SLVM 10-K & 10-Q changes, risk factors and insider trading
Sylvamo Corp · NYSE · Paper Mills · CIK 1856485 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our business can be adversely affected by global or regional economic, civil, political or trade developments.”
New heading “We are exposed to risks associated with adverse climate and weather conditions and evolving climate-related regulations, obligations and stakeholder expectations.”
New heading “Industry, Competition and Customer Risks”
New heading “Paper and pulp supply and demand are cyclical and fluctuate, which can result in declines in our products’ prices.”
New heading “Demand for the types of products that we sell is in a secular decline.”
New heading “Our products face strong competition as commodities and from industry consolidation.”
New heading “We rely significantly on a few customers and are exposed to risks associated with their financial viability and consolidations.”
New heading “Operational and Supply Chain Risks”
New heading “Disruptions at our facilities or in transportation and logistics could increase our costs and impair our ability to operate and serve customers.”
New heading “Failures or security breaches of our information technology systems could disrupt our operations, harm our business and result in regulatory non-compliance.”
New heading “Labor disputes could disrupt our operations and increase our labor and operating costs.”
New heading “Our business depends on our ability to attract, retain and develop skilled employees and management.”
New heading “Environmental regulations could result in significant compliance costs, operational constraints and liabilities for non-compliance.”
New heading “Compliance with a broad range of complex and changing regulations could increase our costs or limit our operations, and failure to comply could result in liabilities and harm our business.”
New heading “Strategic and Transaction Risks”
New heading “We may not achieve expected benefits from strategic capital investments or transactions.”
New heading “We have ongoing potential liabilities in connection with our 2021 separation from International Paper.”
New heading “Financial Risks”
New heading “Our operations require substantial capital, and significant capital investments could negatively affect our cash flows.”
New heading “We may be required to recognize impairments of goodwill or other intangible assets.”
New heading “Our indebtedness could constrain our business and use of cash, and a default under our debt agreements could adversely impact our business.”
New heading “Equity and Capital Market Risks”
New heading “Dividends and share repurchases are subject to board discretion and may be reduced or discontinued.”
New heading “Future issuances of securities could rank senior to our common stock, dilute shareholders or adversely affect our common stock’s value.”
New heading “Governance Risks”
New heading “Our certificate of incorporation limits the liability of our directors and officers.”
Removed heading “SUMMARY RISK FACTORS”
Removed heading “We are subject to physical, financial and reputational risks associated with climate conditions and climate change, including the impact of global, regional and local weather conditions, the availability of wood fiber, water and fuel, and the impact of increasing regulatory and investor focus on climate change.”
Removed heading “Risks Relating to Our Industry, the Products We Offer and Product Distribution”
Removed heading “Demand for and prices of paper and pulp products fluctuate and are cyclical, and fluctuations or cycles that result in decreased demand and lower prices could cause us to have lower sales volumes and smaller profit margins.”
Removed heading “Reduced truck, rail and ocean freight availability could lead to higher costs or poor service, resulting in lower earnings, and could affect our ability to deliver the products we manufacture in a timely manner.”
Removed heading “The industry-wide decline in demand for paper and related products could have a material adverse effect on our business, financial condition, results of operations and cash flows.”
Removed heading “Competition from other businesses and consolidation within the paper industry could have a material adverse effect on our competitive position, financial condition, results of operations and cash flows.”
Removed heading “Risks Relating to Our Operations”
Removed heading “Material disruptions at one of our manufacturing facilities could have a material adverse effect on our business, financial condition, results of operations and cash flows.”
Removed heading “We are subject to information technology risks, including risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information, and breaches in the technology used to manage our operations and other business processes, and the increasing use of artificial intelligence.”
Removed heading “We are subject to extensive environmental laws and regulations, and could incur substantial costs as a result of compliance with, violations of or liabilities under these laws and regulations.”
Removed heading “Our business is subject to a wide variety of other laws, regulations and other government requirements that may change in significant ways, and the cost of compliance with such requirements could have a material adverse effect on our business, financial condition, results of operations and cash flows.”
Removed heading “We rely heavily on a small number of significant customers and are exposed to risks associated with the financial viability of our customers and consolidation among our customers.”
Removed heading “Our operations require substantial capital, and any significant capital investments could negatively affect our cash flows.”
Removed heading “Our business and business prospects could be materially adversely affected if we fail to attract and retain senior management and other key employees.”
Removed heading “A significant write-down of goodwill or other intangible assets could have a material adverse effect on our financial condition and results of operations.”
Removed heading “Failure to achieve expected investment returns on pension plan assets, as well as changes in interest rates or plan demographics, could adversely impact our business, financial condition, results of operations and cash flows.”
Removed heading “We could experience disruptions in operations and increased labor costs due to labor disputes.”
Removed heading “We may not achieve the expected benefits from strategic acquisitions, joint ventures, divestitures, capital investments and other corporate transactions that we may pursue.”
Removed heading “Risks Related To Our Agreements with International Paper”
Removed heading “We rely on commercial agreements with our former parent company, International Paper, whereby a substantial amount of our production in the United States is outsourced, and the loss of such agreements or the inability to recoup the fixed costs of such agreements, could have an adverse effect on our business, financial condition, results of operations and cash flows.”
Removed heading “Satisfaction of indemnification obligations to International Paper could have a material adverse effect on our financial condition, results of operations and cash flows.”
Removed heading “Risks Relating To Our Indebtedness”
Removed heading “We may not be able to generate sufficient cash to service our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.”
Removed heading “Risks Relating To Our Common Stock”
Removed heading “Future offerings of debt or equity securities ranking senior to our common stock could adversely affect the market price of our common stock.”
Removed heading “Continued payment of dividends on, and repurchases of, our common stock are subject to the continued discretion of our board of directors and, consequently, shareholders’ ability to achieve a return on their investment could become limited to appreciation in the price of our common stock.”
Removed heading “Shareholders’ percentage ownership in Sylvamo will be diluted by equity compensation and potential use of our shares as consideration for any future acquisitions, strategic investments or financing of ongoing operations.”
Removed heading “Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our current or former directors, officers or shareholders.”
Largest changes
“In addition to environmental regulations, our operations are subject to a wide range of other regulations and governmental requirements in the jurisdictions in which we operate, including Europe, Latin America and North America. These requirements relate to, among other areas, health and safety, labor and employment, data privacy and cybersecurity, taxation, antitrust and competition, trade and customs and other regulatory matters. …”see in full comparison
“Our operations are subject to anti-corruption laws and regulations, such as the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act of 2010 (“Bribery Act”), France’s Sapin II Act, and other anti-corruption laws in various jurisdictions where we operate. These laws prohibit us and our officers, directors, employees, and agents acting on our behalf from corruptly offering, promising, authorizing, or providing anything of value to foreign officials for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. …”see in full comparison
“Because we operate internationally and work with third‑party agents, distributors, suppliers and other business partners, we are exposed to the risk that our employees or third parties may violate, or be alleged to have violated, applicable anti‑corruption or sanctions regulations, even if such conduct was not authorized by us. We have implemented policies, procedures, training and internal controls designed to promote compliance with applicable anti‑corruption and sanctions regulations. …”see in full comparison
“We are regularly subject to audits, examinations, and inquiries by tax authorities in multiple jurisdictions, particularly Brazil. Although we believe our tax positions are appropriate and are reported in accordance with applicable regulations, tax authorities could reach different conclusions. Adverse outcomes from tax audits, litigation or changes in regulation or interpretation could result in additional tax liabilities, higher effective tax rates, interest, penalties or other charges, some of which could be material. …”see in full comparison
“Further, we are required to comply with environmental laws and the terms and conditions of multiple environmental permits. In the countries where we manufacture paper, our industry is subject to various performance-based rules associated with effluent and air emissions. For example, in the United States, federal, state and local laws and regulations require us to routinely obtain authorizations from and comply with the evolving standards of the appropriate governmental authorities, which have considerable discretion over the terms of permits. …”see in full comparison
“Our compliance with existing and new environmental laws, and any future remediation requirements relating to discharges under environmental laws, including, potentially, with respect to an ongoing environmental matter in Brazil (see Note 13 Commitments and Contingent Liabilities to the Consolidated Financial Statements included in Item 8 in this Annual Report on 10-K), could require significant expenditures by us, and there is no assurance that our existing reserves for specific matters will be adequate to cover our future costs. …”see in full comparison
Full comparison: every changed paragraph (260)
Sylvamo faces risks in the normal course of business and through global, regional and local events. In addition to the risks and uncertainties discussed elsewhere in this Annual Report on Form 10-K, including in Item 1. Business, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 1C. Cybersecurity, the following are some important risk factors that we face. The occurrence of any of the following risk factors, or of additional risks and uncertainties not presently known to us or that we currently believe to be immaterial, could cause a material adverse effect on our business, financial condition, results of operations and cash flows. In any such case, the trading price of our common stock could decline. In addition, many of these risks are interrelated and could occur under similar business and economic conditions, and the occurrence of certain of them could in turn cause the emergence or exacerbate the effecteffects of others.
