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Sylvamo First Quarter Results In Line With Guidance

Adjusted Operating Earnings Per Share Up More Than 85% vs. First Quarter 2022

Sylvamo (NYSE: SLVM), the world’s paper company, is releasing first quarter 2023 earnings.

Message from the Chairman and Chief Executive Officer

“We generated $208 million in adjusted EBITDA, which was consistent with our outlook of $205 million to $215 million, and achieved a 22% adjusted EBITDA margin,” said Jean-Michel Ribiéras. “We maintained a strong balance sheet and repurchased 80% of our outstanding notes to eliminate restrictive covenants in the notes agreement. These steps enabled us to continue on the path to returning more cash to shareowners.”

Financial Highlights – First Quarter vs. Fourth Quarter

  • Net income from continuing operations of $97 million ($2.25 per diluted share) vs. $88 million ($1.99 per diluted share)
  • Adjusted operating earnings1 (non-GAAP) of $108 million ($2.51 per diluted share) vs. $87 million ($1.97 per diluted share)
  • Adjusted EBITDA2 (non-GAAP) of $208 million (22% margin) vs. $170 million (18% margin)
  • Cash provided by operating activities from continuing operations of $63 million vs. $142 million
  • Free cash flow3 (non-GAAP) of $2 million vs. $84 million

Commercial and Operational Highlights – First Quarter vs. Fourth Quarter

  • Adjusted EBITDA, including $17 million from the newly-acquired Nymolla mill, increased by $38 million, which was in line with our guidance
  • Compared to the fourth quarter, excluding Nymolla:
    • Price and mix decreased by $8 million, due to pricing pressure on both pulp and paper in Europe, while remaining stable in Latin America and North America
    • Volume declined by $34 million due to seasonal weakness in Latin America and channel inventory destocking in Europe and North America
    • Operations and costs improved by $18 million, driven by lower annual incentive plan expense in the first quarter and favorable foreign exchange rates
    • Planned maintenance outage expenses decreased by $31 million with no planned outages
    • Input costs improved by $14 million, driven by favorable energy and transportation costs
    • Free cash flow reflected increases in working capital and annual incentive compensation payments

Second Quarter Outlook

  • We expect adjusted EBITDA to be $115 million to $125 million
  • Compared to the first quarter:
    • Price and mix are expected to decrease by $45 million to $50 million, reflecting the realization of prior price decreases for pulp in all regions and paper in Europe as well as less favorable product mix
    • Volume is projected to improve by $10 million to $15 million, with seasonally stronger volume in Latin America
    • Operations and costs are expected to increase by $10 million to $15 million primarily due to unabsorbed fixed costs
    • Input and transportation costs are projected to improve by $15 million to $20 million, with favorable trends in energy and chemicals
    • Total planned maintenance outage expenses are expected to increase by $59 million, with two-thirds of 2023 planned maintenance outage costs scheduled for the second quarter

Management Summary

We now project 2023 adjusted EBITDA of $720 million to $770 million, which reflects the impacts of previously announced pulp price decreases, updated views on pulp and paper prices and volume, continued channel inventory corrections and more favorable input and transportation cost trends. We also now project free cash flow of $250 million to $280 million.

The integration of our new mill in Sweden is proceeding well. We expect Nymolla to continue strengthening our performance while enabling us to serve customers across Europe and around the world more effectively.

We maintained a strong balance sheet, achieving a net debt-to-adjusted EBITDA ratio of 1.1x and improved our financial flexibility by increasing our ability to return more cash to shareowners. We repurchased $360 million of our 2029 notes, which eliminated restrictive covenants related to the notes. We replaced the notes with Term Loan A and short-term debt.

We returned $21 million of cash to shareowners in the first quarter. Returning more cash to shareowners remains a priority.

We announced a cooperation agreement with our largest shareowner, Atlas Holdings, in February. Our board added two independent directors and terminated the shareholder rights plan adopted in April 2022.

Our board also declared a quarterly dividend of $0.25 per share for the second quarter, which we paid on April 27.

