Agreement bet(cid:76)een Amcor Limited and Eric (cid:45)oegner(cid:11) dated as of August 28(cid:11) 2018 (incorporated by reference to E(cid:77)hibit 10.7 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Incorporated by (cid:45)eference Incorporated by (cid:45)eference 10 .10 Form of (cid:31)eed of Appointment (incorporated by reference to E(cid:77)hibit 10.8 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Incorporated by (cid:45)eference Employment Agreement bet(cid:76)een Amcor Limited and (cid:40)ichael (cid:53)ac(cid:64)a(cid:11) dated as of 10 .11 February 24(cid:11) 2017 (incorporated by reference to E(cid:77)hibit 10.24 to Amcor plc(cid:6)s Incorporated by (cid:45)eference (cid:47)hree(cid:12)(cid:52)ear Syndicated Facility Agreement(cid:11) dated as of April 26(cid:11) 2022(cid:11) by and among(cid:11) Amcor plc(cid:11) Amcor (cid:43)ty Ltd(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor (cid:48)(cid:38) Finance plc and Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc.(cid:11) the lenders party thereto and (cid:37)(cid:43)(cid:40)organ Chase Ban(cid:64)(cid:11) (cid:41).A.(cid:11) as administrative agent and foreign administrative agent (incorporated herein by reference to E(cid:77)hibit 10.1 to Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on April 28(cid:11) 2022). Five(cid:12)(cid:52)ear Syndicated Facility Agreement(cid:11) dated as of April 26(cid:11) 2022(cid:11) by and among(cid:11) Amcor plc(cid:11) Amcor (cid:43)ty Ltd(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor (cid:48)(cid:38) Finance plc and Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc.(cid:11) the lenders party thereto and (cid:37)(cid:43)(cid:40)organ Chase Ban(cid:64)(cid:11) (cid:41).A.(cid:11) as administrative agent and foreign administrative agent (incorporated herein by reference to E(cid:77)hibit 10.2 to Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on April 28(cid:11) 2022). 21 .1 Subsidiaries of Amcor plc. Subsidiary (cid:34)uarantors and Issuers of (cid:34)uaranteed Securities. Consent of (cid:43)rice(cid:76)aterhouseCoopers A(cid:34) as auditors for the financial statements of Amcor plc. Chief E(cid:77)ecutive Officer Certification required by (cid:45)ules 13a(cid:12)14 and 15d(cid:12)14 under the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended. Chief Financial Officer Certification required by (cid:45)ules 13a(cid:12)14 and 15d(cid:12)14 under the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended. Incorporated by (cid:45)eference Incorporated by (cid:45)eference Filed (cid:35)ere(cid:76)ith Filed (cid:35)ere(cid:76)ith Filed (cid:35)ere(cid:76)ith Filed (cid:35)ere(cid:76)ith Filed (cid:35)ere(cid:76)ith Certification of Chief E(cid:77)ecutive Officer and Chief Financial Officer pursuant to 18 (cid:48).S.C. Section 1350(cid:11) as adopted pursuant to Section (cid:24)06 of Sarbanes O(cid:77)ley Furnished (cid:35)ere(cid:76)ith Inline (cid:51)B(cid:45)L Interactive data files (cid:84) (cid:47)he (cid:51)B(cid:45)L Instance (cid:31)ocument does not appear in the Interactive (cid:31)ata File because its (cid:51)B(cid:45)L tags are embedded (cid:76)ithin the Filed Electronically Inline (cid:51)B(cid:45)L document. E(cid:77)hibit 101). Cover (cid:43)age Interactive (cid:31)ata File (formatted as Inline (cid:51)B(cid:45)L and contained in Filed Electronically 111 Form 10-K (cid:20)(cid:20)2 E(cid:74)hibit 10 .6 Description Employment Agreement bet(cid:76)een Amcor Limited and (cid:40)ichael Casamento(cid:11) dated as of September 23(cid:11) 2015 (incorporated by reference to E(cid:77)hibit 10.4 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Form of Filing Incorporated by (cid:45)eference 10 .7 10 .8 10 .(cid:24) 10 .10 10 .11 10 .12 10 .13 Employment Agreement bet(cid:76)een Amcor Limited and Ian (cid:50)ilson(cid:11) dated as of (cid:40)ay 22(cid:11) 2014 (incorporated by reference to E(cid:77)hibit 10.5 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Incorporated by (cid:45)eference Employment Agreement bet(cid:76)een Amcor Limited and (cid:43)eter (cid:38)oniec(cid:79)ny(cid:11) dated as of September 17(cid:11) 200(cid:24) (incorporated by reference to E(cid:77)hibit 10.6 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Employment Agreement bet(cid:76)een Amcor Limited and Eric (cid:45)oegner(cid:11) dated as of August 28(cid:11) 2018 (incorporated by reference to E(cid:77)hibit 10.7 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Form of (cid:31)eed of Appointment (incorporated by reference to E(cid:77)hibit 10.8 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Employment Agreement bet(cid:76)een Amcor Limited and (cid:40)ichael (cid:53)ac(cid:64)a(cid:11) dated as of February 24(cid:11) 2017 (incorporated by reference to E(cid:77)hibit 10.24 to Amcor plc(cid:6)s Form 10(cid:12)(cid:38) filed on August 24(cid:11) 2021).