SUMMARY RISK FACTORS
Our business is subject to numerous risks and uncertainties, including those described in “Risk Factors” below. The principal risks and uncertainties affecting our business include the following:
•global and regional economic and political conditions and trade relations;
•physical, financial and reputational risks associated with climate conditions and climate change;
•a public health crisis;
•the fluctuating and cyclical nature of paper and pulp supply and demand that periodically results in declines in prices for paper and pulp;
•changes in the cost or availability of raw materials and energy needed to manufacture our products;
•reduced truck, rail and ocean freight availability;
•industry-wide decline in demand for paper and related products;
•competition from other businesses and consolidation within the paper industry;
•material disruptions at one or more of our manufacturing facilities;
•information technology risks, including risk of cybersecurity breaches;
•extensive laws, regulations and government requirements, including those related to the environment and climate change, including costs of compliance and any liabilities under such laws;
•our reliance on a small number of significant customers;
•the significant capital needed for our operations;
•our failure to attract and retain senior management and other key employees;
•a significant write-down of our goodwill or other intangible assets;
•failure to achieve expected investment returns on pension plan assets or regulatory or other factors affecting the plans’ funded level;
•labor disputes;
•inability to achieve expected benefits from strategic corporate actions;
•inability to protect our intellectual property and other proprietary rights;
•loss of commercial agreements with International Paper;
•failure of transactions in connection with our spin-off from International Paper to qualify for non-recognition treatment for U.S. federal income tax purposes;
•satisfaction of indemnification obligations between us and International Paper;
•our indebtedness having a material adverse effect on our financial condition, or our inability to generate sufficient cash to service our indebtedness;
•future offerings of debt or equity securities senior to our common stock, depressing its price;
•if we do not continue to declare dividends, repurchase shares of our common stock or otherwise return capital to shareholders, shareholders must rely on appreciation in our stock’s value for investment returns;
•future issuances of equity, diluting our outstanding common stock;
•a shareholder’s sale of a substantial number of shares of our common stock, causing its price to decline;
•actions of activist shareholders that cause us to incur costs and adversely affect our stock price; and
•provisions in our certificate of incorporation and bylaws that could hinder a change in control of our company, cause a reduction in the price of our stock and limit the forum for actions against, and the liability of, our directors and officers.
RisksEconomic, RelatingTrade, toPolitical, EconomicCivil and PoliticalEnvironmental Conditions and Other External FactorsRisks
Our business can be adversely affected by global or regional economic, civil, political or trade developments.
OurWe operationsoperate in three primary regions: Europe, Latin America and performanceNorth dependAmerica. significantlyFive onof globalour seven mills are located outside the United States, including three in Brazil, one in France and regionalone economic,in civilSweden. and political conditions and stable trade relations; and adverseAdverse economic, civil or political conditions,developments, whether globally or deterioration in tradeany relations,of these regions, could materiallyhave adverselya affectmaterial adverse effect on our business, financial condition, results of operations and cash flows.
Elevated, persistent global inflation has, and could continue to, increase our operating and input costs. Our ability to increase prices to offset those costs without reducing demand is constrained. Thus, inflation has and could further negatively impact our profitability. If an economic recession were to occur, it could reduce demand for our products, lower our capacity utilization and compress margins. Furthermore, significant inflation or a recession could negatively affect industrial non-durable goods production, consumer spending, commercial printing and advertising activity, white collar employment levels, and overall consumer confidence, which also could reduce demand for our products.
We operate in three primary regions, each of which contributes significantly to our financial performance: Europe, Latin America and North America. Five of the seven mills that we own are located outside the United States: three in Brazil, one in France and one in Sweden. Deterioration of economic, civil or political conditions, either globally or in a region where we operate, could have a material adverse effect on our business, financial condition, results of operations and cash flows. As examples, a recession could reduce demand for our products, impact capacity utilization, and erode our profits; significant inflation could increase our costs, reduce demand for our products if we increase prices, and erode our profits; and an unstable economic environment could disrupt our business strategies and destabilize demand for our products. Such conditions could also generally affect industrial non-durable goods production, consumer spending, commercial printing and advertising activity, white-collar employment levels, and consumer confidence, all of which could impact our costs of operating and demand for our products.
Also, civilCivil or political unrest or conflict,unrest, including military conflict, could hinderhas the supplyability to usdisrupt the availability of, and increase the cost of, materialsraw neededmaterials, forenergy, transportation and other inputs critical to our operations. MilitaryExamples of conflicts and unrest that were ongoing in 2024 could have a material adverse effect on us in the future;past forcaused, example,and ifstill have the potential to cause, these impacts are the war in Ukraine were to spread further in Europe, or if, notwithstanding a recent ceasefire,and armed conflictconflicts (and related security concerns) in and near the Middle East were to spread or Houthis attacks affecting Red Sea shipping were to recommence and increase in severity.East. With respect to these specific conflicts,examples, in 20242025 wethey experienceddid inflationnot inhave transportationa costsmaterial dueadverse impact on us, but they could if they were to shipping disruptions inworsen and aroundspread. the Red Sea that, in turn, resulted in global increases in shipping and container costs and supply chain disruptions. However, weWe believe that, generally, our operations in Europe are at more risk than our operations in Latin America and North Americaelsewhere from the potential expansion of these conflicts, because geographic proximity to such conflicts elevates the risk of transportation network, energy and supply chain disruptions and related price increases.
Other unfavorable economic, political or civil conditions in the three regions where we operate, such as strikes, lack of availability and high cost of credit, and fluctuations in the value of local currency versus the U.S. dollardollar, could adversely affect our costcosts and ability to manufacture and deliver our products to customers, obtain credit on favorable terms,terms and maintain profit margins. Fluctuations in local currencies versus the U.S. dollar impact the translation of our results in Latin America and Europe into U.S. dollars, and, for example, in 2025 had a negative impact on our operating results.
We are exposed to risks from the imposition, expansion or removal of trade protection measures, including tariffs, anti-dumping or countervailing duties, governmental subsidies and tax incentives.
TheTrade impositionpolicies ofthat trade protection measures, such as governmental subsidies and tax benefits, favoringfavor locally produced productscompeting thatproducts, competewithout withproviding ours,comparable butprotection which do not also protectto our products, could haveplace us at a materialcompetitive adversedisadvantage, effectas on our results of operations and business prospects. Conversely,could the removalelimination or reduction of trade protection measures that protectcurrently benefit our products could have a material adverse effect on our results of operations and business prospects.products. For example, our mills in Brazil have historically benefited from Brazil’s policies favoringthat favor Brazilian domestic producers. We cannot guaranteepredict that anywhether such policies will continueremain in effect, whether they will be modified or that we will continue to benefit from existingrepealed, or whether future policies,trade noror canindustrial wepolicies guaranteemay adversely affect us. Any material change in these policies could reduce the competitive position or profitability of our operations in that we will not be harmed by future policies.region.
Increased trade friction between countries or disruptions to existing trade agreements have resulted, and may further result, in the imposition of protective trade measures such as tariffs. Tariffs also could disrupt the cross border flow and availability of raw materials, energy or finished goods, negatively affecting our supply chain and distribution capabilities. As of December 31, 2025, the United States has imposed tariffs on imported goods from various countries. Resulting changes in trade flows have introduced additional competing products into some countries where we sell, putting downward pressure on the pricing of our products. Also, the tariffs have increased, directly or indirectly, the costs of certain equipment and other goods that we purchase for our operations, constrained our ability to import and sell in the United States various products that we produce outside the United States, and caused, and could cause future, volatility in ocean shipping prices as demand for ocean transport increases or decreases in response to the tariffs’ impact on the volume of goods to be transported to and from affected areas. We cannot predict how long these impacts will continue or if new tariffs or other protective trade measures will be introduced in the future. Any new or increased tariffs or other protective trade measures could add to these impacts.
To offset increased costs resulting from tariffs or other protective trade measures, we may implement price increases, cost reductions and operational efficiencies, but we are limited in our ability to mitigate higher costs through price increases without decreasing demand for our products. The ultimate impact of continuing or new tariffs or other protective trade measures on our business is uncertain and depends on a number of factors, including which jurisdictions are affected by the tariffs or other measures, the scope and duration of the measures, the volume and nature of the goods affected, the extent to which we can pass any increased costs on to customers, changes in competitive dynamics resulting from the measures, and whether we obtain any competitive advantage from the measures and such advantage is sufficient to offset any higher costs we incur as a result of the measures.
We are exposed to risks associated with adverse climate and weather conditions and evolving climate-related regulations, obligations and stakeholder expectations.
