10-Q 1 ryam-20230930.htm 10-Q ryam-20230930
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number 001-36285
Logo.jpg
RAYONIER ADVANCED MATERIALS INC.
Incorporated in the State of Delaware
I.R.S. Employer Identification No.: 46-4559529
Principal Executive Office:
1301 RIVERPLACE BOULEVARD, SUITE 2300
JACKSONVILLE, FL 32207
Telephone Number: (904357-4600

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common stock, par value $0.01 per shareRYAMNew York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x       No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes x       No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
x
Non-accelerated filer
o
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes        No x

The registrant had 65,343,418 shares of common stock outstanding as of November 6, 2023.



Table of Contents


Glossary
The following terms and abbreviations appearing in the text of this report have the meanings indicated below.
2022 Form 10-KRYAM Annual Report on Form 10-K for the year ended December 31, 2022
2024 Notes
$550 million original aggregate principal amount of 5.50 percent senior unsecured notes due 2024, issued May 2014
2026 Notes
$500 million original aggregate principal amount of 7.625 percent senior secured notes due 2026, issued December 2020
2027 Term Loan$250 million original aggregate principal amount of variable rate term loan maturing July 2027, entered into July 2023
2GSecond generation
ABL Credit Facility
5-year senior secured asset-based revolving credit facility due December 2025
AOCI
Accumulated other comprehensive income (loss)
CADCanadian dollar
CEWS
Canada Emergency Wage Subsidy
DTADeferred tax asset
EBITDAEarnings before interest, taxes, depreciation and amortization
Exchange Act
Securities Exchange Act of 1934, as amended
Financial StatementsConsolidated financial statements included in Part I Item 1 of this Quarterly Report on Form 10-Q
GAAPUnited States generally accepted accounting principles
GreenFirst
GreenFirst Forest Products, Inc.
LTF
LignoTech Florida LLC
MTMetric ton
OPEBOther post-employment benefits
Purchase Right
Board-declared dividend of one preferred share purchase right for each outstanding share of RYAM common stock
ROU
Right-of-use
RYAM, the Company, our, we, usRayonier Advanced Materials Inc. and its consolidated subsidiaries
SECUnited States Securities and Exchange Commission
SG&ASelling, general and administrative expense
SOFR
Secured Overnight Financing Rate
TSR
Total shareholder return
U.S.
United States of America
USDUnited States of America dollar
USDOC
United States Department of Commerce


Part I. Financial Information
Item 1. Financial Statements
Rayonier Advanced Materials Inc.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)
Three Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Net sales$368,670 $466,346 $1,220,844 $1,217,282 
Cost of sales(359,938)(419,804)(1,160,044)(1,138,118)
Gross margin8,732 46,542 60,800 79,164 
Selling, general and administrative expense(21,162)(19,905)(58,653)(68,041)
Foreign exchange gain (loss)624 3,025 (1,510)4,480 
Other operating expense, net(2,634)(1,133)(4,939)(5,764)
Operating income (loss)(14,440)28,529 (4,302)9,839 
Interest expense(21,015)(16,433)(51,949)(49,318)
Other components of pension and OPEB, excluding service costs (Note 14)501 1,009 (834)1,910 
Gain on GreenFirst equity securities (Note 2)   5,197 
Other income, net3,281 4,117 6,894 6,760 
Income (loss) from continuing operations before income taxes(31,673)17,222 (50,191)(25,612)
Income tax (expense) benefit (Note 15)5,392 1,824 11,227 (3,230)
Equity in loss of equity method investment(259)(691)(1,591)(2,127)
Income (loss) from continuing operations(26,540)18,355 (40,555)(30,969)
Income from discontinued operations, net of taxes (Note 2)1,440 11,252 312 12,458 
Net income (loss)$(25,100)$29,607 $(40,243)$(18,511)
Basic earnings per common share (Note 12)
Income (loss) from continuing operations$(0.41)$0.29 $(0.62)$(0.48)
Income from discontinued operations0.02 0.18  0.20 
Net income (loss) per common share-basic$(0.39)$0.47 $(0.62)$(0.28)
Diluted earnings per common share (Note 12)
Income (loss) from continuing operations$(0.41)$0.28 $(0.62)$(0.48)
Income from discontinued operations0.02 0.17  0.20 
Net income (loss) per common share-diluted$(0.39)$0.45 $(0.62)$(0.28)
See Notes to Consolidated Financial Statements.

1

Rayonier Advanced Materials Inc.
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
(in thousands)
Three Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Net income (loss)$(25,100)$29,607 $(40,243)$(18,511)
Other comprehensive loss, net of tax (Note 10)
Foreign currency translation adjustment(5,212)(14,697)(1,109)(30,561)
Unrealized gain on derivative instruments47 67 150 224 
Net gain (loss) on employee benefit plans(65)1,948 (2,432)5,844 
Total other comprehensive loss(5,230)(12,682)(3,391)(24,493)
Comprehensive income (loss)$(30,330)$16,925 $(43,634)$(43,004)
See Notes to Consolidated Financial Statements.
2

