Amcor AMCR

Market dynamics remain have remained challenging with during fiscal year 2026, reflecting softer consumer demand and customer order volatility in certain markets, and higher costs cost pressures in certain areas, including labor costs, during fiscal year 2025. Despite these hurdles, we have benefited from overall sales volume growth of approximately 1% during fiscal year 2025 compared to the prior fiscal year, with sales volumes in North America generally softening sequentially in the second half of fiscal year 2025. The underlying causes for the market volatility being experienced can be attributed to costs. These conditions were driven by a variety combination of factors, such as including ongoing geopolitical tension tensions and conflicts, volatility and changes in U.S. domestic and global tariff frameworks frameworks, and persistent inflation in across many economies impacting economies, all of which have adversely affected consumption and consumer demand. Rapid changes shifts in U.S. trade policies, including the announcement of wide-spread tariff increases which were paused and then re-announced, amid persistent inflation policy, together with sustained inflationary pressures in the U.S., has resulted in lower consumer United States, have further contributed to global market uncertainty and uneven demand across many categories. Recent finalization of U.S. trade agreements with certain trading partners, including the United Kingdom and the European Union, helps to reduce trade tensions, but the overall impact of these agreements remains uncertain as many details still need to be negotiated. several end markets.

We are subject to income and other taxes in the many jurisdictions in which we operate. Tax laws and regulations are complex and the determination of our global provision for income taxes and current and deferred tax assets and liabilities requires judgment and estimation. We are subject to routine examinations of our income tax returns, and tax authorities may disagree with our tax positions and assess additional tax. Our future income taxes could also be negatively impacted by our mix of earnings in the jurisdictions in which we operate being different than anticipated given differences in statutory tax rates in the countries in which we operate. In addition, we may be adversely impacted by certain tax policy efforts, including any tax law changes resulting from the Organization for Economic Cooperation and Development ("OECD") and the G20's inclusive framework on Base Erosion and Profit Shifting ("BEPS"), which has proposed a 15% global minimum tax applied on a country-by-country basis (the "Pillar Two rule"), and many countries (including countries in which we operate) have enacted or begun the process of enacting laws adopting the Pillar Two rule. The first component of the Pillar Two rule applied to us from July 1, 2024. While we do not currently expect the Pillar Two rule to have a material impact on our effective tax rate, our analysis is ongoing as the OECD continues to release guidance and as countries begin implementing legislation. Future developments could change our current assessment, and it is possible that the Pillar Two rule could adversely impact our tax rate and subsequent tax expense.

In fiscal year 2025, 2026, the Company performed qualitative quantitative impairment tests for its two reporting units to determine whether or not indicators of impairment existed. The Company evaluated factors including, but not limited to, macro-economic conditions, market and industry conditions, competitive environment, results of prior impairment tests, operational stability, the overall financial performance of our reporting units and the impacts of discount rates. As a result of the qualitative assessment, no indicators of impairment were identified and the Company concluded that goodwill was not impaired. impaired as the fair value of the reporting units substantially exceeded their carrying values. There were no events or circumstances which indicated goodwill might be impaired as of June 30, 2026.