Climate related physical conditions, including those typically associated with climate change, could disrupt our operations and supply chain and result in financial losses. If average temperatures increase, it may contribute to changes in weather patterns, including precipitation variability and more frequent or severe extreme weather events and natural disasters. Events such as hurricanes, tornadoes, hailstorms, wildfires, floods, droughts, heatwaves, snow, ice storms and lightening strikes could damage or destroy our facilities and other assets, interrupt operations, increase operating and repair costs and adversely affect demand for our products. If any such event were to damage infrastructure at our mills or disrupt water and energy availability, it could cause us reduced throughput, temporary shutdowns or costly repairs. For example, periodic drought conditions in Mogi Guaçu, Brazil have at times in the past reduced water flow needed for our mill operations there. In addition, our mills located near rivers are exposed to the risk of flooding that could significantly damage facilities. If severe enough, any of these types of events could result in a suspension of operations at a mill for an extended period or mill closure.
Our business relies on a steady and reliable supply of timber and other forest-based inputs. Reduced timber availability and quality and poor timber harvesting conditions can be caused by climate-related problems, such as the spread of pests or disease, increased drought, wildfires, altered growing seasons, flooding and other extreme weather. Any reduction in the availability, density or quality of virgin timber fiber could increase manufacturing costs or disrupt operations. For example, in Brazil, our owned and managed forestlands have been producing sub-optimal yields, partly due to weather events, of mature virgin fiber for our operations, and if there were additional adverse weather-related events affecting virgin timber availability in Brazil, it could further increase the costs we have been incurring to replenish trees on such forestlands (and, in the meantime, our costs to source virgin fiber from third parties). Drought conditions in Brazil in 2024 caused weather- and fire- related decreases in the supply of virgin fiber and thus inflated its cost, which inflation continued into 2025. While these events did not have a material impact in 2025, if we become unable to procure wood supplies in Brazil, or third party wood costs significantly elevate, or droughts increase in frequency or severity, then our wood fiber costs in Brazil would further increase. If adequate fiber supply could not be obtained, production at our Brazil mills could be reduced or interrupted.
Energy and fuel are critical to our manufacturing processes, our suppliers’ transportation of materials to us and our transportation of finished products to customers. Climate related disruptions of or constraints on energy and fuel sources could increase their costs, cause shortages or cause delivery disruptions. Such events could increase our manufacturing and logistics costs or require us to curtail or suspend operations.
Severe or unpredictable weather may disrupt our suppliers’ and customers’ operations, impair logistics networks, or reduce end market demand, which could increase our input costs, delay production or reduce sales volumes.
While we maintain disaster preparedness, response and business continuity plans, these measures may not fully mitigate the adverse effects of all climate-related events. Also, we may not be able to offset increased costs resulting from climate-related events through pricing or other measures. Attempts to pass such costs on to customers could reduce demand for our products and adversely affect our competitive position.
We are exposed to risks associated with climate-related regulatory developments. The introduction of carbon taxes or new or more stringent environmental regulations, such as those addressing GHG emissions, energy use or permitting requirements, could increase our compliance, monitoring, reporting or capital expenditure costs (references to “regulations” in these Risk Factors include all governmental and quasi-governmental requirements, including, without limitation, laws, rules, regulations, ordinances, governmental agency requirements and court orders). The scope, timing, and impact of future regulatory developments is uncertain and may vary by jurisdiction. See Item 1. Business – Environmental and Other Regulations for additional information. Compliance with evolving regulations could increase our administrative and compliance costs.
Disruption in existing trade agreements, or increased trade friction between countries, could result in protective measures such as tariffs and anti-dumping and countervailing duties. Protective trade measures could skew markets and disrupt the cross-border flow of globally traded materials needed to make our products and the distribution of our products. For example, tariffs imposed or proposed by the United States on items that we import into the United States could increase our costs for such items. If we were to increase our products’ prices to mitigate the increase in our costs, it could decrease demand for our products. Also, protective trade measures taken by other countries in response to tariffs imposed by the United States could make our exported products more expensive and less desirable to customers in those countries. The impact on us of tariffs imposed or proposed by the United States or other countries is currently uncertain and depends upon various factors, including the extent to which we would import or export the items subject to the tariffs, the impact of the tariffs on the pricing, distribution and availability of items we import, the impact on demand for products that we export, and whether the negative impact on us of any tariffs imposed on products that we import is ameliorated by the positive impact of any competitive advantage conferred on products that we produce and sell within the same country. One of our significant imports into the United States is energy from Canada, and we export products from the United States to various locations globally, including Mexico. Our products sold within the United States compete with similar imported products and may benefit from tariffs imposed by the United States.
We are subject to physical, financial and reputational risks associated with climate conditions and climate change, including the impact of global, regional and local weather conditions, the availability of wood fiber, water and fuel, and the impact of increasing regulatory and investor focus on climate change.
Climate conditions, including those that may be associated with climate change, have the potential to disrupt our business and cause us financial loss. Increases in global average temperatures, which can be caused by increased concentrations of carbon dioxide and other GHGs in the atmosphere, could significantly change weather patterns, including precipitation patterns and growing seasons. An increase in global temperature could also lead to an increase in the frequency and severity of severe weather events and other natural disasters. Changes in weather patterns, severe weather events and other natural disasters pose significant risks for our operations and the operations of our suppliers and customers, including, without limitation, that hurricanes, tornados, hail, fire, extreme precipitation, flooding, snow, ice storms, extreme heatwaves and drought could cause heavy damage to or destruction of our valuable assets and have multiple adverse impacts on our business:
•Decreased productivity of forests, increased frequency and severity of wildfires, heavy rain or drought, inadequate distribution and abundance of tree species, and the spread of disease or insect epidemics in forestlands, could adversely affect timber production and harvesting, thereby reducing the availability to us of, or reducing the density and quality of, the virgin fiber upon which we rely to manufacture our products. Thus, any one or more of these events could significantly increase the costs to manufacture our products and potentially delay or interrupt our manufacturing operations (see “ – Changes in the cost or availability of raw materials and energy used to manufacture our products could have a material adverse effect on our business, financial condition and results of operations”). If occurring in Brazil, such events could further increase the costs that we have been incurring to replenish the trees on our owned and managed Brazil forestlands and to source virgin fiber from third parties for our mills in Brazil, because such forestlands have been producing sub-optimal yields of mature virgin fiber for our operations. Also, as a result of drought in Brazil, in 2024 wildfires burned approximately 1% of our Brazil forestlands. The 2024 wildfires did not have a material impact on us, but if drought and wildfires in Brazil worsen, we could incur further increased costs to source more wood in Brazil from third parties and, if we were unable to source an adequate supply of suitable wood, production at our mills in Brazil could decrease.
•A steady supply of significant volumes of water are necessary to the manufacturing operations at our mills, and weather events interrupting such supply could slow or interrupt our mill operations. For example,as a result of periodic drought conditions in Mogi Guaçu, Brazil, water flow sometimes slows and is interrupted to our mill, slowing operations. Although this has not had a material adverse impact in the past,if there were a severe, extended drought, it could cause production at the mill to be suspended for an unknown period of time. Also, because of the need for a steady supply of water, our mills are located near rivers, exposing them to the risk of floods. A flood at any of our mills could result in severe damage to our assets, require costly repairs and cause the mill to suspend operations.
•Our manufacturing operations rely significantly on a steady supply of energy, and fuel is critical to the transport to us of inputs and the distribution by us of our products. Energy or fuel shortages or delivery disruptions caused by climate-related events, or the transition to a lower-carbon economy, could increase the price of energy needed to manufacture our products, the cost to us of having inputs transported to us, and costs of delivering our products to customers. Disruptions have the potential to cause us to suspend or stop operations until energy or fuel again become available.
•Unpredictable weather patterns or extended periods of severe weather could impact our suppliers and disrupt our supply chain, and thus increase our material costs and potentially delay or stop our operations. They also could impact our customers and result in decreased demand for our products by affected customers.
•Our ability to mitigate the adverse physical impacts of severe weather events and other natural disasters depends in part upon our disaster preparedness and response and business continuity planning, but we cannot guarantee that our disaster preparedness and business continuity planning would adequately mitigate such impacts.
•The introduction of a carbon tax or government mandates to reduce GHG emissions, and more stringent or complex environmental and other permitting requirements, could result in costs to meet such requirements and other additional costs of compliance.
•There is no assurance that we can recover, through increased prices, any increased costs to us of fiber, energy, other materials, manufacturing stoppages or delays, regulatory compliance, or any other factor related to climate conditions or climate change, and if we were to pass these costs on to customers, it could reduce demand for our products.
Management's Discussion & Analysis (MD&A)
Removed heading “Acquisition of Nymölla”
Removed heading “Divestiture of Russian Operations”
Largest changes
(b) Net special items represent income or expenses that are incurred periodically, rather than on a regular basis. Net special items in the periods presented primarily include the impairment of goodwill in our France reporting unit, charges related to the termination of the Georgetown mill offtake agreement, environmental reserves in Brazil, legal fees related to the Brazil Tax Dispute, a loss related to forest fires in Brazil, foreign VAT refunds, transaction and integration costs related to the Nymöllasee in full comparisonacquisition, professional and legal fees related to negotiations resulting in a shareholder cooperation agreement, the impact of the step-up of acquired Nymölla inventory sold during the first quarter of 2023acquisition and certain severance costs related to our salaried workforce.
