GPK 10-K & 10-Q changes, risk factors and insider trading

Increases in the costs of raw materials, including secondary fiber, petroleum-based materials, energy, wood, transportationtransportation, electricity and other necessary goods and services, could have an adverse effect on the Company's financial results. Paperboard manufacturing processes require significant energy and raw materials, the costs of which are subject to worldwide supply and demand factors, supply chain disruptions that can affect availability and result in increased prices, as well as trade regulations and tariffs, GHG emissions-based regulations, and other factors beyond our control. Variations in the cost of energy, which primarily reflect market prices for oil and natural gas, and for raw materials may significantly affect our operating results from period to period. Because negotiated sales contracts and the market largely determine the pricing for our products, the Company is at times limited in its ability to raise prices and pass through to its customers any inflationary or other cost increases that the Company may incur.

The Company uses productivity improvements and other initiatives to reduce costs, offset inflation and maintain adequate raw material supplies. These actions include global continuous improvement initiatives that use best-in-classbest practice industry methodologies and statistical process control to help design and manage many types of activities, including planning, procurement, production and maintenance. These efforts result not only in cost reductions, but also build resilience in the overall supply chain. The Company's ability to realize anticipated savings from these improvements is subject to significant operational, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control. If the Company cannot successfully implement cost savings plans, it may not be able to continue to compete successfully against other manufacturers. In addition, any failure to generate the anticipated efficiencies and savings could adversely affect the Company's financial results.

Changing dietary habits and preferences have impacted sales growth for many of the food and beverage products the Company packages. Customer and consumer preferences are constantly changing based on, among other factors, the economy, convenience, cost and health considerations, changes in dietary recommendations, as well as environmental, social concerns and perceptions, such as pressure to reduce packaging waste by switching to reusable containers versus single-use packaging options. If these trends continue and the Company is unable to adapt to them, then the Company’sCompany's financial results could be adversely affected.

The Company’sCompany's information technology systems, some of which are dependent on services provided by third parties, serve an important role in the operation of the business. These systems could be damaged or cease to function properly due to any number of causes, such as catastrophic events, power outages, security breaches, computer viruses or cyber-based attacks. The Company has contingency plans in place to prevent or mitigate the impact of these events, however, if they are not effective on a timely basis, business interruptions could occur which may adversely impact results of operations.

The Company has been, and likely will continue to be, subject to computer hacking, acts of vandalism or theft, malware, ransomware, computer viruses or other malicious codes, phishing, malicious use of artificial intelligence for sophisticated attacks, employee error or malfeasance or other cyber-attack. To date, the Company has experienced no material impact on our business or operations from these types of attacks or events. Any future significant compromise or breach of data security, whether external or internal, or misuse of customer, employee, supplier or Company data, could result in significant costs, interrupted operations, lost sales, fines, lawsuits,lawsuits and damage to the Company's reputation. These ever-evolving threats mean the Company and its third-party service providers and vendors must continually evaluate and adapt their respective systems and processes and overall security environment, as well as those of any business we acquire. There is no guarantee that these measures will be adequate to safeguard against all data security breaches, system compromises or misuses of datadata, and insurance may not fully cover the costs of cyber incidents. In addition, the regulatory environment related to information security, data collection and use, and privacy is becoming increasingly rigorous, with new requirements applicable to the Company's business. Compliance with such requirements could also result in additional costs.

The Company could experience material disruptions at our facilities,facilities that could adversely impact the Company's financial results and could increase the cost of insurance and level of deductibles.

Although the Company takes appropriate measures to minimize the risk and effect of material disruptions to the business conducted at our facilities, natural disasters such as hurricanes, tornadoes, heat waves, freezing events, floods, droughts, fire and other extreme weather events, (all of which may be exacerbated by climate change), and our employees' inability to get to our facilities as a result of such events, as well as other unexpected disruptions such as disruptions related to our ability to obtain and renew appropriate environmental contracts and permits, the unavailability of critical raw materials, power outages, and equipment breakdowns or failures can reduce production and increase manufacturing costs. These types of disruptions, whether caused by climate change or other events, could materially adversely affect our earnings, depending upon the duration and magnitude of the disruption and our ability to shift business to other facilities or find other sources of materials or energy. In addition, given the Company's integrated supply chain, managing board supply and properly planning for paperboard manufacturing outages and downtime must be integrated with the packaging facilities’facilities' forecasts. Any inability to do so could adversely affect the Company's financial results. Any losses due to these events may not be covered by our existing insurance policies and may be subject to significant deductibles. The premiums for insurance coverage have recently increased and may continue to increase, along with the level of deductibles.

In addition to the possible disruptions to our facilities' production as discussed above, because approximately 59% of the Company's employees are represented by unions, the Company could experience disruptions such as work slowdowns or strikes from time to time. If the Company is unable to prevent prolonged interruptions of the Company's operations at any of its'its facilities due to slowdowns, strikes or other work interruptions, the Company may experience a negative impact to its'its financial results.results and customer relationships.

The Company's ability to maintain or expand its business depends on our ability to attract, develop and retain a skilled workforce at all levels within our organization, including production employeesemployees, professionals, leaders and key managers. Changing demographics and workforce trends may result in a loss of knowledge and skills as experienced workers retire or resign. The Company may incur higher costs to hire and retain new and existing workers due to changes to the Company's needs relative to the size of skilled labor pools and increased demand for skilled workers by other manufacturing industries. The failure to attract and retain sufficient skilled workers may result in operational inefficiencies or require additional capital investments and increased costs to reduce reliance on labor, which may adversely impact the Company's results.