Our 2030 goals demonstrate our commitment to produce paper in the most responsible and sustainable ways. In April, we received formal approval of our greenhouse gas emissions targets from the Science Based Target initiative (SBTi). We expect to reduce our 2030 Scope 1, 2 and 3 greenhouse gas emissions by 35% from a 2019 baseline and define a pathway to net zero emissions.

Sylvamo will achieve its vision to be the world’s paper company – the employer, supplier and investment of choice – by implementing our three-pronged strategy of commercial excellence, operational excellence and financial discipline.

1 Adjusted Operating Earnings (non-GAAP) are net income (loss) (GAAP) excluding discontinued operations, net of tax and net special items. Management uses this measure to focus on ongoing operations and believes it is useful to investors because it enables them to perform meaningful comparisons of past and present combined operating results. The Company believes that using this information, along with net income (loss), provides for a more complete analysis of the results of operations. Net income (loss) is the most directly comparable GAAP measure. For more information regarding net special items, see the information under the heading Effects of Net Special Items and the Condensed Consolidated Statement of Operations and related notes included later in this release.

 

2 Adjusted EBITDA (non-GAAP) is net income (loss) (GAAP) excluding discontinued operations, net of tax, plus the sum of income taxes, net interest expense (income), depreciation, amortization and cost of timber harvested, transition service agreement expense, stock-based compensation, and, when applicable for the periods reported, net special items. Management uses this measure in managing the operating performance of our business and believes that Adjusted EBITDA and Adjusted EBITDA Margin provide investors and analysts meaningful insights into our operating performance and Adjusted EBITDA is a relevant metric for the third-party debt. The Company believes that using this information, along with net income (loss), provides for a more complete analysis of the results of its operations. Net income (loss) is the most directly comparable GAAP measure. For more information regarding net special items, see the information under the heading Effects of Net Special Items and the Condensed Consolidated Statement of Operations and related notes included later in this release.

 

3 Free Cash Flow is a non-GAAP measure and the most directly comparable GAAP measure is cash provided by operating activities from continuing operations. Management utilizes this measure in connection with managing our business and believes that Free Cash Flow is useful to investors as a liquidity measure because it measures the amount of cash generated that is available, after reinvesting in the business, to maintain a strong balance sheet and service debt, and return cash to shareowners. It should not be inferred that the entire Free Cash Flow amount is available for discretionary expenditures. Free Cash Flow also enables investors to perform meaningful comparisons between past and present periods.

Select Financial Measures

 

(In millions)

First Quarter 2023

 

Fourth Quarter 2022

 

First Quarter 2022

Net Sales

$

959

 

$

927

 

$

821

Net Income from Continuing Operations

 

97

 

 

88

 

 

55

Net Income

 

97

 

 

94

 

 

26

Business Segment Operating Profit

 

166

 

 

133

 

 

103

Adjusted Operating Earnings

 

108

 

 

87

 

 

59

Adjusted EBITDA

 

208

 

 

170

 

 

146

Cash Provided By Operating Activities From Continuing Operations

 

63

 

 

142

 

 

48

Free Cash Flow

 

2

 

 

84

 

 

32

Segment Information

Sylvamo uses business segment operating profit to measure the earnings performance of its businesses and is calculated as set forth in footnote (f) under the "Sales and Earnings by Business Segment" table (page 8). First quarter 2023 net sales by business segment and operating profit by business segment compared with the fourth quarter of 2022 and the first quarter of 2022 are as follows:

Business Segment Results

 

(In millions)

First Quarter 2023

 

Fourth Quarter 2022

 

First Quarter 2022

Net Sales by Business Segment

 

 

 

 

 

Europe

$

248

 

 

$

119

 

 

$

117

 

Latin America

 

222

 

 

 

289

 

 

 

215

 

North America

 

505

 

 

 

527

 

 

 

508

 

Inter-segment Sales

 

(16

)

 

 

(8

)

 

 

(19

)

Net Sales

$

959

 

 