(a) Net special items represent income or expenses that are incurred periodically, rather than on a regular basis. Net special items in the periods presented primarily include the impairment of goodwill in our France reporting unit, charges related to the termination of the Georgetown mill offtake agreement, environmental reserves in Brazil, legal fees related to the Brazil Tax Dispute, foreign VAT refunds, transaction and integration costs related to the Nymöllasee in full comparisonacquisition, professional and legal fees related to negotiations resulting in a shareholder cooperation agreement, the impact of the step-up of acquired Nymölla inventory sold during the first quarter of 2023acquisition and certain severance costs related to our salaried workforce.
The Company also performed its annual testing of goodwill impairment by applying the quantitative goodwill impairment test to itssee in full comparisonBrazilFrance reporting unit due tothecontinuedlengthchallengingofmarkettimeconditionslapsedinsince the previous quantitative goodwill impairment test.Europe. The Company calculated the estimated fair value of theBrazilFrance reporting unit using aprobability-weightedweighted approach based on discounted future cash flows, market multiples and transactionmultiples.multiples,Asanda result, the Company concludeddetermined thatthe fair valueall of theBrazil reporting unit was substantiallygoodwill inexcesstheofbusiness,carryingtotalingvalue$11andmillion,noshouldgoodwillbeimpairmentwrittencharge was recorded.off.
“During the second quarter of 2022, management committed to a plan to sell the Company’s Russian operations (which were sold on October 2, 2022). As a result, all historical operating results of the Company’s Russian operations have been classified as “Discontinued operations, net of taxes” in the consolidated statements of operations and the notes to the consolidated financial statements. In October 2022, the Company completed the sale of its Russian operations to Pulp Invest Limited Liability Company, a company incorporated in the Russian Federation. …”see in full comparison
“The Company recorded an $11 million impairment charge in 2025 and recorded no goodwill impairment charges in 2024 or 2023.”see in full comparison
Full comparison: every changed paragraph (47)
Full-year 20242025 net income was $132 million ($3.24 per diluted share) compared with $302 million ($7.18 per diluted share) compared with $253 million ($5.93 per diluted share) for 2023.2024. Net sales increaseddecreased to $3.8$3.4 billion in the current year compared with $3.7$3.8 billion in 2023.2024. Cash from continuing operations was $469$268 million in the current year compared to $504$469 million in the prior year. Adjusted EBITDA was $448 million in 2025 compared with $632 million in 2024, which represents an increase of $25 million from the prior year adjusted EBITDA of $607 million.2024. Additionally, our 20242025 adjusted EBITDA margin was 16.8%13% compared to 16.3%17% in the prior year and free cash flow was $248$44 million compared to $294$248 million last year.
Comparing our performance in 20242025 to 2023,2024, higherchallenging industry conditions contributed to lower volumes were driven by stronger demand forof uncoated freesheet across all three of our regions. UnabsorbedPrice and mix were unfavorable in Europe and Latin America but improved in North America. Planned maintenance outages were significantly higher due to two outages in Europe compared with one in the previous year. Europe and North America benefited from lower unabsorbed fixed costs due to reduced economic manufacturing downtime in Europe2025. and North America declined significantly in 2024. These factors, in addition to more favorable inputInput costs and lower planned maintenance outages,operations were partiallyunfavorable offsetin byall lowerof priceour andregions mixcompared andto less favorable operations.2024. We generated solid free cash flow again this year. We generated $248$44 million in free cash flow,flow repaidthis $154 million in debt,year and returned $130$155 million in cash to shareholders.shareowners. Additionally,We wealso reinvested $221$224 million across our manufacturing network and our Brazil forestlands to strengthen our low-cost position. We also accelerated the development of high-return capital project investments.
Looking ahead, 2026 will be a transition year for North America as we work through short-term capacity constraints with the Riverdale supply agreement exit and the execution of investments at our Eastover mill. We are prioritizing strategic projects with the fastest payback so that 2027 and beyond reflects lower costs, higher efficiency, and stronger cash conversion potential. We strive to create long-term shareowner value by executing our strategy and delivering on our investment thesis. Keeping a strong financial position is the cornerstone of our capital allocation framework. This allows us to reinvest in our business to strengthen our competitive advantages through the cycle and to increase future earnings and cash flow.
Looking ahead to 2025, we remain committed to generating strong adjusted EBITDA and free cash flow while returning cash to shareowners. Our financial results for the three full years since spin-off have established a solid track record and are indicative of our ability to navigate industry conditions, geopolitical events and other uncertainty that we may face. We are confident in our ability to continue to create value for our customers and shareowners.
Acquisition of Nymölla
On January 2, 2023, the Company completed the previously announced acquisition of Stora Enso’s uncoated freesheet paper mill in Nymölla, Sweden. Sylvamo accounted for the acquisition under ASC 805, “Business Combinations” and the Nymölla mill’s results of operations are included in Sylvamo’s consolidated financial statements from the date of acquisition. See Note 7 Acquisitions to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.
Divestiture of Russian Operations
During the second quarter of 2022, management committed to a plan to sell the Company’s Russian operations (which were sold on October 2, 2022). As a result, all historical operating results of the Company’s Russian operations have been classified as “Discontinued operations, net of taxes” in the consolidated statements of operations and the notes to the consolidated financial statements. In October 2022, the Company completed the sale of its Russian operations to Pulp Invest Limited Liability Company, a company incorporated in the Russian Federation. See Note 8 Divestiture and Impairment of Business to our financial statements included elsewhere in this Annual Report on Form 10-K for further details.
Our Europe segment produces a broad portfolio of uncoated freesheet papers for numerous uses and applications, and market pulp. We operate two integrated mills in the region, one in Saillat, France and one in Nymölla, Sweden. Located in the Limousin region of France, the Company’s Saillat mill produces both paper and market pulp. It is the only mill in France to cover the entire production process from wood harvesting to paper, and is one of the leading cutsize producers in France and Western Europe. The Saillat mill produces UFS papers, such as copy paper, and value-added products such as tinted paper and colored laser printing paper under leading brands such as REYREY. AdagioIn 2025, we made investments in our finished roll production capabilities to improve our product mix and Pro-Design. We also produceallow us to enhance our business in graphic and high-speed inkjet printing papers under the brand Jetstar.Berga. The Saillat mill has some of the highest environmental credentials for our products. In January 2023, the Company acquired a paper mill in Nymölla, Sweden. The integrated mill has two pulp lines and the capacity to produce approximately 500,000 short tons of uncoated freesheet on two paper machines. The mill produces several brands, including Multicopy, and paper used for office printing, business forms, digital printing, offset for printing books and much more. The Nymölla mill has an excellent environmental footprint, which complements Sylvamo’s purpose to produce paper in the most responsible and sustainable ways.
Our Latin American operationssegment focusfocuses on uncoated freesheet paper and market pulp, supported by the management of approximately 250,000 acres of certified eucalyptus forestlands in Brazil. With a total uncoated freesheet paper capacity exceeding 1.1 million short tons, our three mills in Brazil serve both regional and international markets, being a key supplier in Latin America and a solid global exporter, reaching customers in over 130 countries.worldwide. Our portfolio includes market-leading brands such as Chamex and Chamequinho copy papers, widely recognized by consumers and distribution channels for their superior quality. Additionally, Chambril offset papers are trusted by printers and converters for their versatility and reliability across various applications. Chambril is available in a wide range of basis weights and specifications to meet the demands of books, notebooks, inserts, leaflets, and industrial end-use requirements. All the products are primarily made from sustainably sourced eucalyptus, which is cultivated and harvested in less than seven years. Latin America operations combine sustainable forestry practices, operational excellence, strong brands and global distribution network.
TheOur North American paper businesssegment manufactures uncoated freesheet papers at its mills in Eastover, South Carolina and Ticonderoga, New York and has an offtake agreement to purchase the uncoated papers produced by International Paper’s Riverdale mill in Selma, Alabama. This offtake agreement is expected to terminate in May 2026. The North American papers business comprises three product lines, Imaging Papers, Commercial Printing Papers and Converting Papers. The imaging papers business, which comprises roughly half of the North American segment’s volume, produces copy paper for use in copiers, desktop and laser printers and digital imaging. These products are important for office use, home office use and in businesses such as education, healthcare and financial services. The commercial printing business comprises about 13%17% of the North American segment’s volume, and end-use applications in the commercial printing business include advertising and promotional materials such as brochures, pamphlets, greeting cards, books, annual reports and direct mail. The converting business manufactures a variety of grades that are converted by our customers into envelopes, tablets, business forms, file folders and several specialty grades. Uncoated papers are sold under private label and brand names that include Hammermill®, Springhill®, Williamsburg, Accent®, DRM® and Postmark®.
Uncoated papers are sold under private label and brand names that include Hammermill®, Springhill®, Williamsburg, Accent®, DRM® and Postmark®.