As a result of events, such as pandemics or other global health emergencies and widespread military and geopolitical conflicts and other social and political unrest in Eastern Europe, Africa and the Middle East,unrest, there could be unpredictable disruptions to the Company’sCompany's operations that could limit production, reduce future revenues and negatively impact the Company’sCompany's financial condition. These events may result in supply chain and transportation disruptions to and from our facilities and could impact the Company’sCompany's ability to operate its facilities and distribute products to its customers in a timely or cost-effective fashion. In addition, these events may result in extreme volatility and disruptions in the capital and credit markets as well as widespread furloughs and layoffs for workers in the broader economy. This volatility and loss of employment as well as general economic downturns may negatively impact consumer buying habits, which could adversely affect the Company’sCompany's financial results.

The Company has packagingmanufacturing facilities andin one paperboard manufacturing facility inover 20 countries outside of the U.S. and sells its products worldwide. For 2024,2025, before intercompany eliminations, net sales from operations outside of the U.S. represented approximately 30%31% of the Company’sCompany's net sales. The Company’sCompany's revenues from foreign sales fluctuate with changes in foreign currency exchange rates. In addition, at December 31, 2024,2025, approximately 26%27% of the Company's total assets were denominated in currencies other than the U.S. dollar. The Company pursues a currency hedging program in order to reduce a portion of the impact of foreign currency exchange fluctuations on financial results.

The Company invests significant amounts of cash each year in capital projects, which have expected returns to the Company. The Company's ability to execute on these projects in order to achieve planned outcomes, including completing the projects on time and within budget and obtaining expected returns and strategic long-term goals within a reasonable period of time, is an important factor in the Company's financial results and commitments. As these investments start up, the Company may experience unanticipated business disruptions and not achieve the desired benefits or timelines. In addition, the Company's acquisitions may require more capital than expected to achieve synergies or expected operating results. Additional spending and unachieved benefits may adversely affect the Company's cash flow and results of operations. Also, the Company may not achieve or make satisfactory progress on its Vision 2030 goals, thereby harming its reputation with customers, investors and other stakeholders.

The Company could be adversely impacted if the Company is unable to successfully integrate acquired businesses.businesses, or unable to make changes to optimize our business portfolio.

The Company works to increase market share and profitability through product innovation and the introduction of new products. The inability to developdevelop, in a timely manner, new or better products that satisfy customer and consumer preferences for packaging that is more functional and more convenient inand acomply timelywith mannerevolving regulations may impact the Company's competitive position. The Company's future success and competitive position also depends, in part, upon its ability to obtain and maintain protection for certain proprietary carton and packaging machine technologies used in its value-added products, particularly those incorporating the Fridge Vendor, IntegraPak, KeelClip, MicroFlex-Q, MicroRite, Opti-Cycle, PaperSeal Slice and PaperSeal Wedge, PaperSeal Shapes, Boardio, Produce Pack, Quilt Wave, Qwik Crisp, Tite-Pak, and Z-Flute technologies. Failure to protect the Company's existing intellectual property rights may result in the loss of valuable technologies or may require the Company to license other companies' intellectual property rights. It is possible that any of the patents owned by the Company may be invalidated, rendered unenforceable, circumvented, challenged or licensed to others or any of its pending or future patent applications may not be issued within the scope of the claims sought by the Company, if at all. Further, others may develop technologies that are similar or superior to the Company's technologies, duplicate its technologies or design around its patents, and steps taken by the Company to protect its technologies may not prevent misappropriation of such technologies.

The Company is subject to a broad range of foreign, federal, state,state and local laws and regulations, including environmental, health and safety, sustainability, data privacy, labor and employment, corruption, tax, supply chain, human rights and healthcare,healthcare. and costsCosts to comply with such laws and regulations, or any liability or obligation imposed under new laws or regulations, could negatively impact its financial condition and results of operations.

The Company must comply with a wide variety of environmental, health and safety laws and regulations, including but not limited to those governing environmental matters. GHG emissionsemissions, and othertheir product lifecycle; impacts of discharges to air, soil and water and; the management, treatment and disposal of hazardous substances,substances; the investigation and remediation of contamination resulting from releases of hazardous substances,substances; waste disposal,disposal; recycling of packaging,packaging; extended producer responsibilities,responsibilities; labor and human rights,rights and the health and safety of employees. These laws and regulations, as well as the permits governing discharges to air and water at many of our facilities, particularly those that relate to GHG emissions, supply chain due diligence, and reporting on sustainability-related matters, are evolving and expected to become more stringent over time, which could result in significant additional compliance costs (such as the installation or modification of emission control equipment),costs, increased costs of purchased energy or other raw materials, increased transportation costs, restrictions on our operations, or other costs associated with air and water emissions.emissions, including fines for any non-compliance. The Company is tracking and taking actions to reduce our GHG and other air and water emissions to decrease the potential future impact of these regulatory matters. However, the Company cannot currently assess the impact that future emission standards, climate control initiatives, regulation changes and enforcement practices will have on the Company's operations and capital expenditurespending requirements.

Additionally, over the past few years, the number of data privacy laws and regulations has increased and become more complex and stringent in the U.S. and internationally. The improper handling and disclosure of or access to personal data in violation of privacy laws and regulations across multiple countries and U.S. states could cause harm to the Company’sCompany's reputation, cause loss of consumer confidence, subject the Company to government enforcement actions,actions or result in private litigation against the Company. Any of these outcomes could negatively impact the Company’sCompany's financial condition and results of operations. Moreover, with no unifying standards for both U.S. and international data privacy laws and regulations, the Company could incur additional compliance cost in order to comply with the large number of data privacy laws and regulations, which could result in a negative impact to the Company’sCompany's results of operations.

BecauseAs a result of the Company's debt level, a portion of its cash flows from operations is dedicated to payments on indebtedness and the Company's ability to obtain additional financing for working capital, capital expenditures,spending, acquisitions or general corporate purposes may be restricted in the future.