Rayonier Advanced Materials Inc.
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and par value amounts)
 September 30, 2023December 31, 2022
Assets
Current assets
Cash and cash equivalents$27,127 $151,803 
Accounts receivable, net (Note 3)175,814 211,526 
Inventory (Note 4)242,691 265,334 
Prepaid and other current assets72,696 60,867 
Total current assets518,328 689,530 
Property, plant and equipment (net of accumulated depreciation of $1,792,607 and $1,721,898, respectively)
1,132,469 1,151,268 
Deferred tax assets329,084 322,164 
Intangible assets, net19,166 24,423 
Other assets176,619 160,143 
Total assets$2,175,666 $2,347,528 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$171,333 $163,962 
Accrued and other current liabilities (Note 6)133,716 164,369 
Debt due within one year (Note 7)18,621 14,617 
Current environmental liabilities (Note 8)10,740 10,732 
Total current liabilities334,410 353,680 
Long-term debt (Note 7)730,453 838,508 
Non-current environmental liabilities (Note 8)158,854 159,949 
Pension and other postretirement benefits (Note 14)119,737 119,571 
Deferred tax liabilities14,972 17,021 
Other liabilities31,563 29,486 
Commitments and contingencies (Note 17)
Stockholders’ Equity
Common stock: 140,000,000 shares authorized at $0.01 par value, 65,343,418 and 64,020,761 issued and outstanding, respectively
654 640 
Additional paid-in capital418,032 418,048 
Retained earnings434,180 474,423 
Accumulated other comprehensive loss (Note 10)(67,189)(63,798)
Total stockholders’ equity785,677 829,313 
Total liabilities and stockholders’ equity$2,175,666 $2,347,528 

See Notes to Consolidated Financial Statements.
3

Rayonier Advanced Materials Inc.
Consolidated Statements of Stockholders’ Equity
(Unaudited)
(in thousands, except share data)
Common StockAdditional Paid in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Stockholders’ Equity
SharesPar Value
Three months ended September 30, 2023
Balance at July 1, 2023
65,343,418 $654 $416,042 $459,280 $(61,959)$814,017 
Net loss— — — (25,100)— (25,100)
Other comprehensive loss, net of tax— — — — (5,230)(5,230)
Stock-based compensation — — 1,990 — — 1,990 
Balance at September 30, 2023
65,343,418 $654 $418,032 $434,180 $(67,189)$785,677 
Three months ended September 24, 2022
Balance at June 25, 2022
63,971,166 $639 $415,257 $441,224 $(96,281)$760,839 
Net income— — — 29,607 — 29,607 
Other comprehensive loss, net of tax— — — — (12,682)(12,682)
Stock-based compensation— — 1,959 — — 1,959 
Balance at September 24, 2022
63,971,166 $639 $417,216 $470,831 $(108,963)$779,723 
Nine months ended September 30, 2023
Balance at December 31, 2022
64,020,761 $640 $418,048 $474,423 $(63,798)$829,313 
Net loss— — (40,243)— (40,243)
Other comprehensive loss, net of tax— — — (3,391)(3,391)
Issuance of common stock under incentive stock plans1,966,815 20 (20)— —  
Stock-based compensation— — 5,361 — — 5,361 
Repurchase of common stock(a)
(644,158)(6)(5,357)— — (5,363)
Balance at September 30, 2023
65,343,418 $654 $418,032 $434,180 $(67,189)$785,677 
Nine months ended September 24, 2022
Balance at December 31, 2021
63,738,409 $637 $408,834 $489,342 $(84,470)$814,343 
Net loss— — — (18,511)— (18,511)
Other comprehensive loss, net of tax— — — — (24,493)(24,493)
Issuance of common stock under incentive stock plans294,936 3 (3)— —  
Stock-based compensation— — 8,687 — — 8,687 
Repurchase of common stock(a)
(62,179)(1)(302)— — (303)
Balance at September 24, 2022
63,971,166 $639 $417,216 $470,831 $(108,963)$779,723 
(a)Repurchased to satisfy tax withholding requirements related to the issuance of stock under the Company’s incentive stock plans.
See Notes to Consolidated Financial Statements.
4

Rayonier Advanced Materials Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Nine Months Ended
September 30, 2023September 24, 2022
Operating activities
Net loss$(40,243)$(18,511)
Adjustments to reconcile net loss to cash provided by operating activities:
Income from discontinued operations (312)(12,458)
Depreciation and amortization104,073 96,294 
Stock-based compensation expense5,361 8,687 
Deferred income tax expense (benefit)(8,130)372 
Gain on GreenFirst equity securities (5,197)
Net periodic benefit cost of pension and other postretirement plans3,060 4,489 
Unrealized (gain) loss on foreign currency564 (6,853)
(Gain) loss on disposal of property, plant and equipment(1,085)2,917 
Other6,133 5,389 
Changes in operating assets and liabilities:
Accounts receivable42,865 (41,599)
Inventories22,301 (41,504)
Accounts payable5,545 (2,393)
Accrued liabilities(31,732)23,620 
Other(17,493)(338)
Contributions to pension and other postretirement plans(8,768)(5,467)
Cash provided by operating activities82,139 7,448 
Investing activities
Capital expenditures, net (95,203)(114,159)
Investment in equity method investment(415) 
Cash used in investing activities-continuing operations(95,618)(114,159)
Cash provided by investing activities-discontinued operations 44,428 
Cash used in investing activities(95,618)(69,731)
Financing activities
Borrowings of long-term debt303,217 5,721 
Repayments of long-term debt(397,087)(51,410)
Short-term financing, net(2,457)(4,990)
Debt issuance costs(10,082) 
Repurchase of common stock(5,363)(303)
Cash used in financing activities(111,772)(50,982)
Net decrease in cash and cash equivalents(125,251)(113,265)
Net effect of foreign exchange on cash and cash equivalents575 (8,369)
Balance, beginning of period151,803 253,307 
Balance, end of period$27,127 $131,673 
Supplemental cash flow information:
Interest paid$(50,306)$(48,384)
Income taxes refunded (paid), net(7,215)16,484 
Capital assets purchased on account31,706 16,316 
See Notes to Consolidated Financial Statements.
5