(a) We define business segment operating profit as our income from continuing operations before income taxes calculated in accordance with GAAP, excluding net interest expense (income), foreign exchange on a note receivable from our Brazilian subsidiary and net special items. We believe that business segment operating profit is an important indicator of operating performance as it 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.
(b) Net special items represent income or expenses that are incurred periodically, rather than on a regular basis. Net special items in the periods presented primarily include the impairment of goodwill in our France reporting unit, charges related to the termination of the Georgetown mill offtake agreement, environmental reserves in Brazil, legal fees related to the Brazil Tax Dispute, a loss related to forest fires in Brazil, foreign VAT refunds, transaction and integration costs related to the Nymölla acquisition, professional and legal fees related to negotiations resulting in a shareholder cooperation agreement, the impact of the step-up of acquired Nymölla inventory sold during the first quarter of 2023acquisition and certain severance costs related to our salaried workforce.
For the year ended December 31, 2024,2025, our Europe segment sales decreased $20$60 million compared to the same period in 2023,2024, primarily due to lower sales price and mix ($58$74 million) whichand more than offset higherlower volumes ($39$28 million)., partially offset by significant favorable foreign exchange impacts.
Europe operating profit for the year ended December 31, 20242025 was $35$122 million higherlower than the same period in 20232024 as lower sales price and mix ($73 million), higher planned maintenance outages ($26$39 million), higher operating costs ($16 million) and higher input costs ($8 million), primarily for wood, more than offset lower unabsorbed costs due to economic downtime ($27$10 million), lower operating costs ($11 million), lower input costs ($16 million), primarily for chemicals, and higher volumes ($13 million) more than offset the impact of lower sales price and mix ($58$4 million).
For the year ended December 31, 2024,2025, our Latin America segment sales decreased $32$70 million compared to the same period in 2023,2024, primarily driven by lower sales price and mix ($35$27 million), lower volumes ($36 million) and significant unfavorable foreign exchange impacts which were partially offset by higher volumes ($39 million).impacts.
Operating profit for Latin America for the year ended December 31, 20242025 was $47$50 million lower than the same period in 2023,2024, primarily driven by the impact of lower sales price and mix ($34$26 million), higher operating costs ($18$24 million) and, higher planned maintenance outages ($3 million) and lower volumes ($9 million) which more than offset higher volumes ($9 million) and lower input costs,costs ($12 million), primarily for chemicalsenergy, pulp and pulpdistribution ($5 million).costs.
For the year ended December 31, 2024,2025, our North America segment sales increaseddecreased $78$275 million, compared to the same period in 2023, primarily2024, driven by higherlower volumes ($145$292 million) primarily due to the termination of the Georgetown mill offtake agreement which more than offset lowerhigher sales price and mix ($68$19 million).
Operating profit for North America for the year ended December 31, 20242025 was $24$30 million higherlower than the same period in 20232024 as lower volumes ($71 million) and higher volumeinput costs ($45$21 million), primarily for energy and chemicals, more than offset lower unabsorbed costs due to economic downtime ($56 million) and lower input costs, primarily for chemicals, wood and distribution ($20$26 million), more than offset lowerhigher sales price and mix ($68$19 million), higherlower operating costs ($28$12 million) and slightly higherlower planned maintenance outages ($1$5 million).
(a) Net special items represent income or expenses that are incurred periodically, rather than on a regular basis. Net special items in the periods presented primarily include the impairment of goodwill in our France reporting unit, charges related to the termination of the Georgetown mill offtake agreement, environmental reserves in Brazil, legal fees related to the Brazil Tax Dispute, foreign VAT refunds, transaction and integration costs related to the Nymölla acquisition, professional and legal fees related to negotiations resulting in a shareholder cooperation agreement, the impact of the step-up of acquired Nymölla inventory sold during the first quarter of 2023acquisition and certain severance costs related to our salaried workforce.
(b) We define Adjusted EBITDA (non-GAAP) as net income (GAAP) excluding discontinued operations,, net of taxes plus the sum of income taxes, net interest expense (income), depreciation, amortization and cost of timber harvested, stock-based compensation, foreign exchange on a note receivable from our Brazilian subsidiary, and, when applicable for the periods reported, special items.
Free cash flow is a non-GAAP measure and the most directly comparable GAAP measure is cash provided by operating activities from continuing operations.activities. Management 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 shareholders.shareowners. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. By adjusting for certain items that are not indicative of the Company’s ongoing performance, free cash flow also enables investors to perform meaningful comparisons between past and present periods.
The following are reconciliations of cash provided by operating activities from continuing operations to free cash flow:
A major factor in our liquidity and capital resource planning is our generation of operating cash flow, which is highly sensitive to changes in the pricing and demand for our products. While changes in key operating cash costs, such as raw materials, energy, mill outages and distribution expenses do have an effect on operating cash generation, we believe that our focus on commercial and operational excellence, as well as our ability to manage costs and working capital, will provide sufficient cash flow generation.generation to meet our operational and capital spending needs.
Cash provided by operating activities fromtotaled continuing$268 operationsmillion totaledfor the year ended December 31, 2025, compared with cash provided by operating activities of $469 million for the year ended December 31, 2024, compared with cash provided by operating activities from continuing operations of $504 million for the year ended December 31, 2023.2024. The decrease in cash provided by operating activities from continuing operations in 20242025 relates primarily to changeslower innet income and timing of cash flows related to working capital which was partially offset by higher net income.capital.
Cash used for working capital components (accounts and notes receivable, inventories, accounts payable and accrued liabilities, and other) was $79 million for the year ended December 31, 2025, compared with cash used for working capital components of $8 million for the year ended December 31, 2024, compared with cash provided by working capital components of $85 million for the year ended December 31, 2023.2024. Working capital components for the year ended December 31, 2024 primarily2025 reflect $47 million of cash used for accounts and notes receivable and $28 million cash used for other operating activities. This activity was offset by $25 million of cash provided by inventories and $42$33 million of cash provided by accounts and notes receivable. This activity was offset by $14 million, $52 million and $46 million of cash used for inventories, accounts payable and accrued liabilities.liabilities, and other operating activities, respectively.
The total cash outflow from investing activities from continuing operations for the year ended December 31, 20242025 decreasedincreased from the year ended December 31, 2023, primarily2024, due to theincreased purchasecapital of the Nymölla mill which occurred in the prior year.spending.
The following table shows capital spending by our business segment,segments whichand represents the most significant portion of our recurring investment activities.corporate:
Cash used for financing activities from continuing operations for the year ended December 31, 2024 primarily reflects the payments of $218 million, $49 million, $35 million, $10 million, and $3 million on our outstanding principal debt balances for Term Loan F, Term Loan A, the AR Securitization, Revolving Credit Facility, and Term Loan F-2, respectively. Additionally, payments of $93 million were made to redeem, at a premium, the full value of our 7.00% Senior Notes and pay $5 million in debt issuance costs in connection with the debt refinancing in the third quarter of 2024. These amounts are primarily offset by the issuance of Term Loan F-2, draws on our Revolving Credit Facility, and AR Securitization of $235 million, $10 million, and $6 million, respectively. During the year ended December 31, 2024, the Company also paid $62 million in dividends and paid $69 million to repurchase shares pursuant to our share repurchase program.
Cash used for financing activities from continuing operations for the year ended December 31, 20232025 primarily reflects the payments of $70$11 million, $36$45 million, $26$111 million, and $31$12 million on our outstanding principal debt balances for Term Loan A, the AR Securitization, Revolving Credit Facility, AR Securitization, Term Loan F, and Term Loan A,F-2, respectively. Additionally, $360 million was paid to bond holders as part of our tender offer. These amounts are primarily offset by the issuance of Term Loan A, draws on our Revolving Credit Facility,Facility and AR Securitization of $300$178 million, $70 million,million and $78$47 million, respectively. During the year ended December 31, 2023,2025, the Company also paid $57$73 million in dividends and paid $70$82 million to repurchase shares pursuant to our share repurchase program.
Cash used for financing activities for the year ended December 31, 2024 primarily reflects the payments of $218 million, $49 million, $35 million, $10 million, and $3 million on our outstanding principal debt balances for Term Loan F, Term Loan A, the AR Securitization, Revolving Credit Facility, and Term Loan F-2, respectively. Additionally, payments of $93 million were made to redeem, at a premium, the full value of our 7.00% Senior Notes and pay $5 million in debt issuance costs in connection with the debt refinancing in the third quarter of 2024. These amounts are primarily offset by the issuance of Term Loan F-2, draws on our Revolving Credit Facility, and AR Securitization of $235 million, $10 million, and $6 million, respectively. During the year ended December 31, 2024, the Company also paid $62 million in dividends and paid $69 million to repurchase shares pursuant to our share repurchase program.