Additionally, the Company's Fifth Amended and Restated Credit Agreement (as amended, the “"Current Credit Agreement”") and the indentures governing the 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029 and2029, 3.75% Senior Notes due 2030 and 6.375% Senior Notes due 2032 (the “"Indentures”"), limit the Company's ability to incur additional indebtedness. Additional covenants contained in the Current Credit Agreement and the Indentures may, among other things, restrict the ability of the Company to dispose of assets, incur guarantee obligations, prepay other indebtedness, repurchase stock, pay dividends and make other restricted payments, create liens, make equity or debt investments, make acquisitions, modify terms of the Indentures, engage in mergers or consolidations, change the business conducted by the Company and its subsidiaries, and engage in certain transactions with affiliates. Such restrictions could limit the Company’sCompany's ability to respond to changing market conditions, fund its capital spending program, provide for unexpected capital investments or take advantage of business opportunities. These restrictions could limit the Company's flexibility to respond to changing market conditions and competitive pressures. The debt obligations and restrictions may also leave the Company more vulnerable to a downturn in general economic conditions or its business, or unable to carry out capital expendituresspending that areis necessary or important to its growth strategy and productivity improvement programs.

This management’smanagement's discussion and analysis of financial conditions and results of operations is intended to assist you in understanding the Company’sCompany's past performance, financial condition and prospects. A detailed discussion of the fiscal 20242025 year-over-year changes can be found below and a detailed discussion of fiscal 20232024 year-over-year changes can be found in Item 7. “Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations” in ourthe Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.2024.

Graphic Packaging is a leading global provider of consumer goods packaging made from renewable or recycled materials. The Company designs and manufactures sustainable packaging solutions including cartons, multipack cartons, trays, carriers,carriers and paperboard canisters, andas well as cups and bowls, made primarily from unbleachedrecycled paperboard, recycledunbleached paperboard,paperboard and bleached paperboard. Paperboard used in its packaging solutions comes from wood fiber, a renewable resource, and from secondaryrecovered (reused) fiber. Graphic Packaging’sPackaging's consumer packaging is designed to be recycled, and the Company works across the value chain to make it easier for people to recycle. With this focus, the Company plays an active role in support of the move to a more circular economy and a sustainable future for generations to come. Graphic Packaging’sPackaging's commitment to reducing the environmental impact of everyday consumer packaging is fundamental to ourthe Company's strategy, our goals,goals and to our business purpose.

The Company serves a wide variety of consumer markets, from food and beverage, to foodservice, household products, beauty and heath care. WeGraphic producePackaging produces packaging solutions at over 100 locations in over 20 countries around the world, serving customers and brands ranging from local to multinational consumer products companies and retailers. The Company offers one of the most comprehensive ranges of packaging design, manufacture,manufacturing and execution capabilities available. Graphic Packaging manufactures a significant amount of the paperboard that it uses to produce packaging solutions, mainlyprimarily where it believes that self-manufacture provides it with a competitive advantage and allows the Company to deliver better, more consistent results for customers. The Company currently manufactures most of the paperboard it consumes in the Americas and purchases from third parties the majority of the paperboard it consumes in its EuropeInternational Paperboard Packaging operations.operations from third parties.

Graphic Packaging works closely with its customers to understand their needs and goals and to create new and innovative designs customized to their specific needs. The Company’sCompany's approach serves to build and strengthen long-term relationships with purchasing, brand management, marketing,marketing and other key customer functions. The Company is organized to bring the full resources of its global and local innovation, design,design and manufacturing capabilities to all of its customers,customers with the goal of delivering packaging solutions that are more circular, more functional,functional and more convenient.

The Company competes with a wide range of packaging companies whose primary raw materials are paperboard, plastic, multi-layer laminates, shrink film, paper, corrugated board, bio-based materials and other packaging materials. While circularity and sustainability are increasingly important to customerscustomers' purchase decisions, the Company also competes on the basis of product innovation, price,price and execution capabilities. Many of the Company’sCompany's multi-year supply contracts include terms which provide for the pass through of certain costs including raw materials, energy, labor and other manufacturing costs,costs with the intention of reducing exposure to the volatility of these costs, many of which are outside of the Company’sCompany's control.

The Company is implementing strategies to (i) to develop and market innovative,innovative packaging products and applications that benefit from consumer-led sustainability trends; (ii) to expand market share in its current markets and to identify and penetrate new markets; (iii) to capitalize on the Company’sCompany's customer relationships, business competencies,competencies and manufacturing facilities; and (iv) to continue to reduce costs and drive productivity through operational improvements. The Company’sCompany's ability to fully implement its strategies and achieve its objectives may be influenced by a variety of factors, many of which are beyond its control. WeGraphic Packaging cannot predict with any certainty the impact that rising interest rates, a global or regional recession,recession or higher inflation may have on ourits customers or suppliers. Additionally, weit areis unable to predict the potential effects that any future pandemic or other global health emergency andemergency, widespread military and geopolitical conflictsconflicts, andor other social and political unrest or change, including in Eastern Europe, Africa and the Middle East,East and related sanctions or market disruptions, may have on ourits business.

•OnIn May 1, 2024, the Company completed the sale of its Augusta, Georgia bleached paperboard manufacturing facility (the “"Augusta Divestiture”") to Clearwater Paper Corporation for a total consideration of $711 million.

•During 2024,2024 and 2023, the Company decided to close multiple packaging facilities by the end of 2024 and early 2025. These are in addition to the multiple packaging facilities that the Company decided to close by the end of 2023 and early 2024.facilities. Production from these facilities willhas bebeen consolidated into other existing packaging facilities. Current Assets withinon the Consolidated Balance Sheet include $8 million and $15 million relating to multiple paperboard manufacturing and packaging facilities that met the held for sale criteria as of December 31, 2024.2025 and 2024, respectively.