(cid:9) (cid:47)hree(cid:12)(cid:52)ear Syndicated Facility Agreement(cid:11) dated as of April 26(cid:11) 2022(cid:11) by and among(cid:11) Amcor plc(cid:11) Amcor (cid:43)ty Ltd(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor (cid:48)(cid:38) Finance plc and Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc.(cid:11) the lenders party thereto and (cid:37)(cid:43)(cid:40)organ Chase Ban(cid:64)(cid:11) (cid:41).A.(cid:11) as administrative agent and foreign administrative agent (incorporated herein by reference to E(cid:77)hibit 10.1 to Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on April 28(cid:11) 2022). Five(cid:12)(cid:52)ear Syndicated Facility Agreement(cid:11) dated as of April 26(cid:11) 2022(cid:11) by and among(cid:11) Amcor plc(cid:11) Amcor (cid:43)ty Ltd(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor (cid:48)(cid:38) Finance plc and Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc.(cid:11) the lenders party thereto and (cid:37)(cid:43)(cid:40)organ Chase Ban(cid:64)(cid:11) (cid:41).A.(cid:11) as administrative agent and foreign administrative agent (incorporated herein by reference to E(cid:77)hibit 10.2 to Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on April 28(cid:11) 2022). Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference 4 .16 (cid:31)escription of Securities of the (cid:45)egistrant. Filed (cid:35)ere(cid:76)ith 21 .1 Subsidiaries of Amcor plc. 22 23 31 .1 31 .2 Subsidiary (cid:34)uarantors and Issuers of (cid:34)uaranteed Securities. Consent of (cid:43)rice(cid:76)aterhouseCoopers A(cid:34) as auditors for the financial statements of Amcor plc. Chief E(cid:77)ecutive Officer Certification required by (cid:45)ules 13a(cid:12)14 and 15d(cid:12)14 under the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended. Chief Financial Officer Certification required by (cid:45)ules 13a(cid:12)14 and 15d(cid:12)14 under the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) as amended. 32 101 104 Certification of Chief E(cid:77)ecutive Officer and Chief Financial Officer pursuant to 18 (cid:48).S.C. Section 1350(cid:11) as adopted pursuant to Section (cid:24)06 of Sarbanes O(cid:77)ley Act of 2002. Inline (cid:51)B(cid:45)L Interactive data files (cid:84) (cid:47)he (cid:51)B(cid:45)L Instance (cid:31)ocument does not appear in the Interactive (cid:31)ata File because its (cid:51)B(cid:45)L tags are embedded (cid:76)ithin the Inline (cid:51)B(cid:45)L document. Cover (cid:43)age Interactive (cid:31)ata File (formatted as Inline (cid:51)B(cid:45)L and contained in E(cid:77)hibit 101). Incorporated by (cid:45)eference (cid:9) (cid:47)his e(cid:77)hibit is a management contract or compensatory plan or arrangement. Item 1(cid:20)(cid:12) - Form 10-(cid:35) Summary (cid:41)one. Filed (cid:35)ere(cid:76)ith Filed (cid:35)ere(cid:76)ith Filed (cid:35)ere(cid:76)ith Filed (cid:35)ere(cid:76)ith Filed (cid:35)ere(cid:76)ith Furnished (cid:35)ere(cid:76)ith Filed Electronically Filed Electronically 111 112 Amcor Annual Report 2022 E(cid:74)hibit 4 .(cid:24) Form of 1.125(cid:4) (cid:34)uaranteed Senior (cid:41)ote (cid:31)ue 2027 (incorporated by reference to E(cid:77)hibit 4.2 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 23(cid:11) 2020). Incorporated by (cid:45)eference Description Form of Filing 4 .10 4 .11 4 .12 4 .13 4 .14 4 .15 4 .17 4 .18 4 .1(cid:24) 4 .20 Indenture(cid:11) dated as of (cid:37)une 13(cid:11) 201(cid:24)(cid:11) by and among AF(cid:48)I(cid:11) as issuer(cid:11) Amcor plc(cid:11) Amcor Limited(cid:11) Bemis(cid:11) Amcor (cid:48)(cid:38) Finance plc and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas(cid:11) as trustee (incorporated by reference to E(cid:77)hibit 10.4 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 17(cid:11) 201(cid:24)). Indenture(cid:11) dated as of (cid:37)une 1(cid:24)(cid:11) 2020(cid:11) by and among Bemis(cid:11) as issuer(cid:11) Amcor plc(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor (cid:48)(cid:38) Finance plc(cid:11) Amcor (cid:43)ty Ltd and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas(cid:11) the trustee (incorporated by reference to E(cid:77)hibit 4.1 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 1(cid:24)(cid:11) 