SYLVAMO CORPORATION
Reconciliation of Net Income to Adjusted Operating Earnings
Preliminary and Unaudited
(In millions, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ----- ---------------------
Three Months
Ended June
2024 2023 30, 2024 2024 2023
---- ------- ------------- ----- ------
Net Income $ 95 $ 58 $ 83 $ 221 $ 204
Add back:
Net
special
items
expense
(income) 7 14 -- 9 25
---- ------- ----- ------ ----- ------
Adjusted
Operating
Earnings $ 102 $ 72 $ 83 $ 230 $ 229
==== ======= ===== ====== ===== ======
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ---- ---------------------
Three Months
Ended June
2024 2023 30, 2024 2024 2023
----- ------- ------------ ----- ------
Diluted
Earnings
Per
Common
Share as
Reported $ 2.27 $ 1.37 $ 1.98 $ 5.26 $ 4.77
Add back:
Net
special
items
expense
(income) 0.17 0.33 -- 0.22 0.58
----- ------- ---- ------ ----- ------
Adjusted
Operating
Earnings
Per
Share $ 2.44 $ 1.70 $ 1.98 $ 5.48 $ 5.35
===== ======= ==== ====== ===== ======
SYLVAMO CORPORATION
Sales and Earnings by Business Segment
Preliminary and Unaudited
(In millions)
Net Sales by Business Segment
Three Months Nine Months
Ended Ended September
September 30, 30,
-------------- ----------------
Three
Months
Ended
June 30,
2024 2023 2024 2024 2023
---- ---- --------- ----- -----
Europe $ 194 $ 184 $206 $ 607 $ 624
Latin America 247 246 245 708 718
North America 532 476 493 1,515 1,455
Inter-segment
Sales (8) (9) (11) (27) (40)
---- ---- --- ----- -----
Net Sales $ 965 $ 897 $933 $2,803 $2,757
==== ==== === === ===== =====
Operating Profit by Business Segment
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
Three
Months
Ended
June 30,
2024 2023 2024 2024 2023
---- ---- -------- ---- ----
Europe $ 3 $ (14) $ 8 $ 7 $ (2)
Latin
America 49 55 37 100 149
North
America 98 75 77 237 217
---- ---- ---- ---- ----
Business
Segment
Operating
Profit $ 150 $ 116 $ 122 $ 344 $ 364
==== ==== ==== ==== ====
Income
Before
Income
Taxes $ 132 $ 91 $ 113 $ 305 $ 302
Interest
expense
(income),
net 14 (a) 9 9 32 (a) 28 (e)
Net
special
items
expense
(income) 4 (b) 16 (d) -- (c) 7 (b) 34 (d)
---- ---- ---- ---- ----
Business
Segment
Operating
Profit
(f) $ 150 $ 116 $ 122 $ 344 $ 364
==== ==== ==== ==== ====
Three and Nine Months Ended September 30, 2024
(a) Includes pre-tax loss of $5 million ($4 million after taxes) for the
three and nine months ended September 30, 2024, related to debt
extinguishment costs.
(b) Includes pre-tax loss of $2 million ($1 million after taxes) for legal
fees related to the Brazil Tax Dispute for the three and nine months
ended September 30, 2024 and a pre-tax loss of $1 million ($1 million
after taxes) for the three and nine months ended September 30, 2024,
related to forest fires in Brazil. Also includes pre-tax loss of $1
million ($1 million after taxes) and $2 million ($2 million after taxes)
for certain severance costs related to our salaried workforce for the
three and nine months ended September 30, 2024, respectively. Finally,
includes pre-tax loss of $2 million ($1 million after taxes) for
integration costs related to the Nymölla acquisition, a pre-tax
gain of $1 million ($1 million after taxes) to adjust the recognition of
a foreign value-added tax refund in Brazil and a pre-tax loss of $1
million ($1 million after taxes) for other charges, all for the nine
months ended September 30, 2024.
Three Months Ended June 30, 2024
(c) Includes pre-tax loss of $1 million ($1 million after taxes) for certain
severance costs related to our salaried workforce. Also includes pre-tax
gain of $1 million ($1 million after taxes) to adjust the recognition of
a foreign value-added tax refund in Brazil.
Three Months and Nine Months Ended September 30, 2023
(d) Includes pre-tax loss of $13 million ($10 million after taxes) for the
three months and nine months ended September 30, 2023 for certain
severance costs related to our salaried workforce. Also includes a
pre-tax loss of $3 million ($2 million after taxes) for the three months
ended September 30, 2023, and a pre-tax loss of $8 million ($6 million
after taxes) for the nine months ended September 30, 2023, for
transaction costs related to the Nymölla acquisition. Finally,
includes a pre-tax loss of $4 million ($3 million after taxes) for
professional and legal fees related to negotiations resulting in a
shareholder cooperation agreement and incremental expense of $9 million
($7 million after taxes) related to the impact of the step-up of
acquired Nymölla inventory sold during the first quarter for the
nine months ended September 30, 2023.
(e) Includes $9 million ($6 million after taxes) of interest income related
to tax settlements and a pre-tax loss of $5 million ($4 million after
taxes) related to debt extinguishment costs for the nine months ended
September 30, 2023.
(f) As set forth in the chart above, business segment operating profit is
defined as income before income taxes, but excluding net interest
expense (income) and net special items. Business segment operating
profit is a measure reported to our management for purposes of making
decisions about allocating resources to our business segments and
assessing the performance of our business segments.
Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin
Preliminary and Unaudited
(In millions)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ----------------------
Three Months
Ended June
2024 2023 30, 2024 2024 2023
---- ---- ------------ ----- -----
Net Income $ 95 $ 58 $ 83 $ 221 $ 204
Adjustments:
Income tax
provision 37 33 30 84 98
Interest
expense
(income),
net 14 9 9 32 28
Depreciation,
amortization
and cost of
timber
harvested 39 36 37 115 105
Stock-based
compensation 5 6 5 17 21
Net special
items expense
(income) 3 16 -- 6 34
---- ---- ---- ----- ----- -----
Adjusted EBITDA $ 193 $ 158 $ 164 $ 475 $ 490
---- ---- ---- ----- ----- -----
Net Sales $ 965 $ 897 $ 933 $2,803 $2,757
---- ---- ---- ----- ----- -----
Adjusted EBITDA
Margin 20.0% 17.6% 17.6% 16.9% 17.8%
---- ---- ---- ---- ----- -----
Adjusted EBITDA and Adjusted EBITDA Margin by Business Segment
Three Months Ended Nine Months Ended
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