Sylvamo (NYSE: SLVM), the world’s paper company, is releasing
fourth quarter 2023 earnings.
Financial Highlights – 2023 Full Year
- Net income from continuing operations of $253 million ($5.93
per diluted share)
- Adjusted operating earnings1 of $278 million ($6.51 per diluted
share)
- Adjusted EBITDA2 of $607 million (16% margin)
- Cash provided by operating activities from continuing
operations of $504 million
- Free cash flow3 of $294 million
- Paid regular and special dividends totaling $57 million
- Repurchased 1,574,133 shares of our common stock for
approximately $70 million, resulting in 41.2 million shares
outstanding as of Dec. 31
- Ended the year with net debt of $730 million ($950 million of
gross debt and $220 million cash on hand)
Financial Highlights - Fourth Quarter vs. Third
Quarter
- Net sales of $964 million vs. $897 million (7.5% increase)
- Net income from continuing operations of $49 million ($1.16 per
diluted share) vs. $58 million ($1.37 per diluted share)
- Adjusted operating earnings1 of $49 million ($1.16 per diluted
share) vs. $72 million ($1.70 per diluted share)
- Adjusted EBITDA2 of $117 million (12% margin) vs. $158 million
(18% margin)
- Cash provided by operating activities from continuing
operations of $167 million vs. $197 million
- Free cash flow3 of $104 million vs. $155 million
Commercial and Operational Highlights – Fourth Quarter vs.
Third Quarter
- Price and mix decreased by $25 million due primarily to prior
paper price decreases as well as unfavorable mix in Latin America
and North America
- Volume increased by $20 million due to seasonally stronger
sales volume in Latin America and positive trends in Europe and
North America
- Operations and other costs increased by $12 million due to
seasonally higher costs in Europe and North America, including $5
million for an unexpected reliability issue with a third-party
energy provider at our Saillat, France, mill and unfavorable
foreign exchange variances. These costs were partially offset by
lower economic downtime costs versus the prior quarter.
- Planned maintenance outage expenses increased by $25 million
due to planned outages in all regions
- Input costs improved by $1 million, driven primarily by
favorable chemical costs, more than offsetting seasonally high
energy costs
First Quarter Outlook
- Adjusted EBITDA of $105 million to $125 million
- Compared to the fourth quarter:
- Price and mix are expected to decrease slightly by $5 million
to $10 million, primarily reflecting a seasonal, geographic mix
shift in Latin America
- Volume is projected to decrease by $10 million to $15 million,
with seasonally weaker industry demand in Latin America
- Operations and other costs are expected to improve by $20
million to $25 million due primarily to lower economic
downtime
- Input and transportation costs are projected to increase by $5
million to $10 million due to increased transportation costs,
mainly in North America and higher fiber costs in Latin
America
- Total planned maintenance outage expenses are expected to
decrease by $3 million
Management Summary from Chairman and Chief Executive Officer
Jean-Michel Ribiéras
In 2023, we earned $607 million in adjusted EBITDA, generated
$294 million of free cash flow and returned $127 million in cash to
shareowners. We are proud of the way our teams adapted when
challenged by uncoated freesheet market conditions that were
significantly less favorable than expected. We continued to deliver
on our promises to customers and shareowners.
We remain focused on allocating capital to drive long-term
shareowner value. Last year, we invested $210 million to strengthen
our low-cost assets and acquired a 500,000-ton uncoated freesheet
mill in Nymolla, Sweden, for $167 million. In 2023, this mill
generated strong cash flow, benefiting from the $40 million pulp
mill modernization project completed just before the acquisition.
We are also on track to deliver $20 million annual run rate
synergies by the end of 2024. The Nymolla mill is strengthening our
performance while enabling us to serve customers across Europe and
around the world more effectively.
By the end of 2023, we exhausted our initial $150 million share
repurchase program authorization and have approximately $150
million remaining on our September 2023 authorization. We will
continue to return substantial amounts of cash to shareowners and
look for opportunities to repurchase shares at attractive prices.
Our board of directors declared a first quarter dividend of $0.30
per share, which we paid Jan. 25th.
In the second half of last year, we reduced overhead expenses by
$15 million from budgeted levels in response to industry
conditions. We also announced a structural cost reduction program,
Project Horizon, to streamline our overhead, manufacturing and
supply chain costs. Before inflation, we are targeting run rate
savings of at least $110 million by the end of 2024.
Our Brazil forestlands are a significant competitive advantage.
These eucalyptus plantations provide a material cost advantage
relative to most other global competitors. In 2023, we invested $34
million, and this year, we will invest $35 million in our
forestlands to increase our wood self-sufficiency and reduce wood
costs.
In addition, we are investing $20 million this year and $12
million in 2025 for a three-year, third-party wood supply agreement
to ensure adequate wood supply from 2024 through 2026.
Our forestlands have significantly increased in value. In
December, a third party appraisal valued these assets at 4.8
billion reais (approximately $1 billion), an increase of 3 billion
reais (roughly $600 million) from a 2021 appraisal. Increasing
demand for land and wood in Brazil has driven this increase in
valuation. Our forestlands are a significant global competitive
advantage and an enduring repository of shareowner value.