2020). Indenture(cid:11) dated as of (cid:37)une 23(cid:11) 2020(cid:11) by and among Amcor (cid:48)(cid:38) Finance plc(cid:11) as issuer(cid:11) Amcor plc(cid:11) Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor (cid:43)ty Ltd(cid:11) Bemis Company(cid:11) Inc. and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas(cid:11) the trustee (incorporated by reference to E(cid:77)hibit 4.1 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 23(cid:11) 2020). (cid:45)egistration (cid:45)ights Agreement(cid:11) dated as of (cid:37)une 13(cid:11) 201(cid:24)(cid:11) by and among Bemis(cid:11) Amcor plc(cid:11) Amcor Limited(cid:11) AF(cid:48)I(cid:11) Amcor (cid:48)(cid:38) Finance plc and the (cid:31)ealer (cid:40)anagers(cid:11) relating to the Bemis(cid:89) 3.100(cid:4) 2026 (cid:41)otes (incorporated by reference to E(cid:77)hibit 10.6 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 17(cid:11) 201(cid:24)). (cid:45)egistration (cid:45)ights Agreement(cid:11) dated as of (cid:37)une 13(cid:11) 201(cid:24)(cid:11) by and among AF(cid:48)I(cid:11) Amcor plc(cid:11) Amcor Limited(cid:11) Bemis(cid:11) Amcor (cid:48)(cid:38) Finance plc and the (cid:31)ealer (cid:40)anagers(cid:11) relating to the Amcor(cid:89)s 3.625(cid:4) 2026 (cid:41)otes (incorporated by reference to E(cid:77)hibit 10.7 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 17(cid:11) 201(cid:24)). (cid:45)egistration (cid:45)ights Agreement(cid:11) dated as of (cid:37)une 13(cid:11) 201(cid:24)(cid:11) by and among AF(cid:48)I(cid:11) Amcor plc(cid:11) Amcor Limited(cid:11) Bemis(cid:11) Amcor (cid:48)(cid:38) Finance plc and the (cid:31)ealer (cid:40)anagers(cid:11) relating to the Amcor(cid:89)s 4.500(cid:4) 2028 (cid:41)otes (incorporated by reference to E(cid:77)hibit 10.8 on Amcor plc(cid:89)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)une 17(cid:11) 201(cid:24)). Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Incorporated by (cid:45)eference Form of 2.6(cid:24)0(cid:4) (cid:34)uaranteed Senior (cid:41)ote (cid:31)ue 2031 (incorporated by reference to E(cid:77)hibit 4.3 on Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:40)ay 25(cid:11) 2021). Incorporated by (cid:45)eference Form of 4.000(cid:4) (cid:34)uaranteed Senior (cid:41)ote due 2025 (incorporated by reference to E(cid:77)hibit 4.3 on Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:40)ay 17(cid:11) 2022). Incorporated by (cid:45)eference First Supplemental Indenture(cid:11) dated as of (cid:37)une 30(cid:11) 2022(cid:11) among Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas (incorporated by reference to E(cid:77)hibit 4.7 on Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)uly 1(cid:11) 2022). Second Supplemental Indenture(cid:11) dated as of (cid:37)une 30(cid:11) 2022(cid:11) among Amcor Finance ((cid:48)SA)(cid:11) Inc.(cid:11) Amcor Fle(cid:77)ibles (cid:41)orth America(cid:11) Inc. and (cid:31)eutsche Ban(cid:64) (cid:47)rust Company Americas (incorporated by reference to E(cid:77)hibit 4.6 on Amcor plc(cid:6)s Current (cid:45)eport on Form 8(cid:12)(cid:38) filed on (cid:37)uly 1(cid:11) 2022). Incorporated by (cid:45)eference Incorporated by (cid:45)eference Amcor plc 201(cid:24) Omnibus Incentive Share (cid:43)lan (incorporated by reference to 10 .1 E(cid:77)hibit (cid:24)(cid:24).1 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)8 filed on (cid:37)uly 22(cid:11) Incorporated by (cid:45)eference 201(cid:24)).(cid:9) 201(cid:24)).(cid:9) 201(cid:24)).(cid:9) 10 .2 10 .3 10 .4 Amcor Limited 2016(cid:14)17 Long (cid:47)erm Incentive (cid:43)lan (incorporated by reference to E(cid:77)hibit (cid:24)(cid:24).3 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)8 filed on (cid:37)uly 22(cid:11) Amcor Limited 2017(cid:14)18 Long (cid:47)erm Incentive (cid:43)lan (incorporated by reference to E(cid:77)hibit (cid:24)(cid:24).4 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)8 filed on (cid:37)uly 22(cid:11) Incorporated by (cid:45)eference Amcor (cid:45)igid (cid:43)lastics (cid:31)eferred Compensation (cid:43)lan(cid:11) as amended by that certain First Amendment(cid:11) dated (cid:31)ecember 11(cid:11) 2014(cid:11) that certain Second Amendment(cid:11) dated (cid:31)ecember 10(cid:11) 2018 and that certain (cid:47)hird Amendment(cid:11) dated (cid:31)ecember 16(cid:11) 201(cid:24) (incorporated by reference to E(cid:77)hibit 10.8 to Amcor plc(cid:6)s Form 10(cid:12)(cid:38) filed on August 27(cid:11) 2020).