$

927

 

 

$

821

 

Operating Profit by Business Segment

 

 

 

 

 

Europe

$

23

 

 

$

12

 

 

$

2

 

Latin America

 

46

 

 

 

56

 

 

 

39

 

North America

 

97

 

 

 

65

 

 

 

62

 

Business Segment Operating Profit

$

166

 

 

$

133

 

 

$

103

 

Operating profits in the first quarter of 2023:

Europe - $23 million compared with $12 million in the fourth quarter of 2022. Earnings were higher as the $16 million of operating profit contributed by Nymolla and lower operating and input costs more than offset lower volumes.

Latin America - $46 million compared with $56 million in the fourth quarter of 2022. Earnings were lower as lower operating costs and planned maintenance outage costs were more than offset by lower volumes.

North America - $97 million compared with $65 million in the fourth quarter of 2022. Earnings were higher as lower operating and input costs, and lower planned maintenance outages more than offset lower volumes.

Effective Tax Rate

The reported effective tax rate for continuing operations for the first quarter of 2023 was 31%, compared to 28% for the fourth quarter of 2022. The higher rate for the first quarter was due to the mix of earnings in our regions and unfavorable U.S. rule change restricting foreign tax credits in Brazil.

Excluding net special items, the effective tax rate for the first quarter of 2023 was 30%, compared with 28% for the fourth quarter of 2022.

Effects of Net Special Items

Net special items related to continuing operations in the first quarter of 2023 amounted to a net after-tax charge of $11 million ($0.26 per diluted share) compared with net after-tax income of $1 million ($0.02 per diluted share) in the fourth quarter of 2022.

Earnings Webcast

The company will host an audio webcast at 10 a.m. EST / 9 a.m. CST. All interested parties are invited to listen at investors.sylvamo.com.

Parties who wish to participate should call +1-877-336-4440 (U.S.) or +1-409-207-6984 (international) and use access code 7148273. Participants should call in no later than 9:45 a.m. EST / 8:45 a.m. CST.

Replays are available at investors.sylvamo.com for one year and by phone for 90 days, beginning at approximately noon CST the day of the call. To listen to the replay by phone, call +1-866-207-1041 (U.S.) or +1-402-970-0847 (international) and use access code 9951284.

About Sylvamo

Sylvamo Corporation (NYSE: SLVM) is the world's paper company with mills in Europe, Latin America and North America. Our vision is to be the employer, supplier and investment of choice. We transform renewable resources into papers that people depend on for education, communication and entertainment. Headquartered in Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales for 2022 were $3.6 billion. For more information, please visit Sylvamo.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including the information under the headings "Second Quarter Outlook" and "Management Summary." Any or all forward-looking statements may turn out to be incorrect, and our actual actions and results could differ materially from what they express or imply, because they involve known and unknown risks, uncertainties and other factors, many of which are beyond our control. These risks, uncertainties, and other factors include those disclosed in the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended Dec. 31, 2022, filed with the U.S. Securities and Exchange Commission (SEC) and in our subsequent filings with the SEC, available on our website, Sylvamo.com. These forward-looking statements reflect our current expectations, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

SYLVAMO CORPORATION

Condensed Consolidated Statement of Operations

Preliminary and Unaudited

(In millions, except per share amounts)

 

 

Three Months Ended

March 31,

 

Three Months Ended

December 31,

2022

 

 

 

2023

 

 

2022

 

 

 

Net Sales

$

959

 

$

821

 

 

$

927

 

Costs and Expenses

 

 

 

 

 

 

Cost of products sold

 

688

(a)

 

620

 

(d)

 

654

(g)

Selling and administrative expenses

 

82

(b)

 

66

 

(e)

 

97

(h)

Depreciation, amortization and cost of timber harvested

 

35

 

 

31

 

 

 

32

 

Taxes other than payroll and income taxes

 

6

 

 

6

 

 

 

5

 

Interest expense (income), net

 

7

(c)

 

17

 

 

 

17

(i)

Income From Continuing Operations Before Income Taxes

 

