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What changed in RAYONIER ADVANCED MATERIALS INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of RAYONIER ADVANCED MATERIALS INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+397 added−323 removedSource: 10-K (2025-03-06) vs 10-K (2024-02-29)

Top changes in RAYONIER ADVANCED MATERIALS INC.'s 2024 10-K

397 paragraphs added · 323 removed · 265 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

67 edited+34 added−13 removed22 unchanged
Biggest changeWith production expected to begin in the first quarter of 2024, we will be among the first in France to produce wood-based 2G bioethanol fuel, a product that is noncompetitive to the human food supply and is expected to help petrochemical companies improve the climate profile of their energy offerings in the European market; • Production of 2G bioethanol fuel at our Fernandina facility, a multi-year project expected to have similar carbon impacts as our Tartas bioethanol facility and may be used in additional market segments, including as a feedstock for sustainable aviation fuel; and • Our involvement with Altamaha Green Energy, a start-up entity bidding on an annual contract with Georgia Power to sell green electricity from a new plant to be constructed adjacent to our Jesup facility.
Biggest changeWith production commencing in the first quarter of 2024, we are among the first in France to produce wood-based 2G bioethanol, a renewable fuel made from non-food-based biomass that is not competitive to the human food supply and that reduces GHG emissions by up to 90 percent compared to traditional fossil fuels. • Production of 2G bioethanol fuel at our Fernandina facility, a multi-year project expected to deliver carbon benefits comparable to our France bioethanol facility, with potential applications in additional market segments, including as a feedstock for sustainable aviation fuel. • Involvement in AGE, a start-up entity that aims to utilize renewable forestry waste and other biomass generally discarded as waste to generate green electricity for the state of Georgia from a new facility to be constructed adjacent to our Jesup plant.
Wood We procure wood chips for our high purity cellulose and high-yield pulp plants through the purchase of chips from lumber producers or the production for chips from roundwood at our own wood chipping facilities. The price for wood is impacted by various factors, including supply and demand, weather events, transportation costs for delivery and overall economic conditions.
Wood We procure wood chips for our high purity cellulose and high-yield pulp plants through the purchase of chips from lumber producers or the production of chips from roundwood at our own wood chipping facilities. The price for wood is impacted by various factors, including supply and demand, weather events, transportation costs for delivery and overall economic conditions.
Commodity viscose pulp is a raw material required for the manufacture of viscose staple fibers which are used in woven applications, such as rayon textiles for clothing and other fabrics, and in non-woven applications, such as baby wipes, cosmetic and personal wipes, industrial wipes and mattress ticking.
Commodity viscose is a raw material required for the manufacture of viscose staple fibers which are used in woven applications, such as rayon textiles for clothing and other fabrics, and in non-woven applications, such as baby wipes, cosmetic and personal wipes, industrial wipes and mattress ticking.
To meet this demand, our products are custom-engineered and manufactured to each customer’s unique specifications and undergo a stringent qualification process, resulting in the quality and consistency that allow our customers to operate more efficiently and cost-effectively.
To meet this demand, our products are custom-engineered and manufactured to each customer’s unique specifications and undergo a stringent qualification process, resulting in quality and consistency that allow our customers to operate more efficiently and cost-effectively.
Absorbent materials, typically referred to as fluff fibers, are used as an absorbent medium in products such as disposable baby diapers, feminine hygiene products, incontinence pads, convalescent bed pads, industrial towels and wipes and non-woven fabrics.
Absorbent materials, typically referred to as fluff, are used as an absorbent medium in products such as disposable baby diapers, feminine hygiene products, incontinence pads, convalescent bed pads, industrial towels and wipes and non-woven fabrics.
The product must be formulated to achieve the desired characteristics, including parameters for purity, viscosity, brightness, reactivity and other physical properties. Product qualification time can be lengthy, extending six to 24 months.
The product must be formulated to achieve the desired characteristics, including parameters for purity, viscosity, brightness, reactivity and other physical properties. Product qualification time can be lengthy, extending from six to 24 months.
However, in recent years, commodity viscose pulp from wood has supplanted cotton as the preferred raw material input for viscose staple fiber production. Although cellulose specialties can generally be sold to meet commodity viscose demand, the reverse is not typically true. Our major competitors for commodity viscose pulp include April/Bracell, Sappi, Lenzing, Aditya Birla Group and Sun Paper.
However, in recent years, commodity viscose from wood has supplanted cotton as the preferred raw material input for viscose staple fiber production. Although cellulose specialties can generally be sold to meet commodity viscose demand, the reverse is not typically true. Our major competitors for commodity viscose include Bracell, Sappi, Lenzing, Aditya Birla Group and Sun Paper.
Pricing for commodity products is typically referenced to published indices or based on publicly available spot market prices. We compete with both domestic and foreign producers of commodity products. For commodity viscose pulp, many competitors derive their commodity viscose pulp from either wood or cotton.
Pricing for commodity products is typically referenced to published indices or based on publicly available spot market prices. We compete with both domestic and foreign producers of commodity products. Many competitors derive commodity viscose from either wood or cotton.
Adherence to the Code is intended to ensure that we: • Fulfill our obligation to observe the law both in letter and spirit in all countries in which we do business; and • Deal fairly with our stockholders, employees, customers, suppliers, regulators and communities.
Adherence to the Code is intended to ensure that we fulfill our obligation to observe the law, both in letter and spirit, in all countries where we do business, and to deal fairly with our stockholders, employees, customers, suppliers, regulators and communities.
Our website and the information posted thereon are not incorporated into this 2023 Form 10-K or any current or other periodic report that we file with or furnish to the SEC.
Our website and the information posted thereon are not incorporated into this 2024 Form 10-K or any current or other periodic report that we file with or furnish to the SEC.
With four facilities and five manufacturing lines capable of producing cellulose specialties, we are the only cellulose specialties producer in the world with the flexibility to use both hardwood and softwood fibers, kraft and sulfite cooking processes and a variety of proprietary chemical treatments to provide customized product functionality.
With four facilities and five manufacturing lines capable of producing cellulose specialties, we are the only cellulose specialties producer in the world with the flexibility to use both hardwood and softwood fibers, kraft and sulfite cooking processes and various proprietary chemical treatments to provide customized product functionality.
We believe end-use market diversity reduces our exposure to a potential global recession. 3 Table of Contents In addition to cellulose specialties, a significant portion of our production capacity is dedicated to manufacturing high-purity commodity products for absorbent materials and viscose applications.
We believe our end-use market diversity reduces our exposure to a potential global recession. In addition to cellulose specialties, a significant portion of our production capacity is dedicated to manufacturing high-purity commodity products for absorbent materials and viscose applications.
Availability of Reports and Other Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Sections 13(a) or 14 of the Exchange Act are made available to the public free of charge in the Investor Relations section of our website www.ryam.com shortly after we electronically file such material with, or furnish them to, the SEC.
Availability of Reports and Other Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Sections 13(a) or 14 of the Exchange Act are made available to the public free of charge in the Investor Relations section of our website www.ryam.com as soon as reasonably practicable after we electronically file such material with, or furnish them to, the SEC.
Pricing for paperboard is typically referenced to published indices and marketed through our internal sales team and is impacted by the balance between supply and demand, as affected by global economic conditions, changes in consumption and capacity, the level of customer and producer inventories and fluctuations in currency exchange rates.
Pricing for high-yield pulp is typically referenced to published indices marketed through our internal sales team and is impacted by the balance between supply and demand, as affected by global economic conditions, changes in consumption and capacity, the level of customer and producer inventories and fluctuations in currency exchange rates.
We publish and communicate these expectations and values for all new hires and for all other employees several times throughout each year, including through various trainings.
We publish and communicate these expectations and values for all new hires and employees several times each year, including through various trainings.
Human Capital Employees We have production facilities in the U.S., Canada and France and sales offices in the U.S., Canada, France, United Kingdom, Japan and China. Of our approximately 2,800 employees, 61 percent belong to labor unions, as all of our manufacturing sites are represented by various local and national unions.
Human Capital We have production facilities in the U.S., Canada and France and sales offices in the U.S., Canada, France, United Kingdom, Japan and China. Of our approximately 2,350 employees, 69 percent belong to labor unions, as all of our manufacturing sites are represented by various local and national unions.
Cellulose specialties are natural polymers, used as raw materials to manufacture a broad range of consumer-oriented products such as liquid crystal displays, impact-resistant plastics, thickeners for food products, pharmaceuticals, cosmetics, cigarette filters, high-tenacity rayon yarn for tires and industrial hoses, food casings, paints and lacquers.
Cellulose specialties are natural polymers that are used as raw materials to manufacture a broad range of consumer-oriented products such as liquid crystal displays, impact-resistant plastics, thickeners for food products, pharmaceuticals, cosmetics, cigarette filters, high-tenacity rayon tire cords and industrial hoses, food casings, paints and lacquers.
Additionally, we possess significant knowledge of wood fiber properties and their modification under a sequence of chemical processes, which we have accumulated and developed over 95 years of practical application to satisfy a variety of customer needs.
Additionally, we possess significant knowledge of wood fiber properties and their modification under a sequence of chemical processes, which we have accumulated and developed over nearly 100 years of practical application to satisfy various customer needs.
We are the only multi-ply paperboard producer in North America, with our competition producing single ply solid bleached sulfite paperboard. Competition The principal method of competition in our Paperboard segment is price and product performance.
We are the only multi-ply paperboard producer in North America, with our competition producing single ply solid bleached sulfite paperboard. 6 Table of Contents Competition The principal method of competition in our Paperboard business is price and product performance.
This process knowledge, combined with our manufacturing scale and flexibility and knowledge of customer applications and specifications, makes us the industry’s most adaptable modifier of cellulose fibers. Commodity Products We have the ability to shift our High Purity Cellulose segment manufacturing assets from cellulose specialties production to commodity absorbent materials and viscose pulp production.
This process knowledge, combined with our manufacturing scale and flexibility and knowledge of customer applications and specifications, makes us the industry’s most adaptable modifier of cellulose fibers. Commodity Products We can shift our High Purity Cellulose operating segment manufacturing assets from cellulose specialties production to commodity fluff and viscose production.
Unlike other wood pulps used for their physical properties, cellulose specialties are sought after for the unique chemical properties and reactivity they impart to downstream products. Derived from wood, our cellulose specialties require high levels of purity, consistency and process knowledge.
Cellulose specialties are a dissolving wood pulp product which target a combination of high purity and high viscosity. Unlike other wood pulps used for their physical properties, cellulose specialties are sought after for the unique chemical properties and reactivity they impart to downstream products. Our cellulose specialties, derived from wood, require high levels of purity, consistency and process knowledge.
Item 1. Business We are a global leader of specialty cellulose materials with a broad offering of high purity cellulose specialties, a natural polymer used in the production of a variety of specialty chemical products, including liquid crystal displays, filters, textiles and performance additives for pharmaceutical, food and other industrial applications.
Item 1. Business We are a global leader in the production of cellulose specialties, a natural polymer used in the manufacturing of various specialty chemical products, including liquid crystal displays, filters, textiles and performance additives for pharmaceutical, food and other industrial applications.
We manufacture products tailored to the precise and demanding chemical and physical specifications of our customers, achieving industry-leading purity and product functionality. Our ability to consistently manufacture high-quality cellulose specialties products is the result of our proprietary production processes, intellectual property and over 95 years of technical expertise and knowledge of cellulosic chemistry.
We manufacture products tailored to our customers’ precise and demanding chemical and physical specifications, achieving industry-leading purity and product functionality. Our ability to consistently manufacture high-quality cellulose specialties products results from our proprietary production processes, intellectual property and nearly 100 years of technical expertise and knowledge of cellulosic chemistry.
Our 2G bioethanol project, for example, will capture residual sugars from our existing pulp process, which we will then use in the production of wood-based 2G bioethanol fuel. Our Tartas bioethanol facility is expected to be operational in the first quarter of 2024.
Our 2G bioethanol facility in France, operational in the first quarter of 2024, for example, captures residual sugars from our existing pulp process, which we then use in the production of wood-based 2G bioethanol fuel.
Certified waste handlers dispose of any hazardous waste. Business Operations Prior to June 27, 2014, we consisted of Rayonier Inc.’s wholly-owned performance fibers business, which was engaged primarily in the production of cellulose specialties. On that date, we separated from Rayonier Inc. and started our business as an independent, publicly-traded company.
Our Business Before June 27, 2014, we consisted of Rayonier Inc.’s wholly-owned performance fibers business, which was primarily engaged in producing cellulose specialties. On that date, we separated from Rayonier Inc. and started our business as an independent, publicly traded company.
Product performance is determined based on the physical attributes of the products in a customer’s manufacturing processes. To a lesser extent, quality and service are also competitive determinants. Our major paperboard competitors include WestRock, Graphic Packaging, Clearwater Paper, Sappi, Metsa Group and Billerud. High-Yield Pulp We manufacture and market high-yield pulp produced in our Temiscaming plant in Quebec, Canada.
Product performance is determined based on the physical attributes of the products in a customer’s manufacturing processes. To a lesser extent, quality and service are also competitive determinants. Our major paperboard competitors include Smurfit Westrock, Graphic Packaging, Clearwater Paper, Sappi, Metsa Group, Stora Enso, CMPC and Billerud.
During the years ended December 31, 2023, 2022 and 2021, our R&D spend totaled $6 million, $7 million and $7 million, respectively. 7 Table of Contents Environmental Matters Our manufacturing operations are subject to stringent federal, state, provincial and local environmental laws and regulations concerning air emissions, wastewater discharges, waste handling and disposal and assessment and remediation of environmental contamination, which impact our current ongoing operations and approximately 20 former operating facilities and third party-owned sites classified as disposed operations.
Environmental Matters Our manufacturing operations are subject to stringent federal, state, provincial and local environmental laws and regulations concerning air emissions, wastewater discharges, waste handling and disposal and assessment and remediation of environmental contamination, which impact our current ongoing operations and approximately 20 former operating facilities and third party-owned sites classified as disposed operations.
Cellulose specialties typically contain over 95 percent cellulose, while commodity products typically contain less than 95 percent cellulose. Our specialized assets, capable of creating the world’s leading high purity cellulose products, are also suited for generating biofuels, bioelectricity and other biomaterials such as lignin and tall oils.
Cellulose specialties typically contain over 95 percent cellulose, while commodity products usually contain less than 95 percent cellulose. Our specialized assets, capable of creating the world’s leading high purity cellulose products, also produce bioelectricity and biomaterials, including biofuels, lignin and tall oil soap.
These raw materials and input costs are subject to significant changes in price as a result of weather conditions, supply and demand. To control cost, we continually pursue reductions in usage and cost of key supplies, services and raw materials.
Additionally, our High Purity Cellulose and High-Yield Pulp operating segments’ manufacturing processes require significant amounts of chemicals. These raw materials and input costs are subject to significant changes in price as a result of weather conditions, supply and demand. To control cost, we continually pursue reductions in usage and cost of key supplies, services and raw materials.
Our operating lines fluctuate production of cellulose specialties and commodity products based on market conditions and to generate the most attractive margins. Absorbent materials, or fluff fibers, are typically used in consumer products such as baby diapers.
Our operating lines fluctuate the production of cellulose specialties and commodity products based on market conditions and to generate the most attractive margins. Commodity fluff is typically used in consumer products such as baby diapers. These fibers provide a medium for fluid acquisition, distribution and retention in the products in which they are incorporated.
Our future spending requirements in the area of environmental compliance could change significantly based on the passage of new environmental laws and regulations. Management closely monitors our environmental responsibilities and believes we are in material compliance with current requirements.
Our future spending requirements in the area of environmental compliance could change significantly based on the passage of new environmental laws and regulations.
Our energy costs are also impacted by emission allowances purchased or sold at market prices during any given period. In addition, energy prices impact our transportation costs for delivery of raw materials to our manufacturing facilities and delivery of our finished products to customers. Intellectual Property Substantially all of our intellectual property relates to our High Purity Cellulose segment.
In addition, energy prices impact our transportation costs for delivery of raw materials to our manufacturing facilities and delivery of our finished products to customers. Intellectual Property Substantially all of our intellectual property relates to our High Purity Cellulose operating segment.
No single customer accounted for 10 percent or more of total sales during the years ended December 31, 2022 and 2021. Research and Development Our R&D capabilities and activities are primarily focused on our High Purity Cellulose segment.
One customer in the High Purity Cellulose operating segment represented 10 percent of total sales for the year ended December 31, 2023. Research and Development Our R&D capabilities and activities are primarily focused on our High Purity Cellulose operating segment.
Our ECD program provides recent graduates and new hires with structured onboarding, on-the-job training and leadership experiences to support the ongoing development of the technical and leadership skills required to support and sustain our operations. The ECD program covers engineering, supply chain, accounting, information technology and human resources.
Some of our key programs include: • Our ECD five-year rotational program provides recent graduates and new hires with structured onboarding, on-the-job training and leadership experiences to support the ongoing development of the technical and leadership skills required to support and sustain our operations.
Seasonality Our operating results may be materially affected by seasonal changes and the related impact on energy prices. Customers One customer in the High Purity Cellulose segment represented 10 percent of total sales for the year ended December 31, 2023.
Seasonality Our operating results may be materially affected by seasonal changes and the related impact on energy prices. Customers No single customer accounted for 10 percent or more of total sales during the years ended December 31, 2024 and 2022.
See Item 1A—Risk Factors for a discussion of the potential impact of environmental risks on our business, as well as Note 10—Environmental Liabilities and Note 21—Commitments and Contingencies to our Financial Statements for further discussion of our estimated environmental liabilities and any environmental-related litigation.