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)

1. Basis of Presentation
The unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with GAAP for interim financial information and in accordance with the rules and regulations of the SEC. In the opinion of management, these consolidated financial statements and notes reflect all adjustments, including all normal recurring adjustments, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. These statements and notes should be read in conjunction with the consolidated financial statements and supplementary data included in the Company’s 2022 Form 10-K.
As a result of the sale of its lumber and newsprint assets in August 2021, the Company presents the results for those operations and any associated impacts as discontinued operations. Unless otherwise stated, information in these notes to consolidated financial statements relates to continuing operations. See Note 2—Discontinued Operations for further information on the sale.
Recent Accounting Developments
There have been no new or recently adopted accounting pronouncements impacting the Company’s consolidated interim financial statements.
Subsequent Events
The Company recently began plans towards a realignment of its High Purity Cellulose assets to optimize production mix, including a consolidation of its commodity products production into the Temiscaming plant. The Company is currently evaluating the potential impact of this realignment on its consolidated financial statements and disclosures.
2. Discontinued Operations
In August 2021, the Company completed the sale of its lumber and newsprint facilities and certain related assets located in Canada to GreenFirst for $232 million, which included 28.7 million shares of GreenFirst common stock with a deemed fair value of $42 million. In the second quarter of 2022, the Company sold the GreenFirst common shares for $43 million. Prior to the sale of shares, the GreenFirst common shares were accounted for at fair value, with changes in fair value recorded in the consolidated statements of operations. The shares sale agreement contains a purchase price protection clause whereby the Company is entitled to participate in further share price appreciation under certain circumstances until December 2023.
As part of the sale of the lumber assets, the Company retained all rights and obligations to softwood duties generated or incurred through the closing date of the sale. In total, the Company paid $112 million in softwood lumber duties from 2017 through August 2021, and expects to receive all or the vast majority of these duties upon final resolution of the dispute between the USDOC and Canada. During the third quarter of 2023, the USDOC completed its fourth administrative review of duties applied to Canada softwood lumber exports to the U.S. during 2021 and reduced rates applicable to the Company to a combined 8.05 percent. In connection with this development, the Company recorded a pre-tax gain of $2 million in “income from discontinued operations, net of taxes” and increased the long-term receivable related to USDOC administrative reviews to $40 million. During the third quarter of 2022, the USDOC completed its third administrative review of duties applied to Canada softwood lumber exports during 2020 and reduced applicable rates to a combined 8.6 percent, for which the Company recorded a pre-tax gain of $16 million.
During the nine months ended September 30, 2023, the Company incurred a $2 million loss related to the settlement of a claim pursuant to the representations and warranties in the asset purchase agreement.
6


Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
Income from discontinued operations was comprised of the following:
Three Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Cost of sales$ $ $ $155 
Gross margin   155 
Selling, general and administrative expense and other operating income, net1,957 15,313 424 16,808 
Operating income1,957 15,313 424 16,963 
Non-operating expense (4) (13)
Income from discontinued operations before income taxes1,957 15,309 424 16,950 
Income tax expense(517)(4,057)(112)(4,492)
Income from discontinued operations, net of taxes$1,440 $11,252 $312 $12,458 
3. Accounts Receivable, Net
Accounts receivable, net included the following:
 September 30, 2023December 31, 2022
Accounts receivable, trade$141,998 $171,144 
Accounts receivable, other(a)
34,501 41,446 
Allowance for credit loss(685)(1,064)
Accounts receivable, net$175,814 $211,526 
(a)Consists primarily of value-added/consumption taxes, grants receivable and accrued billings due from government agencies.
4. Inventory
Inventory included the following:
 September 30, 2023December 31, 2022
Finished goods$182,209 $198,931 
Work-in-progress5,816 5,230 
Raw materials47,421 52,967 
Manufacturing and maintenance supplies7,245 8,206 
Inventory$242,691 $265,334 
5. Leases
The Company’s operating and finance leases are primarily for corporate offices, warehouse space, rail cars and equipment. As of September 30, 2023, the Company’s leases have remaining lease terms of less than one year to 13.1 years with standard renewal and termination options available at the Company’s discretion. Certain equipment leases have purchase options at the end of the term of the lease, which are not included in the ROU assets, as it is not reasonably certain that the Company will exercise such options. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants. The Company uses its incremental borrowing rate in determining the present value of lease payments unless the lease provides an implicit or explicit interest rate.
7

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
Financial and other information related to the Company’s operating and finance leases follow:
Three Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Operating lease cost$1,858 $1,973 $5,464 $5,821 
Finance lease cost
Amortization of ROU assets102 95 301 281 
Interest26 34 85 106 
Total lease cost$1,986 $2,102 $5,850 $6,208 
Balance Sheet ClassificationSeptember 30, 2023December 31, 2022
Operating leases
ROU assets Other assets$17,600 $15,623 
Lease liabilities, currentAccrued and other current liabilities4,235 4,741 
Lease liabilities, non-currentOther liabilities14,220 11,399 
Finance leases
ROU assetsProperty, plant and equipment, net1,171 1,448 
Lease liabilitiesLong-term debt1,459 1,760 
Nine Months Ended
September 30, 2023September 24, 2022
Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities$5,182 $1,770 
Operating lease ROU assets obtained in exchange for lease liabilities5,650 2,975 
Finance lease cash flows were immaterial during each of the three and nine months ended September 30, 2023 and September 24, 2022.
September 30, 2023December 31, 2022
Operating leases
Weighted average remaining lease term (in years)5.75.8
Weighted average discount rate8.4 %8.9 %
Finance leases
Weighted average remaining lease term (in years)3.13.8
Weighted average discount rate7.0 %7.0 %
8