(cid:9) Incorporated by (cid:45)eference 10 .5 Employment Agreement bet(cid:76)een Amcor Limited and (cid:45)onald (cid:31)elia(cid:11) dated as of (cid:37)anuary 21(cid:11) 2015 (incorporated by reference to E(cid:77)hibit 10.3 to Amcor plc(cid:89)s (cid:45)egistration Statement on Form S(cid:12)4 filed on (cid:40)arch 12(cid:11) 201(cid:24)).(cid:9) Incorporated by (cid:45)eference Balance at Beginning of the Additions Charged to Year ended June 30, Year (1) Profit and Loss Write-offs 2022 2021 2020 $ 28 $ 42 34 2 $ (4) 5 (3) $ (11) (1) Foreign Currency Impact and Other (2) Balance at End of the Year (2) $ 1 (3) 25 28 35 (1) Beginning balance for fiscal year 2021 includes $7 million addition due to the adoption of ASC 326 ("CECL"). (2) Foreign Currency Impact and Other includes reserve accruals related to acquisitions. Form 10-K 113 (cid:43)ursuant to the requirements of Section 13 or 15(d) of the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) the (cid:45)egistrant has duly caused this report to be signed on its behalf by the undersigned(cid:11) thereunto duly authori(cid:79)ed. Reserves for Doubtful Accounts, Sales Returns, Discounts, and Allowances: Signatures Schedule II - Valuation and Qualifying Accounts and Reserves (in millions) A(cid:40)CO(cid:45) (cid:43)LC By (cid:14)s(cid:14) (cid:40)ichael Casamento By (cid:14)s(cid:14) (cid:37)ulie Sorrells (cid:40)ichael Casamento(cid:11) E(cid:77)ecutive (cid:49)ice (cid:43)resident and Chief Financial Officer ((cid:43)rincipal Financial Officer) (cid:37)ulie Sorrells(cid:11) (cid:49)ice (cid:43)resident (cid:5) Corporate Controller ((cid:43)rincipal Accounting Officer) August 18(cid:11) 2022 August 18(cid:11) 2022 (cid:43)ursuant to the requirements of the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) this report has been signed belo(cid:76) by the follo(cid:76)ing persons on behalf of the (cid:45)egistrant and in the capacities and on the dates indicated. (cid:14)s(cid:14) (cid:40)ichael Casamento (cid:40)ichael Casamento(cid:11) E(cid:77)ecutive (cid:49)ice (cid:43)resident and Chief Financial Officer ((cid:43)rincipal Financial Officer) (cid:14)s(cid:14) (cid:37)ulie Sorrells (cid:37)ulie Sorrells(cid:11) (cid:49)ice (cid:43)resident (cid:5) Corporate Controller ((cid:43)rincipal Accounting Officer) August 18(cid:11) 2022 August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:45)onald (cid:31)elia (cid:45)onald (cid:31)elia(cid:11) (cid:40)anaging (cid:31)irector and Chief E(cid:77)ecutive Officer August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:34)raeme Liebelt (cid:34)raeme Liebelt(cid:11) (cid:31)irector and Chairman August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:41)icholas ((cid:47)om) Long (cid:41)icholas ((cid:47)om) Long(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) Arun (cid:41)ayar Arun (cid:41)ayar(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) Achal Agar(cid:76)al Achal Agar(cid:76)al(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) Susan Carter Susan Carter(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) Armin (cid:40)eyer Armin (cid:40)eyer(cid:11) (cid:31)irector and (cid:31)eputy Chairman August 18(cid:11) 2022 (cid:14)s(cid:14) Andrea Bertone Andrea Bertone(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:38)aren (cid:34)uerra (cid:38)aren (cid:34)uerra(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:37)eremy Sutcliffe (cid:37)eremy Sutcliffe(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:31)avid S(cid:79)c(cid:79)upa(cid:64) (cid:31)avid S(cid:79)c(cid:79)upa(cid:64)(cid:11) (cid:31)irector August 18(cid:11) 2022 113 Amcor Annual Report 2022 114 (cid:43)ursuant to the requirements of Section 13 or 15(d) of the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) the (cid:45)egistrant has duly caused this report to be signed on its behalf by the undersigned(cid:11) thereunto duly authori(cid:79)ed. Reserves for Doubtful Accounts, Sales Returns, Discounts, and Allowances: Signatures Schedule II - Valuation and Qualifying Accounts and Reserves (in millions) 113 Form 10-K 114 Year ended June 30, Balance at Beginning of the Year (1) Additions Charged to Profit and Loss Write-offs Foreign Currency Impact and Other (2) Balance at End of the Year 2022 2021 2020 $ 28 $ 42 34 2 $ (4) 5 (3) $ (11) (1) (2) $ 1 (3) 25 28 35 (1) Beginning balance for fiscal year 2021 includes $7 million addition due to the adoption of ASC 326 ("CECL"). (2) Foreign Currency Impact and Other includes reserve accruals related to acquisitions. A(cid:40)CO(cid:45) (cid:43)LC By (cid:14)s(cid:14) (cid:40)ichael Casamento By (cid:14)s(cid:14) (cid:37)ulie Sorrells (cid:40)ichael