141

 

 

81

 

 

 

122

 

Income tax provision

 

44

 

 

26

 

 

 

34

 

Net Income From Continuing Operations

 

97

 

 

55

 

 

 

88

 

Discontinued operations, net of tax

 

 

 

(29

)

(f)

 

6

(j)

Net Income (Loss)

$

97

 

$

26

 

 

$

94

 

Basic Earnings Per Share

 

 

 

 

 

 

Income from continuing operations

$

2.28

 

$

1.25

 

 

$

2.02

 

Discontinued operations, net of taxes

 

 

 

(0.66

)

 

 

0.14

 

Net earnings (loss)

$

2.28

 

$

0.59

 

 

$

2.16

 

Diluted Earnings Per Share

 

 

 

 

 

 

Income from continuing operations

$

2.25

 

$

1.25

 

 

$

1.99

 

Discontinued operations, net of taxes

 

 

 

(0.66

)

 

 

0.14

 

Net earnings (loss)

$

2.25

 

$

0.59

 

 

$

2.13

 

Average Shares of Common Stock Outstanding - Diluted

 

43

 

 

44

 

 

 

44

 

The accompanying notes are an integral part of this condensed consolidated statement of operations.

 
Three Months Ended March 31, 2023

 

(a)

Includes incremental expense of $9 million ($7 million after taxes) related to the impact of the step-up of acquired Nymolla inventory sold during the quarter.

 

(b)

Includes a pre-tax loss of $4 million ($3 million after taxes) for transaction costs related to the Nymolla acquisition and pre-tax loss of $4 million ($3 million after taxes) for professional and legal fees related to negotiations resulting in a shareholder cooperation agreement.

 

(c)

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.

 

Three Months Ended March 31, 2022

 

(d)

Includes a pre-tax loss of $2 million ($2 million after taxes) for one-time costs associated with the spin-off.

 

(e)

Includes a pre-tax loss of $3 million ($2 million after taxes) for one-time costs associated with the spin-off.

 

(f)

Includes a pre-tax charge of $68 million ($57 million after taxes) related to the impairment of our Russian fixed assets.

 

Three Months Ended December 31, 2022

 

(g)

Includes a pre-tax gain of $10 million ($8 million after taxes) related to hedging the foreign exchange exposure of the Nymolla mill purchase price.

 

(h)

Includes a pre-tax loss of $3 million ($2 million after taxes) for one-time costs associated with the spinoff and a pre-tax loss of $1 million ($1 million after taxes) for transaction costs related to the Nymolla acquisition.

 

(i)

Includes a pre-tax loss of $5 million ($4 million after taxes) related to debt extinguishment costs.

 

(j)

Includes pre-tax income of $6 million ($6 million after taxes) for the final gain on the disposal of our Russian operations.

SYLVAMO CORPORATION

Reconciliation of Net Income to Adjusted Operating Earnings

Preliminary and Unaudited

(In millions, except per share amounts)

 

 

Three Months Ended

March 31,

 

Three Months Ended

December 31,

2022

 

 

 

2023

 

 

2022

 

 

 

Net Income (Loss)

$

97

 

$

26

 

 

$

94

 

 

Less: Discontinued operations, net of tax

 

 

 

(29

)

 

 

6

 

 

Net income From Continuing Operations

 

97

 

 

55

 

 

 

88

 

 

Add back: Net special items expense (income)

 

11

 

 

4

 

 

 

(1

)

 

Adjusted Operating Earnings

$

108

 

$

59

 

 

$

87

 

 

 

Three Months Ended

March 31,

 

Three Months Ended

December 31,

2022

 

 

 

2023

 

 

2022

 

 

 

Diluted Earnings (Loss) Per Common Share as Reported

$

2.25

 

$

0.59

 

 

$

2.13

 

 

Less: Discontinued operations, net of tax

 

 

 

(0.66

)

 

 

0.14

 

 

Continuing Operations

 

2.25

 

 

1.25

 

 

 

1.99

 