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
6. Accrued and Other Current Liabilities
Accrued and other current liabilities included the following:
 September 30, 2023December 31, 2022
Accrued customer incentives$22,815 $28,702 
Accrued payroll and benefits14,974 13,763 
Accrued interest14,012 18,877 
Accrued income taxes2,854 9,321 
Accrued property and other taxes8,111 3,065 
Deferred revenue(a)
20,459 21,645 
Other current liabilities(b)
50,491 68,996 
Accrued and other current liabilities$133,716 $164,369 
(a)Included at both September 30, 2023 and December 31, 2022 was CAD $25 million (USD $19 million) associated with funds received in 2021 for CEWS. All CEWS claims are subject to mandatory audit. The Company will recognize amounts from these claims in income at the time there is sufficient evidence that it will not be required to repay such amounts.
(b)Included at September 30, 2023 and December 31, 2022 was $17 million and $30 million, respectively, of energy-related payables associated with Tartas facility operations.
7. Debt and Finance Leases
Debt and finance leases included the following:
September 30, 2023December 31, 2022
ABL Credit Facility due 2025: $112 million available, bearing interest of 7.42% (5.42% adjusted SOFR plus 2.00% margin) at September 30, 2023
$ $ 
Term Loan due 2027: bearing interest of 13.33% (5.33% three-month Term SOFR plus 8.00% margin) at September 30, 2023
250,000  
7.625% Senior Secured Notes due 2026
464,640 475,000 
5.50% Senior Unsecured Notes due 2024
 322,675 
5.50% CAD-based term loan due 2028
31,776 36,585 
Other loans(a)
20,507 19,598 
Short-term factoring facility-France1,292 3,773 
Finance lease obligations1,459 1,760 
Total principal payments due769,674 859,391 
Less: unamortized debt premium, discount and issuance costs(20,600)(6,266)
Total debt749,074 853,125 
Less: debt due within one year(18,621)(14,617)
Long-term debt$730,453 $838,508 
(a)Consist of loans for energy and bioethanol projects in France.
Term Loan
In July 2023, the Company secured term loan financing of $250 million in aggregate principal amount and received net proceeds of $243 million after original issue discount. In addition, the Company incurred issuance costs of $10 million, which, together with the original issue discount, were recorded in “long-term debt” in the consolidated balance sheets and will be amortized to “interest expense” in the consolidated statements of operations over the term of the loan. The net proceeds, together with cash on hand, were used to redeem the 2024 Notes and pay transaction costs.
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. The Company may voluntarily make prepayments at any time, subject to customary breakage costs and, if within the first three anniversaries of closing, an additional make-whole premium.
9

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
The agreement governing the 2027 Term Loan contains various customary covenants that limit the ability of the Company and its restricted subsidiaries, as defined by the term loan agreement and in particular the Company’s French subsidiaries, to take certain specified actions, subject to stated exceptions, including: incurring debt or liens, making investments, entering into mergers, consolidations, and acquisitions, paying dividends and making other restricted payments. The Company will be required to maintain a consolidated secured net leverage ratio, based on covenant EBITDA, of no greater than 4.50 to 1.00. Additionally, the 2027 Term Loan contains customary affirmative covenants and customary events of default (subject, in certain cases, to customary grace or cure periods), including, without limitation, late payment, breach of covenant, bankruptcy, judgment and defaults under certain other indebtedness and changes in control.
Senior Notes
2026 Notes
In April 2023, the Company repurchased $10 million of its 2026 Notes through open-market transactions and retired the notes for cash of $9 million. A gain on extinguishment of $1 million for the repurchase was recorded to “other income, net” in the consolidated statements of operations.
2024 Notes
In August 2023, the Company redeemed the $318 million principal balance and accrued interest of $4 million of the 2024 Notes. A loss on extinguishment of $1 million related to the redemption was recorded to “other income, net” in the consolidated statements of operations.
Prior to the full redemption of its 2024 Notes, in March 2023, the Company repurchased $5 million of the 2024 Notes through open-market transactions and retired the notes for cash of $5 million. An immaterial gain on extinguishment for the repurchase was recorded to “other income, net” in the consolidated statements of operations.
As of September 30, 2023, the Company’s debt principal payments, excluding finance lease obligations, were due as follows:
Remainder of 2023$5,597 
202416,345 
202516,392 
2026480,320 
2027243,071 
Thereafter6,490 
Total debt principal payments$768,215 
8. Environmental Liabilities
The Company’s environmental liabilities balance changed as follows during the nine months ended September 30, 2023:
Balance at December 31, 2022
$170,681 
Increase in liabilities2,462 
Payments(3,634)
Foreign currency adjustments85 
Balance at September 30, 2023
169,594 
Less: current portion(10,740)
Non-current environmental liabilities$158,854 
10