•In January 2023, the Company completed the acquisition of Tama Paperboard, LLC (“"Tama”"), a recycled paperboard manufacturing facility located in Tama, Iowa, from Greif Packaging LLC for approximately $100 million. Tama is includedreported within theCorporate Paperboardand Manufacturing reportable segment.Other. Subsequently, in the second quarter of 2023, the Company closed this facility.

•OnIn September 8, 2023, the Company completed the acquisition of Bell Incorporated (“"Bell”"), adding three packaging facilities in Sioux Falls, South Dakota and Groveport, Ohio for $262 million. Bell is reported within the Americas Paperboard Packaging reportable segment.

•During the third quarter of 2023, the Company announced its decision to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019. As of December 31, 2024, the Company has completed the decommissioning of the K3 recycled paperboard machine.

2025 Compared to 2024 COMPARED WITH 2023

The Company's Net Sales in 20242025 decreased by $621$190 million or 6.6%,(2)%, to $8,807$8,617 million from $9,428$8,807 million for the same period in 2023,2024 due to the Augusta divestiture in 2024, and reduced open market paperboard volumes and pricing of bleached paperboard,paperboard and lower packagingpricing, volumes,partially pricingoffset declines,by including pass through of lower input costs in Europe, the divestiture of our two packaging facilities in Russia in 2023 ($92 million) and unfavorablefavorable foreign currency exchange ($24 million), partially offset by the acquisition of Bell$57 inmillion. SeptemberPackaging 2023volumes ($118were million).flat. Innovation sales growth was $205$213 millionmillion, driven by conversions to ourthe Company's sustainable consumer packaging solutions. Lower packaging sales in food, household, and health and beauty marketsThere were partially offset by higher packaging sales in the health and beauty market, while packaging sales in the food, beverage, foodservice and beveragehousehold markets.markets were relatively flat.

Interest Expense, Net was $230$220 million and $239$230 million in 20242025 and 2023,2024, respectively. Interest Expense, Net decreased primarily due to an increase in capitalized interest.interest primarily due to the Waco project. The Company capitalized interest of $52 million and $34 million in 2025 and 2024, respectively. As of December 31, 2024,2025, approximately 36%28% of the Company’sCompany's total debt was subject to floating interest rates.

During 20242025 and 2023,2024, the Company recognized Income Tax Expense of $229$139 million and $210$229 million, respectively, on Income before Income Taxes of $886$582 million and $932$886 million, respectively.

The effective tax rate for 20242025 is different from the statutory rate primarily due to the write offimpact of state taxes and non-deductible book goodwill associated with the divestiture of Augustaexpenses, as well as tax benefits of $16$8 million related to U.S. federal, state and foreignfederal income tax credits, including purchased tax credits.

The effective tax rate for 20232024 was different from the statutory rate primarily due to athe decreasewrite inoff of non-deductible book goodwill associated with the Company’sAugusta valuation allowances in Sweden, Norway and the Netherlands of $22 million, the establishment of a valuation allowance against the net deferred tax assets in Nigeria of $3 million,divestiture as well as tax benefits of $22$16 million related to U.S. federal, state and foreign income tax credits, including purchased tax credits.

Equity Income of Unconsolidated Entity was $1 million in 2025 and less than $1 million in both 2024 and 2023 and is related to the Company’sCompany's equity investment in the Rengo Riverwood Packaging, Ltd. joint venture.

The Company has threeCompany's reportable segments are described as follows:

Americas Paperboard Packaging includes paperboard packaging sold primarily to consumer packaged goods (“"CPG”") companies serving the food, beverage,beverage and consumer product markets and cups, lids and food containers sold primarily to foodservice companies and quick-service restaurants (“QSR”) in the Americas.

EuropeInternational Paperboard Packaging includes paperboard packaging sold primarily to CPG companies serving the food, beverage and consumer product markets, including healthcare and beauty, primarily in Europe.

The Company allocates certaininternally sourced paperboard manufacturingmargin and corporate costs to the reportable segments to appropriately represent the economics of these segments. The Corporate and Other caption, which does not meet the criteria of a reportable segment, includes the Pacific Rim and Australia operating segments and unallocated corporate costs and one-timethe costs.Paperboard Manufacturing operating segment. The effect of intercompany transfers to the paperboard packaging segments has been eliminated from the Corporate and Other caption to reflect the economics of the integration of these segments.

TheseThe segmentsCompany's areCODM evaluatedevaluates byeach the chief operating decision makersegment based primarily on Income from Operations, as adjusted for depreciation and amortization.Operations. The accounting policies of the reportable segments are the same as those described in “Note 1 -1. Nature of Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data.”Statements.

(a) Includes revenue from contracts with customers for the Australiasale andof Pacificpaperboard Rimto operatingthird segments.parties.

(b) Includes accelerated depreciation related to exit activities in 2025, 2024 and 2023. See “Note 18 -18. Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for further information.

(fc) Includes accelerated depreciationexpenses related to business combinations, exit activities and other special items in 2024,2025, 2023,2024 and 2022.2023. See “Note 181. -Business Combinations, Exit Activities” and Other Special Items, Net in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for further information.

(gd) Includes gainimpairment fromcharges Augustarelated Divestitureto Russia in 2024.2023. See “Note 19 -19. Divestitures” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for further information.

2025 Compared to 2024 COMPARED WITH 2023

Net Sales decreased due to lower pricingpricing, lower packaging volumes and packagingunfavorable volumes,foreign currency exchange, partially offset by innovation sales growth driven by conversions to ourthe Company's sustainable consumer packaging solutions,solutions. andPackaging sales were lower in the acquisitionfood, of Bell in September 2023. Lower packaging sales in foodbeverage and household marketsmarkets, were partially offset by higherwhile packaging sales in the foodservice market.market were relatively flat.