Casamento(cid:11) E(cid:77)ecutive (cid:49)ice (cid:43)resident and Chief Financial Officer ((cid:43)rincipal Financial Officer) (cid:37)ulie Sorrells(cid:11) (cid:49)ice (cid:43)resident (cid:5) Corporate Controller ((cid:43)rincipal Accounting Officer) August 18(cid:11) 2022 August 18(cid:11) 2022 (cid:43)ursuant to the requirements of the Securities E(cid:77)change Act of 1(cid:24)34(cid:11) this report has been signed belo(cid:76) by the follo(cid:76)ing persons on behalf of the (cid:45)egistrant and in the capacities and on the dates indicated. (cid:14)s(cid:14) (cid:40)ichael Casamento (cid:14)s(cid:14) (cid:37)ulie Sorrells (cid:40)ichael Casamento(cid:11) E(cid:77)ecutive (cid:49)ice (cid:43)resident and Chief Financial Officer ((cid:43)rincipal Financial Officer) (cid:37)ulie Sorrells(cid:11) (cid:49)ice (cid:43)resident (cid:5) Corporate Controller ((cid:43)rincipal Accounting Officer) (cid:45)onald (cid:31)elia(cid:11) (cid:40)anaging (cid:31)irector and Chief Armin (cid:40)eyer(cid:11) (cid:31)irector and (cid:31)eputy Chairman (cid:34)raeme Liebelt(cid:11) (cid:31)irector and Chairman August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:45)onald (cid:31)elia E(cid:77)ecutive Officer August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:34)raeme Liebelt August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:41)icholas ((cid:47)om) Long (cid:41)icholas ((cid:47)om) Long(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) Arun (cid:41)ayar Arun (cid:41)ayar(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) Achal Agar(cid:76)al Achal Agar(cid:76)al(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) Susan Carter Susan Carter(cid:11) (cid:31)irector August 18(cid:11) 2022 August 18(cid:11) 2022 (cid:14)s(cid:14) Armin (cid:40)eyer August 18(cid:11) 2022 (cid:14)s(cid:14) Andrea Bertone Andrea Bertone(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:38)aren (cid:34)uerra (cid:38)aren (cid:34)uerra(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:37)eremy Sutcliffe (cid:37)eremy Sutcliffe(cid:11) (cid:31)irector August 18(cid:11) 2022 (cid:14)s(cid:14) (cid:31)avid S(cid:79)c(cid:79)upa(cid:64) (cid:31)avid S(cid:79)c(cid:79)upa(cid:64)(cid:11) (cid:31)irector August 18(cid:11) 2022 113 114 Amcor Annual Report 2022 Other information 17 Other Information Amcor Annual Report 2022 Other information 18 Cautionary Statement Regarding Forward -Looking Statements This document contains certain statements that are “forward- looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified with words like “believe,” “expect,” “target,” “project,” “may,” “could,” “would,” “approximately,” “possible,” “will,” “should,” “intend,” “plan,” “anticipate,” "commit," “estimate,” “potential,” "ambitions," “outlook,” or “continue,” the negative of these words, other terms of similar meaning, or the use of future dates. Such statements are based on the current expectations of the management of Amcor and are qualified by the inherent risks and uncertainties surrounding future expectations generally. Actual results could differ materially from those currently anticipated due to a number of risks and uncertainties. None of Amcor or any of its respective directors, executive officers, or advisors provide any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements will actually occur. Risks and uncertainties that could cause actual results to differ from expectations include, but are not limited to: changes in consumer demand patterns and customer requirements; the loss of key customers, a reduction in production requirements of key customers; significant competition in the industries and regions in which Amcor operates; failure by Amcor to expand its business; challenging current and future global economic conditions, including inflation and supply chain disruptions; impact of operating internationally, including negative impacts from the Russia- Ukraine conflict and the ability to sell assets in Russia; price fluctuations or shortages in the availability of raw materials, energy, and other inputs; disruptions to production, supply, and commercial risks, which may be exacerbated in times of economic volatility; global health outbreaks, including COVID-19; an inability to attract and retain key personnel; costs and liabilities related to current and future environment, health, and safety laws and regulations; labor disputes; risks related to climate change; failures or disruptions in information technology systems; cybersecurity risks; a significant increase in indebtedness