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
In addition to these estimated liabilities, the Company is subject to the risk of reasonably possible additional liabilities in excess of the established reserves due to potential changes in circumstances and future events, including, without limitation, changes to current laws and regulations; changes in governmental agency personnel, direction, philosophy or enforcement policies; developments in remediation technologies; increases in the cost of remediation, operation, maintenance and monitoring of its environmental liability sites; changes in the volume, nature or extent of contamination to be remediated or monitoring to be undertaken; the outcome of negotiations with governmental agencies or non-governmental parties; and changes in accounting rules or interpretations. Based on information available as of September 30, 2023, the Company estimates this exposure could range up to approximately $85 million, although no assurances can be given that this amount will not be exceeded given the factors described above. These potential additional costs are attributable to several sites and other applicable liabilities. This estimate excludes liabilities that would otherwise be considered reasonably possible but for the fact that they are not currently estimable, primarily due to the factors discussed above.
Subject to the previous paragraph, the Company believes its estimates of liabilities are sufficient for probable costs expected to be incurred over the next 20 years with respect to its environmental liabilities. However, no assurances are given that these estimates will be sufficient for the reasons described above and additional liabilities could have a material adverse effect on the Company’s financial position, results of operations and cash flows.
9. Fair Value Measurements
The following table presents the carrying amount, estimated fair values and categorization under the fair value hierarchy for financial instruments held by the Company, using market information and what management believes to be appropriate valuation methodologies:
September 30, 2023December 31, 2022
Carrying
Amount
Fair ValueCarrying
Amount
Fair Value
Level 1Level 2Level 1Level 2
Assets
Cash and cash equivalents
Cash$17,484 $17,484 $ $127,288 $127,288 $ 
Money market and similar funds9,643 9,643  24,515 24,515  
Liabilities
Fixed-rate long-term debt(a)
$513,004 $ $439,787 $847,591 $ $838,502 
(a)Excludes finance lease obligations.
The Company uses the following methods and assumptions in estimating the fair value of its financial instruments:
Cash and cash equivalents — Cash and cash equivalents are highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase and the carrying amount is equal to fair market value. The Company measures its investments in money market and similar funds using level 1 inputs.
Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities. Variable rate debt adjusts with changes in the market rate and so carrying value approximates fair value.
11

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
10. Accumulated Other Comprehensive Loss
Nine Months Ended
September 30, 2023September 24, 2022
Unrecognized components of employee benefit plans, net of tax
Balance, beginning of period$(43,694)$(76,849)
Other comprehensive loss before reclassifications(3,034) 
Income tax on other comprehensive loss804  
Reclassifications to earnings(a)
Amortization of (gain) loss(531)7,466 
Amortization of prior service cost259 24 
Income tax on reclassifications70 (1,646)
Net comprehensive gain (loss) on employee benefit plans, net of tax(2,432)5,844 
Balance, end of period(46,126)(71,005)
Unrealized gain (loss) on derivative instruments, net of tax
Balance, beginning of period(567)(847)
Reclassifications to earnings - foreign currency exchange contracts(b)
173 258 
Income tax on reclassifications(23)(34)
Net comprehensive gain on derivative instruments, net of tax150 224 
Balance, end of period(417)(623)
Foreign currency translation
Balance, beginning of period(19,537)(6,774)
Foreign currency translation adjustment, net of tax(c)
(1,109)(30,561)
Balance, end of period(20,646)(37,335)
Accumulated other comprehensive loss, end of period$(67,189)$(108,963)
(a)The AOCI components for defined benefit pension and post-retirement plans are included in the computation of net periodic benefit cost. See Note 14—Employee Benefit Plans for further information.
(b)Reclassifications of foreign currency exchange contracts are recorded in “cost of sales,” “other operating expense, net” or “other income, net,” as appropriate.
(c)Foreign currency translation is net of tax effects of $0 for all periods presented, as the French operations are taxed on the foreign functional currency, not the translated reporting currency.
11. Stockholders’ Equity
Stockholder Rights Plan
In March 2022, the Company adopted a stockholder rights plan whereby a significant penalty is imposed upon any person or group which acquires beneficial ownership of 10% or more of the Company’s common stock without the approval of the Board of Directors. On the same date, the Board of Directors declared a dividend of one preferred share Purchase Right for each outstanding share of common stock of the Company, par value $0.01 per share, which was paid to Company stockholders of record as of March 31, 2022. On March 20, 2023, the Purchase Rights expired.
12

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
12. Earnings Per Common Share
The following table provides the inputs to the calculations of basic and diluted earnings per common share (share amounts not in thousands):
Three Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Income (loss) from continuing operations $(26,540)$18,355 $(40,555)$(30,969)
Income from discontinued operations 1,440 11,252 312 12,458 
Net income (loss) available for common stockholders$(25,100)$29,607 $(40,243)$(18,511)
Shares used for determining basic earnings per share of common stock 65,343,418 63,971,166 65,024,654 63,882,920 
Dilutive effect of:
Performance and restricted stock 1,548,941   
Shares used for determining diluted earnings per share of common stock65,343,418 65,520,107 65,024,654 63,882,920 
Anti-dilutive instruments excluded from the computation of diluted earnings per share included (not in thousands):
Three Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Stock options46,798 78,660 46,798 78,660 
Performance and restricted stock3,302,332 1,517,135 3,302,332 3,726,090 
Total anti-dilutive instruments3,349,130 1,595,795 3,349,130 3,804,750 
13. Incentive Stock Plans
Stock-based compensation expense was as follows:
Three Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Stock-based compensation expense
$1,990 $1,959 $5,361 $8,687 
The Company made new grants of restricted stock units, performance-based stock units and performance-based cash awards during the first and second quarters of 2023. The 2023 restricted stock unit awards cliff vest after three years. The 2023 performance-based awards cliff vest after three years and are based equally on TSR relative to peers and three-year cumulative adjusted EBITDA. Participants can earn between 0 and 200 percent of the target award. Performance below the threshold for the TSR would result in zero payout for the TSR metric. The performance-based cash award is measured using the same objectives as the performance-based stock unit award but is paid and accounted for separately. Performance-based cash awards are classified as a liability and remeasured to fair value at the end of each reporting period until settlement.
In March 2023, the performance-based stock units granted in 2020 were settled with the issuance of 1,257,015 shares of common stock, including incremental shares of 370,366, based on performance results.
13