Income from Operations decreased due to lower pricingpricing, lower packaging volumes and packaging volumes, higher levels of planned maintenance and market downtime, weather and power issues and commodity inflation (primarily secondary fiber and byproducts, partially offset by energy, wood and chemicals)cost and other inflation (primarily labor and benefits). These decreases were, partially offset by net performance, including cost savings from continuous improvement and other programs,programs and productivity improvements, including benefits from capital projects, innovation sales growth, and the acquisition of Bell in September 2023.improvements. Income from Operations was also favorably impacted by reductions in accelerated depreciation and charges related to the closures of several packaging facilities (refer to “Note 18 -18. Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information). and by the weather and power issues in 2024 that did not recur in 2025.

Net Sales decreasedincreased due to lower pricing, predominantly due to pass through of lower input costs, the divestiture of our two packaging facilities in Russia in 2023 and unfavorable foreign currency exchange, partially offset by innovation sales growth driven by conversions to ourthe Company's sustainable consumer packaging solutionssolutions, higher packaging volumes and higherfavorable volumes.foreign Lowercurrency packaging sales in food, health and beauty, and household markets wereexchange, partially offset by higherlower packagingpricing and mix. Packaging sales were higher in the food, foodservice, household, health and beauty and beverage market.markets.

The Company broadly defines liquidity as its ability to generate sufficient funds from both internal and external sources to meet its obligations and commitments. In addition, liquidity includes the ability to obtain appropriate debt and equity financing and to convert into cash those assets that are no longer required to meet existing strategic and financial objectives.objectives into cash. Therefore, liquidity cannot be considered separately from capital resources that consist of current or potentially available funds for use in achieving long-range business objectives and meeting debt service commitments.

Net cash provided by operating activities in 20242025 totaled $840$841 million, compared to $1,144$840 million in 2023.2024. The decreaseincrease was mainlyprimarily due to a decrease in income from operations, an increase in payments for income taxes, andpartially higheroffset levelsby ofthe workingdecrease capital.in income from operations in 2025 as compared to 2024. Pension contributions in 20242025 and 20232024 were $12$11 million and $15$12 million, respectively.

Net cash used in investing activities in 20242025 totaled $342$732 million, compared to $1,025$342 million in 2023.2024. The Company had capital spending of $1,203$922 million ($1,256$803 million was capitalized of which $1,169$737 million was for adding capacity and improving process capabilities, $22$32 million for capital spares and $34 million for manufacturing packaging machinery) and $804$1,203 million ($894$1,256 million was capitalized) in 20242025 and 2023,2024, respectively. The increaseelevated inlevels of capital spending waswere driven by the construction of the Company's new recycled paperboard manufacturing facility in Waco, Texas. For more information on the construction of the new recycled paperboard manufacturing facility in Waco, Texas, and continued investments made as part of the integration of acquisitions, see “Note 18 -18. Exit Activities” in the Notes to the Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” On May 1, 2024, the Company completed the sale of the Augusta Paperboard Manufacturing Facility to Clearwater Paper Corporation for total cash consideration of $711 million. For further discussion of the Company's Divestiture of the Augusta Paperboard Manufacturing Facility, see “Note 19 - Divestitures” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data".Statements. Net cash receipts related to the accounts receivable securitization and sale programs were $152$171 million and $139$152 million in 20242025 and 2023,2024, respectively. In the prior year the Company completed the acquisitionAugusta Divestiture for total cash consideration of Tama on January 31, 2023 from Greif Packaging LLC for approximately $100$711 million. The Company also completed the acquisition of Bell Incorporated, adding three packaging facilities in Sioux Falls, South Dakota and Groveport, Ohio for approximately $262 million on September 8, 2023. For further discussion of the Company'sAugusta acquired coated recycled paperboard manufacturing facility and packaging facilities,Divestiture, see “Note 419. - Business Combinations”Divestitures in the Notes to the Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”Statements.

Net cash used in financing activities in 20242025 totaled $489$18 million compared to $106$489 million in 2023.2024. Current year financing activities included the Company completing a $100 million tax-exempt green bond transaction on May 29, 2025 through Mission Economic Development Corporation's Private Activity Bond Program (the "Green Bonds"). The net proceeds of $99 million were used to fund a portion of the construction of the Company's new recycled paperboard manufacturing facility in Waco, Texas. For more information on the Green Bonds, see Note 5. Debt in the Notes to Consolidated Financial Statements. Current year activities also include borrowings under revolving credit facilities primarily for capital spending, repurchase of common stock of $150 million and payments on debt of $14 million. The Company also paid dividends of $128 million and withheld $34 million of restricted stock units to satisfy tax withholding obligations related to the payout of restricted stock units. Prior year financing activities included a debt drawing of the new incremental term facilities which consist of a $50 million Incremental Term A-5 Facility (the “Incremental A-5 Loan”),Facility, a $200 million Incremental Term A-6 Facility (the “Incremental Term A-6 Loan”),Facility, an offering of $500 million aggregate principal amount of 6.375% Senior Unsecured Notes due 2032. The net proceeds were used by the Company to repay a portion of the outstanding borrowings under its senior secured revolving credit facility. The Company also drew $400 million from the senior secured domestic revolving credit facilities and used the proceeds, together with cash on hand, to redeem it's 0.821% Senior Notes due in 2024. The Company also on August 14, 2024 drew $300 million from the senior secured domestic revolving credit facilities on August 14, 2024 and used the proceeds to redeem its 4.125% Senior Notes due in 2024. For further discussion of the Company's newly acquired debt and redemptions, see “Note 5 -5. Debt” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”Statements. Other currentprior year activities include borrowings under revolving credit facilities primarily for capital spending, repurchase of common stock of $200 million and payments on debt of $23 million. The Company also paid dividends of $122 million and withheld $25 million of restricted stock units to satisfy tax withholding obligations related to the payout of restricted stock units. In the prior year the Company made borrowings under revolving credit facilities primarily for capital spending, repurchase of common stock of $54 million, and payments on debt of $26 million. The Company also paid dividends and distributions of $123 million and withheld $22 million of restricted stock units to satisfy tax withholding payments related to the payout of restricted stock units.