Contractual obligations for future payments at December 31, 20242025 primarily relate to lease commitments, raw material purchase obligations and principal debt payments. Operating and financing leases represent minimum required lease payments during the noncancelable lease term. Most real estate leases also require payment of related operating expenses such as taxes, insurance, utilities, and maintenance, which are not included in our estimated capital lease obligation. Our total estimated finance lease obligations total $2$27 million in 2025,2026, an average of $2$11 million from 20252027 to 20292031 and $7$11 million thereafter.
Purchase obligations for commercial commitments include inventory obligations to purchase raw materials, including starch, electricity, fuel oil, corrugated boxes, wood and Precipitated Calcium Carbonate (“PCC”). Our total estimated commercial commitments include $305 million in 2025, $168 million in 2026 and average $58 million annually from 2027 to 2029, with $109 million thereafter.
At December 31, 2024,2025, contractual obligations for future payments of long-term debt maturities (including finance lease liabilities disclosed in Note 10 Leases) by calendar year were as follows: 2025 - $22 million; 2026 - $25$20 million; 2027 - $370 million; 2028 - $25$23 million; 2029 - $191$189 million; 2030 - $12 million; thereafter - $180$161 million. In addition, at December 31, 2025 there is an outstanding balance of $67 million related to a cash flow-based revolving credit facility which matures in 2029.
Purchase obligations for commercial commitments include inventory obligations to purchase raw materials, including starch, electricity, fuel oil, corrugated boxes, wood and Precipitated Calcium Carbonate (“PCC”). Our total estimated commercial commitments include $406 million in 2026, $175 million in 2027 and average $35 million annually from 2028 to 2030, with $172 million thereafter.
For the year ended December 31, 2024,2025, we have invested approximately $221$224 million, or 5.9%6.7% of net sales in total capital expenditures. Of that amount, we spent approximately $195$162 million, or 5.2%4.8% of net sales, on maintenance, regulatory and reforestation capital expenditures, and approximately $27$62 million, or 0.7%1.9% of net sales, on high-return capital projects. Our annual maintenance, regulatory and reforestation capital expenditures are expected to be in the range of approximately $175$165 to $190 million per year (before inflation) for the next several years, which we believe will be sufficient to maintain our operations and productivity. In addition, we expect to invest approximately $50 to $70$95 million in high-return projects in 2025.2026.
The OECD Pillar Two global minimum tax rules have been enacted in numerous jurisdictions in which the Group operates, with effective dates beginning January 1, 2024 and continuing through 2025. Management has assessed the potential impact of the rules on the Group’s 2025 tax obligations. Based on currently available information, no material top‑up tax liabilities are expected for the year ended December 31, 2025. However, the Group continues to monitor evolving administrative guidance and data requirements, which may affect future reporting periods.
The Organization for Economic Co-Operation and Development (“OECD”) has been working on a project to act to prevent what it refers to as base erosion and profit shifting (“BEPS”). Most recently, the OECD, through an association of almost 140 countries known as the “inclusive framework,” has announced a consensus to address, among other things, perceived challenges presented by global digital commerce (“Pillar 1”) and the perceived need for a minimum global effective tax rate of 15% (“Pillar 2”). On December 15, 2022, the European Union formally adopted the Pillar Two Directive, and a majority of EU member states have enacted the directive into domestic law as of December 31, 2023. Other countries are taking similar actions. We have evaluated the developments and do not anticipate any material impact on our financial position, results of operations, or cash flows.
An impairment of a long-lived asset exists when thean asset’sasset group’s carrying amount exceeds its fair value and is recorded when the carrying amount is not recoverable through undiscounted cash flows from future operations or disposals. A goodwill impairment exists when the carrying amount of a reporting unit with goodwill exceeds its fair value. Assessments of possible impairments of long-lived assets and goodwill are made when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable or may, if a business is classified as held for sale, exceed the sales price less costs to dispose. Additionally, evaluation for possible impairment of goodwill is required annually. The amount and timing of any impairment charges based on these assessments may require the estimation of future cash flows or the fair market value of the related assets based on management’s best estimates of certain key factors, including future selling prices and volumes, operating, raw material, energy and freight costs, various other projected operating economic factors and other intended uses of the assets. As these key factors change in future periods, the Company will update its impairment analysis to reflect its latest estimates and projections.
The Company performed its annual testing of goodwill impairment by applying the qualitative assessment to its FranceBrazil reporting unit as of October 1, 2024.2025. For the current year evaluation, the Company assessed various assumptions, events and circumstances that would have affected the estimated fair value of the reporting unit under the qualitative assessment. The results of the qualitative assessment indicated that it is not more likely than not that the fair valuesvalue of its FranceBrazil reporting unit was less than its carrying value.
The Company also performed its annual testing of goodwill impairment by applying the quantitative goodwill impairment test to its BrazilFrance reporting unit due to thecontinued lengthchallenging ofmarket timeconditions lapsedin since the previous quantitative goodwill impairment test.Europe. The Company calculated the estimated fair value of the BrazilFrance reporting unit using a probability-weightedweighted approach based on discounted future cash flows, market multiples and transaction multiples.multiples, Asand a result, the Company concludeddetermined that the fair valueall of the Brazil reporting unit was substantiallygoodwill in excessthe ofbusiness, carryingtotaling value$11 andmillion, noshould goodwillbe impairmentwritten charge was recorded.off.
In addition, the Company considered whether there were any events or circumstances outside of the annual evaluation that would reduce the fair value of its reporting units with goodwill below their carrying amounts and necessitate aan interim goodwill impairment evaluation. In consideration of all relevant factors, there were no indicators that would require goodwill impairment subsequent to October 1, 2024.2025.
The Company recorded an $11 million impairment charge in 2025 and recorded no goodwill impairment charges in 2024 or 2023.
No goodwill impairment charges were recorded in 2024, 2023 or 2022.
Sylvamo is subject to interest rate risk in connection with the issuance of debt. Our exposure to interest rate risk arises primarily from changes in SOFR. As of December 31, 2025, Sylvamo had floating rate debt of $842 million comprised of Term Loan F, Term Loan F-2, Term Loan A and amounts drawn on the Securitization Program and Revolving Credit Facility, which is partially offset by $428 million of interest rate swaps. At December 31, 2025, the applicable one-month SOFR rate was 3.72%. Based on the amounts outstanding, a 100-basis point increase in market interest rates would result in a change to annual interest expense, including the impact of the swaps, of approximately $4 million at December 31, 2025. As of December 31, 2024, Sylvamo had floating rate debt of $796 million comprised of Term Loan F, Term Loan F-2,F-2 and Term Loan A and amounts drawn on the Securitization Program, which is partially offset by $652 million of interest rate swaps. At December 31, 2024, the applicable one-month SOFR rate was 4.36%. Based on the amounts outstanding, a 100-basis point increase in market interest rates would result in a change to annual interest expense, including the impact of the swaps,expense of approximately $1 million at December 31, 2024. As of December 31, 2023, Sylvamo had floating rate debt of $859 million comprised of Term Loan F, Term Loan A and amounts drawn on the Securitization Program, which is partially offset by $469 million of interest rate swaps. At December 31, 2023, the applicable one-month SOFR rate was 5.36%. Based on the amounts outstanding, a 100-basis point increase in market interest rates would result in a change to annual interest expense of approximately $4 million at December 31, 2023. For more information about our term loans, Revolving Credit Facility, and Securitization Program see Note 1412 Long-Term Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The Company transacts business in many currencies and is also subject to currency exchange rate risk through investments and businesses owned and operated outside the United States. Our objective in managing the associated foreign currency risks is to minimize the effect of exchange rate fluctuations on our after-tax cash flows. We address these risks on a limited basis by entering into cross-currency interest rate swaps or foreign exchange contracts. At December 31, 20242025 and 20232024 the net fair value of financial instruments with exposure to foreign currency risk was approximately a $14$0 million liabilityasset and a $6$14 million asset,liability, respectively. The potential loss in fair value for such financial instruments from a 10% adverse change in quoted foreign currency exchange rates would have been approximately $14$9 million and $12$14 million at December 31, 20242025 and 2023,2024, respectively.
What changed in the latest 10-Q
Risk Factors
The risk factors that affect our business and financial results are set forth under Part I, Item 1A, “Risk Factors,” in our 2025 Form 10-K. There have been no material changes to the risk factors described in the 2025 Form 10-K. The risk factors in Item 1A. Risk Factors in the 2025 Form 10-K and the risks described in this Form 10-Q or our other SEC filings could cause our actual results to differ materially from those stated in any forward-looking statements.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “RESULTS OF OPERATIONS”
New heading “Cost of Products Sold”
New heading “Selling and Administrative Expenses”
New heading “Depreciation, Amortization and Cost of Timber Harvested”
New heading “Taxes Other Than Payroll and Income Taxes”
New heading “Interest Expense, Net”
New heading “Income Tax Provision”
New heading “Cost of Products Sold”
New heading “Selling and Administrative Expenses”
New heading “Depreciation, Amortization and Cost of Timber Harvested”
New heading “Taxes Other Than Payroll and Income Taxes”
New heading “Interest Expense, Net”
New heading “Reconciliation of Net Income (Loss) to Business Segment Operating Profit”
New heading “(a) Business Segment Operating Profit (Loss) (non-GAAP) is net income (loss) (GAAP) plus the sum of income taxes, net interest expense, the impact of foreign exchange on an intercompany note receivable from our Brazilian subsidiary, and, when applicable for the periods reported, net special items.”