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
The following table summarizes the 2023 activity of the Company’s incentive stock awards:
Stock OptionsRestricted Stock UnitsPerformance-Based Stock Units
OptionsWeighted Average Exercise PriceAwardsWeighted Average Grant Date Fair ValueAwardsWeighted Average Grant Date Fair Value
Outstanding at December 31, 2022
77,767 $39.98 1,697,587 $6.21 1,956,919 $6.79 
Granted  972,307 5.32 305,764 9.09 
Forfeited  (28,363)5.95 (5,433)4.73 
Exercised or settled  (709,800)5.49 (886,649)5.95 
Expired or cancelled(30,969)43.32     
Outstanding at September 30, 2023
46,798 $37.77 1,931,731 $6.03 1,370,601 $7.83 
14. Employee Benefit Plans
Defined Benefit Plans
The Company has defined benefit pension and other long-term and postretirement benefit plans covering certain union and non-union employees, primarily in the U.S. and Canada. The defined benefit pension plans are closed to new participants. The liabilities for these plans are calculated using actuarial estimates and management assumptions. These estimates are based on historical information and certain assumptions about future events.
During the nine months ended September 24, 2022, the Company recorded a $1 million loss related to the final asset surplus distribution to the plan participants of certain wound-up Canadian pension plans. During the nine months ended September 30, 2023, the Company recorded a $2 million loss related to the final asset surplus distribution to the plan participants of certain other wound-up Canadian pension plans. The settlements were recognized in “other components of pension and OPEB, excluding service costs” in the Company’s consolidated statements of operations.
The following tables present the components of net periodic benefit costs of these plans:
PensionPostretirement
Three Months EndedThree Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Service cost$1,223 $2,150 $293 $352 
Interest cost7,204 4,561 352 215 
Expected return on plan assets(7,967)(8,258)  
Amortization of prior service cost (credit)111 38 (24)(31)
Amortization of (gain) loss(123)2,473 (54)17 
Pension settlement loss (25)  
Net periodic benefit cost$448 $939 $567 $553 
PensionPostretirement
Nine Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Service cost$3,664 $6,497 $879 $1,057 
Interest cost21,586 13,764 1,057 646 
Expected return on plan assets(23,854)(24,965)  
Amortization of prior service cost (credit)332 116 (73)(92)
Amortization of (gain) loss(369)7,419 (162)47 
Pension settlement loss2,317 1,154   
Net periodic benefit cost$3,676 $3,985 $1,701 $1,658 
14

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
Service cost is included in “cost of sales” or “selling, general and administrative expense” in the consolidated statements of operations, as appropriate. Interest cost, expected return on plan assets, amortization of prior service cost (credit) and amortization of (gain) loss are included in “other components of pension and OPEB, excluding service costs” in the consolidated statements of operations.
15. Income Taxes
Effective Tax Rate
The Company’s effective tax rates were as follows:
Three Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Income (loss) from continuing operations
$(26,540)$18,355 $(40,555)$(30,969)
Effective tax rate17.0 %(10.6)%22.4 %(12.6)%
The 2023 effective tax rates differed from the federal statutory rate of 21 percent primarily due to disallowed interest deductions in the U.S. and nondeductible executive compensation, offset by U.S. tax credits, return-to-accrual adjustments related to previously filed tax returns, changes in the valuation allowance on disallowed interest deductions and interest received on overpayments of tax from prior years. The effective tax rate for the nine-month period was also impacted by an excess tax benefit on vested stock compensation.
The effective tax rate for the three months ended September 24, 2022 differed from the federal statutory rate of 21 percent primarily due to changes in the valuation allowance on disallowed interest deductions in the U.S. and interest received on overpayments of tax from prior years, partially offset by unfavorable tax return-to-accrual adjustments. The effective tax rate for the nine months ended September 24, 2022 differed from the federal statutory rate primarily due to changes in the valuation allowance on disallowed interest deductions in the U.S. and nondeductible executive compensation, partially offset by interest received on overpayments of tax from prior years, U.S. tax credits and favorable tax return-to-accrual adjustments.
Deferred Taxes
As of both September 30, 2023 and December 31, 2022, the Company’s net DTA included $17 million of disallowed U.S. interest deductions that the Company does not believe will be realized. In strict compliance with the American Institute of Certified Public Accountants’ Technical Questions and Answers 3300.01-02, which asserts that certain material evidence regarding the realizability of disallowed U.S. interest deductions should be ignored when assessing the need for a valuation allowance, the Company has not recognized a valuation allowance on this portion of the net DTA generated from disallowed interest.
16. Segments
The Company operates in the following business segments: High Purity Cellulose, Paperboard and High-Yield Pulp. Corporate consists primarily of senior management, accounting, information systems, human resources, treasury, tax and legal administrative functions that provide support services to the operating business units. The Company allocates a portion of the cost of maintaining these support functions to its operating units.
The Company evaluates the performance of its segments based on operating income (loss). Intersegment sales consist primarily of High-Yield Pulp sales to Paperboard. Intersegment sales prices are at rates that approximate market for the respective operating area.
15