As discussed in “Note 5 -5. Debt” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,”Statements, the Senior Notes issued by GPILGraphic Packaging International, LLC (the “Issuer”"GPIL") are guaranteed by Graphic Packaging International Partners, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company ("GPIP") and certain domestic subsidiaries (the “"Subsidiary Guarantors”"), which consist of all material 100% owned subsidiaries of the issuerGPIL other than its foreign subsidiaries,subsidiaries and inforeign certainsubsidiary instancesholding by the Company (a Parent guarantee)companies (collectively “"the Guarantors”"). GPIL's remaining subsidiaries (the “"Nonguarantor Subsidiaries”") include all of GPIL’sGPIL's foreign subsidiariessubsidiaries, foreign subsidiary holding companies and immaterial domestic subsidiaries. The Subsidiary Guarantors are jointly and severally, fully and unconditionally liable under the guarantees.

TheBecause GPHC and GPIP have no independent assets or operations other than ownership of GPIL, the results of operations, assets,assets and liabilities for GPHC and GPIL are substantially the same. Therefore, theThe summarized financial information below is presented on a combined basis, consisting of the Issuer (GPIL) and Subsidiary Guarantors (collectively, the “Obligor Group”),Guarantors, and is presented after the elimination of: (i) intercompany transactions and balances among the Issuer and Subsidiary Guarantors, and (ii) equity in earnings from and investments in the Nonguarantor Subsidiaries.

The Company expects its material cash requirements for the next twelve months will be for: capital expenditures,spending, periodic required income tax payments, periodic interest and debt service payments on associated debt (refer to “Note 5 -5. Debt” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information), lease agreements which have fixed lease payment obligations (refer to “Note 6 -6. Leases” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information), and minimum purchase commitments (refer to “Note 13 -13. Commitments” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information) along with ongoing operating costs, working capital, share repurchases and dividend payments. The Company expects its primary sources of liquidity to be cash flows from sales and operating activities in the normal course of operations and availability from its revolving credit facilities, as needed. The Company expects that these sources will be sufficient to fund ourits ongoing cash requirements for the foreseeable future, including at least the next twelve months.

Principal and interest payments under the term loan facilities and the revolving credit facilities, together with principal and interest payments on the Company's 4.00% Green Bonds due 2026, 5.00% Green Bonds due 2030, 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029, 3.75% Senior Notes due 2030 and 6.375% Senior Notes due 2032 (the “"Notes”"), represent liquidity requirements for the Company. Based upon current levels of operations, anticipated cost savings and expectations as to future growth, the Company believes that cash generated from operations, together with amounts available under its revolving credit facilities and other available financing sources, will be adequate to permit the Company to meet its debt service obligations, necessary capital expenditurespending program requirements and ongoing operating costs and working capital needs, although no assurance can be given in this regard. The Company's future financial and operating performance, ability to service or refinance its debt and ability to comply with the covenants and restrictions contained in its debt agreements (see “"Covenant Restrictions”" below) will be subject to future economic conditions, including conditions in the credit markets, and to financial, business and other factors, many of which are beyond the Company's control, and will be substantially dependent on the selling prices and demand for the Company's products, raw material and energy costs, and the Company's ability to successfully implement its overall business and profitability strategies.

Accounts receivable are stated at the amount owed by the customer, net of an allowance for estimated uncollectible accounts, returns and allowances, and cash discounts. The allowance for doubtful accounts is estimated based on historical experience, current economic conditions, reasonable and supportable forecasts of future economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible.

The Company hasengages enteredwith intothird-party agreementsfinancial institutions to sell, on a revolving basis,sell certain trade accounts receivable tofrom third party financial institutions.customers. Transfers under these agreements meet the requirements to be accounted for as sales of receivables in accordance with the Transfers and Servicing topic of the Financial Accounting Standards Board (“"FASB”") Accounting Standards Codification (the “"Codification”"). The receivables sold are reflected as a reduction of accounts receivable on the Consolidated Balance Sheets at the time of sale. The corresponding proceeds are reflected in Cash Flows from Operating Activities within the Consolidated Statements of Cash Flows. Receivables related to the Company's European program are sold in exchange for cash and a Beneficial Interest, therefore, a portion of the proceeds are reflected as "Beneficial Interest on Sold Receivables" and "Beneficial Interest Obtained in Exchange for Proceeds" in Cash Flows from Investing Activities within the Consolidated Statements of Cash Flows. The loss on sale isfor notall material andprograms is included in Other Expense, Net in the Consolidated Statements of Operations. The following table summarizes the activity under these programs for the yearyears ended December 31, 20242025 and 2023, respectively2024:

The Company serves a wide variety of consumer markets, from food and beverage, to foodservice, household products, beauty and health care. Graphic Packaging produces packaging solutions at overapproximately 100 locations in overapproximately 20 countries around the world, serving customers and brands ranging from local to multinational consumer products companies and retailers. The Company offers one of the most comprehensive ranges of packaging design, manufacturing and execution capabilities available. Graphic Packaging manufactures a significant amount of the paperboard that it uses to produce packaging solutions, primarily where it believes that self-manufacture provides it with a competitive advantage and allows the Company to deliver better, more consistent results for customers. The Company currently manufactures most of the paperboard it consumes in the Americas and purchases the majority of the paperboard it consumes in its International Paperboard Packaging operations from third parties.

The Company competes with a wide range of packaging companies whose primary raw materials are paperboard, plastic, multi-layer laminates, shrink film, paper, corrugated board, bio-based materials and other packaging materials. While circularity and sustainability are increasingly important to customers' purchase decisions, the Company also competes on the basis of product innovation, price and execution capabilities. Many of the Company's multi-year supply contracts include terms which provide for the pass through of certain costscosts, including raw materials, energy, labor and other manufacturing costscosts, with the intention of reducing exposure to the volatility of these costs, many of which are outside of the Company's control.