New heading “(b) See Note 15 Financial Information by Business Segment for effects of net special items expense (income).”
New heading “Reconciliation of Net Income (Loss) to Adjusted EBITDA”
New heading “(b) See Note 15 Financial Information by Business Segment for effects of net special items expense (income).”
Removed heading “(a) We define business segment operating profit (loss) as our income (loss) before income taxes calculated in accordance with GAAP, excluding net interest expense, the impact of foreign exchange on a note receivable from our Brazilian subsidiary and net special items. We believe that business segment operating profit (loss) is an important indicator of operating performance as it 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.”
Removed heading “(b) Net special items represent income or expenses that are incurred periodically, rather than on a regular basis. Net special items in the periods presented primarily include charges related to the termination of the Georgetown mill offtake agreement, environmental reserves in Brazil and other charges.”
Removed heading “(a) Net special items represent income or expenses that are incurred periodically, rather than on a regular basis. Net special items in the periods presented primarily include charges related to the termination of the Georgetown mill offtake agreement, environmental reserves in Brazil and other charges.”
Largest changes
“(a) We define business segment operating profit (loss) as our income (loss) before income taxes calculated in accordance with GAAP, excluding net interest expense, the impact of foreign exchange on a note receivable from our Brazilian subsidiary and net special items. We believe that business segment operating profit (loss) is an important indicator of operating performance as it 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.”see in full comparison
“(b) Net special items represent income or expenses that are incurred periodically, rather than on a regular basis. Net special items in the periods presented primarily include charges related to the termination of the Georgetown mill offtake agreement, environmental reserves in Brazil and other charges.”see in full comparison
“(a) Net special items represent income or expenses that are incurred periodically, rather than on a regular basis. Net special items in the periods presented primarily include charges related to the termination of the Georgetown mill offtake agreement, environmental reserves in Brazil and other charges.”see in full comparison
“(a) Business Segment Operating Profit (Loss) (non-GAAP) is net income (loss) (GAAP) plus the sum of income taxes, net interest expense, the impact of foreign exchange on an intercompany note receivable from our Brazilian subsidiary, and, when applicable for the periods reported, net special items.”see in full comparison
“(b) See Note 15 Financial Information by Business Segment for effects of net special items expense (income).”see in full comparison
“(b) See Note 15 Financial Information by Business Segment for effects of net special items expense (income).”see in full comparison
Full comparison: every changed paragraph (77)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included in “Financial Information” of this Quarterly Report on Form 10-Q (this “Form 10-Q”) and the Company’s Form 10-K for the three years ended December 31, 2025, 2024 and 2023. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those stated and implied in any forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Form 10-Q and in our 2025 Form 10-K, particularly under the headings “Risk Factors” and “Forward-Looking Statements.”
FirstSecond quarter 2026 net loss was $3$11 million ($0.08$0.28 per diluted share) compared with net income of $27$15 million ($0.65$0.37 per diluted share) for the firstsecond quarter of 2025. Net sales were $755$806 million in the current quarter compared with $821$794 million in the prior year. Cash usedprovided forby operationsoperating activities was $10$38 million compared to cash provided by operations of $23$64 million in the firstsecond quarter of last year. Adjusted EBITDA was $29$60 million and our adjusted EBITDA margin was 4% compared to $90$82 million and an adjusted EBITDA margin of 11% in the firstsecond quarter of 2025. Free cash flow was $(5923) million compared to $(252) million in the firstsecond quarter of 2025.
2026 is a transition year as we work through some short-term capacity constraints resulting from the termination of the Riverdale supply agreement at the end of April and the extended outage at Eastover later this year as we execute our strategic investments. Comparing our performance in the firstsecond quarter of 2026 to the prior year, volume decreased, primarily due to lower North America volume as we build inventory in response towith the endtermination of the Riverdale mill supply agreement and as we build inventory in response to the extended Eastover mill outage later in the year. Price and mix decreased primarilyin Europe but were partially offset by improved price and mix in Europe.North America. Operations and costs and input costs were unfavorable. Planned maintenance outage costs were lower as the prior year outage in our Saillat mill did not repeat.repeat and the current year outage in our Nymölla mill will take place during the fourth quarter. We continued to return cash to shareowners through an $18 million dividend payment during the quarter.
2026 is a transition year as we navigate the termination of the Riverdale supply agreement at the end of April and the extended Eastover outage later this year as we execute our strategic investments. We expect this North America footprint transition to have an unfavorable $85 million impact on full year 2026 Adjusted EBITDA. Our Eastover strategic investments, including our woodyard modernization and paper machine optimization, and new sheeter continue to make good progress. These investments will result in 60,000 additional tons of uncoated freesheet capacity annually, which will start to ramp up early next year. The benefits include reducing costs and improving our mix and efficiency, while enhancing service for our customers. We anticipate an incremental annual benefit of $50 million to Adjusted EBITDA from the paper machine speed-up and the new sheeter, including an estimated $30 million to $40 million benefit in 2027.
This has been a very dynamic year where we continue to adapt to changing conditions while executing the initiatives within our control. We remain focused on generating strong, sustainable results and creating long-term value through disciplined, data-driven decision-making that strengthens Sylvamo for decades to come.
RESULTS OF OPERATIONS
The following summarizes our results of operations for the periods presented:
Net Sales
Net sales for the three months ended June 30, 2026 increased by $12 million compared to the same period in 2025. The increase was primarily due to favorable foreign exchange impact ($17 million) partially offset by lower sales price and mix ($7 million). Additional information on sales by business segment, excluding inter-segment eliminations, is provided in the section titled Business Segment Results.
Cost of Products Sold
Cost of products sold for the three months ended June 30, 2026 increased by $34 million compared to the same period in 2025. The increase was primarily driven by higher input costs, mainly related to distribution, fiber and energy costs ($23 million), unfavorable foreign exchange, operating and cost impacts ($29 million) and volume impacts ($8 million). These increases were partially offset due to lower planned maintenance outage costs ($25 million) and a favorable impact from foreign exchange on an intercompany note receivable from our Brazilian subsidiary ($1 million).
Selling and Administrative Expenses
Selling and administrative expenses for the three months ended June 30, 2026 decreased by $3 million compared to the same period in 2025. The decrease was primarily due to lower incentive compensation expense partially offset by the net impact of certain special items, including professional and legal fees ($4 million).
Depreciation, Amortization and Cost of Timber Harvested
Depreciation, amortization and cost of timber harvested for the three months ended June 30, 2026 decreased by $2 million compared to the same period in 2025 primarily due to lower timber depletion expense.
Taxes Other Than Payroll and Income Taxes
Taxes other than income taxes of $8 million for the three months ended June 30, 2026 was relatively consistent compared to $7 million in the same period in 2025.
Interest Expense, Net
Interest expense, net for the three months ended June 30, 2026 increased by $1 million compared to the same period in 2025. This is primarily due to debt extinguishment costs ($2 million) and higher interest expense which were offset by higher interest income and the capitalization of interest costs for construction projects.
Income Tax Provision
Income tax provision for the three months ended June 30, 2026 increased by $7 million compared to the same period in 2025. This is primarily due to additional tax expense related to a change in valuation allowances for certain foreign deferred tax assets ($12 million) partially offset by lower tax expense resulting from lower pre-tax income.
Net Sales
Net sales for the six months ended June 30, 2026 decreased by $54 million compared to the same period in 2025. The change was primarily attributable to lower sales volume ($63 million) and sales price and mix ($37 million) partially offset by favorable foreign exchange impacts ($46 million). Additional information on sales by business segment, excluding inter-segment eliminations, is provided in the section titled Business Segment Results.
Cost of Products Sold
Cost of products sold for the six months ended June 30, 2026 increased by $2 million compared to the same period in 2025. The change was primarily driven by higher input costs ($39 million), mainly related to distribution and energy costs, and unfavorable foreign exchange, operating and cost impacts ($60 million). These increases were largely offset by volume impacts ($39 million), lower planned maintenance outage costs ($35 million), a favorable impact from foreign exchange on an intercompany note receivable from our Brazilian subsidiary ($20 million) and lower unabsorbed costs due to economic downtime ($3 million).
Selling and Administrative Expenses
Selling and administrative expenses for the six months ended June 30, 2026 decreased by $3 million compared to the same period in 2025. The change was primarily the result of lower incentive compensation expense partially offset by the net impact of certain special items, including professional and legal fees ($4 million).
Depreciation, Amortization and Cost of Timber Harvested
Depreciation, amortization and cost of timber harvested for the six months ended June 30, 2026 decreased by $1 million compared to the same period in 2025 primarily due to lower timber depletion.