Management closely monitors our environmental responsibilities and believes we are in material compliance with current requirements. 8 Table of Contents See Item 1A—Risk Factors for a discussion of the potential impact of environmental risks on our business, as well as Note 11—Environmental Liabilities and Note 22—Commitments and Contingencies to our Financial Statements for further discussion of our estimated environmental liabilities and any environmental-related litigation.
Pricing for high-yield pulp is typically referenced to published indices marketed through our internal sales team and is impacted by the balance between supply and demand, as affected by global economic conditions, changes in consumption and capacity, the level of customer and producer inventories and fluctuations in currency exchange rates. 6 Table of Contents Our major high-yield pulp competitors include Winstone Pulp, Sappi, Millar Western, West Fraser, Paper Excellence, SCA and Estonia Cell.
Pricing is typically based on published indices and marketed through our internal sales team and is impacted by the balance between supply and demand, as affected by global economic conditions, changes in consumption and capacity, the level of customer and producer inventories and fluctuations in currency exchange rates.
In November 2017, we completed the acquisition of Tembec Inc., a manufacturer of cellulose specialties, lumber, paperboard, newsprint and high-yield pulp. In August 2021, we sold the lumber and newsprint assets acquired in the Tembec acquisition. As a result of this sale, the operating results of the lumber and newsprint operations are presented as discontinued operations in our Financial Statements.
In November 2017, we acquired Tembec Inc., a manufacturer of cellulose specialties, lumber, paperboard, newsprint and high-yield pulp. 3 Table of Contents In August 2021, we sold the lumber and newsprint assets acquired in the Tembec acquisition.
Shifts in fashion styles and textile fiber blending have increased demand for viscose staple fibers. Additionally, variability in cotton linter supply and increasing environmental concerns about cotton production have resulted in viscose staple producers shifting volume away from cotton linter pulp to wood-based dissolving pulp, absent other pricing factors.
Additionally, variability in cotton linter supply and growing environmental concerns about cotton production have resulted in viscose staple producers shifting volume away from cotton linter pulp to wood-based dissolving pulp, absent other pricing factors. Biomaterials We are uniquely positioned to meet the rapidly growing demand for renewable materials and sustainable products.
Raw Materials and Input Costs All of our manufacturing operations require significant amounts of wood fiber, in the form of logs or wood chips, as a raw material and energy to produce our products. Additionally, our High Purity Cellulose and High-Yield Pulp segments’ manufacturing processes require significant amounts of chemicals.
Our major high-yield pulp competitors include Sappi, Millar Western, West Fraser, Domtar, SCA, Pan Pac Forest Products Ltd and Estonia Cell. Raw Materials and Input Costs All of our manufacturing operations require significant amounts of wood fiber, in the form of logs or wood chips, as a raw material and energy to produce our products.
Chemicals Chemicals, which include caustic soda (sodium hydroxide), sulfuric acid, ammonia, sodium chlorate and various specialty chemicals, are purchased under negotiated supply agreements with third parties. The price for these chemicals is impacted by various factors, including supply and demand, environmental regulation, energy prices and overall economic conditions.
Chemicals Chemicals, which include caustic soda (sodium hydroxide), sulfuric acid, ammonia, sodium chlorate and various specialty chemicals, are purchased under negotiated supply agreements with third parties.
Competition The principal method of competition in the High-Yield Pulp segment is price, however a better quality (i.e., higher bulk) can sometimes command a premium price.
Typical applications of our high-yield pulp include paperboard, packaging, coated and uncoated printing and writing paper, specialty papers and various other paper products. Competition The principal method of competition in the High-Yield Pulp operating segment is price. However, better quality (i.e., higher bulk) can sometimes command a premium price.
We continuously track and measure our progress against these metrics at the individual plant level, with each plant accountable for their respective metrics and reporting to the Safety Steering Committee chaired by our CEO. Employee Engagement Attracting, retaining and developing employees is vital to our success.
We continuously track and measure our progress against these metrics at the individual plant level, with each plant accountable for its respective metrics and reporting to the RYAM Leadership Team, headed by our CEO.
Building upon more than 95 years of experience in cellulose chemistry, we provide some of the highest quality high-purity cellulose pulp products that make up the essential building blocks for our customers’ products while providing exceptional service and value. We also produce a unique, lightweight multi-ply paperboard product and a bulky, high-yield pulp product.
Building upon nearly 100 years of experience in cellulose chemistry, we provide some of the highest quality high-purity cellulose pulp products that make up the essential building blocks for our customers’ products while providing exceptional service and value. RYAM’s specialized assets also produce bioelectricity, biomaterials, including biofuels, lignin and tall oil soap, and commodity fluff, viscose and paper pulp.
We currently generate and sell lignosulfonates and tall oil soap using these compounds. Lignosulfonates are used to produce a variety of products, including construction materials, dispersants, plant nutrients, leather tanning and fungicides, and tall oil soap is used as feedstock for producing crude tall oil. We also produce bio-generated electricity utilizing renewable biomass.
Lignosulfonates are used to produce various products, including construction materials, dispersants, plant nutrients, leather tanning and fungicides, and tall oil soap, which is used as feedstock for producing crude tall oil. We also produce bio-generated electricity utilizing renewable biomass. Our France bioethanol facility produces 2G bioethanol, a non-food-based ethanol utilized as an environmentally friendly fuel blend supporting transport decarbonization.
Our paperboard is used for production in the commercial printing, lottery ticket and high-end packaging sectors. Our high-yield pulp is used by paperboard producers, as well as in traditional printing, writing and specialty paper manufacturing. Strategic Growth Investments We focus our strategic investments in projects that optimize and align our assets to meet the ever-growing demand for renewable products.
Additionally, we produce a unique, lightweight multi-ply paperboard product and a bulky, high-yield pulp product. Our paperboard is used for production in the commercial printing, lottery ticket and high-end packaging sectors. Our high-yield pulp is used by paperboard producers as well as in traditional printing, writing and specialty paper manufacturing.
We believe this dual certification reinforces our dedication to responsible and sustainable forestry practices throughout our manufacturing processes. Our fluff pulp, produced at our Jesup facility, carries the distinction of being certified as an “Inspected Raw Material” by Nordic Swan Ecolabeling.
Our fluff pulp, produced at our Jesup facility, carries the distinction of being certified as an “Inspected Raw Material” by Nordic Swan Ecolabeling. This label signifies adherence to environmental requirements at every stage of manufacturing. We frequently monitor and pursue additional opportunities for sustainability in our manufacturing processes.
Our Temiscaming plant has an annual production capacity of 290,000 MTs of high-yield pulp, approximately 65,000 MTs of which are used internally to produce paperboard. Wood fiber, chemicals and energy represent approximately 40 percent of our per MT cost of sales. Labor, manufacturing and maintenance supplies, depreciation, manufacturing overhead and transportation costs represent our remaining cost of sales.
Paperboard We manufacture paperboard in the Temiscaming plant in Quebec, Canada. Our production facility has an annual production capacity of 180,000 MTs of paperboard. Key input costs — wood, chemicals and energy — represent approximately 75 percent of our per MT cost of sales. Transportation, depreciation, labor, maintenance and other manufacturing fixed costs represent our remaining cost of sales.
These fibers provide a medium for fluid acquisition, distribution and retention in the products in which they are incorporated. 4 Table of Contents Commodity viscose pulp is primarily sold to producers of viscose staple fibers, which in turn are used to manufacture rayon fibers, which are widely used in the clothing and textile industries.
Commodity viscose is primarily sold to producers of viscose staple fibers, which in turn are used to manufacture rayon fibers, which are widely used in the clothing and textile industries. Shifts in fashion styles and textile fiber blending have increased demand for viscose staple fibers.
Water is also necessary for steam and on-site power generation, air emissions control, process cooling and equipment cleaning. Each gallon of water gets used and reused multiple times in our process and 98 out of every 100 gallons we use are treated and returned to natural water sources in keeping with stringent government-issued permit limitations.
Water is also necessary for steam and on-site power generation, air emissions control, process cooling and equipment cleaning. Each gallon of water consumed at our facilities is reused multiple times in our process.
Our four production facilities have a combined annual production capacity of 1,045,000 MTs of cellulose specialties and commodity products. Of our total annual capacity, we dedicate 270,000 MTs of annual production to commodity products, primarily absorbent materials. Wood fiber, chemicals and energy represent approximately 50 percent of our per MT cost of sales.
Of our total annual capacity, we dedicate 270,000 MTs of annual production to commodity products, primarily fluff. 4 Table of Contents Key input costs — wood, chemicals and energy — represent approximately 50 percent of our per MT cost of sales. Transportation, depreciation, labor, maintenance and other manufacturing fixed costs represent our remaining cost of sales.
Labor, manufacturing and maintenance supplies, depreciation, manufacturing overhead and transportation costs comprise the rest of our cost of sales. Products Cellulose Specialties Cellulose specialties are a natural polymer primarily derived from either wood or cotton and are used as a principal raw material to manufacture a broad range of products.
Products Cellulose Specialties Cellulose specialties are a natural polymer primarily derived from either wood or cotton and are used as a principal raw material to manufacture a broad range of products. Cellulose specialties generally command a price premium and earn higher margins relative to other commodity wood pulp products.
In addition, we provide our employees with training and education opportunities such as financial services and retirement planning workshops. 8 Table of Contents Commitment to Human Rights To reinforce and strengthen our commitment to socially responsible business practices, we have a Human Rights Policy that specifically addresses the following fundamental human rights principles: • Safe and healthy workplaces • Environmentally responsible operations • No forced or child labor • Anti-corruption and bribery compliance • Freedom of association and the right to collective bargaining if legally elected • Fair compensation and working hours • Diversity and inclusion • Harassment and discrimination free workplace • Community and stakeholder engagement Code of Conduct Within the framework of our core values of Integrity, Accountability, Quality and People, the Rayonier Advanced Materials Standard of Ethics and Code of Corporate Conduct is our guide to the lawful and ethical performance of our duties.
Through open communication, mentorship and continuous learning, we reinforce a culture where all individuals can thrive and reach their full potential. 9 Table of Contents Commitment to Human Rights To reinforce and strengthen our commitment to socially responsible business practices, we have a Corporate Human Rights Policy that specifically addresses the following fundamental human rights principles: • Safe and healthy workplaces • Environmentally responsible operations • No forced or child labor • Anti-corruption and bribery compliance • Freedom of association and the right to collective bargaining if legally elected • Fair compensation and working hours • Harassment and discrimination-free workplace • Community and stakeholder engagement Our Corporate Human Rights Policy is overseen by the Sustainability Committee of the Board of Directors.
Wood pulp, chemicals and energy represent approximately 80 percent of our per MT cost of sales. Labor, manufacturing and maintenance supplies, depreciation, manufacturing overhead and transportation costs represent our remaining cost of sales. Products Products in the Paperboard business include packaging, printing documents, brochures, promotional materials, paperback book and catalog covers, file folders, tags and lottery tickets.
Products Products in the Paperboard business include packaging, printing documents, brochures, promotional materials, paperback book and catalog covers, file folders, tags and lottery tickets.
Our Fernandina Beach and Tartas facilities are ISCC PLUS and ISCC EU certified, respectively, underscoring our commitment to independently audited sustainability standards and processes within our supply chain. Moreover, all our production facilities hold certification in both the Forest Stewardship Council and Programme for the Endorsement of Forest Certification Chain of Custody standards.
We believe this dual certification reinforces our dedication to responsible forestry practices throughout our manufacturing processes. Our Fernandina Beach and Tartas facilities are ISCC PLUS and ISCC EU certified, respectively, underscoring our commitment to independently audited sustainability standards and processes within our supply chain.
We take special care to limit our generation of hazardous or dangerous wastes through source reduction, reuse and recycling. We seek to comply with all waste management expectations in each country where we operate. Each facility has ongoing relationships with local recyclers and we strive to reuse or recycle as much as possible.
We recycle our pulping chemicals, produce environmentally friendly co-products from tree material, and generate energy from biomass residuals. We also take special care to limit our generation of hazardous or dangerous wastes through source reduction, reuse and recycling. We seek to meet or exceed all waste management standards and expectations of each country in which we operate.
The primary global market driver for bioethanol is the regulatory agenda towards production of bioethanol with an active participation of GHG emission reduction and the positive impact on climate change. Key growth drivers for lignosulfonates include increasing usage of lignosulfonates in all the market segments where fossil petrochemicals can be replaced by sustainable bioproducts.
Key growth drivers for lignosulfonates include increasing usage of lignosulfonates in all the market segments where fossil petrochemicals can be replaced by sustainable bioproducts. Pricing for biomaterials that we currently produce is based on the market dynamics of supply and demand.
Generally, a tree’s mass is comprised of 50 percent water and 50 percent “dry solids.” Dry solids are comprised of roughly 40 percent cellulose and 60 percent other chemical compounds, including hemicellulose, lignin, sugars and other extractives. These chemical compounds can be utilized to produce sustainable biomaterials, including lignosulfonates, biofuels, prebiotics, crude tall oil, turpentine and bioelectricity.
Fully unlocking the capabilities of our plants and the sustainably harvested trees that we use as our primary feedstock is a core mission. Generally, a tree’s mass is comprised of 50 percent water and 50 percent “dry solids.” Dry solids are comprised of roughly 40 percent cellulose and 60 percent other chemical compounds, including hemicellulose, lignin, sugars and other extractives.
While no injury is acceptable, our company-wide injury rate decreased 8 percent, 5 percent and 17 percent in 2021, 2022 and 2023, respectively. We drive towards our vision of injury-free operations by focusing on five leading safety metrics: housekeeping, leadership engagement, corrective action closure, gas emissions and life safety programs.
Our Safety Values Exchange process, one of our most important safety programs, requires that leaders talk to their employees about safety to encourage and reinforce desired safe behaviors. We drive towards our vision of injury-free operations by focusing on five leading safety metrics: housekeeping, leadership engagement, corrective action closure, gas emissions and life safety programs.
We continue to actively monitor and pursue additional opportunities for sustainability. Our 2023 results are pending confirmation. 2 Table of Contents Energy Our facilities are energy intensive; however, over 75 percent of the energy consumed by them is derived from renewable sources, primarily biomass.
We are on track to meet this objective, with external verification confirming total reductions of 21 percent and 14 percent in absolute and intensity emissions, respectively, through 2023. Our 2024 results are pending confirmation. Energy Our facilities are energy intensive; however, nearly 78 percent of the energy consumed by them is derived from renewable sources, primarily biomass.
Commercial sales of this 2G bioethanol are targeted to begin in the first quarter of 2024 under a long-term offtake agreement with a large international petrochemicals company. Competition Cellulose Specialties Significant intellectual property, capital investment and technical expertise are needed to design and manufacture customized cellulose specialties fibers to exacting customer specifications.
We are currently moving forward with plans for a similar bioethanol facility at our Fernandina facility. 5 Table of Contents Competition Cellulose Specialties Significant intellectual property, capital investment and technical expertise are needed to design and manufacture customized cellulose specialties fibers to exacting customer specifications.
Energy Our energy is primarily produced through the burning of lignin and other residual biomass in recovery and power boilers located at our plants. In addition, our manufacturing facilities utilize significant amounts of fuel oil, natural gas and purchased electricity to supplement their energy requirements.
In addition, our manufacturing facilities utilize significant amounts of fuel oil, natural gas and purchased electricity to supplement their energy requirements. Our energy costs are also impacted by emission allowances purchased or sold at market prices during any given period.
In October 2023, we announced that we engaged a financial advisor to explore the potential sale of our Paperboard and High-Yield Pulp assets located at our Temiscaming site.
Our Temiscaming paperboard and high-yield pulp plants that support our Paperboard and High-Yield Pulp operating segments will continue to operate at full capacity while we continue to explore a potential sale of the Paperboard and High-Yield Pulp assets. We remain committed to pursuing a sale of these assets at a fair price.
The multi-year project offers significant potential long-term benefits to RYAM. Our strategic investment approach unlocks the capabilities of our facilities and capitalizes on the sustainably harvested trees that we use as our primary feedstock. Our Sustainability Profile We operate four production facilities strategically located in the U.S., Canada and France.
We have submitted notice of our Generally Recognized as Safe self-certification for our prebiotics product to the U.S. Food and Drug Administration. Our strategic investment approach unlocks the capabilities of our facilities and capitalizes on the sustainably harvested trees that we use as our primary feedstock.
Our portfolio is aligned with sustainability drivers, including the European Union Green Deal for the Renewable Energy Directive II.
Our portfolio is aligned with sustainability drivers, including the European Union Green Deal for the Renewable Energy Directive II. Our ongoing projects include: • Production of 2G bioethanol fuel at our France facility, intended to help meet the demand for Europe’s fast-growing biofuels market and further improve the sustainability of our operating model.
Our major biomaterials competitors in the lignosulfonates market include Borregaard and Domsjö Aditya Birla and in the bioethanol market include Borregaard and AustroCel Hallein. Paperboard We manufacture paperboard in the Temiscaming plant in Quebec, Canada. Our production facility has an annual production capacity of 180,000 MTs of paperboard.
High-Yield Pulp We manufacture and market high-yield pulp produced in our Temiscaming plant in Quebec, Canada. Our Temiscaming plant has an annual production capacity of 290,000 MTs of high-yield pulp, approximately 60,000 MTs of which are used internally to produce paperboard.
See Note 3—Discontinued Operations to our Financial Statements for further information. We currently operate the following business segments, to which all prior period disclosures have been conformed: • High Purity Cellulose • Paperboard • High-Yield Pulp See Note 20—Segment and Geographical Information to our Financial Statements for further information.