•In May 2025, the Company closed its Middletown, Ohio, recycled paperboard manufacturing facility.facility (the "Middletown facility"). The Company completed the sale of the Middletown facility in the second quarter of 2026.

Current Assets and Current Liabilities on the Condensed Consolidated Balance Sheets include $19$8 million and $6$2 million, respectively, primarily related to multiple paperboard manufacturing and packaging facilities and other related assets that met the held for sale criteria as of MarchJune 31,30, 2026. Current Assets on the Condensed Consolidated Balance Sheets include $10 million primarily related to multiple paperboard manufacturing and packaging facilities that met the held for sale criteria as of December 31, 2025. During the three and six months ended June 30, 2026, the Company recognized a gain of $1 million and $5 million, respectively, on the sales of exited properties.

FirstSecond Quarter 2026 Compared to FirstSecond Quarter 2025

The Company's Net Sales for the three months ended MarchJune 31,30, 2026 increaseddecreased by $36$16 million, or 2%,1%, to $2,156$2,188 million from $2,120$2,204 million for the three months ended MarchJune 31,30, 2025,2025 drivendue to lower pricing of $27 million, the Croatia divestiture and other items, partially offset by higher volumes and a favorable foreign currency exchange of $50$20 million, partiallywhile offsetpackaging byvolumes lowerwere pricingrelatively of $32 million.flat. Innovation sales growth was $42$40 million, driven by sales of the Company's sustainable consumer packaging solutions. Higher packaging sales in the food and health and beauty markets were partially offset by lower packaging sales in the foodservice and household markets, while packaging sales in the beverage market waswere relatively flat.

Income from Operations for the three months ended MarchJune 31,30, 2026 decreased $202$98 million, or 91%,51%, to $19$95 million from $221$193 million for the three months ended MarchJune 31,30, 2025, due to lower pricing, weather, higher maintenance spend and production curtailment impacts, other inflation (primarily labor and benefits) of $21$24 million, and commodity inflation (including energy, logistics, chemicalschemicals, secondary fiber and purchased materials, partially offset by wood and secondary fiber) of $16$36 million,million and unfavorable foreign currency exchange, partially offset by favorablepositive foreignNet currency exchangePerformance of $3$9 million.

Income from Operations was also unfavorably impacted by $40an millionadditional of charges related to the Company's decision to discontinue its project to build automated roll warehouses at its Kalamazoo, Michigan and Texarkana, Texas paperboard manufacturing facilities. The Company also incurred $18$5 million of charges related to cost and production optimization initiatives, primarily for severance following itsthe review of support functions and other expenses, and recognized $13 million of impairment charges related to adjusting certain held for sale assets to their estimated fair value.expenses. Income from Operations was favorably impacted by a reduction in accelerated depreciation related to the closures of several paperboard facilities of $4 million.million and by the start-up charges related to Waco of $10 million in 2025 that did not recur in 2026.

Interest Expense, Net was $64$68 million and $51$53 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Interest Expense, Net increased primarily due to a decrease inlower capitalized interest dueas toa theresult of completion of the Waco project. The Company capitalized interest of $2$1 million and $14$15 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. As of MarchJune 31,30, 2026, approximately 31%34% of the Company's total debt was subject to floating interest rates.

During the three months ended MarchJune 31,30, 2025,2026, the Company recognized Income Tax Expense of $43$2 million on Income before Income Taxes of $170$26 million. The effective tax rate for the three months ended MarchJune 31,30, 20252026 is different from the statutory rate primarily due to discrete tax adjustments including a $6 million tax benefit from the release of $2reserves millionfor related to excessuncertain tax benefitspositions on restricted stock that vested duringfollowing the periodexpiration inof additionapplicable tostatutes of limitations, as well as the mix of earnings between foreign and domestic jurisdictions, including those with and without valuation allowances.

FirstSecond Quarter 2026 Compared to FirstSecond Quarter 2025

Net Sales decreased due to lower pricing, partially offset by innovation sales growth driven by conversions to the Company's sustainable consumer packaging solutions and favorable foreign currency exchange. Lower packaging sales in the foodservice, householdbeverage and beveragehousehold markets were partially offset by higher packaging sales in the food market.

Net Sales increased due to favorable foreign currency exchange,exchange and innovation sales growth driven by conversions to the Company's sustainable consumer packaging solutions and mix, partially offset by lower pricing. Higher packaging sales were in the beverage, food, beverage and health and beauty and foodservice markets, while packaging sales in the foodservice and household marketsmarket werewas relatively flat.

Income from Operations decreased due to lower pricing, higher commodity cost and other inflation (primarily labor and benefits), partially offset by favorable foreign currency exchange and cost savings from continuous improvement and other programs, including benefits from capital projects,projects and productivity improvements. Income from Operations was also unfavorably impacted by $13 million of impairment charges related to adjusting certain held for sale assetsof toour theirCroatia estimated fair value.business.

Net cash usedprovided inby operating activities for the threesix months ended MarchJune 31,30, 2026 totaled $113$45 million compared to $174$93 million provided by operating activities for the same period in 2025. The improvementdecrease was drivenmainly bydue ato lower useincome offrom working capitaloperations in the current year. Pension contributions for the threesix months ended MarchJune 31,30, 2026 and 2025 were $2$3 million.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 totaled $97$133 million compared to $298$505 million for the same period in 2025. The Company had capital spending of $140$223 million ($96$183 million was capitalized, of which $82$145 million was for adding capacity and improving process capabilities, $8$29 million for capital spares and $6$9 million for manufacturing packaging machinery) and $313$541 million ($215$484 million was capitalized) in 2026 and 2025, respectively. Capital spending decreased compared to prior year due to the completion of a significant portion of the Waco, Texas recycled paperboard facility in the fourth quarter of 2025, which drove elevated capital spending in the prior period. Net cash receipts related to the accounts receivable securitization and sale programs were $45$76 million and $28$56 million in 2026 and 2025, respectively.