 

Add back: Net special items expense (income)

 

0.26

 

 

0.09

 

 

 

(0.02

)

 

Adjusted Operating Earnings Per Share

$

2.51

 

$

1.34

 

 

$

1.97

 

 

SYLVAMO CORPORATION

Sales and Earnings by Business Segment

Preliminary and Unaudited

(In millions)

 

Net Sales by Business Segment

 

 

Three Months Ended

March 31,

 

Three Months Ended

December 31,

2022

 

 

 

2023

 

 

 

2022

 

 

 

Europe

$

248

 

 

$

117

 

 

$

119

 

 

Latin America

 

222

 

 

 

215

 

 

 

289

 

 

North America

 

505

 

 

 

508

 

 

 

527

 

 

Inter-segment Sales

 

(16

)

 

 

(19

)

 

 

(8

)

 

Net Sales

$

959

 

 

$

821

 

 

$

927

 

 

Operating Profit by Business Segment

 

 

Three Months Ended

March 31,

 

Three Months Ended

December 31,

2022

 

 

 

2023

 

 

2022

 

 

Europe

$

23

 

$

2

 

$

12

 

 

Latin America

 

46

 

 

39

 

 

56

 

 

North America

 

97

 

 

62

 

 

65

 

 

Business Segment Operating Profit

$

166

 

$

103

 

$

133

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Before Income Taxes

$

141

 

$

81

 

$

122

 

 

Interest expense (income), net

 

7

(a)

 

17

 

 

17

 

(d)

Net special items expense (income)

 

18

(b)

 

5

(c)

 

(6

)

(e)

Business Segment Operating Profit (f)

$

166

 

$

103

 

$

133

 

 

Three Months Ended March 31, 2023

 

(a)

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.

 

(b)

Includes a pre-tax loss of $4 million ($3 million after taxes) for transaction costs related to the Nymolla acquisition, 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 Nymolla inventory sold during the quarter.

 

Three Months Ended March 31, 2022

 

(c)

Includes a pre-tax loss of $5 million ($4 million after taxes) for one-time costs associated with the spin-off.

 

Three Months Ended December 31, 2022

 

(d)

Includes a pre-tax loss of $5 million ($4 million after taxes) related to debt extinguishment costs.

 

(e)

Includes a pre-tax gain of $10 million ($8 million after taxes) related to hedging the foreign exchange exposure of the Nymolla mill purchase price, a pre-tax loss of $3 million ($2 million after taxes) for one-time costs associated with the spinoff, and a pre-tax loss of $1 million ($1 million after taxes) for transaction costs related to the Nymolla acquisition.

 

(f)

As set forth in the chart above, business segment operating profit is defined as income from continuing operations 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

March 31,

 

Three Months Ended

December 31,

2022

 

 

 

2023

 

 

 

2022

 

 

 

Net Income (Loss)

$

97

 

 

$

26

 

 

$

94

 

Less: Discontinued operations, net of tax

 

 

 

 

(29

)

 

 

6

 

Net Income From Continuing Operations

 

97

 

 

 

55

 

 

 

88

 

Adjustments:

 

 

 

 

 

Income tax provision

 

44

 

 

 

26

 

 

 

34

 

Interest expense (income), net

 

7

 

 

 

17

 

 

 

17

 

Depreciation, amortization and cost of timber harvested

 

35

 

 

 

31

 

 

 

32

 

Stock-based compensation

 

7

 

 

 

4

 

 

 

4

 

Transition service agreement expense

 

 

 

 

8

 

 

 

1

 

Net special items expense (income)

 

18

 

 

 

5

 

 

 

(6

)

Adjusted EBITDA

$

208

 

 

$

146

 

 

$

170

 

Net Sales

$

959

 

 

$

821

 

 

$

927

 

Adjusted EBITDA Margin

 

21.7

%

 

 

17.8

%

 

 

18.3

%

Adjusted EBITDA and Adjusted EBITDA Margin by Business Segment

 

 

Three Months Ended

March 31,

 