For the years presented in this 2024 Form 10-K, we operated the following operating segments: • High Purity Cellulose • Paperboard • High-Yield Pulp See Note 21—Segment and Geographical Information to our Financial Statements for further information on this operating segment structure in place as of December 31, 2024.
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Our ongoing projects include: • Our investment in Anomera, who manufactures CNC, a patented, biodegradable product used as an ingredient in cosmetics and various industrial materials, at our Temiscaming facility; • Development of a prebiotic for enhanced gut health in poultry and swine at our Jesup facility, which is expected to support sustainable poultry and swine farming and provide a healthy alternative nutrient to enhance gut health; • Production of 2G bioethanol fuel at our Tartas facility, intended to help meet the demand for Europe’s fast-growing biofuels market and further improve the sustainability of our operating model.
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Our Sustainability Profile Sustainability is at the core of our business model and guides every aspect of our strategy and operations. Operations We operate four production facilities strategically located in the U.S., Canada and France. The manufacturing of all of our products begins with trees sourced from working forests.
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This label signifies adherence to rigorous environmental requirements at every stage of manufacturing, assuring consumers and commercial buyers of our product’s sustainable and environmentally friendly nature.
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Working forests are instrumental to maintaining environmental health, including the crucial role they play in carbon sequestration. All of our production facilities adhere to the EPA’s Best Management Practices and hold certification in both the Forest Stewardship Council and Programme for the Endorsement of Forest Certification Chain of Custody standards.
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We are on track to meet this objective, with external verification confirming total reductions of 15 percent and 10 percent in absolute and intensity emissions, respectively, for 2021 and 2022. This translates to an aggregate goal achievement for absolute and intensity emissions of approximately 40 percent and 25 percent, respectively.
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We have achieved several key advancements in our processes with the aim of reducing chemical usage, improving energy efficiency and minimizing our CO 2 emissions and environmental footprint. Examples include the optimization of acid usage, transitioning to rail delivery for H 2 O 2 and refinements of product formulations.
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The remaining two gallons are either captured in the final product or evaporated during manufacturing. Waste Our facilities are designed to minimize waste. We recycle our pulping chemicals, produce environmentally friendly co-products from the material extracted from the trees and generate energy from biomass residuals.
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In addition, in our ongoing efforts to reduce chemical usage we have also introduced Maple 80, a new product manufactured without EDTA, a common chelating agent, which served to decrease our chemical reliance.
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The process is ongoing for this strategic review, which is consistent with our commitment to align our portfolio with our long-term growth strategy and providing flexibility to pay down debt, reduce leverage and minimize earnings volatility. High Purity Cellulose Our High Purity Cellulose segment, and in particular, cellulose specialties products, is the primary driver of our profitability.
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Over 90 percent of the total water withdrawn at our facilities is returned to natural water sources after undergoing rigorous treatment, in keeping with stringent government-issued permit limitations. The remaining amounts are either captured in the final product or evaporated during manufacturing. 2 Table of Contents Waste Our facilities are designed to minimize waste.
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Cellulose specialties generally command a price premium and earn higher margins relative to other commodity wood pulp products. Cellulose specialties are a dissolving wood pulp product which target a combination of high purity and high viscosity.
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Each facility has ongoing relationships with local recyclers, and we strive to reuse or recycle as much as possible. Certified waste handlers dispose of any hazardous waste. Product Safety We prioritize safety and regulatory compliance in our product development. Our high purity cellulose is derived from the treatment of wood fiber with aqueous solutions of pulping and bleaching chemicals.
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Biomaterials We are uniquely positioned to meet the rapidly growing demand for renewable materials and sustainable products. Fully unlocking the capabilities of our biorefineries and the sustainably harvested trees we use as our primary feedstock is a core priority.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

88 edited+24 added−13 removed69 unchanged
Biggest changeFor example, in 2018, in retaliation against U.S. tariffs, China imposed a tariff on certain U.S. product exports, including all wood pulp sold by us from the U.S. into China, a result of which was a significant decline in operating income for as long as the tariffs remained in place.
Biggest changeTrade tensions and trade-related actions, such as tariffs and duties, between China and the U.S. have previously impacted our business and our customers’ businesses and could do so in the future. For example, in 2018, in retaliation against U.S. tariffs, China imposed a tariff on certain U.S. exports, including all wood pulp sold by us from the U.S. into China.
Similarly, the price of oil and natural gas and their pipeline transportation has historically experienced significant fluctuations based on weather and market demand and other factors.
Similarly, the price of oil and natural gas and their pipeline transportation has historically experienced significant fluctuations based on weather, market demand and other factors.
There can be no assurance that, upon termination of this wood chip and residual fiber supply agreement due to its natural expiration or otherwise, this agreement will be renewed, extended or replaced in the future on acceptable terms, or at all.
There can be no assurance that, upon the termination of this wood chip and residual fiber supply agreement due to its natural expiration or otherwise, this agreement will be renewed, extended or replaced in the future on acceptable terms, or at all.
For example, in March 2014, litigation was commenced in federal court by the Altamaha Riverkeeper alleging violations of federal and state environmental laws relating to permitted wastewater discharges from our plant in Jesup, Georgia (although it was dismissed by the court on summary judgment in 2015), and in January of 2016 the same group brought an action against the Georgia EPD in opposition to the Georgia EPD’s issuance of a renewed wastewater treatment permit for our Jesup plant.
For example, in March 2014, litigation was commenced in federal court by the Altamaha Riverkeeper alleging violations of federal and state environmental laws relating to permitted wastewater discharges from our plant in Jesup, Georgia (although it was dismissed by the court on summary judgment in 2015), and in January 2016, the same group brought an action against the Georgia EPD in opposition to the Georgia EPD’s issuance of a renewed wastewater treatment permit for our Jesup plant.
This significant amount of debt could have material adverse consequences to us and our investors, including: • requiring a substantial portion of our cash flows from operations to be used for interest payments on this debt; • making it more difficult to satisfy debt service and other obligations; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; • increasing our vulnerability to general adverse economic and industry conditions; • reducing the cash flows available to fund capital expenditures and other corporate purposes and to grow our business; • limiting our flexibility in planning for, or reacting to, market or other changes in our businesses and industry; • placing us at a disadvantage to our competitors that may not be as highly leveraged with debt; • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase shares of our common stock; and • limiting access to liquidity, including through our asset-based revolving credit facility.
This significant amount of debt could have material adverse consequences for us and our investors, including: • requiring a substantial portion of our cash flows from operations to be used for interest payments on this debt; • making it more difficult to satisfy debt service and other obligations; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; • increasing our vulnerability to general adverse economic and industry conditions; • reducing the cash flows available to fund capital expenditures and other corporate purposes and grow our business; • limiting our flexibility in planning for, or reacting to, market or other changes in our businesses and industry; • placing us at a disadvantage to our competitors that may not be as highly leveraged with debt; • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase shares of our common stock; and • limiting access to liquidity, including through our asset-based revolving credit facility.
To the extent we incur additional indebtedness, the risks described above could increase. In addition, our actual cash requirements in the future may be greater than expected.
The risks described above could increase to the extent we incur additional indebtedness. In addition, our actual cash requirements in the future may be greater than expected.
Fiber for our U.S. and France facilities is primarily harvested from privately-held lands, while fiber for our Canadian facilities is primarily harvested from lands owned or controlled by the governments of the provinces of Ontario and Quebec, referred to as “Crown Lands.” In connection with the sale of our lumber and newsprint assets in August 2021, we transferred agreements with provincial authorities, which granted timber “tenures” for terms varying from five to 20 years, to a third party.
Fiber for our U.S. and France facilities is primarily harvested from privately-held lands, while fiber for our Canadian facilities is harvested mainly from lands owned or controlled by the governments of the provinces of Ontario and Quebec, referred to as “Crown Lands.” In connection with the sale of our lumber and newsprint assets in August 2021, we transferred agreements with provincial authorities, which granted timber “tenures” for terms varying from five to 20 years, to a third party.
It is not clear whether increased frequency of these or similar events would materially change our risk profile, analyses or mitigation measures, but there can be no assurance that they would not require additional material expenditures. In sum, additional business and regulatory initiatives may be implemented to address GHG emissions and other climate change-related concerns.
It is not clear whether an increased frequency of these or similar events would materially change our risk profile, analyses or mitigation measures, but there can be no assurance that they would not require additional material expenditures. In sum, additional business and regulatory initiatives may be implemented to address GHG emissions and other climate change-related concerns.
Additionally, increased use of e-cigarettes, electronically heated tobacco products and smokeless tobacco products may affect demand for traditional cigarettes. In addition, some of the industries in which our end-use customers participate, such as publishing, packaging, automotive and textiles, are cyclical in nature, thus posing risks to us which are beyond our control.
Additionally, increased use of e-cigarettes, electronically heated tobacco products and smokeless tobacco products may affect demand for traditional cigarettes. In addition, some of the industries in which our end-use customers participate, such as publishing, packaging, automotive and textiles, are cyclical in nature, thus posing risks to us that are beyond our control.
If one or more of our ten largest customers were to become bankrupt, insolvent or otherwise were unable to pay for our products, we may incur significant write-offs that may have a material adverse effect on our business, financial condition and results of operations.
If one or more of our ten largest customers were to become bankrupt, insolvent or otherwise unable to pay for our products, we may incur significant write-offs that could have a material adverse effect on our business, financial condition and results of operations.
We currently own, and may acquire in the future, properties which are subject to environmental liabilities, such as remediation of soil, sediment and groundwater contamination and other liabilities. In addition, we may have such liabilities at properties, such as formerly operated manufacturing facilities, that we no longer own.
We currently own, and may acquire in the future, properties that are subject to environmental liabilities, such as remediation of soil, sediment and groundwater contamination and other liabilities. In addition, we may have such liabilities at properties, such as formerly operated manufacturing facilities, that we no longer own.
Our global operations expose us to risks associated with public health crises, including epidemics and pandemics, which may generate significant volatility, uncertainty and economic disruption in many markets in which we or our customers do business.
Our global operations expose us to risks associated with public health crises, including epidemics and pandemics, which may generate significant volatility, uncertainty and economic disruption in many markets where we or our customers do business.
These industries are highly competitive and may experience overcapacity and reductions in end-use demand, each of which may affect demand for and pricing of our products. The consequences of this could include reduction, delay or cancellation of customer orders.
These industries are highly competitive and may experience overcapacity and reductions in end-use demand, which may affect demand for and pricing of our products. The consequences of this could include reduction, delay or cancellation of customer orders.
Finally, natural conditions, including prolonged wet or cold or other weather events, timber growth cycles and restrictions on access to timberlands for harvesting, may also limit the availability, and increase the price, of wood, as may other factors, including damage by fire, insect infestation, disease, prolonged drought and natural disasters (including those as a result of climate change) such as windstorms and hurricanes.
Further, natural conditions, including prolonged wet or cold or other weather events, timber growth cycles and restrictions on access to timberlands for harvesting, may also limit the availability and increase the price of wood, as may other factors, including damage by fire, insect infestation, disease, prolonged drought and natural disasters (including those as a result of climate change) such as windstorms and hurricanes.
If any of the events described in the following risk factors occur, our business, financial condition, operating results and cash flows, as well as the market price of our securities, could be materially adversely affected. 9 Table of Contents Macroeconomic and Industry Risks Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by geopolitical conflicts and related impacts.
If any of the events described in the following risk factors occur, our business, financial condition, operating results and cash flows, as well as the market price of our securities, could be materially adversely affected. 10 Table of Contents Macroeconomic and Industry Risks Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by geopolitical conflicts and related impacts.
Although we endeavor to maintain our production equipment with regular scheduled maintenance, key pieces of equipment and systems, some of which are large in scale, may need to be repaired or replaced periodically. The costs of repairing or replacing such equipment and the associated downtime of the affected production line could adversely affect our financial condition and results of operations.
Although we endeavor to maintain our production equipment with regularly scheduled maintenance, key pieces of equipment and systems, some of which are large in scale, may need to be repaired or replaced periodically. The costs of repairing or replacing such equipment and the associated downtime of the affected production line could adversely affect our financial condition and results of operations.
While we have not experienced any material information security breaches within the periods being reported (or to the best of our knowledge, any material information security breach prior to that), there can be no assurance that our third party service providers’ security efforts and programs will be successful and/or that a successful cybersecurity incident will not otherwise occur in the future.
While we have not experienced any material information systems security breaches within the periods being reported (or, to the best of our knowledge, any material information systems security breach prior to that), there can be no assurance that our or our third-party service providers’ security efforts and programs will be successful and/or that a material cybersecurity incident will not occur in the future.
We expect that environmental groups, Indigenous communities and interested individuals will intervene with increasing frequency in the regulatory processes in areas where we operate. Generally, environmental permitting programs in all areas where we operate include provisions for public and stakeholder engagement for both renewal of existing permits and approvals for expansions or modifications of our manufacturing operations.
We expect that environmental groups, Indigenous communities and interested individuals will intervene with increasing frequency in the regulatory processes in areas where we operate. Generally, environmental permitting programs in all areas where we operate include provisions for public and stakeholder engagement for both renewal of existing permits and approval for expansions or modifications of our manufacturing operations.
See Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations —Critical Accounting Estimates and Note 17—Employee Benefit Plans to our Financial Statements for additional information about these plans. 18 Table of Contents We have debt obligations that could materially adversely affect our business and our ability to meet our obligations.
See Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates and Note 18—Employee Benefit Plans to our Financial Statements for additional information about these plans. 20 Table of Contents We have debt obligations that could materially adversely affect our business and our ability to meet our obligations.
Raw material and energy costs, such as chemicals, oil, natural gas and electricity, are a significant operating expense for us.
Raw material and energy costs, such as wood, chemicals, oil, natural gas and electricity, are a significant operating expense for us.
Depending on the nature, magnitude and duration of any operational interruption, the event could materially adversely affect our business, financial condition and results of operations. 13 Table of Contents Unfavorable changes in the availability of, and prices for, wood fiber may have a material adverse impact on our business, financial condition and results of operations.
Depending on the nature, magnitude and duration of any operational interruption, the event could materially adversely affect our business, financial condition and results of operations. 14 Table of Contents Unfavorable changes in the availability of, and prices for, wood fiber may have a material adverse impact on our business, financial condition and results of operations.
The primary input of all our products is wood, a renewable, natural raw material. Further, our cellulose specialty products are natural polymers that can be used as an effective, more climate-friendly substitute for certain applications that currently use fossil fuel-based products.
The primary input of all our products is wood — a renewable, natural raw material. Further, our cellulose specialties products are natural polymers that can be used as an effective, more climate-friendly substitute for certain applications that currently use fossil fuel-based products.
A strengthening of the USD or a weakening of the home currency of the countries in which our international competitors manufacture products can adversely impact our competitive position. In addition to ordinary-course currency fluctuations, specific events have had, and could in the future have, an impact on currency valuation.
A strengthening of the USD or a weakening of the home currency of the countries where our international competitors manufacture products can adversely impact our competitive position. In addition to ordinary-course currency fluctuations, specific events have had, and could in the future have, an impact on currency valuation.
Under the provisions of the Greenhouse Gas Pollution Pricing Act, the provinces, who have previously implemented their own carbon pollution price, or “cap-and-trade” system, will not be subject to the federal program provided their program meets the minimum federal pricing and emissions reduction targets.
Under the provisions of the Greenhouse Gas Pollution Pricing Act, the provinces that have previously implemented their own carbon pollution price, or “cap-and-trade” system, will not be subject to the federal program provided their program meets the minimum federal pricing and emissions reduction targets.
These and other risks of doing business outside of the U.S. could materially adversely affect our business, financial condition and results of operations. 11 Table of Contents Foreign currency exchange fluctuations may have a material adverse impact on our business, financial condition and results of operations.
These and other risks of doing business outside of the U.S. could materially adversely affect our business, financial condition and results of operations. 12 Table of Contents Foreign currency exchange fluctuations may have a material adverse impact on our business, financial condition and results of operations.
If we raise additional funds by issuing debt, the terms of such debt may subject us to further limitations on our operations and ability to pay dividends or repurchase stock than are currently in place pursuant to our existing indebtedness. Common Stock and Certain Corporate Matters Risks Our stockholders’ ownership in RYAM may be diluted.
If we raise additional funds by issuing debt, the terms of such debt may subject us to further limitations on our operations and ability to pay dividends or repurchase stock than are currently in place pursuant to our existing indebtedness. 21 Table of Contents Common Stock and Certain Corporate Matters Risks Our stockholders’ ownership in RYAM may be diluted.
Our high-yield pulp business is cyclical and influenced by a variety of factors, including periods of excess product supply due to industry capacity increases, periods of decreased demand due to reduced economic activity or market conditions, inventory destocking by customers, reduced market prices, scarcity of economically viable fiber in Canada and fluctuations in currency exchange rates.
Our high-yield pulp business is cyclical and influenced by various factors, including periods of excess product supply due to industry capacity increases, periods of decreased demand due to reduced economic activity or market conditions, inventory destocking by customers, reduced market prices, scarcity of economically viable fiber in Canada and fluctuations in currency exchange rates.
When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in this 2023 Form 10-K and our other filings and submissions to the SEC.
When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in this 2024 Form 10-K and our other filings and submissions to the SEC.
In addition to intervention in permit proceedings, interested groups and individuals may file or threaten to file lawsuits that seek to prevent us from obtaining permits, implementing capital improvements or pursuing operating plans.
In addition to intervening in permit proceedings, interested groups and individuals may file or threaten to file lawsuits that seek to prevent us from obtaining permits, implementing capital improvements or pursuing operating plans.