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
Net sales, disaggregated by product line, was comprised of the following:
Three Months EndedNine Months Ended
 September 30, 2023September 24, 2022September 30, 2023September 24, 2022
High Purity Cellulose
Cellulose Specialties$164,654 $243,175 $570,584 $645,169 
Commodity Products98,834 92,638 321,548 223,151 
Other sales(a)
28,528 33,080 73,447 84,059 
Total High Purity Cellulose292,016 368,893 965,579 952,379 
Paperboard57,212 65,039 164,300 182,512 
High-Yield Pulp25,393 39,564 111,397 101,992 
Eliminations(5,951)(7,150)(20,432)(19,601)
Net sales$368,670 $466,346 $1,220,844 $1,217,282 
(a)Include sales of bioelectricity, lignosulfonates and other by-products to third parties.
Operating income (loss) by segment was comprised of the following:
Three Months EndedNine Months Ended
September 30, 2023September 24, 2022September 30, 2023September 24, 2022
High Purity Cellulose$(5,547)$22,536 $6,965 $21,221 
Paperboard13,088 11,293 28,680 27,579 
High-Yield Pulp(6,062)5,646 2,030 3,910 
Corporate (15,919)(10,946)(41,977)(42,871)
Operating income (loss)$(14,440)$28,529 $(4,302)$9,839 
Identifiable assets by segment were as follows:
September 30, 2023December 31, 2022
High Purity Cellulose$1,544,041 $1,654,214 
Paperboard115,851 112,757 
High-Yield Pulp36,276 50,947 
Corporate479,498 529,610 
Total assets$2,175,666 $2,347,528 
17. Commitments and Contingencies
Commitments
The Company had no material changes to the purchase obligations presented in its 2022 Form 10-K that were outside the normal course of business during the nine months ended September 30, 2023. The Company’s purchase obligations continue to primarily consist of commitments for the purchase of natural gas, steam energy and wood chips.
The Company leases certain buildings, machinery and equipment under various operating and finance leases. See Note 5—Leases for further information.
16

Rayonier Advanced Materials Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in thousands unless otherwise stated)
Litigation and Contingencies
Duties on Canadian Softwood Lumber Sold to the U.S.
The Company previously operated six softwood lumber mills in Ontario and Quebec, Canada, and exported softwood lumber into the U.S. from Canada. In connection with these exports, the Company paid approximately $112 million for softwood lumber duties between 2017 and August 28, 2021, including $1 million of ancillary fees, which were recorded as expense in the periods incurred. As part of the sale of its lumber assets, the Company retained all rights and obligations to softwood duties generated or incurred through the closing date of the sale. As of September 30, 2023, the Company had a $40 million long-term receivable associated with the USDOC’s determinations of the revised rates for the 2017, 2018, 2019, 2020 and 2021 periods. This amount does not include interest, which will be due on any amounts refunded. The Company estimates interest earned on the total amount of softwood lumber duties paid to be approximately $6 million.
Cash is not expected to return to the Company until final resolution of the softwood lumber dispute, which remains subject to legal challenges.
Other
In addition to the above, the Company is engaged in various legal and regulatory actions and proceedings and has been named as a defendant in various lawsuits and claims arising in the ordinary course of business. While the Company has procured reasonable and customary insurance covering risks normally occurring in connection with its businesses, the Company has, in certain cases, retained some risk through the operation of self-insurance, primarily in the areas of workers’ compensation, property insurance, business interruption and general liability. These other lawsuits and claims, either individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.
Guarantees and Other
The Company provides financial guarantees as required by creditors, insurance programs and various governmental agencies. As of September 30, 2023, the Company had net exposure of $34 million from various standby letters of credit, primarily for financial assurance relating to environmental remediation, credit support for natural gas and electricity purchases and guarantees related to foreign retirement plan obligations. These standby letters of credit represent a contingent liability; the Company would only be liable upon its default on the related payment obligations. The standby letters of credit have various expiration dates and are expected to be renewed as required.
The Company had surety bonds of $90 million as of September 30, 2023, primarily to comply with financial assurance requirements relating to environmental remediation and post closure care, to provide collateral for the Company’s workers’ compensation program and to guarantee taxes and duties for products shipped internationally. These surety bonds expire at various dates and are expected to be renewed annually as required.
LTF is a venture in which the Company owns 45 percent and its partner, Borregaard ASA, owns 55 percent. The Company is a guarantor of LTF’s financing agreements and, in the event of default, expects it would only be liable for its proportional share of any repayment under the agreements. The Company’s proportion of the LTF financing agreement guarantee was $29 million at September 30, 2023.
The Company has not recorded any liabilities for these financial guarantees in its consolidated balance sheets, either because the Company has recorded the underlying liability associated with the guarantee or the guarantee is dependent on the Company’s own performance and, therefore, is not subject to the measurement requirements or because the Company has calculated the estimated fair value of the guarantee and determined it to be immaterial based upon the current facts and circumstances that would trigger a payment obligation.
It is not possible to determine the maximum potential amount of liability under these potential obligations due to the unique set of facts and circumstances likely to be involved with each provision.
As of December 31, 2022, a collective bargaining agreement covering approximately 575 unionized employees was expired. The employees continued to work under the terms of the expired contract until negotiations concluded in the second quarter of 2023 and final agreement with the union was reached. As of September 30, 2023, all of the Company’s collective bargaining agreements covering its unionized employees were current.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following analysis of our financial condition and results of operations should be read in conjunction with our Financial Statements and the notes thereto included in this Quarterly Report on Form 10-Q and with our 2022 Form 10-K and information contained in subsequent Forms 8-K and other reports filed with the SEC.
Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q regarding anticipated financial, business, legal or other outcomes, including business and market conditions, outlook and other similar statements relating to future events, developments or financial or operational performance or results, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as “may,” “will,” “should,” “could,” “expect,” “estimate,” “believe,” “intend,” “plan,” “forecast,” “anticipate,” “project,” “guidance” and other similar language. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking.
Forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that these expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. The risk factors contained in Item 1A—Risk Factors of our 2022 Form 10-K, among others, could cause actual results or events to differ materially from our historical experience and those expressed in forward-looking statements made in this report.
Forward-looking statements are only as of the date of the filing of this Quarterly Report on Form 10-Q and we undertake no duty to update its forward-looking statements except as required by law. You are advised to review any further disclosures that we have made or may make in our filings and other submissions to the SEC, including those on Forms 10-K, 10-Q, 8-K and other reports.
Business Overview
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. 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. 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 operate in the following business segments: High Purity Cellulose, Paperboard and High-Yield Pulp.
Recent Business Developments
In July 2023, we secured term loan financing of $250 million in aggregate principal amount, the proceeds of which were used, together with cash on hand, to redeem the $318 million principal balance of the 2024 Notes in August 2023.
In April 2023, we repurchased $10 million of our 2026 Notes through open-market transactions and retired the notes for cash of $9 million.
In March 2023, we repurchased $5 million of our 2024 Notes through open-market transactions and retired the notes for cash of $5 million.
Market Assessment
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. This strategic move is aligned with our commitment to enhancing our operational and financial performance, optimizing our portfolio to align with our long-term growth strategy and providing flexibility to pay down debt and reduce leverage.
18