The Company expects its material cash requirements for the next ninesix months will be for: capital spending, periodic required income tax payments, periodic interest and debt service payments on associated debt, as discussed in Note 5. Debt of the Notes to Consolidated Financial Statements of the Company's 2025 Annual Report on Form 10-K, lease agreements which have fixed lease payment obligations, as discussed in Note 6. Leases of the Notes to Consolidated Financial Statements of the Company's 2025 Annual Report on Form 10-K, and minimum purchase commitments as discussed in Note 13. Commitments of the Notes to Consolidated Financial Statements of the Company's 2025 Annual Report on Form 10-K, along with ongoing operating costs, working capital, share repurchases and dividend payments. The Company expects its primary sources of liquidity to be cash flows from sales and operating activities in the normal course of operations and availability from its revolving credit facilities, as needed. The Company expects that these sources will be sufficient to fund ongoing cash requirements for the foreseeable future, including at least the next twelve months.

Principal and interest payments under the term loan facilities and the revolving credit facilities, together with principal and interest payments on the Company's 4.00% 2021 Green Bonds due 2026, 5.00% 2025 Green Bonds due 2030, 1.512%5.00% Senior2026 NotesGreen Bonds due 2026,2030, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029, 3.75% Senior Notes due 2030 and 6.375% Senior Notes due 2032 (the "Notes"), represent liquidity requirements for the Company. Based upon current levels of operations, anticipated cost savings and expectations as to future growth, the Company believes that cash generated from operations, together with amounts available under its revolving credit facilities and other available financing sources, will be adequate to permit the Company to meet its debt service obligations, necessary capital spending program requirements and ongoing operating costs and working capital needs, although no assurance can be given in this regard. The Company's future financial and operating performance, ability to service or refinance its debt and ability to comply with the covenants and restrictions contained in its debt agreements (see Covenant Restrictions below) will be subject to future economic conditions, including conditions in the credit markets, and to financial, business and other factors, many of which are beyond the Company's control, and will be substantially dependent on the selling prices and demand for the Company's products, raw material and energy costs and the Company's ability to successfully implement its overall business and profitability strategies.

The following table summarizes the activity under these programs for the threesix months ended MarchJune 31,30, 2026 and 2025:

Receivables sold under all programs subject to continuing involvement, which consists principally of collection services, were $847$877 million and $814 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

The Company also participates in supply chain financing arrangements offered by certain customers that qualify for sale accounting in accordance with the Transfers and Servicing topic of the FASB Codification. For the threesix months ended MarchJune 31,30, 2026 and 2025, the Company sold receivables of $271$564 million and $262$548 million, respectively, related to these arrangements.

The fees associated with the sale of receivables for all programs were $13 million and $14$26 million for the three and six months ended MarchJune 31,30, 20262026, respectively, $15 million and $29 million for the three and six months ended June 30, 2025, respectively, and are included in Other Expense, Net in the Condensed Consolidated Statements of Operations.

The Company has arranged a supplier finance program ("SFP") with a financial intermediary, which provides certain suppliers the option to be paid by the financial intermediary earlier than the due date on the applicable invoice. The transactions are at the sole discretion of both the suppliers and financial institution, and the Company is not a party to the agreements and has no economic interest in the supplier's decision to sell a receivable. The range of payment terms negotiated by the Company with its suppliers is consistent, irrespective of whether a supplier participates in the program. The agreement with the financial intermediary does not require the Company to provide assets pledged as security or other forms of guarantees for the SFP. Amounts due to suppliers that elected to participate in the SFP are included in Accounts Payable on the Company's Condensed Consolidated Balance Sheets, and payments made under the SFP are reflected in Cash Flows from Operating Activities in the Company's Condensed Consolidated Statements of Cash Flows. Accounts Payable included $28$30 million and $27 million payable to suppliers who elected to participate in the SFP as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

At MarchJune 31,30, 2026, the Company was in compliance with such covenant and the ratio was 4.184.37 to 1.00.

The Company must also comply with a minimum Consolidated Interest Expense Ratio of 3.00 to 1.00. At MarchJune 31,30, 2026, the Company was in compliance with such covenant and the ratio was 5.484.86 to 1.00.

As of MarchJune 31,30, 2026, the Company's credit was rated BB by Standard & Poor's and Ba1 by Moody's Investor Services. Standard & Poor's and Moody's Investor Services' ratings on the Company included a stable outlook.

The Company performed its annual goodwill impairment tests as of October 1, 2025. The Company concluded that all reporting units with goodwill have a fair value that exceeds their carrying value, and thus goodwill was not impaired. Excess fair value over carrying value was approximately 2% for the International reporting unit and 18% for the Foodservice reporting unit. No other reporting units had excess fair value over carrying value below 20%. The International reporting unit and the Foodservice reporting unit had goodwill totaling $525$520 million and $84 million at MarchJune 31,30, 2026, respectively.

The variability of the assumptions that management uses to perform the goodwill impairment test depends on a number of conditions, including uncertainty about future events and cash flows. Accordingly, the Company's accounting estimates may materially change from period to period due to changing market factors. If the Company had used other assumptions and estimates or if different conditions occur in future periods, future operating results and cash flows could be materially impacted, and judgments and conclusions about the recoverability of goodwill could change. The assumptions used in the goodwill impairment testing process could also be adversely impacted by certain of the risks disclosed in Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and thus could result in future goodwill impairment charges. The Company continuously monitors events which could trigger an interim impairment analysis, such as changing business conditions, our financial performance and our market capitalization. The Company determined there were no triggering events requiring an interim impairment analysis during the three months ended MarchJune 31,30, 2026.