Likewise, certain cellulose specialty grade volumes have declined meaningfully in recent years due to these factors. Our high-purity commodity products for viscose and absorbent materials applications were also at extremely low pricing levels in 2019 and 2020 and later rebounded.
Likewise, certain cellulose specialty grade volumes have declined meaningfully in recent years due to these factors. Our high-purity commodity products for viscose and fluff applications were also at extremely low pricing levels in 2019 and 2020 and later rebounded.
Wood fiber is the largest volume of raw material used in the manufacturing process for virtually all of our products. Many factors can impact its availability and pricing.
Wood fiber is the largest volume raw material used in the manufacturing of virtually all of our products. Many factors can impact its availability and pricing.
The potential impacts of extreme weather, such as hurricanes, blizzards, and heavy rain, which could result from the impacts of climate change, are factored into our enterprise risk assessment process and the mitigation measures we currently take to protect our assets and business.
The potential impacts of extreme weather, such as hurricanes, blizzards, wildfires and heavy rain, that could result from the impacts of climate change, are factored into our enterprise risk assessment process and the mitigation measures we currently take to protect our assets and business.
Like most companies, we have been, and expect to continue to be, subject to attempted cyber intrusions. One form of intrusion that has become increasingly prevalent is the practice of cyber extortion, particularly through the use of ransomware.
Like most companies, we have been, and expect to continue to be, subject to cybersecurity threats, including attempted cyber intrusions. One form of attempted cyber intrusion that has become increasingly prevalent is the practice of cyber extortion, particularly through the use of ransomware.
Our paperboard business has a blend of long- and short-term contracts and has generally been more stable than our high-yield pulp business due to strong ties to and steady demand of the lottery and packaging sectors. 10 Table of Contents Changes in the availability and price of raw materials and energy and continued inflationary pressure could have a material adverse effect on our business, financial condition and results of operations.
Our paperboard business has a mix of long- and short-term contracts and has generally been more stable than our high-yield pulp business due to its strong ties to and steady demand of the lottery and packaging sectors. 11 Table of Contents Changes in the availability and price of raw materials and energy and continued inflationary pressure could have a material adverse effect on our business, financial condition and results of operations.
While these proceedings have, to date, been decided largely in our favor, we expect similar attempts at legal intervention to be made in the future. We currently own and may acquire properties that require environmental remediation or otherwise are subject to environmental and other liabilities.
While these proceedings have, to date, been decided largely in our favor, we expect similar attempts at legal intervention to be made in the future. 18 Table of Contents We currently own and may acquire properties that require environmental remediation or otherwise are subject to environmental and other liabilities.
In addition, new or existing environmental regulations at times require additional capital expenditures for compliance. We believe our capital resources are currently adequate to meet our projected operating needs, capital expenditures and other cash requirements.
In addition, new or existing environmental regulations sometimes require additional capital expenditures for compliance. We believe our capital resources are currently adequate to meet our projected operating needs, capital expenditures and other cash requirements.
We have manufacturing operations in the U.S., Canada and France, and we sell our products all over the world, in either USD, CAD or Euros. As a result, we are exposed to movements in foreign currency exchange rates and our earnings are affected by changes in the value of the CAD and Euro relative to the USD.
We have manufacturing operations in the U.S., Canada and France, and we sell our products worldwide, in either USD, CAD or Euros. As a result, we are exposed to movements in foreign currency exchange rates and our earnings are affected by changes in the value of the CAD and Euro relative to the USD.
We are subject to material risks associated with doing business outside of the U.S. We have large manufacturing operations in Canada and France and a significant portion of our sales are to customers located outside of the U.S., including China, the European Union, Japan, Canada, South Korea and other international markets.
We are subject to material risks associated with doing business outside of the U.S. We have large manufacturing operations in Canada and France and a significant portion of our sales are to customers outside the U.S., including China, Europe, Japan, Canada, South Korea and other international markets.
We have major manufacturing operations in the U.S., Canada and France that are conducted through four production facilities.
We have major manufacturing operations in the U.S., Canada and France, which are conducted through four production facilities.
We experienced significant reliability issues during the first quarter of 2019 at our Temiscaming, Quebec plant and during the third quarter of 2021 at our Jesup, Georgia plant; • prolonged power interruptions or failures; • explosion of boilers or other pressure vessels; • interruptions in the supply of raw materials, including chemicals and wood fiber; • disruptions to or failures in the transportation infrastructure, such as roads, bridges, railroad tracks and tunnels, as well as lack of availability of rail, trucking and ocean shipping equipment and service from third party transportation providers; • interruption or material reduction of water supply; • a chemical spill or release or other event causing impacts to the environment or human health and safety; • information technology system failures and cybersecurity incidents causing systems to be inaccessible or unusable; • natural disasters (including those as a result of climate change), including fires, floods, windstorms, earthquakes, hurricanes or other similar catastrophes; • labor interruptions, including strikes and short duration walk-outs, such as the walk-outs in 2019 and 2021 at our plant in Tartas, France; • terrorism or threats of terrorism; • new climate change or other environmental regulations, compliance with which may require significant capital expenditures to address modifications to our facilities, supply chain or other infrastructure; and • other operational issues resulting from these and other risks.
In the third quarter of 2024, a fire at our Jesup plant impacted operations for two weeks; • prolonged power interruptions or failures; • explosion of boilers or other pressure vessels; • interruptions in the supply of raw materials, including chemicals and wood fiber; • disruptions to or failures in the transportation infrastructure, such as roads, bridges, railroad tracks and tunnels, as well as lack of availability of rail, trucking and ocean shipping equipment and service from third-party transportation providers; • interruption or material reduction of water supply; • a chemical spill or release or other event causing impacts to the environment or human health and safety; • information technology system failures and cybersecurity incidents causing systems to be inaccessible or unusable; • natural disasters (including those as a result of climate change), including fires, floods, windstorms, earthquakes, hurricanes or other similar catastrophes; • labor interruptions, including strikes and short duration walk-outs, such as the walk-outs in 2019 and 2021 at our plant in Tartas, France; • terrorism or threats of terrorism; • new climate change or other environmental regulations, compliance with which may require significant capital expenditures to address modifications to our facilities, supply chain or other infrastructure; and • other operational issues resulting from these and other risks.
While we are not dependent on any single customer or group of customers and we continue to strive to broaden and diversify our customer base, our ten largest customers accounted for a significant portion, approximately 40 percent , of our 2023 revenue.
While we are not dependent on any single customer or group of customers and we continue to strive to broaden and diversify our customer base, our ten largest customers accounted for a significant portion, approximately 35 percent , of our 2024 revenue.
See Item 1—Business—Environmental Matters and Note 10—Environmental Liabilities to our Financial Statements for additional information. The potential longer-term impacts of climate-related risks remain uncertain at this time. Climate change and its impacts on people and our planet continue to be a topic of significant focus and attention of our customers, investors and various other stakeholders.
See Item 1—Business—Environmental Matters and Note 11—Environmental Liabilities to our Financial Statements for additional information. The potential long-term impact of climate-related risks remain uncertain at this time. Climate change and its impact on people and our planet continue to be a topic of significant focus and attention of our customers, investors and various other stakeholders.
Finally, if the port system that we rely on for international shipping suffers work stoppages, slowdowns or strikes, our business could be materially adversely impacted. Failure to maintain satisfactory labor relations could have a material adverse effect on our business. As of December 31, 2023, 61 percent of our global work force was unionized.
Finally, if the port system that we rely on for international shipping suffers work stoppages, slowdowns or strikes, our business could be materially adversely impacted. Failure to maintain satisfactory labor relations could have a material adverse effect on our business. As of December 31, 2024, 69 percent of our global workforce was unionized.
Mitigation of inflationary impacts to some extent through cost surcharges may not be sufficient and continued inflationary pressure could materially adversely affect our profits and margins under our customer contracts. The impact of raw material and energy pricing increases could materially adversely affect our business, financial condition and results of operations.
Mitigating inflationary impacts through cost surcharges may not be sufficient and continued inflationary pressure could materially adversely affect our profits and margins under our customer contracts. The impact of raw material and energy pricing increases could materially adversely affect our business, financial condition and results of operations.
Environmental laws and regulations will likely continue to become more restrictive and over time could materially adversely affect our business, financial condition and results of operations. 16 Table of Contents Environmental groups, Indigenous communities and interested individuals may seek to delay or prevent a variety of our operations .
Environmental laws and regulations may continue to become more restrictive and over time could materially adversely affect our business, financial condition and results of operations. Environmental groups, Indigenous communities and interested individuals may seek to delay or prevent a variety of our operations .
We may require additional financing in the future for general corporate purposes, such as to increase our investment in R&D activities, make strategic investments in our facilities, invest in joint ventures or make acquisitions. We may be unable to obtain desired additional financing on terms favorable to us, if at all.
We may require additional financing in the future for general corporate purposes, such as increasing our investment in R&D activities, making strategic investments in our facilities, investing in joint ventures or making acquisitions. We may be unable to obtain desired additional financing on terms favorable to us, if at all.
Our risk management policy allows management, with oversight from the Audit Committee of our Board of Directors, to hedge a significant portion of our exposure to fluctuations in foreign currency exchange rates, though no hedges are currently in place.
Our risk management policy allows management, with oversight from the Finance and Strategic Planning Committee of our Board of Directors, to hedge a significant portion of our exposure to fluctuations in foreign currency exchange rates, though no hedges are currently in place.
We are closely monitoring these rules and regulations and their potential impact on us. Transition risks associated with climate change. The transition to a low carbon economy, as predicted by many investors and other stakeholders, poses both risk and opportunity for us that are, as yet, not able to be quantified.
We are closely monitoring these rules and regulations and their potential impact on us. 19 Table of Contents Transition risks associated with climate change. The transition to a low carbon economy, as predicted by many investors and other stakeholders, poses both risk and opportunity for us that are, as yet, unable to be quantified.
We expect that compliance-related capital expenditures and operating costs will likely increase over time as environmental laws, regulations and permit conditions become more strict, and as the expectations of the communities in which we operate become more demanding. Environmental laws, regulations and permits are constantly changing and are generally becoming more restrictive.
We expect compliance-related capital expenditures and operating costs to likely increase over time as environmental laws, regulations and permit conditions become more strict and as the expectations of the communities in which we operate become more demanding. Environmental laws, regulations and permits are constantly changing and may become more restrictive.
Sales to customers outside of the U.S. made up 67 percent of our revenue in 2023. The manufacture and sale of our products in non-U.S. markets results in risks that are inherent to conducting business under international laws, regulations and customs. We expect international sales will continue to contribute significantly to our results of operations and future growth.
Sales to customers outside the U.S. made up 66 percent of our revenue in 2024. The manufacture and sale of our products in non-U.S. markets result in risks inherent to conducting business under international laws, regulations and customs. We expect international sales will continue to contribute significantly to our results of operations and future growth.
If any such events or circumstances arise and it is determined that sufficient future cash flows do not exist to support the current carrying value, we will be required to record an impairment charge for our long-lived assets or write-off of recognized DTAs.
If any such events or circumstances arise and it is determined that sufficient future cash flows do not exist to support the current carrying value, we would be required to record an impairment charge for our long-lived assets.
While we do not expect any labor interruptions of significant duration, if our unionized employees were to engage in a strike or other work stoppage, such as the short-duration walk-outs in 2019 and 2021 at our plant in Tartas, France, at one or more of our major facilities, we could experience a significant disruption of our operations, which could materially adversely affect our business, financial condition and results of operations.
While we do not expect any labor interruptions of significant duration, if our unionized employees were to engage in a strike or other work stoppage, such as the short-duration walk-outs in 2019 and 2021 at our plant in Tartas, France, at one or more of our major facilities, we could experience a significant disruption of our operations, which could materially adversely affect our business, financial condition and results of operations. 16 Table of Contents We depend on attracting and retaining key personnel, the loss of whom could materially adversely affect our business.
In the fourth quarter of 2023, in conjunction with the optimization and realignment of our High Purity Cellulose assets, we recorded a non-cash impairment of $62 million related to certain assets at the Temiscaming and Jesup facilities. See Note 7—Property, Plant and Equipment, Net for further details of this impairment.
In the fourth quarter of 2023, in conjunction with the optimization and realignment of our High Purity Cellulose assets, we recorded a non-cash impairment of $62 million related to certain assets at the Temiscaming and Jesup facilities. See Note 3—Indefinite Suspension of Operations and Note 8—Property, Plant and Equipment, Net for further details of these impairments.
The sophistication of cyber intrusions continues to grow, and the use of emerging technologies, such as artificial intelligence and quantum computing, for nefarious purposes increases the risk of cyber security incidents.
The sophistication of cybersecurity threats continues to grow, and the use of emerging technologies, such as artificial intelligence and quantum computing, for nefarious purposes increases the risk of cybersecurity incidents.
Business and Operational Risks Our ten largest customers represented approximately 40 percent of our 2023 revenue and the loss of all or a substantial portion of our revenue from these customers could have a material adverse effect on our business.
Business and Operational Risks Our ten largest customers represented a significant portion of our 2024 revenue and the loss of all or a substantial portion of our revenue from these customers could have a material adverse effect on our business.
We manufacture our products in the U.S., Canada and France, and sell them in more than 40 countries. Our financial results are highly dependent on our ability to sell our products globally.
We manufacture our products in the U.S., Canada and France, and sell them in over 40 countries. Our financial results highly depend on our ability to sell our products globally.
If the repayment obligation under a debt agreement is accelerated, we may not be able to repay the debt or refinance the debt on acceptable terms and our financial position would be materially adversely affected.
If the repayment obligation under a debt agreement is accelerated, we may not be able to repay the debt or refinance the debt on acceptable terms and our financial position would be materially adversely affected. Challenges in the commercial and credit environments may materially adversely affect our future access to capital.
However, our inability to provide for our operating cash requirements on reasonable economic terms could materially adversely affect our business, financial condition and results of operations. 14 Table of Contents We face substantial asset risk, including the potential for impairment related to our long-lived assets and the potential impact to the value of recorded deferred tax assets.
However, our inability to provide for our operating cash requirements on reasonable economic terms could materially adversely affect our business, financial condition and results of operations. 15 Table of Contents We face risks to our assets, including the potential for substantial impairment of our long-lived assets.
Failure of the U.S. and Chinese governments to reach acceptable agreements regarding trade, as well as continued trade volatility and additional trade-related actions by the Chinese government, could have a material adverse impact on our business, financial condition and results of operations.
This caused a significant decline in operating income for as long as the tariffs remained in place. Failure by the U.S. and Chinese governments to reach acceptable agreements regarding trade, as well as continued trade volatility and additional trade-related actions by the Chinese government, could have a material adverse impact on our business, financial condition and results of operations.
In addition, much of the wood fiber we use is sourced by or from third party contractors who harvest, chip and/or transport the wood fiber to our manufacturing facilities, either as logs for lumber and chipping or as chips.
In addition, much of the wood fiber we use is sourced by or from third-party contractors who harvest, chip and/or transport the wood fiber to our manufacturing facilities, either as logs for lumber and chipping or as chips. A significant reduction in the availability of contractors experienced in harvesting and transporting logs could impact wood fiber supply, pricing and availability.
Environmental regulatory authorities have pursued a number of initiatives which, if implemented, could impose additional obligations and constraints on our operations, especially in the area of air emissions, wastewater and storm water control. See Item 1—Business—Environmental Matters of this 2023 Form 10-K for further information.
Environmental regulatory authorities have pursued several initiatives that, if implemented, could impose additional obligations and constraints on our operations, especially in air emissions, wastewater and stormwater control. See Item 1—Business—Environmental Matters of this 2024 Form 10-K for further information.
A significant reduction in the availability of contractors experienced in harvesting and transporting logs could impact wood fiber supply, pricing and availability. Wood fiber supply and pricing may also be impacted by the proximity between available experienced logging and fiber transportation contractors and our manufacturing facilities. Sourcing wood fiber from greater distances could result in increased transportation costs.
The proximity between available experienced logging and fiber transportation contractors and our manufacturing facilities may also impact wood fiber supply and pricing. Sourcing wood fiber from greater distances could result in increased transportation costs.
Trade barriers such as tariffs, countervailing and anti-dumping duties, quotas and other similar restrictions on trade have in the past resulted in, and may in the future result in, a material reduction in revenues and profitability. The effects of such restrictions on trade on our business in China and Canada are set forth below.
Trade barriers such as tariffs, countervailing and anti-dumping duties, quotas and other similar restrictions on trade have historically resulted in, and may in the future result in, a material reduction in revenues and profitability.
Each dispute has been resolved via agreement or litigation, which generally involved some combination of duties and/or quotas, as well as a return of all or most of the duties previously paid by Canadian softwood lumber producers. In October 2015, a 10-year Softwood Lumber Agreement between the U.S. and Canada, which resolved a 2001-2006 lumber dispute between the countries, expired.
Each dispute was resolved via agreement or litigation, which generally involved some combination of duties and/or quotas, as well as a return of all or most of the duties previously paid by Canadian softwood lumber producers. In October 2015, a 10-year softwood lumber agreement expired and no agreement was reached to extend or renew it.
As of December 31, 2023, our total indebtedness was $777 million.
As of December 31, 2024, our total indebtedness was $730 million.
Changing demographics and labor work force trends may result in the loss of knowledge and skills as experienced workers retire. Furthermore, some of our facilities are in relatively remote locations, which can challenge our ability to recruit and retain employees.
We believe our success depends significantly on our ability to attract and retain key senior management and operations management personnel. Changing demographics and labor workforce trends may result in the loss of knowledge and skills as experienced workers retire. Furthermore, some of our facilities are in relatively remote locations, which can challenge our ability to recruit and retain employees.