The following market assessment represents our best current estimate of our business segments’ future performance.
High Purity Cellulose
Average sales prices for cellulose specialties in 2023 are expected to be in the high single-digit percent higher than average 2022 sales prices, while sales volumes are expected to decrease from prior year due to softness in sales orders driven principally by significant customer destocking and market-driven demand declines. Market demand for commodity products remains resilient with fluff and viscose prices bottoming in the third quarter and a slight uptick expected in the fourth quarter. Commodity sales volumes are expected to continue to increase through the end of 2023. The prices for certain inputs have come off the 2022 highs but are expected to remain significantly elevated versus pre-COVID pandemic levels. We expect to take downtime at our Tartas facility at the end of 2023 due to market conditions and to improve working capital.
We recently began plans towards a realignment of our High Purity Cellulose assets to optimize production mix, including a consolidation of our commodity products production into the Temiscaming plant. We are currently evaluating the potential impact of this realignment on our consolidated financial statements and disclosures.
Paperboard
Paperboard prices are expected to rebound slightly in the fourth quarter, remaining elevated from 2022 levels, while sales volumes are expected to improve in the second half of the year as customer inventories return to more normal levels. Raw material prices are expected to increase slightly as purchased pulp prices are forecast to increase in the fourth quarter. We expect to take downtime in the coming quarter due to market conditions and to improve working capital.
High-Yield Pulp
High-yield pulp prices have declined due to soft demand and new paper pulp capacity ramping up. Prices are expected to decline overall in 2023 despite an expected uptick in the fourth quarter, in line with industry forecasts for the global paper pulp market. We expect to take downtime in the coming quarter due to market conditions and to improve working capital.
A Sustainable Future
Our portfolio is aligned with sustainability drivers in the European Green Deal for the Renewable Energy Directive II and the 2G bio-fuel that is noncompetitive to human food supply. The 2G bioethanol facility at our Tartas, France plant is near completion and is anticipated to be operational in the first quarter of 2024. The total estimated cost of the project is approximately $40 million, with $22 million to be spent in 2023. We plan to utilize $28 million of low-cost green loans to help fund the project, including $10 million already borrowed, and $4 million in grants. The project is expected to provide $8 million to $10 million of annual incremental EBITDA, depending on current exchange rates, beginning in 2025.
19

Results of Operations
Three Months EndedNine Months Ended
(in millions, except percentages)September 30, 2023September 24, 2022September 30, 2023September 24, 2022
Net sales$369 $466 $1,221 $1,217 
Cost of sales(360)(419)(1,160)(1,138)
Gross margin47 61 79 
Selling, general and administrative expense(22)(20)(59)(68)
Foreign exchange gain (loss)(1)
Other operating expense, net(2)(1)(5)(5)
Operating income (loss)(14)29 (4)10 
Interest expense(21)(16)(52)(49)
Other components of pension and OPEB, excluding service costs— (1)
Gain on GreenFirst equity securities— — — 
Other income, net
Income (loss) from continuing operations before income taxes(31)17 (50)(26)
Income tax (expense) benefit11 (3)
Equity in loss of equity method investment(1)(1)(2)(2)
Income (loss) from continuing operations(27)18 (41)(31)
Income from discontinued operations, net of taxes12 12 
Net income (loss)$(25)$30 $(40)$(19)
Gross margin %2.4 %10.1 %5.0 %6.5 %
Operating margin %(3.8)%6.2 %(0.3)%0.8 %
Effective tax rate17.0 %(10.6)%22.4 %(12.6)%
Net Sales
Three Months EndedNine Months Ended
(in millions)September 30, 2023September 24, 2022September 30, 2023September 24, 2022
High Purity Cellulose$292 $369 $966 $952 
Paperboard57 66 164 183 
High-Yield Pulp25 40 111 102 
Eliminations(5)(9)(20)(20)
Net sales$369 $466 $1,221