Taxes Other Than Payroll and Income Taxes
Taxes other than payroll and income taxes for the six months ended June 30, 2026 increased by $5 million compared to the same period in 2025 primarily related to higher energy taxes in Europe.
Interest Expense, Net
Interest expense, net for the six months ended June 30, 2026 increased by $1 million compared to the same period in 2025. This is primarily due to debt extinguishment costs ($2 million) and higher interest expense which were offset by higher interest income and the capitalization of interest costs for construction projects.
Income Taxes
Income tax provision for the six months ended June 30, 2026 decreased by $2 million compared to the same period in 2025. The change is primarily attributable to lower tax expense resulting from lower pre-tax income partially offset by additional tax expense related to a change in valuation allowances for certain foreign deferred tax assets ($12 million).
Our high-return strategic investments at our Eastover mill are on track and making solid progress. These projects will generate incremental earnings and cash flow over the long term. On May 7, 2026, we completed the refinancing of our accounts receivable securitization facility and Term Loan F to extend our debt maturity profile in order to sustain flexibility and maintain a strong financial position. With a strong financial position we can navigate geopolitical and economic challenges and focus on improving our customer experience, continue reinvesting in low-risk, high-return projects as well as execute through the end of the Riverdale supply and the Eastover mill outage later this year.
Reconciliation of Net Income (Loss) to Business Segment Operating Profit
Management provides business segment operating profit, a non-GAAP financial measure, to supplement our GAAP financial information, and it should be considered in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Management believes that business segment operating profit provides investors and analysts useful insights into our operating performance. Business segment operating profit is reconciled to net income (loss), the most directly comparable GAAP measure.
(a) Business Segment Operating Profit (Loss) (non-GAAP) is net income (loss) (GAAP) plus the sum of income taxes, net interest expense, the impact of foreign exchange on an intercompany note receivable from our Brazilian subsidiary, and, when applicable for the periods reported, net special items.
(b) See Note 15 Financial Information by Business Segment for effects of net special items expense (income).
Management provides business segment operating profit, a non-GAAP financial measure, to supplement our GAAP financial information, and it should be considered in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Management believes that business segment operating profit provides investors and analysts useful insights into our operating performance. Business segment operating profit is reconciled to Income (loss) before income taxes, the most directly comparable GAAP measure. Business segment operating profit may be determined or calculated differently by other companies and therefore may not be comparable among companies.
The following table presents a comparison of Income (loss) before taxes to business segment operating profit:
(a) We define business segment operating profit (loss) as our income (loss) before income taxes calculated in accordance with GAAP, excluding net interest expense, the impact of foreign exchange on a note receivable from our Brazilian subsidiary and net special items. We believe that business segment operating profit (loss) is an important indicator of operating performance as it 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.
(b) Net special items represent income or expenses that are incurred periodically, rather than on a regular basis. Net special items in the periods presented primarily include charges related to the termination of the Georgetown mill offtake agreement, environmental reserves in Brazil and other charges.
The following tables present netsales, salesexcluding inter-segment eliminations, and operating profit (loss), which is the Company’s measure of business segment profitability, for each of the Company’s segments. See Note 15 Financial Information by Business Segment for more information on the Company’s segments.
Our Europe business segment sales were consistent with the same period in 2025, primarily due to lower sales price and mix ($16 million) and lower volumes ($4 million) which were offset by favorable foreign exchange ($20 million).
Europe operating losses were $20 million higher than the same period in 2025, primarily driven by lower sales price and mix ($16 million), lower volumes ($3 million) and higher operating ($9 million) and input costs ($4 million), primarily for energy, which more than offset lower planned maintenance outages ($12 million).
Our Latin America business segment sales decreased $12 million compared to the same period in 2025, primarily driven by lower sales price and mix ($8 million) and lower volumes ($13 million), partially offset by favorable foreign exchange ($9 million).
Operating profit for Latin America was $22 million lower than the same period in 2025, primarily due to lower sales price and mix ($8 million), higher operating costs ($11 million), lower volumes ($3 million) and higher planned maintenance outages ($2 million) which more than offset lower input costs ($2 million), primarily for purchased fiber.
Our North AmericaEurope business segment sales decreasedincreased $48by $16 million compared to the same period in 2025, primarily due to higher volumes ($25 million) and favorable foreign exchange ($5 million) which were partially offset by lower sales price and mix ($6 million) and lower volumes ($42$14 million).
OperatingEurope profitoperating forlosses Northwere America was $17$18 million lower than the same period in 2025, primarily duedriven toby lower planned maintenance outages ($25 million), lower operating costs ($8 million) and slightly higher volumes ($12$1 million), which were partially offset by lower sales price and mix ($6$14 million) and higher input costs ($14$2 million), primarily duefor to higher energy, chemicals and distribution costs, which more than offset lower operating costs ($12 million) and lower unabsorbed costs due to economic downtime ($3 million).energy.
Our Europe business segment sales increased by $16 million compared to the same period in 2025, primarily due to higher volumes ($21 million) and favorable foreign exchange ($25 million) which were partially offset by lower sales price and mix ($30 million).
Europe operating losses were $2 million higher than the same period in 2025, primarily driven by lower sales price and mix ($30 million), volume impacts ($2 million) and higher operating ($1 million) and input costs ($6 million), primarily for energy, which were offset by lower planned maintenance outages ($37 million).
Our Latin America business segment sales increased $12 million compared to the same period in 2025, primarily due to favorable foreign exchange ($12 million).
Operating profit for Latin America was $18 million lower than the same period in 2025, primarily due to higher operating ($6 million) and input costs ($11 million), primarily for purchased fiber and higher planned maintenance outages ($1 million).
Our Latin America business segment sales were consistent with the same period in 2025, as lower sales price and mix ($8 million) and lower volumes ($13 million) were offset by favorable foreign exchange ($21 million).
Operating profit for Latin America was $40 million lower than the same period in 2025, primarily due to higher operating ($16 million) and input costs ($9 million), primarily for purchased fiber, lower sales price and mix ($8 million), lower volume ($4 million) and slightly higher planned maintenance outages ($3 million).
Our North America business segment sales decreased $8 million compared to the same period in 2025, primarily due to lower volumes ($15 million) which were partially offset by slightly higher sales price and mix ($7 million).
Operating profit for North America was $16 million lower than the same period in 2025, primarily due to higher operating ($8 million) and input costs ($10 million), primarily due to higher distribution costs, and lower volumes ($6 million) which were partially offset by higher sales price and mix ($7 million) and lower planned maintenance outages ($1 million).
Our North America business segment sales decreased $56 million compared to the same period in 2025, primarily due to lower volumes ($57 million) partially offset by higher sales price and mix ($1 million).
SLVM insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 1 filing (1 insider, 1 trade date, 1,230 shares, about $51.3K). Net open-market shares: -1,230 (purchases minus sales); net value about -$51.3K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-01 | Ferguson Kevin W |
Shares withheld for tax | 78 | $35.92 | $2.8K |
| 2026-06-15 | Bruce Lizanne M |
Open-market sale | 1,230 | $41.70 | $51.3K |
| 2026-06-01 | Lawson Shawn |
Shares withheld for tax | 980 | $39.27 | $38.5K |
| 2026-06-01 | Ferguson Kevin W |
Shares withheld for tax | 204 | $39.27 | $8.0K |
| 2026-06-01 | Devlin Donald P. |
Shares withheld for tax | 813 | $39.27 | $31.9K |
| 2026-05-15 | Petratis David D |
Grant/award | 10,207 | $38.70 | $395.0K |
| 2026-05-15 | Zallie James P. |
Grant/award | 3,876 | $38.70 | $150.0K |
| 2026-05-15 | Petratis David D |
Grant/award | 7,623 | $38.70 | $295.0K |
| 2026-05-15 | Johnson Joia M |
Grant/award | 3,876 | $38.70 | $150.0K |
| 2026-05-15 | Desmond Jeanmarie F. |
Grant/award | 3,876 | $38.70 | $150.0K |
| 2026-05-15 | Bruce Lizanne M |
Grant/award | 3,876 | $38.70 | $150.0K |
| 2026-05-15 | Breves Christine S |
Grant/award | 3,876 | $38.70 | $150.0K |
Well-known investors holding SLVM (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 2,517,545 | $95.2M | 0.06% | Added 6% |
| D. E. Shaw & Co. | 2026-06-30 | 129,953 | $4.9M | 0.0% | Reduced 33% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 120,687 | $4.6M | 0.0% | Added 46% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 99,900 | $3.8M | 0.01% | Reduced 59% |
| Two Sigma Investments | 2026-06-30 | 82,377 | $3.1M | 0.0% | Added 841% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 64,540 | $2.4M | 0.0% | Reduced 16% |
| Renaissance Technologies | 2026-06-30 | 26,300 | $1.1M | — | Sold out |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 21,008 | $794.1K | 0.0% | Added 1% |