Cyber intrusions targeting our business systems, operational tools and external vendor software could compromise our intellectual property and confidential business data, cause a disruption to our operations or damage our reputation.
Cyber intrusions targeting our business systems, operational tools and external vendor software could compromise our intellectual property and confidential business data, cause a disruption to our operations or damage our reputation. To address these challenges, we use advanced detection systems and artificial intelligence-driven threat mitigation tools.
We have a qualified non-contributory defined benefit pension plan, which covers many of our salaried and hourly employees in the U.S. The Federal Pension Protection Act of 2006 requires that certain capitalization levels be maintained in each of these benefit plans.
We have a qualified non-contributory defined benefit pension plan, which covers many of our salaried and hourly employees in the U.S. The Federal Pension Protection Act of 2006 requires that certain capitalization levels be maintained in each benefit plan. Our non-U.S. pension plans, while currently adequately funded, will also require periodic contributions to ensure that applicable legal requirements are met.
To date, the cost of GHG credits under cap-and-trade programs purchased by our business and incorporated into the overall cost of our purchased wood fiber has not been material, although no assurances can be given that they will not substantially increase in the future, as the future regulatory state and the cost of GHG credits in applicable jurisdictions is currently unknown. 17 Table of Contents As regulators increasingly focus on climate change and other sustainability issues, we have and may become subject to new disclosure frameworks and regulations.
However, no assurances can be given that they will not substantially increase in the future, as the future regulatory state and the cost of GHG credits in applicable jurisdictions is currently unknown. As regulators increasingly focus on climate change and other sustainability issues, we have and may become subject to new disclosure frameworks and regulations.
We have an active R&D program to develop new products and applications for our existing products. However, there can be no assurance this program will be successful, either from a product development or commercialization perspective, or that any particular invention, product or development, or the program as a whole, will lead to significant revenue or profit generation.
However, there can be no assurance this program will be successful, either from a product development or commercialization perspective, or that any particular invention, product or development, or the program as a whole, will address changes in our customers’ needs and lead to significant revenue or profit generation.
The U.S. and Canada have a history of trade disputes, dating to the early 1980s, related to the export of softwood lumber from Canada into the U.S.
Canada In 2024, product sales of $233 million were generated from Canadian exports to the U.S. The U.S. and Canada have a history of trade disputes, dating to the early 1980s, in particular, related to the export of softwood lumber from Canada into the U.S.
Covenants in our debt agreements may impair our ability to operate our business Our debt agreements contain various covenants that limit our ability to take certain specified actions, including incurring debt or liens, making investments, entering into mergers, consolidations and acquisitions, paying dividends and making other restricted payments.
Our debt agreements contain various covenants that limit our ability to take certain specified actions, including incurring debt or liens, making investments, entering into mergers, consolidations and acquisitions, paying dividends and making other restricted payments. Our ABL Credit Facility and 2029 Term Loan are also subject to financial covenant requirements.
Over the past several years, COVID-19 adversely impacted our business and financial condition in various ways, including increased operating costs due to social distancing and other strict health and safety protocols implemented at our facilities to protect employees and contractors, reductions and unpredictable fluctuations in demand and reduced supply chain reliability due to international shipping congestion and the pandemic’s adverse impact on our suppliers, vendors and other global supply chain partners, which impaired our ability to timely and efficiently move our products through the various steps in the global supply chain process to our end customers.
Pandemics and epidemics, such as COVID-19, have adversely impacted, and may in the future adversely impact, our business and financial condition in various ways, including increased operating costs due to stricter health and safety protocols implemented at our facilities to protect employees and contractors, reductions and unpredictable fluctuations in demand and reduced supply chain reliability, impairing our ability to timely and efficiently move our products through the various steps in the global supply chain process to our end customers.
Our failure to develop and retain key personnel and recruit and develop qualified replacements for retiring and other departing employees could materially adversely affect our business, financial condition and results of operations, as well as our ability to succeed in our human capital goals and priorities. 15 Table of Contents Failure to develop new products or discover new applications for our existing products, or our inability to protect the intellectual property underlying new products or applications, could have a material adverse impact on our business.
Our failure to develop and retain key personnel and recruit and develop qualified replacements for retiring and other departing employees could materially adversely affect our business, financial condition and results of operations, as well as our ability to succeed in our human capital goals and priorities.
See Note 9—Debt and Finance Leases to our Financial Statements for further information regarding our debt obligations.
See Note 10—Debt and Finance Leases to our Financial Statements for further information regarding our debt obligations. Covenants in our debt agreements may impair our ability to operate our business.
Our non-U.S. pension plans, while currently adequately funded, will also require periodic contributions to ensure that applicable legal requirements are met. Because it is unknown what interest rates and the investment return on pension assets will be in future years, no assurances can be given that applicable law will not require us to make future material plan contributions.
Because it is unknown what interest rates and the investment return on pension assets will be in future years, no assurances can be given that applicable law will not require us to make future material plan contributions. In addition, new accounting rules and/or changes to actuarial requirements may also result in the need for additional contributions to the plans.
Certain provisions in our amended and restated certificate of incorporation and bylaws, and of Delaware law, could prevent or delay an acquisition of RYAM, which could decrease the price of our common stock.
Such awards and other issuances would have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock. Certain provisions in our amended and restated certificate of incorporation and bylaws, as well as Delaware law, could prevent or delay an acquisition of RYAM, which could decrease the price of our common stock.
Volatility in the world financial markets could increase borrowing or other costs of capital or affect our ability to gain access to the capital markets, which could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows. 19 Table of Contents We may require additional financing in the future to meet our capital needs or to make acquisitions, and such financing may not be available on favorable terms, if at all, and may be dilutive to existing stockholders.
Volatility in the world financial markets could increase borrowing or other costs of capital or affect our ability to gain access to the capital markets, which could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.
We face significant competition from domestic and foreign producers in all of our businesses.
Competition, demand fluctuations and cyclicality are our products’ most significant drivers of sales volumes and pricing. We face significant competition from domestic and foreign producers in all of our businesses.
Quebec has a cap-and-trade program for GHGs that meets the minimum criteria, and our Temiscaming, Quebec plant was a net purchaser of credits under this program in 2023.
Quebec has a cap-and-trade program for GHGs that meets the minimum criteria, and our Temiscaming, Quebec plant was a net purchaser of credits under this program in 2024. To date, the cost of GHG credits under cap-and-trade programs purchased by our business and incorporated into the overall cost of our purchased wood fiber has not been material.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeUnder the oversight of our Audit Committee, our CEO-chaired Enterprise Risk Management team and our Cybersecurity Governance Committee, each comprised of a cross-functional team of executives and key functional leads and subject matter experts, convene at least quarterly to assess the identification and mitigation of cybersecurity risks, ensure the effective execution of our cybersecurity strategy and verify that our cybersecurity processes are adequately strengthened.
Biggest changeTo ensure clarity and accountability, these reports are segmented into key areas of focus, including incident response updates, emerging threat analyses and project progress metrics. 22 Table of Contents Under the oversight of our Audit Committee, our CEO-chaired Enterprise Risk Management team and our chartered Cybersecurity Governance Committee convene at least quarterly to assess the identification and mitigation of cybersecurity risks, ensure the effective execution of our cybersecurity strategy and verify that our cybersecurity processes are adequately strengthened.
Cybersecurity risks are identified and addressed through coordinated efforts of our internal information technology security audit teams, internal governance and compliance reviews. We also engage external consultants to assist us with the review of our assessment and risk mitigation strategies for cybersecurity threats and the development of new approaches as needed.
Cybersecurity risks are identified and addressed through coordinated efforts of our internal information technology security audit teams, internal governance and compliance reviews. Our security program also involves the engagement of external consultants to assist us with the review of our assessment and risk mitigation strategies for cybersecurity threats and the development of new approaches as needed.
Governance Our Audit Committee is responsible for the oversight of risk from cybersecurity threats and includes one committee member with significant cybersecurity consulting experience.
Governance Our Audit Committee is responsible for the oversight of risk from cybersecurity threats and includes one committee member with significant cybersecurity consulting experience. On a quarterly basis, the Audit Committee receives reports from senior management on our cybersecurity program covering our strategies and processes for the identification, assessment and mitigation of material cybersecurity risks.
Removed
To protect our information technology systems from cyber threats, we use various tools that help us prevent, detect, investigate, resolve and recover from cybersecurity incidents, including proactive cybersecurity reviews of systems and applications, annual risk assessments that identify and evaluate new and recurring cyber threats, tabletop exercises and infiltration testing.
Added
To safeguard our information technology systems against cyber threats, we conduct regular risk assessments to identify and address both new and recurring vulnerabilities. These efforts include tabletop exercises and penetration testing, which provide valuable insights to enhance our cybersecurity posture.
Removed
Cybersecurity events, including those identified and communicated to us by our third-party service providers, are evaluated for severity and materiality to our business, based on both quantitative and qualitative factors, and prioritized accordingly for response and remediation. 20 Table of Contents Our information technology systems have been, and we expect will continue to be, subject to cyber intrusion attempts.
Added
We also utilize advanced tools that continuously monitor and evaluate our systems, enabling proactive prevention, detection, investigation, resolution and recovery from cybersecurity incidents. Cybersecurity events, including those reported to us by third-party service providers, are assessed for their severity and potential impact on our business using both quantitative and qualitative criteria, ensuring appropriate prioritization for response and remediation.
Removed
On a quarterly basis, the Audit Committee receives reports from senior management on our cybersecurity program covering our strategies and processes for the identification, assessment and mitigation of the material cybersecurity risks that we face, existing and emerging cybersecurity trends and threat landscapes and the status of projects in process that are intended to strengthen our information security systems and improve our cyber readiness.
Added
Our information technology systems have been, and we expect will continue to be, subject to cyber intrusion attempts.
Added
These reports also include updates on existing and emerging cybersecurity trends and threat landscapes, along with the status of ongoing projects aimed at strengthening our information security systems and improving our cyber readiness.
Added
The individuals responsible for the day-to-day management and assessment of cybersecurity risks include our Vice President of Information Technology and our Senior Director of IT Cybersecurity and Infrastructure, both of whom bring extensive expertise in cybersecurity risk management.
Added
The Vice President of IT has over 30 years of experience in enterprise IT strategy and governance, with a strong background in project management and ERP implementations. The Senior Director of IT Cybersecurity and Infrastructure has over 25 years of experience in manufacturing IT, specializing in enterprise infrastructure, process control and cybersecurity.
Added
Additionally, our internal security and risk management teams consist of professionals with specialized expertise in intrusion detection and prevention, network security and endpoint defense, thereby ensuring a comprehensive approach to cybersecurity risk assessment and mitigation.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThese facilities, warehouses, machinery and equipment that we owned or leased as of December 31, 2023 are in good operating condition and in regular use.
Biggest changeThese facilities, warehouses, machinery and equipment that we owned or leased as of December 31, 2024 are, with the exception of the Temiscaming High Purity Cellulose plant, in good operating condition and in regular use.
Properties The following table details the material properties we owned or leased at December 31, 2023: Location by Segment Annual Production Capacity (a) Owned/Leased High Purity Cellulose Facilities Jesup, Georgia, United States 330,000 MTs of cellulose specialties or commodity products 270,000 MTs of commodity products Owned Fernandina Beach, Florida, United States 155,000 MTs of cellulose specialties or commodity products Owned Temiscaming, Quebec, Canada 150,000 MTs of cellulose specialties or commodity products Owned Tartas, France 140,000 MTs of cellulose specialties or commodity products Owned Paperboard Facilities Temiscaming, Quebec, Canada 180,000 MTs of paperboard Owned High-Yield Pulp Facilities Temiscaming, Quebec, Canada 290,000 MTs of high-yield pulp Owned Corporate and Other Jacksonville, Florida, United States Corporate Headquarters Leased (a) Based on the facility equipment operating under average production conditions.
Properties The following table details the material properties we owned or leased at December 31, 2024: Location by Operating Segment Annual Production Capacity (a) Owned/Leased High Purity Cellulose Facilities Jesup, Georgia, United States 330,000 MTs of cellulose specialties or commodity products 270,000 MTs of commodity products Owned Fernandina Beach, Florida, United States 155,000 MTs of cellulose specialties or commodity products Owned Temiscaming, Quebec, Canada (b) 150,000 MTs of cellulose specialties or commodity products Owned Tartas, France 140,000 MTs of cellulose specialties or commodity products Owned Paperboard Facilities Temiscaming, Quebec, Canada 180,000 MTs of paperboard Owned High-Yield Pulp Facilities Temiscaming, Quebec, Canada 290,000 MTs of high-yield pulp Owned Corporate and Other Jacksonville, Florida, United States Corporate Headquarters Leased (a) Based on the facility equipment operating under average production conditions.
Actual production is impacted by overall equipment effectiveness and market circumstances. Our manufacturing facilities are maintained through ongoing capital investments, regular maintenance and equipment upgrades. As a result, production capacities may vary from the amounts listed above.
Our manufacturing facilities are maintained through ongoing capital investments, regular maintenance and equipment upgrades. As a result, production capacities may vary from the amounts listed above.
Removed
We recently began efforts towards a realignment of our High Purity Cellulose assets to optimize production mix, including the consolidation of commodity viscose production into the Temiscaming plant and fluff production into the Jesup plant’s C Line. See Note 7—Property, Plant and Equipment, Net for further details of this realignment. 21 Table of Contents
Added
Actual production is impacted by overall equipment effectiveness and market circumstances. (b) In July 2024, we indefinitely suspended operations at our Temiscaming High Purity Cellulose plant. The Company’s Paperboard and High-Yield Pulp operating segments continue to operate at full capacity. See Note 3—Indefinite Suspension of Operations for further information.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings As disclosed in Note 21—Commitments and Contingencies to our Financial Statements, we are engaged in certain legal proceedings and the disclosures set forth in Note 21 relating to legal proceedings are incorporated herein by reference. 22 Table of Contents Part II
Biggest changeItem 3. Legal Proceedings As disclosed in Note 22—Commitments and Contingencies to our Financial Statements, we are engaged in certain legal proceedings. The disclosures set forth in Note 22 relating to legal proceedings are incorporated herein by reference. 23 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe declaration and payment of future common stock dividends, if any, will be at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements and other factors that our Board of Directors deems relevant. In addition, our debt facilities place limitations on the declaration and payment of future dividends.
Biggest changeDividends In September 2019, our Board of Directors suspended our quarterly common stock dividend and no dividends have since been declared. The declaration and payment of future common stock dividends, if any, will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements and other relevant factors.
(b) In January 2018, our Board of Directors authorized a share buyback program pursuant to which we may, from time to time, purchase shares of our common stock with an aggregate purchase price of up to $100 million. As of December 31, 2023, the remaining unused authorization under the share buyback program was $60 million.
(b) In January 2018, our Board of Directors authorized a share buyback program pursuant to which we may, from time to time, purchase shares of our common stock with an aggregate purchase price of up to $100 million. As of December 31, 2024, the remaining unused authorization under the share buyback program was $60 million.
Securities Authorized for Issuance under Equity Compensation Plans See Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for information relating to our equity compensation plans. 23 Table of Contents Stock Performance Graph The following graph compares the performance of a $100 investment in our common stock, assuming reinvestment of dividends, with the same investment in a broad-based market index, the S&P Small Cap 600, and an industry-specific index, the S&P 500 Materials, over the five-year period beginning December 31, 2018.
Securities Authorized for Issuance under Equity Compensation Plans See Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for information relating to our equity compensation plans. 24 Table of Contents Stock Performance Graph The following graph compares the performance of a $100 investment in our common stock, assuming reinvestment of dividends, with the same investment in a broad-based market index, the S&P Small Cap 600, and an industry-specific index, the S&P 500 Materials, over the five-year period beginning December 31, 2019.
See Note 13—Stockholders’ Equity to our Financial Statements for further information.
See Note 14—Stockholders’ Equity to our Financial Statements for further information.
Recent Sales of Unregistered Securities We did not issue or sell any unregistered equity securities in 2023. 24 Table of Contents
Recent Sales of Unregistered Equity Securities We did not issue or sell any unregistered equity securities in 2024. 25 Table of Contents
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange under the trading symbol “RYAM.” Holders The number of record holders of our common stock at February 27, 2024 was 3,116.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange under the trading symbol “RYAM.” Holders The number of record holders of our common stock at March 4, 2025 was 2,912.
Issuer Purchases of Equity Securities The following table provides information regarding our purchases of RYAM common stock during the quarter ended December 31, 2023: Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (b) October 1 to November 4 — $ — — $ 60,294,000 November 5 to December 2 — $ — — $ 60,294,000 December 3 to December 31 15,964 $ 3.48 — $ 60,294,000 Total 15,964 — (a) Represents shares repurchased to satisfy tax withholding requirements related to the issuance of stock under our stock incentive plans.
Issuer Purchases of Equity Securities The following table provides information regarding our purchases of RYAM common stock during the quarter ended December 31, 2024: Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (b) September 29 to November 2 6,386 $ 8.56 — $ 60,294,000 November 3 to November 30 1,489 $ 8.60 — $ 60,294,000 December 1 to December 31 21,729 $ 8.53 — $ 60,294,000 Total 29,604 — (a) Represents shares repurchased to satisfy tax withholding requirements related to the issuance of stock under our stock incentive plans.
Removed
Dividends In September 2019, our Board of Directors suspended our quarterly common stock dividend and no dividends have since been declared.
Added
In addition, our debt facilities place limitations on the declaration and payment of future dividends.