Three Months Ended

December 31,

2022

 

 

 

2023

 

 

 

2022

 

 

 

Adjusted EBITDA

 

 

 

 

 

Europe

$

31

 

 

$

8

 

 

$

16

 

Latin America

 

63

 

 

 

56

 

 

 

72

 

North America

 

114

 

 

 

82

 

 

 

82

 

Total Business Segment Adjusted EBITDA

$

208

 

 

$

146

 

 

$

170

 

Net Sales (excluding discontinued operations and inter-segment sales eliminations)

 

 

 

 

 

Europe

$

248

 

 

$

117

 

 

$

119

 

Latin America

 

222

 

 

 

215

 

 

 

289

 

North America

 

505

 

 

 

508

 

 

 

527

 

Total Business Segment Net Sales

$

975

 

 

$

840

 

 

$

935

 

Adjusted EBITDA Margin

 

 

 

 

 

Europe

 

13

%

 

 

7

%

 

 

13

%

Latin America

 

28

%

 

 

26

%

 

 

25

%

North America

 

23

%

 

 

16

%

 

 

16

%

SYLVAMO CORPORATION

Condensed Consolidated Balance Sheet

Preliminary and Unaudited

(In millions)

 

 

March 31, 2023

 

December 31, 2022

Assets

 

 

 

Current Assets

 

 

 

Cash and temporary investments

$

191

 

 

$

360

 

Accounts and notes receivable, net

 

441

 

 

 

450

 

Contract assets

 

33

 

 

 

30

 

Inventories

 

506

 

 

 

364

 

Other current assets

 

38

 

 

 

39

 

Total Current Assets

 

1,209

 

 

 

1,243

 

Plants, Properties and Equipment, Net

 

938

 

 

 

817

 

Forestlands

 

340

 

 

 

322

 

Goodwill

 

133

 

 

 

128

 

Right of Use Assets

 

37

 

 

 

35

 

Deferred Charges and Other Assets

 

141

 

 

 

165

 

Total Assets

$

2,798

 

 

$

2,710

 

Liabilities and Equity

 

 

 

Current Liabilities

 

 

 

Accounts payable

$

409

 

 

$

453

 

Notes payable and current maturities of long-term debt

 

104

 

 

 

29

 

Accrued payroll and benefits

 

53

 

 

 

81

 

Other current liabilities

 

160

 

 

 

165

 

Total Current Liabilities

 

726

 

 

 

728

 

Long-Term Debt

 

954

 

 

 

1,003

 

Deferred Income Taxes

 

198

 

 

 

183

 

Other Liabilities

 

130

 

 

 

118

 

Equity

 

 

 

Common stock, $1 par value, 200.0 shares authorized, 44.5 shares and 44.2 shares issued and 42.6 shares and 42.6 shares outstanding at March 31, 2023 and December 31, 2022, respectively

 

44

 

 

 

44

 

Paid-In Capital

 

32

 

 

 

25

 

Retained Earnings

 

2,116

 

 

 

2,029

 

Accumulated Other Comprehensive Loss

 

(1,305

)

 

 

(1,338

)

 

 

887

 

 

 

760

 

Less: Common stock held in treasury, at cost, 1.9 shares and 1.6 shares at March 31, 2023 and December 31, 2022, respectively

 

(97

)

 

 

(82

)

Total Equity

 

790

 

 

 

678

 

Total Liabilities and Equity

$

2,798

 

 

$

2,710

 

Condensed Consolidated Statement of Cash Flows

Preliminary and Unaudited

(In millions)

 

 

Three Months Ended March 31,

 

 

2023

 

 

 

2022

 

Operating Activities

 

 

 

Net income from continuing operations

$

97

 

 

$

55

 

Depreciation, amortization, and cost of timber harvested

 

35

 

 

 

31

 

Deferred income tax provision (benefit), net

 

5

 

 

 

7

 

Stock-based compensation

 

7

 

 

 

4

 

Changes in operating assets and liabilities and other

 

 

 