or a downgrade in the credit rating; foreign exchange rate risk; rising interest rates; a significant write- down of goodwill and/or other intangible assets; failure to maintain an effective system of internal control over financial reporting; inability of the Company’s insurance policies to provide adequate protections; challenges to or the loss of intellectual property rights; litigation, including product liability claims; increasing scrutiny and changing expectations with respect to Amcor Environmental, Social and Governance policies resulting in increased costs; changing government regulations in environmental, health, and safety matters; changes in tax laws or changes in our geographic mix of earnings; and other risks and uncertainties identified from time to time in Amcor’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including without limitation, those described under Item 1A. “Risk Factors” of Amcor’s annual report on Form 10-K for the fiscal year ended June 30, 2022 and any subsequent quarterly reports on Form 10-Q. You can obtain copies of Amcor’s filings with the SEC for free at the SEC’s website (www.sec.gov). Forward- looking statements included herein are made only as of the date hereof and Amcor does not undertake any obligation to update any forward- looking statements, or any other information in this communication, as a result of new information, future developments or otherwise, or to correct any inaccuracies or omissions in them which become apparent, except as expressly required by law. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement. Amcor Annual Report 2022 Other information 19 - material purchase accounting adjustments for inventory; - amortization of acquired intangible assets from business combination; - significant property impairments, net of insurance recovery; - payments or settlements related to legal claims; - - impacts from hyperinflation accounting; and impacts related to the Russia- Ukraine conflict. Amcor also evaluates performance on a comparable constant currency basis, which measures financial results assuming constant foreign currency exchange rates used for translation based on the average rates in effect for the comparable prior year period. In order to compute comparable constant currency results, we multiply or divide, as appropriate, current-year U.S. dollar results by the current year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior-year average foreign exchange rates. We then adjust for other items affecting comparability. While not all inclusive, examples of items affecting comparability include the difference between sales or earnings in the current period and the prior period related to acquired, disposed, or ceased operations. Comparable constant currency net sales performance also excludes the impact from passing through movements in raw material costs. Management has used and uses these measures internally for planning, forecasting and evaluating the performance of the Company’s reporting segments and certain of the measures are used as a component of Amcor’s Board of Directors’ measurement of Amcor’s performance for incentive compensation purposes. Amcor believes that these non-GAAP measures are useful to enable investors to perform comparisons of current and historical performance of the Company. For each of these non-GAAP financial measures, a reconciliation to the most directly comparable U.S. GAAP financial measure has been provided herein. These non-GAAP financial measures should not be construed as an alternative to results determined in accordance with U.S. GAAP. The Company provides guidance on a non-GAAP basis as we are unable to predict with reasonable certainty the ultimate outcome and timing of certain significant forward-looking items without unreasonable effort. These items include but are not limited to the impact of foreign exchange translation, restructuring program costs, asset impairments, possible gains and losses on the sale of assets, and certain tax related events. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP earnings and cash flow measures for the guidance period. Presentation of non-GAAP information Included in this release are measures of financial performance that are not calculated in accordance with U.S. GAAP. These measures include adjusted EBIT (calculated as earnings before interest and tax), adjusted net income, adjusted earnings per share, adjusted free cash flow and net debt. In arriving at these non-GAAP measures, we exclude items that either have a non-recurring impact on the income statement or which, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not singled out, potentially cause investors to extrapolate future performance from an improper base. While not all inclusive, examples of these items include: - material restructuring programs, including associated costs such as employee severance, pension and related benefits, impairment of property and equipment and other assets, accelerated depreciation, termination payments for contracts and leases, contractual obligations, and any other qualifying costs related to the restructuring plan; - material sales and earnings from disposed or ceased operations and any associated profit or loss on sale of businesses or subsidiaries; - consummated and identifiable divestitures agreed to with certain regulatory agencies as a condition of approval for those acquisitions; - impairments in goodwill and equity method investments; - material acquisition compensation and transaction costs such as due diligence expenses, professional and legal fees, and integration costs; Amcor Annual Report 2022 19 Reconciliation of non-GAAP measures 20 Reconciliation of non-GAAP measures Reconciliation of adjusted Earnings before interest, tax, depreciation and amortization (EBITDA), Earnings before interest and tax (EBIT), Net income, and Earnings per share (EPS) Twelve months ended June 30, 2021 Twelve months ended June 30, 2022 ($ million) Net income attributable to Amcor Net income attributable to non-controlling interests Tax expense Interest expense, net Depreciation and amortization EBIT 939 (cid:20)2 2(cid:25)(cid:20) 139 EBITDA 939 (cid:20)2 2(cid:25)(cid:20) 139 (cid:24)(cid:26)2 Net Income EPS (Diluted US cents) EBITDA 939 60.2 805 (cid:20)0 EBIT 805 (cid:20)0 Net Income EPS (Diluted US cents) 805 52.9 (cid:22)00 (cid:22)00 135 135 579 EBITDA, EBIT, Net income and EPS 1,923 1,351 939 60.2 1,829 1,250 805 52.9 Material restructuring programs Net (gain) / loss on disposals1 Material acquisitions and other costs2 Impact of hyperinflation Property and other losses, net3 Pension settlements Amortization of acquired intangibles Russia-Ukraine conflict impacts4 Tax effect of above items 88 (cid:11)(cid:28)(cid:12) 7 19 – – – 88 (cid:11)(cid:28)(cid:12) 7 19 – – 88 (cid:11)(cid:28)(cid:12) 7 19 – – 5.7 (cid:11)0(cid:17)(cid:25)(cid:12) 0(cid:17)(cid:24) (cid:20)(cid:17)2 – – 37 (cid:20)0 4 16 13 8 37 (cid:20)0 4 16 13 8 37 (cid:20)0 4 16 13 8 165 165 (cid:20)0(cid:17)(cid:25) 163 163 – – (cid:11)(cid:24)(cid:20)(cid:12) – 200 200 200 (cid:11)(cid:22)(cid:17)2(cid:12) (cid:11)(cid:22)2(cid:12) Adjusted EBITDA, EBIT, Net income and EPS 2,028 1,621 1,158 74.4 2,117 1,701 1,224 Reconciliation of adjusted growth to comparable constant currency growth % growth - Adjusted EBITDA, EBIT, Net income and EPS % items affecting comparability5 % currency impact % comparable constant currency growth 4 – 3 7 5 – 2 7 6 – 2 8 2(cid:17)(cid:24) 0(cid:17)(cid:26) 0(cid:17)(cid:22) (cid:20)(cid:17)0 0(cid:17)(cid:27) 0(cid:17)(cid:24) (cid:20)0(cid:17)(cid:26) (cid:20)(cid:22)(cid:17)2 (cid:11)2(cid:17)(cid:20)(cid:12) 80.5 8 – 3 11 (1) Includes losses on disposal of non-core businesses in fiscal year 2022. Includes $15 million gain realized upon disposal of AMVIG and losses on disposal of other non-core businesses in fiscal year 2021. (2) Includes costs associated with the Bemis acquisition. (3) Property and other losses, net includes property and related business losses primarily associated with the destruction of the Company's Durban, South Africa, facility during general civil unrest in July 2021, net of insurance recovery. (4) Russia-Ukraine conflict impacts include approximately $140 million of impairment charges and approximately $60 million of restructuring and related expenses for fiscal year 2022. (5) Reflects the impact of disposed and ceased operations. Amcor Annual Report 2022 Reconciliation of non-GAAP measures 2(cid:20) Reconciliation of adjusted EBIT by reporting segment Twelve months ended June 30, 2021 Twelve months ended June 30, 2022 ($ million) Net income attributable to Amcor Net income attributable to non-controlling interests Tax expense Interest expense, net EBIT Material restructuring programs Net (gain) loss / on disposals2 Material acquisition and other costs3 Impact of hyperinflation Property and other losses, net4 Pension settlements Russia-Ukraine conflict impacts5 Amortization of acquired intangibles Adjusted EBIT Adjusted EBIT / sales % Flexibles Rigid packaging Other1 Total Flexibles Rigid packaging Other1 939 (cid:20)2 