Item 7. Management's Discussion & Analysis

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

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Biggest changeLoss from continuing operations is reconciled to EBITDA and adjusted EBITDA as follows: Year Ended December 31, (in millions) 2023 2022 Loss from continuing operations $ (102) $ (27) Depreciation and amortization 140 135 Interest expense, net 69 64 Income tax expense (benefit) (32) 1 EBITDA-continuing operations 75 173 Asset impairment 62 — Pension settlement loss 2 1 Severance — 4 Gain on debt extinguishment — (1) Adjusted EBITDA-continuing operations $ 139 $ 177 33 Table of Contents EBITDA from continuing operations decreased $98 million, primarily driven by the $62 million non-cash asset impairment recorded on certain High Purity Cellulose assets in the fourth quarter of 2023, the decrease in net sales across all segments and increased labor and wood costs in our High Purity Cellulose and High-Yield Pulp segments, respectively, partially offset by lower key input and logistics costs in our High Purity Cellulose and Paperboard segments.
Biggest changeLoss from continuing operations is reconciled to EBITDA and adjusted EBITDA as follows: Year Ended December 31, (in millions) 2024 2023 Loss from continuing operations $ (42) $ (102) Loss from continuing operations attributable to redeemable noncontrolling interest — — Loss from continuing operations attributable to RYAM (42) (102) Depreciation and amortization 137 140 Interest expense, net 84 69 Income tax benefit (9) (32) EBITDA-continuing operations attributable to RYAM 170 75 Asset impairment 25 62 Indefinite suspension charges 17 — Debt refinancing charges 10 — Pension settlement loss — 2 Adjusted EBITDA-continuing operations attributable to RYAM $ 222 $ 139 36 Table of Contents EBITDA from continuing operations increased $95 million in 2024 compared to 2023 primarily driven by the prior year fourth quarter $62 million non-cash impairment recorded as a result of the optimization and realignment of our High Purity Cellulose assets, lower costs due to the indefinite suspension of High Purity Cellulose operations at Temiscaming, cost benefit from strategic capital investment, the impact of favorable foreign exchange rates in the current year compared to unfavorable rates in the prior year and the recognition of $10 million in CEWS benefit claims deferred since 2021.
We periodically review our environmental liabilities and also engage third-party consultants to assess our ongoing remediation of contaminated sites. Quarterly, we review our environmental liabilities related to assessment activities and remediation costs and adjust them as necessary. Liabilities for financial assurance, monitoring and maintenance activities and other activities are assessed annually.
We periodically review our environmental liabilities and also engage third-party consultants to assess our ongoing remediation of contaminated sites. We review our environmental liabilities related to assessment activities and remediation costs quarterly and adjust them as necessary. Liabilities for financial assurance, monitoring and maintenance activities and other activities are assessed annually.
Our estimate of useful lives and salvage values are based on assumptions and judgments that reflect both historical experience and expectations regarding future use of our assets, including wear and tear, obsolescence, technical standards, market demand and geographic location.
Our estimate of useful lives and salvage values are based on assumptions and judgments that reflect both historical experience and expectations regarding the future use of our assets, including wear and tear, obsolescence, technical standards, market demand and geographic location.
The liabilities for unrecognized tax benefits are adjusted in the period in which it is determined the issue is settled with the taxing authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position or when new facts or information become available. See Note 19—Income Taxes to our Financial Statements for further information.
The liabilities for unrecognized tax benefits are adjusted in the period in which it is determined the issue is settled with the taxing authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position or when new facts or information become available. See Note 20—Income Taxes to our Financial Statements for further information.
The following discussion includes forward-looking statements that involve certain risks and uncertainties. See Forward-Looking Statements and Item 1A — Risk Factors in this 2023 Form 10-K. This section primarily discusses 2023 and 2022 items and comparisons between these years.
The following discussion includes forward-looking statements that involve certain risks and uncertainties. See Forward-Looking Statements and Item 1A—Risk Factors in this 2024 Form 10-K. This section primarily discusses 2024 and 2023 items and comparisons between these years.
Our impairment analysis involved various assumptions and estimates in the determination of fair value, the most significant being our estimates of future cash flows, including key assumptions regarding production levels, price levels, profit margins, capital expenditures and discount rate.
Our impairment analyses involved various assumptions and estimates in the determination of fair value, the most significant being our estimates of future cash flows, including key assumptions regarding production levels, price levels, profit margins, capital expenditures and discount rate.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Financial Statements, the notes thereto, and the financial information appearing elsewhere in this 2023 Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with our Financial Statements, the notes thereto, and the financial information appearing elsewhere in this 2024 Form 10-K.
We use EBITDA and adjusted EBITDA as performance measures and adjusted free cash flows as a liquidity measure. We do not consider non-GAAP financial measures an alternative to financial measures determined in accordance with GAAP.
We use EBITDA and adjusted EBITDA as performance measures and adjusted free cash flow as a liquidity measure. We do not consider non-GAAP financial measures an alternative to financial measures determined in accordance with GAAP.
During 2024, we expect to make mandatory contributions and benefit payments to plan participants of $10 million. Future mandatory contribution requirements will vary depending on actual investment performance, changes in valuation assumptions, interest rates and legal requirements to maintain a certain funding status.
During 2025, we expect to make mandatory contributions and benefit payments to plan participants of $8 million. Future mandatory contribution requirements will vary depending on actual investment performance, changes in valuation assumptions, interest rates and legal requirements to maintain a certain funding status.
Significant judgments and estimates are required in determining consolidated income tax expense. Realizability of Deferred Tax Assets We have recorded certain DTAs that we believe will be realized in future periods.
Significant judgments and estimates are required to determine consolidated income tax expense. Realizability of Deferred Tax Assets We have recorded certain DTAs that we believe will be realized in future periods.
Income Taxes The effective tax rate on the loss from continuing operations for 2023 was a benefit of 24 percent.
The effective tax rate on the loss from continuing operations for 2023 was a benefit of 24 percent.
While the result of the impairment analysis is highly sensitive to these assumptions, we believe the assumptions are reasonable and appropriately supported; however, our operating results could be adversely affected if actual results are not consistent with our estimates and assumptions.
While the results of the impairment analyses are highly sensitive to these assumptions, we believe the assumptions are reasonable and appropriately supported; however, our operating results could be adversely affected if actual results are not consistent with our estimates and assumptions.
For a discussion of year-over-year comparisons between 2022 and 2021 and other financial information related to 2021 that is not included in this 2023 Form 10-K, refer to Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023.
For a discussion of year-over-year comparisons between 2023 and 2022 and other financial information related to 2022 that is not included in this 2024 Form 10-K, refer to Item 7 —Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024.
The sensitivity of pension expense and projected benefit obligation related to our pension plans to changes in economic assumptions is presented below: (in millions) Increase (Decrease) in 2024 Pension Expense Increase (Decrease) in December 31, 2023 Projected Benefit Obligation Change in Assumption 50 bp decrease in discount rate $(1) $33 50 bp increase in discount rate $— $(30) 50 bp decrease in long-term return on assets $3 n/a 50 bp increase in long-term return on assets $(3) n/a Realizability of Recorded and Unrecorded Tax Assets and Liabilities Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid.
The sensitivity of pension expense and projected benefit obligation related to our pension plans to changes in economic assumptions is presented below: (in millions) Increase (Decrease) in 2025 Pension Expense Increase (Decrease) in December 31, 2024 Projected Benefit Obligation Change in Assumption 50 bp decrease in discount rate $(1) $28 50 bp increase in discount rate $— $(25) 50 bp decrease in long-term return on assets $3 n/a 50 bp increase in long-term return on assets $(3) n/a 39 Table of Contents Realizability of Recorded and Unrecorded Tax Assets and Liabilities Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid.
If the review of evidence indicates the realizability may be less than likely, then a valuation allowance is recorded, with the exception of recorded DTAs for suspended U.S. interest deductions, which do not have a full valuation allowance in accordance with specific AICPA guidance. See Note 19—Income Taxes to our Financial Statements for further information.
If the review of evidence indicates the realizability may be less than likely, then a valuation allowance is recorded, except for recorded DTAs for suspended U.S. interest deductions, which do not have a full valuation allowance in accordance with specific AICPA guidance. See Note 20—Income Taxes to our Financial Statements for further information on this item.
This information includes the non-GAAP financial measures of EBITDA, adjusted EBITDA and adjusted free cash flows. These measures are not defined by GAAP and our discussion of them is not intended to conflict with or change any of our GAAP disclosures provided in this 2023 Form 10-K.
This information includes the non-GAAP financial measures of EBITDA, adjusted EBITDA and adjusted free cash flow. These measures are not defined by GAAP and our discussion of them is not intended to conflict with or change any of our GAAP disclosures provided in this Annual Report on Form 10-K.
In projecting future taxable income, we evaluate historical earnings, excluding results from discontinued operations, along with future earnings forecasts, the reversal of temporary differences, and the implementation of feasible and prudent tax-planning strategies.
In projecting future taxable income, we evaluate historical earnings (adjusted for certain items, including the results from discontinued operations), along with future earnings forecasts, the reversal of temporary differences, and the implementation of feasible and prudent tax-planning strategies.
The actuarial rates are developed by models which incorporate high-quality (AA rated), long-term corporate bond rates into their calculations. The weighted average discount rate decreased from 4.95 percent at December 31, 2022 to 4.71 percent at December 31, 2023. Our defined pension plans were underfunded by $83 million at December 31, 2023.
The actuarial rates are developed by models which incorporate high-quality (AA rated), long-term corporate bond rates into their calculations. The weighted average discount rate increased from 4.71 percent at December 31, 2023 to 5.16 percent at December 31, 2024. Our defined pension plans were underfunded by $61 million at December 31, 2024.
Operating Income (Loss) Year Ended December 31, 2022 Gross Margin Changes Attributable to: Year Ended December 31, 2023 (in millions, except percentages) Sales Price Sales Volume/Mix/Other (a) Cost SG&A and other Operating income (loss) $ 31 $ 27 $ (31) $ (11) $ (58) $ (42) Operating margin % 2.3 % 1.9 % (2.2) % (0.8) % (4.4) % (3.2) % (a) Computed based on contribution margin.
Operating Loss Year Ended December 31, 2023 Gross Margin Changes Attributable to: Year Ended December 31, 2024 (in millions, except percentages) Sales Price Sales Volume/Mix (a) Cost SG&A and other Operating loss $ (3) $ (9) $ — $ 3 $ 1 $ (8) Operating margin % (2.2) % (7.2) % — % 2.4 % 0.7 % (6.3) % (a) Computed based on contribution margin.
As operating cash flows can be negatively impacted by fluctuations in market prices for our commodity products and changes in demand for our products, we maintain a key focus on cash, managing working capital closely and optimizing the timing and level of our capital expenditures. Our Board of Directors suspended our quarterly common stock dividend in September 2019.
As operating cash flows can be negatively impacted by fluctuations in market prices for our commodity products and changes in demand for our products, we maintain a key focus on cash, managing working capital closely and optimizing the timing and level of our capital expenditures.
Future pension expense will be impacted by many factors including actual investment performance, changes in discount rates, timing of contributions and other employee related matters. See Note 17—Employee Benefit Plans to our Financial Statements for further information. In 2023, we made mandatory contributions and benefit payments to plan participants of $10 million.
Many factors will impact future pension expense, including actual investment performance, changes in discount rates, timing of contributions and other employee related matters. See Note 18—Employee Benefit Plans to our Financial Statements for further information. In 2024, we made mandatory contributions and benefit payments to plan participants of $9 million.
Cash flows of operating activities of continuing operations is reconciled to adjusted free cash flows as follows: Year Ended December 31, (in millions) 2023 2022 Cash provided by operating activities-continuing operations $ 136 $ 69 Capital expenditures, net (a) (83) (104) Adjusted free cash flows-continuing operations $ 53 $ (35) (a) Net of proceeds from the sale of assets and excluding strategic capital expenditures.
Cash provided by operating activities is reconciled to adjusted free cash flow as follows: Year Ended December 31, (in millions) 2024 2023 Cash provided by operating activities $ 203 $ 136 Capital expenditures, net (a) (75) (83) Adjusted free cash flow-continuing operations $ 128 $ 53 (a) Net of proceeds from the sale of assets and excluding strategic capital expenditures.
Significant and unanticipated changes to these assumptions could require a provision for impairment in a future period. Property, plant and equipment are primarily grouped for purposes of evaluating recoverability at the combined plant level, the lowest level for which independent cash flows are identifiable.
Significant and unanticipated changes to these assumptions could require a provision for impairment in a future period. Property, plant and equipment are primarily grouped for purposes of evaluating recoverability at the combined plant level, the lowest level for which independent cash flows are identifiable. In 2024, we indefinitely suspended operations at our Temiscaming High Purity Cellulose plant.
The 2023 effective tax rate differed from the federal statutory rate of 21 percent primarily due to different statutory tax rates in foreign jurisdictions, U.S. tax credits, return-to-accrual adjustments related to previously filed tax returns and changes in the valuation allowance on disallowed interest deductions.
The 2023 effective tax rate differed from the federal statutory rate of 21 percent primarily due to different statutory tax rates in foreign jurisdictions, U.S. tax credits, return-to-accrual adjustments related to previously filed tax returns and changes in the valuation allowance on disallowed interest deductions. See Note 20—Income Taxes to our Financial Statements for further information.
See Note 10—Environmental Liabilities to our Financial Statements for further information. 35 Table of Contents Pension and Other Postretirement Benefit Assets and Liabilities Our defined benefit pension and postretirement plans for employees in the U.S. and Canada require numerous estimates and assumptions to determine the proper amount of pension and postretirement liabilities and annual expense to record in our Financial Statements.
Pension and Other Postretirement Benefit Assets and Liabilities Our defined benefit pension and postretirement plans for employees in the U.S. and Canada require numerous estimates and assumptions to determine the proper amount of pension and postretirement liabilities and annual expense to record in our Financial Statements.
Of our total annual capacity, we dedicate 270,000 MTs of annual production to commodity products, primarily absorbent materials. Wood fiber, chemicals and energy represent approximately 50 percent of our per MT cost of sales. Labor, manufacturing and maintenance supplies, depreciation, manufacturing overhead and transportation costs represent our remaining cost of sales.
Of our total annual capacity, we dedicate 270,000 MTs of annual production to commodity products, primarily fluff. Key input costs — wood, chemicals and energy — represent approximately 50 percent of our per MT cost of sales. Transportation, depreciation, labor, maintenance and other manufacturing fixed costs represent our remaining cost of sales.
High-Yield Pulp Year Ended December 31, (in millions, unless otherwise stated) 2023 2022 Net sales $ 136 $ 160 Operating income (loss) $ (3) $ 16 Average sales prices ($ per MT) (a) $ 606 $ 685 Sales volumes (thousands of MTs) (a) 182 191 (a) Average sales prices and sales volumes for external sales only.
High-Yield Pulp Year Ended December 31, (in millions, unless otherwise stated) 2024 2023 Net sales $ 127 $ 136 Operating loss $ (8) $ (3) Average sales prices ($ per MT) (a) $ 553 $ 606 Sales volumes (thousands of MTs) (a) 182 182 (a) Average sales prices and sales volumes for external sales only.
During the years ended December 31, 2023 and 2022, the High-Yield Pulp segment sold 60,000 MTs and 66,000 MTs of high-yield pulp for $25 million and $29 million, respectively, to the Paperboard segment.
During the years ended December 31, 2024 and 2023, the High-Yield Pulp operating segment sold 61,000 MTs and 60,000 MTs of high-yield pulp for $27 million and $25 million, respectively, to the Paperboard operating segment.
Discontinued Operations In 2023, we recorded a pre-tax gain of $2 million related to a reduction in the rates applied to Canadian softwood lumber exports to the U.S. during 2021 and a $2 million loss related to the settlement of a claim pursuant to the representations and warranties in the asset purchase agreement. 28 Table of Contents In 2022, we recorded a pre-tax gain of $16 million related to a reduction in the rates applied to Canadian softwood lumber exports to the U.S. during 2020.
In 2023, we recorded a pre-tax gain of $2 million related to a reduction in the rates applied to Canadian softwood lumber exports to the U.S during 2021. Offsetting this gain was a $2 million pre-tax loss related to the settlement of a claim pursuant to the representations and warranties in the asset purchase agreement.
See Note 7—Property, Plant and Equipment, Net to our Financial Statements for further information regarding this asset realignment and impairment. Environmental Liabilities At December 31, 2023, we had $170 million of accrued liabilities for environmental costs relating to disposed operations. Numerous price, quantity, cost and probability assumptions are used in estimating these obligations.
See Note 3—Indefinite Suspension of Operations and Note 8—Property, Plant and Equipment, Net to our Financial Statements for further information regarding these impairments. 38 Table of Contents Environmental Liabilities At December 31, 2024, we had $170 million of accrued liabilities for environmental costs relating to disposed operations. Numerous price, quantity, cost and probability assumptions are used in estimating these obligations.
Operating Income Year Ended December 31, 2022 Gross Margin Changes Attributable to: Year Ended December 31, 2023 (in millions, except percentages) Sales Price Sales Volume/ Mix (a) Cost SG&A and other Operating income $ 37 $ 2 $ (13) $ 11 $ — $ 37 Operating margin % 14.8 % 0.7 % (3.6) % 5.0 % — % 16.9 % (a) Computed based on contribution margin.
Operating Income (Loss) Year Ended December 31, 2023 Gross Margin Changes Attributable to: Year Ended December 31, 2024 (in millions, except percentages) Sales Price Sales Volume/Mix/Other (a) Cost SG&A and other Operating income (loss) $ (42) $ (14) $ (22) $ 128 $ 26 $ 76 Operating margin % (3.2) % (1.1) % (1.7) % 9.8 % 2.0 % 5.8 % (a) Computed based on contribution margin.