Accounts and notes receivable

 

82

 

 

 

16

 

Inventories

 

(81

)

 

 

(26

)

Accounts payable and accrued liabilities

 

(100

)

 

 

(62

)

Other

 

18

 

 

 

23

 

Cash Provided By Operating Activities from Continuing Operations

 

63

 

 

 

48

 

Cash Provided By Operating Activities from Discontinued Operations, net

 

 

 

 

44

 

Cash Provided By Operating Activities

 

63

 

 

 

92

 

Investment Activities

 

 

 

Invested in capital projects

 

(61

)

 

 

(16

)

Acquisition of business, net of cash acquired

 

(167

)

 

 

 

Cash Provided By (Used for) Investment Activities from Continuing Operations

 

(228

)

 

 

(16

)

Cash Provided By (Used for) Investment Activities from Discontinued Operations, net

 

 

 

 

(3

)

Cash Provided By (Used for) Investment Activities

 

(228

)

 

 

(19

)

Financing Activities

 

 

 

Dividends paid

 

(10

)

 

 

 

Issuance of debt

 

427

 

 

 

 

Reduction of debt

 

(407

)

 

 

(35

)

Repurchases of common stock

 

(10

)

 

 

 

Other

 

(8

)

 

 

(4

)

Cash Provided By (Used for) Financing Activities from Continuing Operations

 

(8

)

 

 

(39

)

Cash Provided By (Used for) Financing Activities from Discontinued Operations, net

 

 

 

 

 

Cash Provided By (Used for) Financing Activities

 

(8

)

 

 

(39

)

Effect of Exchange Rate Changes on Cash

 

4

 

 

 

15

 

Change in Cash Included in Assets Held for Sale

 

 

 

 

46

 

Change in Cash and Temporary Investments

 

(169

)

 

 

3

 

Cash and Temporary Investments

 

 

 

Beginning of the period

 

360

 

 

 

159

 

End of the period

$

191

 

 

$

162

 

SYLVAMO CORPORATION

Reconciliation of Cash Provided by Operations to Free Cash Flow

Preliminary and Unaudited

(In millions)

 

 

Three Months Ended

March 31,

 

Three Months Ended

December 31,

2022

 

 

 

2023

 

 

 

2022

 

 

 

Cash Provided By Operating Activities From Continuing Operations

$

63

 

 

$

48

 

 

$

142

 

Adjustments:

 

 

 

 

 

Cash invested in capital projects

 

(61

)

 

 

(16

)

 

 

(58

)

Free Cash Flow

$

2

 

 

$

32

 

 

$

84

 

Reconciliation of Net Income From Continuing Operations to Adjusted EBITDA - 2023 Outlook

Estimates

(In millions)

 

 

Three Months Ended

June 30,

2023

 

Twelve Months Ended

December 31,

2023

 

 

Net Income From Continuing Operations

$37 - $44

 

$338 - $370

Adjustments:

 

 

 

Income tax provision

16 - 19

 

149 - 162

Interest expense (income), net

13

 

47

Depreciation, amortization and cost of timber harvested

37

 

148

Stock-based compensation

8

 

28

Net Special items expense

4

 

10 - 15

Adjusted EBITDA

$115 - $125

 

$720 - $770

Reconciliation of Cash Provided by Operations to Free Cash Flow - 2023 Outlook

Estimates

(In millions)

 

 

Twelve Months Ended

December 31,

2023

 

Cash Provided By Operating Activities From Continuing Operations

$460 - $515

Adjustments:

 

Cash invested in capital projects

(210 - 235)

Free Cash Flow

$250 - $280

The non-GAAP financial measures presented in this release have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this release may not be comparable to similarly titled measures disclosed by other companies, including companies in the same industry as Sylvamo.

 

Management believes certain non-U.S. GAAP financial measures, when used in conjunction with information presented in accordance with U.S. GAAP, can facilitate a better understanding of the impact of various factors and trends on the Company’s financial condition and results of operations. Management also uses these non-U.S. GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance.

 

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