2(cid:25)(cid:20) 139 Total 805 (cid:20)0 (cid:22)00 135 1,142 253 (44) 1,351 1,101 265 (116) 1,250 (cid:20)2(cid:25) 6 (cid:11)(cid:26)(cid:12) – – – – (cid:20)(cid:25)0 1,427 20 (cid:11)(cid:24)(cid:27)(cid:12) – 2 19 – – – 5 (cid:11)(cid:20)(cid:24)(cid:12) (cid:20)2 – – – – – 88 (cid:11)(cid:28)(cid:12) 7 19 – – – 165 38 (cid:20)0 2 – 9 – 200 158 – – – 16 – 3 – 5 (cid:11)(cid:20)(cid:12) – 2 – 4 5 – – 37 (cid:20)0 4 16 13 8 200 163 299 (105) 1,621 1,517 289 (105) 1,701 14.2% 10.6% 12.6% 13.6% 8.5% 11.7% Reconciliation of adjusted growth to comparable constant currency growth % growth - Adjusted EBIT % items affecting comparability6 % currency impact % comparable constant currency growth 6 – 3 9 (4) – – (4) – – – – 5 – 2 7 (1) Other includes equity in income/(loss) of affiliated companies, net of tax and general corporate expenses. (2) Includes losses on disposal of non-core businesses in fiscal year 2022. Includes $15 million gain realized upon disposal of AMVIG and losses on disposal of other non-core businesses in fiscal year 2021. (3) Includes costs associated with the Bemis acquisition. (4) Property and other losses, net includes property and related business losses primarily associated with the destruction of the Company's Durban, South Africa, facility during civil unrest in July 2021, net of insurance recovery. (5) Russia-Ukraine conflict impacts include approximately $140 million of impairment charges and approximately $60 million of restructuring and related expenses for fiscal year 2022. (6) Reflects the impact of disposed and ceased operations. Amcor Annual Report 2022 2(cid:20) Reconciliation of non-GAAP measures 22 Reconciliations of adjusted Free Cash Flow ($ million) Net cash provided from operating activities Purchase of property, plant and equipment and other intangible assets Proceeds from sales of property, plant and equipment and other intangible assets Material transaction and integration related costs Adjusted Free Cash Flow1 Twelve months ended June 30 2021 1,461 (cid:11)(cid:23)(cid:25)(cid:27)(cid:12) 2(cid:25) (cid:27)0 1,099 (1) Adjusted Free Cash Flow excludes material transaction and integration related costs because these cash flows are not considered to be directly related to ongoing operations. ($ million) Adjusted EBITDA Interest paid, net Income tax paid Purchase of property, plant and equipment and other intangible assets Proceeds from sale of property, plant and equipment and other intangible assets Movement in working capital Other Adjusted Free Cash Flow1 Twelve months ended June 30 2021 2(cid:15)02(cid:27) (cid:11)(cid:20)(cid:22)(cid:20)(cid:12) (cid:11)(cid:22)2(cid:20)(cid:12) (cid:11)(cid:23)(cid:25)(cid:27)(cid:12) 2(cid:25) 2(cid:28) (cid:11)(cid:25)(cid:23)(cid:12) 1,099 (1) Adjusted Free Cash Flow excludes material transaction and integration related costs because these cash flows are not considered to be directly related to ongoing operations. 2022 (cid:20)(cid:15)(cid:24)2(cid:25) (cid:11)(cid:24)2(cid:26)(cid:12) 18 49 1,066 2022 2(cid:15)(cid:20)(cid:20)(cid:26) (cid:11)(cid:20)(cid:20)(cid:28)(cid:12) (cid:11)2(cid:24)(cid:25)(cid:12) (cid:11)(cid:24)2(cid:26)(cid:12) 18 (cid:11)(cid:20)(cid:24)(cid:23)(cid:12) (cid:11)(cid:20)(cid:22)(cid:12) 1,066 Reconciliation of net debt ($ million) Cash and cash equivalents Short-term debt Current portion of long-term debt Long-term debt excluding current portion Net debt June 30, 2021 June 30, 2022 (cid:11)(cid:27)(cid:24)0(cid:12) 98 5 6,186 5,439 (cid:11)(cid:26)(cid:26)(cid:24)(cid:12) 136 14 (cid:25)(cid:15)(cid:22)(cid:23)0 5,715 Amcor Annual Report 2022 Amcor plc UK Establishment Address: 83 Tower Road North, Warmley, Bristol, (cid:40)nglan(cid:71)(cid:15) (cid:37)(cid:54)(cid:22)0 (cid:27)(cid:59)(cid:51)(cid:15) (cid:56)nite(cid:71) (cid:46)ing(cid:71)om (cid:56)(cid:46) (cid:50)verseas (cid:38)ompan(cid:92) (cid:49)(cid:88)m(cid:69)er(cid:29) (cid:37)(cid:53)020(cid:27)0(cid:22) Registered Office: 3rd Floor, 44 Esplanade, St Helier, JE4 9WG, Jersey, Channel Islands (cid:45)erse(cid:92) (cid:53)egistere(cid:71) (cid:38)ompan(cid:92) (cid:49)(cid:88)m(cid:69)er(cid:29) (cid:20)2(cid:25)(cid:28)(cid:27)(cid:23)(cid:15) A(cid:88)stralian (cid:53)egistere(cid:71) (cid:37)o(cid:71)(cid:92) (cid:49)(cid:88)m(cid:69)er (cid:11)A(cid:53)(cid:37)(cid:49)(cid:12)(cid:29) (cid:25)(cid:22)0 (cid:22)(cid:27)(cid:24) 2(cid:26)(cid:27) www.amcor.com Contact 2(cid:22) Amcor Annual Report 2022 2(cid:22) Amcor Annual Report 2022 Amcor Annual Report 2022

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