Operating results of our High Purity Cellulose segment declined $73 million in 2023 compared to 2022 driven by a $62 million non-cash impairment recorded in the fourth quarter of 2023 as a result of the optimization and realignment of our High Purity Cellulose assets.
Operating income (loss) of our High Purity Cellulose operating segment improved $118 million in 2024 compared to 2023 driven by the prior year fourth quarter $62 million non-cash impairment recorded as a result of the optimization and realignment of our High Purity Cellulose assets.
No dividends have been declared since. The declaration and payment of future common stock dividends, if any, will be at the discretion of our Board of Directors and dependent upon our financial condition, results of operations, capital requirements and other factors that the Board of Directors deems relevant.
The declaration and payment of future common stock dividends, if any, will be at the discretion of our Board of Directors and dependent upon our financial condition, results of operations, capital requirements and other factors that the Board of Directors deems relevant. In addition, our debt facilities place limitations on the declaration and payment of future dividends.
Results of Operations: Year Ended December 31, 2023 versus December 31, 2022 Year Ended December 31, (in millions, except percentages) 2023 2022 Net sales $ 1,643 $ 1,717 Cost of sales (1,555) (1,594) Gross margin 88 123 Selling, general and administrative expenses (76) (91) Foreign exchange gain (loss) (3) 4 Asset impairment (62) — Other operating expense, net (12) (10) Operating income (loss) (65) 26 Interest expense (74) (66) Components of pension and OPEB, excluding service costs — 5 Gain on GreenFirst equity securities — 5 Other income, net 7 6 Loss from continuing operations before income tax (132) (24) Income tax (expense) benefit 32 (1) Equity in loss of equity method investment (2) (2) Loss from continuing operations (102) (27) Income from discontinued operations, net of tax — 12 Net loss $ (102) $ (15) Gross margin % 5.4 % 7.2 % Operating margin % (4.0) % 1.5 % Effective tax rate 24.4 % (3.8) % Net Sales Year Ended December 31, (in millions) 2023 2022 High Purity Cellulose $ 1,313 $ 1,336 Paperboard 219 250 High-Yield Pulp 136 160 Eliminations (25) (29) Net sales $ 1,643 $ 1,717 27 Table of Contents Net sales decreased $74 million in 2023 compared to 2022 driven by lower sales prices in commodity products and our High-Yield Pulp segment and lower sales volumes in cellulose specialties and our Paperboard and High-Yield Pulp segments, partially offset by higher sales prices in cellulose specialties and our Paperboard segment and higher commodity sales volumes.
Results of Operations: Year Ended December 31, 2024 versus December 31, 2023 Year Ended December 31, (in millions, except percentages) 2024 2023 Net sales $ 1,630 $ 1,643 Cost of sales (1,464) (1,555) Gross margin 166 88 Selling, general and administrative expenses (92) (76) Foreign exchange gain (loss) 7 (3) Asset impairment (25) (62) Indefinite suspension charges (17) — Other operating income (expense), net — (12) Operating income (loss) 39 (65) Interest expense (86) (74) Components of pension and OPEB, excluding service costs 3 — Debt refinancing charges (10) — Other income, net 5 7 Loss from continuing operations before income tax (49) (132) Income tax benefit 9 32 Equity in loss of equity method investment (2) (2) Loss from continuing operations (42) (102) Income from discontinued operations, net of tax 3 — Net loss (39) (102) Net income attributable to redeemable noncontrolling interest — — Net loss attributable to RYAM $ (39) $ (102) Gross margin % 10.2 % 5.4 % Operating margin % 2.4 % (4.0) % Effective tax rate 18.1 % 24.4 % 29 Table of Contents Net Sales Year Ended December 31, (in millions) 2024 2023 High Purity Cellulose $ 1,302 $ 1,313 Paperboard 228 219 High-Yield Pulp 127 136 Eliminations (27) (25) Net sales $ 1,630 $ 1,643 Net sales decreased $13 million in 2024 compared to 2023 driven by lower sales prices in High Purity Cellulose commodity products and our Paperboard and High-Yield Pulp operating segments and lower sales volumes in High Purity Cellulose commodity products, partially offset by higher sales prices and volumes in cellulose specialties and higher sales volumes in our Paperboard operating segment.
High-Yield Pulp We manufacture and market high-yield pulp, which is used by paper manufacturers to produce paperboard, packaging, printing and writing papers and a variety of other paper products. Pricing for high-yield pulp is typically referenced to published indices marketed through our internal sales team.
High-Yield Pulp We manufacture and market high-yield pulp, which paper manufacturers use to produce paperboard, packaging, printing and writing papers and a variety of other paper products. Pricing for high-yield pulp is typically referenced to published indices marketed through our internal sales team. Our production facility in Canada has an annual production capacity of 290,000 MTs of high-yield pulp.
As part of our ongoing operations, we also periodically issue guarantees to third parties. Our primary purchase obligation payments relate to natural gas, steam energy and wood chips purchase contracts. As of December 31, 2023, our noncancellable unconditional purchase obligations totaled $728 million. See Note 21—Commitments and Contingencies to our Financial Statements for further information.
As part of our ongoing operations, we also periodically issue guarantees to third parties. Our primary purchase obligation payments relate to natural gas, steam energy and wood chips purchase contracts. As of December 31, 2024, our noncancellable unconditional purchase obligations totaled $542 million.
Non-Operating Income & Expense Interest expen se increased $8 million i n 2023 compared to 2022 driven by an increase in the average effective interest rate on debt, partially offset by a decrease in the average outstanding balance of debt. Total debt decreased $76 million from December 31, 2022 to December 31, 2023.
Non-Operating Income & Expense Interest ex pense increased $12 million in 2024 compared to 2023 driven by an increase in the average effective interest rate on debt, partially offset by a decrease in the average outstanding debt principal balance. Total debt decreased $47 million from December 31, 2023 to December 31, 2024.
Wood pulp, chemicals and energy represent approximately 80 percent of our per MT cost of sales. Labor, manufacturing and maintenance supplies, depreciation, manufacturing overhead and transportation costs represent our remaining cost of sales.
Key input costs — wood, chemicals and energy — represent approximately 75 percent of our per MT cost of sales. Transportation, depreciation, labor, maintenance and other manufacturing fixed costs represent our remaining cost of sales.
See Results of Operations above for additional discussion of the changes in our operating results. Adjusted Free Cash Flows Adjusted free cash flows is defined as cash provided by operating activities of continuing operations adjusted for capital expenditures, net of proceeds from the sale of assets and excluding strategic capital expenditures deemed discretionary by management.
Adjusted Free Cash Flow Adjusted free cash flow is defined as cash provided by operating activities adjusted for capital expenditures, net of proceeds from the sale of assets and excluding strategic capital expenditures deemed discretionary by management.
We did not repurchase any shares under this program during the years ended December 31, 2023, 2022 and 2021, and do not expect to utilize any of the remaining $60 million in unused authorization in the future.
In January 2018, our Board of Directors authorized a $100 million common stock share buyback program. We did not repurchase any shares under this program during the years ended December 31, 2024, 2023 and 2022, and do not expect to utilize any of the remaining $60 million in unused authorization in the future.
As of December 31, 2023, we were in compliance with all financial and other customary covenants under our 2027 Term Loan and other credit arrangements.
Debt As of December 31, 2024, we were in compliance with all financial and other covenants under our debt agreements. 2029 Term Loan.
Adjusted free cash flows is a non-GAAP financial measure of cash generated during a period, which is available for debt reduction, strategic capital expenditures, acquisitions and repurchases of our common stock.
Adjusted free cash flow is a non-GAAP financial measure of cash generated during a period that is available for debt reduction, strategic capital expenditures, acquisitions and repurchases of our common stock. Adjusted free cash flow is not necessarily indicative of the adjusted free cash flow that may be generated in future periods.
These estimated rebates are included in the transaction price as a reduction to net sales. 34 Table of Contents Property, Plant & Equipmen t Depreciation Depreciation expense is computed using the units-of-production method for our high purity cellulose, paperboard and high-yield pulp plant and equipment and the straight-line method for all other property, plant and equipment over the useful economic lives of the assets involved.
Property, Plant & Equipmen t Depreciation Depreciation expense is computed using the units-of-production method for our high purity cellulose, paperboard and high-yield pulp plant and equipment and the straight-line method for all other property, plant and equipment over the useful economic lives of the assets involved.
Paperboard Paperboard prices in 2024 are expected to decrease slightly as compared to the fourth quarter of 2023, while sales volumes are expected to improve as production is ramped up to meet improved customer demand. Raw material prices are expected to increase as purchased pulp prices are forecast to increase from fourth quarter 2023 levels.
Paperboard Paperboard prices in 2025 are expected to decline as compared to the fourth quarter of 2024, while sales volumes are expected to improve as production is ramped up after taking scheduled maintenance downtime in the fourth quarter. Raw material prices are expected to rise as purchased pulp prices are forecast to increase from fourth quarter 2024 levels.
A significant change in any of these estimates could have a material effect on our results of operations and financial condition.
A significant change in any of these estimates could have a material effect on our results of operations and financial condition. See Note 11—Environmental Liabilities to our Financial Statements for further information.
The underfunded status decreased by $4 million in 2023, primarily due to actuarial losses as a result of decreased discount rates, offset by returns on plan assets. In 2024, pension expense is expected to be flat compared to 2023.
The underfunded status decreased by $22 million in 2024, primarily due to actuarial gains because of increased discount rates, partially offset by decreased returns on plan assets. In 2025, pension expense is expected to increase slightly compared to 2024.
Operating Results by Segment High Purity Cellulose Year Ended December 31, (in millions, unless otherwise stated) 2023 2022 Net sales $ 1,313 $ 1,336 Operating income (loss) $ (42) $ 31 Average sales prices ($ per MT) $ 1,273 $ 1,330 Sales volumes (thousands of MTs) 955 918 Net Sales Year Ended December 31, 2022 Changes Attributable to: Year Ended December 31, 2023 (in millions) Price Volume/Mix/Other Cellulose specialties $ 866 $ 75 $ (158) $ 783 Commodity products 355 (48) 125 432 Other sales (a) 115 — (17) 98 Net sales $ 1,336 $ 27 $ (50) $ 1,313 (a) Includes sales of bioelectricity, lignosulfonates and other by-products to third parties.
High Purity Cellulose Year Ended December 31, (in millions, unless otherwise stated) 2024 2023 Net sales $ 1,302 $ 1,313 Operating income (loss) $ 76 $ (42) Average sales prices ($ per MT) $ 1,335 $ 1,273 Sales volumes (thousands of MTs) 909 955 Net Sales Year Ended December 31, 2023 Changes Attributable to: Year Ended December 31, 2024 (in millions) Price Volume/Mix/Other Cellulose specialties $ 783 $ 8 $ 81 $ 872 Commodity products 432 (22) (69) 341 Other sales (a) 98 — (9) 89 Net sales $ 1,313 $ (14) $ 3 $ 1,302 (a) Includes sales of bioelectricity, lignosulfonates and other by-products to third parties. 31 Table of Contents Net sales of our High Purity Cellulose operating segment for 2024 decreased $11 million compared to 2023.
The vast majority of our DTAs are in Canada, including $477 million of NOLs subject to expiration after 20 years and other DTAs which can be carried forward indefinitely. We evaluate the realizability of these Canadian DTAs in two steps. 36 Table of Contents The first step determines the realizability of the Canadian NOLs prior to expiration.
The vast majority of our DTAs are in Canada, including $627 million of NOLs subject to expiration after 20 years and other DTAs that can be carried forward indefinitely. We have $334 million of net DTAs in Canada recognized on the consolidated balance sheet as of December 31, 2024. We evaluate the realizability of these Canadian DTAs in two steps.
This is done by forecasting Canadian taxable income in each year to confirm each NOL pool is more-likely-than-not to be realized before its respective expiration, which ranges from 2025 to 2037. The forecasted taxable income excludes depreciation, which can be deferred indefinitely under Canadian tax law.
The second step is to determine the realizability of the Canadian NOLs prior to expiration. This is done by forecasting Canadian taxable income in each year to confirm that each NOL pool is more-likely-than-not to be realized before its respective expiration, which ranges from 2027 to 2043.
We are the leading global producer of cellulose specialties, which are primarily used in dissolving chemical applications that require a highly purified form of cellulose. Pricing for our cellulose specialties products is typically set by contract for a duration of at least one year, based on discussions with customers. Our commodity products primarily consist of commodity viscose and absorbent materials.
Pricing for our cellulose specialties products is typically set by contract for at least one year, based on negotiations with customers. Our commodity products primarily consist of commodity viscose and fluff. Commodity viscose is a raw material required for the manufacture of viscose staple fibers, which are used in woven and non-woven applications.
These outflows were partially offset by the net proceeds received from the 2027 Term Loan issuance and borrowings under the ABL Credit Facility. Performance and Liquidity Indicators The discussion below is presented to enhance the reader’s understanding of our operating performance, liquidity and ability to generate cash and satisfy rating agency and creditor requirements.
The decrease in cash used was partially offset by an increase in debt issuance costs and net repayment of short-term financing. Performance and Liquidity Indicators The discussion below is presented to enhance the reader’s understanding of our operating performance, liquidity and ability to generate cash and satisfy rating agency and creditor requirements.
In addition to the availability under the ABL Credit Facility, we have $5 million available under our accounts receivable factoring line of credit in France. (c) See Note 9—Debt and Finance Leases to our Financial Statements for further information. Cash Requirements Contractual Commitments Our principal contractual commitments include standby letters of credit, surety bonds, guarantees, purchase obligations and leases.
See Note 10—Debt and Finance Leases to our Financial Statements for further information. 34 Table of Contents Cash Requirements Contractual Commitments Our principal contractual commitments include standby letters of credit, surety bonds, guarantees, purchase obligations and leases.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring our products and is generally based upon contractual arrangements with customers or published indices. We sell our products both directly to customers and through distributors and agents typically under agreements with payment terms less than 90 days.
Changes in customer contract terms and conditions, as well as the timing of orders and shipments, may impact the timing of revenue recognition. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring our products and is generally based upon contractual arrangements with customers or published indices.
The nature of our contracts may give rise to variable consideration, which may be constrained, including sales volume-based rebates to customers. We estimate the level of volumes based on anticipated purchases at the beginning of the period and record a rebate accrual for each purchase toward the requisite rebate volume.
We estimate the level of volumes based on anticipated purchases at the beginning of the period and record a rebate accrual for each purchase toward the requisite rebate volume. These estimated rebates are included in the transaction price as a reduction to net sales.
Cash used in financing activities increased $14 million primarily due to the redemption of the 2024 Notes and repayment of borrowings under the ABL Credit Facility and other long-term debt, the payment of issuance costs related to our 2027 Term Loan and higher repurchases of common stock to satisfy tax withholding requirements related to the issuance of stock under our incentive stock plans.
Cash used in financing activities decreased $45 million primarily due to lower net repayment of long-term debt, SWEN’s €15 million investment in BioNova and a decrease in repurchases of common stock to satisfy tax withholding requirements related to the issuance of stock under our incentive stock plans.
Included within net sales for 2023 and 2022 were $98 million and $115 million, respectively, of other sales primarily from bio-based energy and lignosulfonates.
Included within net sales for 2024 and 2023 were $89 million and $98 million, respectively, in other sales primarily from bio-based energy and lignosulfonates, which decreased due to the indefinite suspension of Temiscaming High Purity Cellulose operations.
Cash Flows Year Ended December 31, (in millions) 2023 2022 Cash flows provided by (used in): Operating activities $ 136 $ 69 Investing activities-continuing operations (128) (138) Investing activities-discontinued operations 1 44 Financing activities (87) (73) Cash provided by operating activities increased $67 million primarily due to increased cash inflows from working capital, partially offset by payments on deferred energy liabilities associated with our Tartas facility operations, net tax payments of $7 million in 2023 and the receipt of net tax refunds of $15 million in 2022. 32 Table of Contents Cash used in investing activities of continuing operations decreased $10 million primarily due to lower capital spending.
Cash Flows Year Ended December 31, (in millions) 2024 2023 Cash flows provided by (used in): Operating activities $ 203 $ 136 Investing activities-continuing operations (108) (128) Investing activities-discontinued operations — 1 Financing activities (42) (87) Cash provided by operating activities increased $67 million primarily due to stronger operating results, proceeds of $39 million for the sale of our softwood lumber duty refund rights, net tax refunds of $19 million in the current year compared to net tax payments in the prior year and higher payments in the prior year on deferred energy liabilities associated with our Tartas facility operations.
In addition, we earned income on our investment in LTF in 2023 as compared to a loss in 2022. 29 Table of Contents Paperboard Year Ended December 31, (in millions, unless otherwise stated) 2023 2022 Net sales $ 219 $ 250 Operating income $ 37 $ 37 Average sales prices ($ per MT) $ 1,491 $ 1,478 Sales volumes (thousands of MTs) 147 169 Net Sales Year Ended December 31, 2022 Changes Attributable to: Year Ended December 31, 2023 (in millions) Price Volume/Mix Net sales $ 250 $ 2 $ (33) $ 219 Net sales of our Paperboard segment decreased $31 million in 2023 compared to 2022 driven by a 13 percent decrease in sales volumes due to customer destocking.
Paperboard Year Ended December 31, (in millions, unless otherwise stated) 2024 2023 Net sales $ 228 $ 219 Operating income $ 31 $ 37 Average sales prices ($ per MT) $ 1,390 $ 1,491 Sales volumes (thousands of MTs) 164 147 Net Sales Year Ended December 31, 2023 Changes Attributable to: Year Ended December 31, 2024 (in millions) Price Volume/Mix Net sales $ 219 $ (16) $ 25 $ 228 Net sales of our Paperboard operating segment increased $9 million in 2024 compared to 2023.
Operating Income (Loss) Year Ended December 31, (in millions) 2023 2022 High Purity Cellulose $ (42) $ 31 Paperboard 37 37 High-Yield Pulp (3) 16 Corporate (57) (58) Operating income (loss) $ (65) $ 26 Operating results for 2023 declined $91 million compared to 2022 primarily driven by a $62 million High Purity Cellulose non-cash asset impairment recorded in the fourth quarter of 2023 and the decrease in net sales across all segments due to the lower sales prices and sales volumes discussed above.
Operating Income (Loss) Year Ended December 31, (in millions) 2024 2023 High Purity Cellulose $ 76 $ (42) Paperboard 31 37 High-Yield Pulp (8) (3) Corporate (60) (57) Operating income (loss) $ 39 $ (65) Operating results improved $104 million in 2024 compared to 2023 driven in part by the prior year fourth quarter $62 million non-cash impairment recorded because of the optimization and realignment of our High Purity Cellulose assets.
(b) Amounts available under the ABL Credit Facility fluctuate based on eligible accounts receivable and inventory levels. At December 31, 2023, we had $151 million of gross availability and net available borrowings of $118 million after taking into account outstanding letters of credit of $33 million.
At December 31, 2024, we had $168 million of gross availability and net available borrowings of $141 million after taking into account outstanding letters of credit of $27 million. In addition to the availability under the ABL Credit Facility, we have $10 million available under our accounts receivable factoring line of credit in France.
Actual results may differ from these estimates. Revenue Recognition and Measurement Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of our contracts have a single performance obligation to transfer products. Accordingly, we recognize revenue when control has been transferred to the customer.
The majority of our contracts have a single performance obligation to transfer products. Accordingly, we recognize revenue when control has been transferred to the customer. Generally, control transfers upon delivery to a location in accordance with the terms and conditions of the sale.
Although this step does not require earnings be realized before any set time period, the Canadian operations would eventually need cumulative profits (excluding permanent tax adjustments) sufficient to utilize the indefinite-lived DTAs. Evaluation of all available evidence supports the realizability of most recorded DTAs.
Although this step does not require earnings be realized before any set time period, the Canadian operations would eventually need cumulative profits (excluding permanent tax adjustments) sufficient to utilize its net DTAs. Heavy consideration in this analysis is given to Canadian operating results, adjusted for permanent tax adjustments and other non-recurring items, over the most recent three-year period.
Net Sales Year Ended December 31, 2022 Changes Attributable to: Year Ended December 31, 2023 (in millions) Price Volume/Mix Net sales $ 160 $ (15) $ (9) $ 136 Net sales of our High-Yield Pulp segment decreased $24 million in 2023 compared to 2022 driven by 12 percent and 5 percent decreases in sales prices and sales volumes, respectively, due to lower demand. 30 Table of Contents Operating Income (Loss) Year Ended December 31, 2022 Gross Margin Changes Attributable to: Year Ended December 31, 2023 (in millions, except percentages) Sales Price Sales Volume/Mix (a) Cost SG&A and other Operating income (loss) $ 16 $ (15) $ (3) $ (1) $ — $ (3) Operating margin % 10.0 % (9.3) % (2.2) % (0.7) % — % (2.2) % (a) Computed based on contribution margin.
Sales volumes increased 12 percent driven by the easing of prior year customer destocking in the current year, partially offset by a 7 percent decrease in sales prices driven by mix and increased competitive activity from European imports. 32 Table of Contents Operating Income Year Ended December 31, 2023 Gross Margin Changes Attributable to: Year Ended December 31, 2024 (in millions, except percentages) Sales Price Sales Volume/ Mix (a) Cost SG&A and other Operating income $ 37 $ (16) $ 11 $ (1) $ — $ 31 Operating margin % 16.9 % (6.6) % 3.7 % (0.4) % — % 13.6 % (a) Computed based on contribution margin.
High Purity Cellulose Average sales prices for cellulose specialties in 2024 are expected to increase by a low single-digit percentage as compared to average sales prices in 2023.
Cellulose Specialties Average sales prices for cellulose specialties in 2025 are expected to increase a mid single-digit percentage as compared to 2024. Sales volumes for cellulose specialties are expected to decline a low single-digit percentage compared to 2024 as certain sales volumes accelerated in 2024 due to the indefinite suspension of operations in Temiscaming will not repeat in 2025.
Corporate Year Ended December 31, (in millions) 2023 2022 Operating loss $ (57) $ (58) Our Corporate operating loss decreased $1 million in 2023 compared to 2022 driven by lower variable compensation and other benefit costs and one-time severance costs incurred in 2022, largely offset by unfavorable foreign exchange rates in 2023 as compared to favorable rates in 2022.
Corporate Year Ended December 31, (in millions) 2024 2023 Operating loss $ (60) $ (57) 33 Table of Contents Our Corporate operating loss increased $3 million in 2024 compared to 2023 driven by higher variable and other compensation expense, higher discounting and financing fees and higher costs related to our ERP transformation project, partially offset by favorable foreign exchange rates in 2024 compared to unfavorable rates in 2023.
In July 2023, we secured term loan financing of $250 million in aggregate principal amount and received net proceeds of $243 million after original issue discount, which was used, together with cash on hand of $89 million, to redeem the remaining $318 million in aggregate principal balance and accrued interest of $4 million of the 2024 Notes and pay fees and expenses related to the transaction.
In October 2024, we issued $700 million in aggregate principal amount of secured term loan financing, which was used in the fourth quarter, together with cash on hand, to redeem the respective $453 million and $245 million outstanding principal balances of the 2026 Notes and 2027 Term Loan and pay fees and expenses related to the refinancing.
Commodity viscose pulp is a raw material required for the manufacture of viscose staple fibers which are used in woven and non-woven applications. Absorbent materials, typically referred to as fluff fibers, are used as an absorbent medium in consumer products. Pricing for commodity products is typically referenced to published indices or based on publicly available spot market prices.
Commodity fluff is used as an absorbent medium in consumer products. Pricing for commodity products is typically referenced to published indices or based on publicly available spot market prices. Our specialized assets also produce bioelectricity and biomaterials, including biofuels, lignin and tall oil soap.
Critical Accounting Estimates The preparation of financial statements requires us to make estimates, assumptions and judgments that affect our assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities in our Financial Statements. We base these estimates and assumptions on historical data and trends, current fact patterns, expectations and other sources of information we believe are reasonable.
See section Liquidity and Capital Resources—Cash Flows for additional discussion of our operating cash flows and capital expenditures. Critical Accounting Estimates The preparation of financial statements requires us to make estimates, assumptions and judgments that affect our assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities in our Financial Statements.
Additionally, higher costs were recognized related to ERP transformation project expenditures, discounting and financing fees incurred to facilitate working capital enhancements and advisory and professional expenses related to the refinancing of our 2024 Notes. Liquidity and Capital Resources Overview Cash flows from operations, primarily driven by operating results, have historically been our primary source of liquidity and capital resources.
Liquidity and Capital Resources Overview Cash flows from operations, primarily driven by operating results, have historically been our primary source of liquidity and capital resources.
Overview of Operations We are a diversified global leader of cellulose-based technologies that operates in the following business segments: • High Purity Cellulose • Paperboard • High-Yield Pulp High Purity Cellulose We manufacture and market high purity cellulose, which is sold as either cellulose specialties or commodity products.
High Purity Cellulose We manufacture and market high purity cellulose, sold as cellulose specialties or commodity products. We are the leading global producer of cellulose specialties, which are primarily used in dissolving chemical applications that require a highly purified form of cellulose.
Interest income increased $3 million in 2023 compared to 2022 primarily due to the timing of the receipt of the 2027 Term Loan proceeds and their subsequent use in the repayment of the 2024 Notes. See Note 9—Debt and Finance Leases to our Financial Statements for further information on these debt items.
During 2024, we recorded charges of $10 million related to the refinancing of our 2026 Notes and 2027 Term Loan. Interest income decreased $3 million in 2024 compared to 2023 driven by the prior year timing of the receipt of the 2027 Term Loan proceeds and their subsequent use in the repayment of the 2024 Notes.
Sales of chemicals and energy, a majority of which are by-products of our manufacturing processes, are included in the High Purity Cellulose segment. Our four production facilities, located in the U.S., Canada and France, have a combined annual production capacity of 1,045,000 MTs of cellulose specialties and commodity products.
Our three operating production facilities, located in the U.S., Canada and France, have a combined annual production capacity of 895,000 MTs of cellulose specialties and commodity products, excluding the 150,000 MTs capacity of the Temiscaming plant whose operations were indefinitely suspended in July 2024.
Our production facility, located in Canada, has an annual production capacity of 290,000 MTs of high-yield pulp. Wood fiber, chemicals and energy represent approximately 40 percent of our per MT cost of sales.
Key input costs — wood, chemicals and energy — represent approximately 40 percent of our per MT cost of sales.
Also included in non-operating other income in the year ended December 31, 2023 was a $2 million gain on a passive land sale and a pension settlement loss of $2 million.
Included in “other income, net” in 2023 were a $2 million gain on a passive land sale and a $2 million pension settlement loss. 30 Table of Contents Income Taxes The effective tax rate on the loss from continuing operations for 2024 was a benefit of 18 percent.
The 2027 Term Loan matures in July 2027, bears interest at an annual rate equal to three-month Term SOFR (or, if greater, 3.00 percent) plus 8.00 percent and requires quarterly principal payments of $1.25 million. See Note 9—Debt and Finance Leases to our Financial Statements for further information.
The 2029 Term Loan matures in October 2029, bears interest at an annual rate equal to three-month Term SOFR plus an initial spread of 7 percent and requires quarterly principal payments of $1.75 million. The initial spread may fluctuate by 0.5 percent based on our net secured leverage ratio.
The second step evaluates future projected Canadian earnings from continuing operations to confirm the Canadian operations are more-likely-than-not to be profitable in future years, inclusive of deductible depreciation. This second step establishes that the NOLs are not realized due solely to the suspension of Canadian tax depreciation.
The first step evaluates future projected Canadian earnings from continuing operations to confirm the Canadian operations are more-likely-than-not to be profitable in future years. If future years are not expected to be profitable, the Company would only be able to recognize DTAs to the extent there are other sources of taxable income, such as reversals of deductible timing differences.
Total sales volumes increased 4 percent during the current year driven by a 39 percent increase in commodity volumes, partially offset by an 18 percent decrease in cellulose specialties volumes.
Total sales prices increased 5 percent primarily driven by a higher mix of cellulose specialties and a 1 percent increase in cellulose specialties prices, partially offset by a 3 percent decrease in commodity prices. Despite a cellulose specialties sales volumes increase of 10 percent, total sales volumes decreased 5 percent due to a 19 percent decrease in commodity volumes.
Operating results of our High-Yield Pulp segment declined $19 million in 2023 compared to 2022 driven by the lower sales prices and sales volumes and increased wood costs.
Operating loss of our High-Yield Pulp operating segment increased $5 million in 2024 compared to 2023 driven by the lower sales prices, flat sales volumes, higher labor costs and $4 million of net custodial site costs for Temiscaming site operations, partially offset by lower logistics and key input costs, higher productivity and the recognition of $2 million in CEWS benefit claims deferred since 2021.
See Note 9—Debt and Finance Leases to our Financial Statements for further information on debt-related items. 2024 Outlook In October 2023, we announced that we engaged a financial advisor to explore the potential sale of our Paperboard and High-Yield Pulp assets located at our Temiscaming site.
In October 2023, we announced that we were exploring the potential sale of our Paperboard and High-Yield Pulp assets at our Temiscaming site. We remain committed to pursuing a sale of these assets at a fair price. In July 2024, we indefinitely suspended operations at our Temiscaming High Purity Cellulose plant.
Our non-guarantor subsidiaries had assets of $470 million, liabilities of $408 million, year-to-date revenue of $164 million and a trailing twelve month ABL Credit Facility covenant EBITDA for continuing operations of $17 million as of December 31, 2023. 31 Table of Contents Our liquidity and capital resources are summarized below: December 31, (in millions, except ratios) 2023 2022 Cash and cash equivalents (a) $ 76 $ 152 Availability under the ABL Credit Facility (b)(c) 118 130 Total debt (c) 777 853 Stockholders’ equity 747 829 Total capitalization (total debt plus stockholders’ equity) 1,524 1,682 Debt to capital ratio 51 % 51 % (a) Consisted of cash, money market deposits and time deposits with original maturities of 90 days or less.
Our liquidity and capital resources are summarized below: December 31, (in millions, except ratios) 2024 2023 Cash and cash equivalents $ 125 $ 76 Availability under the ABL Credit Facility (a)(b) 141 118 Total debt (b) 730 777 Stockholders’ equity 714 747 Total capitalization (total debt plus stockholders’ equity) 1,444 1,524 Debt to capital ratio 51 % 51 % (a) Amounts available under the ABL Credit Facility fluctuate based on eligible accounts receivable and inventory levels.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changePrices The prices, sales volumes and margins of the commodity products of our High Purity Cellulose segment and all the products of the High-Yield Pulp segment have historically been cyclically affected by economic and market shifts, fluctuations in capacity and changes in foreign currency exchange rates.
Biggest changeWe do not utilize financial instruments for trading or other speculative purposes. 40 Table of Contents Prices The prices, sales volumes and margins of our High Purity Cellulose operating segment’s commodity products and all the High-Yield Pulp operating segment’s products have historically been cyclically affected by economic and market shifts, fluctuations in capacity and changes in foreign currency exchange rates.
These products have less distinguishing qualities from producer to producer and competition is based primarily on price, which is determined by market supply relative to demand. The overall levels of demand for the products we manufacture, and consequently our sales and profitability, reflect fluctuations in end user demand.
These products have fewer distinguishing qualities from producer to producer and competition is based primarily on price, which is determined by market supply relative to demand. The overall levels of demand for the products we manufacture, and consequently our sales and profitability, reflect fluctuations in end user demand.
The fair market value of our long-term fixed interest rate debt is also subject to interest rate risk when the debt becomes due or if we do not hold the debt until maturity.
The fair market value of our long-term fixed interest rate debt may also be subject to interest rate risk when the debt becomes due or if we do not hold the debt until maturity.
The estimated fair value of our fixed-rate debt at December 31, 2023 and 2022 was $498 million and $839 million, respectively, compared to their respective $540 million and $854 million principal amounts. We use quoted market prices to estimate the fair value of our fixed-rate debt.
The estimated fair value of our fixed-rate debt at December 31, 2024 and 2023 was $75 million and $498 million, respectively, compared to their respective $75 million and $540 million principal amounts. We use quoted market prices to estimate the fair value of our fixed-rate debt.
At December 31, 2022, we had $4 million of variable rate debt subject to interest rate risk, for which a hypothetical one percent change in rates would have resulted in an immaterial change in interest expense for the period.
At December 31, 2023, we had $255 million of variable rate debt subject to interest rate risk, for which a hypothetical one percent change in interest rates would have resulted in a $2 million annual change in interest expense.
We may use derivatives in accordance with policies and procedures approved by the Finance & Strategic Planning Committee of our Board of Directors. See Note 11—Derivative Instruments to our Financial Statements for further information. Foreign Currency We manage our foreign currency exposures by balancing certain assets and liabilities denominated in foreign currencies.
We may use derivatives in accordance with policies and procedures approved by the Finance and Strategic Planning Committee of our Board of Directors. Foreign Currency We manage our foreign currency exposures by balancing certain assets and liabilities denominated in foreign currencies. We may also use foreign currency forward contracts to manage these exposures.
Forward contracts that are derivative instruments are reported in our consolidated balance sheets at their fair values, unless they qualify for the normal purchase normal sale exception and such exception has been elected, in which case the fair values of such contracts are not recognized in the balance sheet. 37 Table of Contents Variable Interest Rates As of December 31, 2023, we had $255 million of variable rate debt subject to interest rate risk.
Forward contracts that are derivative instruments are reported in our consolidated balance sheets at their fair values, unless they qualify for the normal purchase normal sale exception and such exception has been elected, in which case, the fair values of such contracts are not recognized in the balance sheet.
In the third quarter of 2023 we issued variable rate term loan financing of $250 million, which was used with cash on hand to redeem the $318 million outstanding principal balance of our fixed rate 2024 Notes.
In the fourth quarter of 2024, we secured variable-rate term loan financing of $700 million, which was used, together with cash on hand, to redeem the respective $453 million and $245 million outstanding principal balances of the fixed-rate 2026 Notes and the variable-rate 2027 Term Loan.
We may also use foreign currency forward contracts to manage these exposures. The principal objective of such contracts is to minimize the potential volatility and financial impact of changes in foreign currency exchange rates. We do not utilize financial instruments for trading or other speculative purposes.
The principal objective of such contracts is to minimize the potential volatility and financial impact of changes in foreign currency exchange rates.
At this borrowing level, a hypothetical one percent change in interest rates would have resulted in a $2 million annual change in interest expense.
The 2029 Term Loan bears interest at an annual rate equal to three-month Term SOFR plus an initial applicable margin of 7 percent. At this new borrowing level, a hypothetical one percent change in interest rates would result in a $7 million annual change in interest expense.
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Variable Interest Rates At December 31, 2024, we had $702 million of variable rate debt subject to interest rate risk.

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