1 Adjusted Operating Earnings (non-GAAP)
are net income (loss) (GAAP) excluding discontinued operations, net
of tax and net special items. Management uses this measure to focus
on ongoing operations and believes it is useful to investors
because it enables them to perform meaningful comparisons of past
and present combined operating results. The Company believes that
using this information, along with net income (loss), provides for
a more complete analysis of the results of operations. Net income
(loss) is the most directly comparable GAAP measure. For more
information regarding net special items, see the information under
the heading Effects of Net Special Items and the Consolidated
Statement of Operations and related notes included later in this
release.
2 Adjusted EBITDA (non-GAAP) is net income
(loss) (GAAP) excluding discontinued operations, net of tax, plus
the sum of income taxes, net interest expense (income),
depreciation, amortization and cost of timber harvested, transition
service agreement expense, stock-based compensation, and, when
applicable for the periods reported, net special items. Management
uses this measure in managing the operating performance of our
business and believes that Adjusted EBITDA and Adjusted EBITDA
Margin provide investors and analysts meaningful insights into our
operating performance and Adjusted EBITDA is a relevant metric for
the third-party debt. The Company believes that using this
information, along with net income (loss), provides for a more
complete analysis of the results of its operations. Net income
(loss) is the most directly comparable GAAP measure. For more
information regarding net special items, see the information under
the heading Effects of Net Special Items and the Consolidated
Statement of Operations and related notes included later in this
release.
3 Free Cash Flow is a non-GAAP measure and
the most directly comparable GAAP measure is cash provided by
operating activities from continuing operations. Management
utilizes this measure in connection with managing our business and
believes that Free Cash Flow is useful to investors as a liquidity
measure because it measures the amount of cash generated that is
available, after reinvesting in the business, to maintain a strong
balance sheet and service debt, and return cash to shareowners. It
should not be inferred that the entire Free Cash Flow amount is
available for discretionary expenditures. Free Cash Flow also
enables investors to perform meaningful comparisons between past
and present periods.
Select Financial
Measures
(In millions)
Fourth Quarter 2023
Third Quarter 2023
Fourth Quarter 2022
Net Sales
$
964
$
897
$
927
Net Income from Continuing Operations
49
58
88
Net Income
49
58
94
Business Segment Operating Profit
77
116
133
Adjusted Operating Earnings
49
72
87
Adjusted EBITDA
117
158
170
Cash Provided By Operating Activities From
Continuing Operations
167
197
142
Free Cash Flow
104
155
84
Segment Information
Sylvamo uses business segment operating profit to measure the
earnings performance of its businesses and is calculated as set
forth in footnote (f) under the "Sales and Earnings by Business
Segment" table (page 9). Fourth quarter 2023 net sales by business
segment and operating profit by business segment compared with the
third quarter of 2023 and the fourth quarter of 2022 are as
follows:
Business Segment
Results
(In millions)
Fourth Quarter 2023
Third Quarter 2023
Fourth Quarter 2022
Net Sales by Business Segment
Europe
$
197
$
184
$
119
Latin America
288
246
289
North America
496
476
527
Inter-segment Sales
(17
)
(9
)
(8
)
Net Sales
$
964
$
897
$
927
Operating Profit by Business
Segment
Europe
$
(23
)
$
(14
)
$
12
Latin America
48
55
56
North America
52
75
65
Business Segment Operating
Profit
$
77
$
116
$
133
Operating profits in the fourth quarter of 2023:
Europe - $(23) million compared with $(14) million
in the third quarter of 2023. Earnings were lower as slightly
higher volumes, lower input costs and lower economic downtime were
more than offset by higher operating costs, lower price and mix and
higher planned maintenance outages.
Latin America - $48 million compared with $55 million in
the third quarter of 2023. Earnings were lower as higher volumes
were more than offset by lower price and mix, higher operating and
input costs and higher planned maintenance outages.
North America - $52 million compared with $75
million in the third quarter of 2023. Earnings were lower as higher
volumes, lower economic downtime and slightly lower input costs
were more than offset by higher planned maintenance outages, higher
operating costs and lower price and mix.
Effective Tax Rate
The reported effective tax rate for continuing operations for
the fourth quarter of 2023 was 27%, compared to 36% for the third
quarter of 2023. The higher rate for the third quarter was due to a
change in estimated Annual Effective Tax Rate (AETR) to reduce the
expected benefit of foreign tax attributes and also a mix of
earnings in our regions.
Excluding net special items, the effective tax rate for the
fourth quarter of 2023 was 25%, compared with 33% for the third
quarter of 2023.
The effective tax rate excluding net special items is a non-GAAP
financial measure and is calculated by adjusting the income tax
provision from continuing operations and rate to exclude the tax
effect at the applicable statutory rate of net special items.
Management believes that this presentation provides useful
information to investors by providing a more meaningful comparison
of the income tax rate between past and present periods.
Effects of Net Special Items
Net special items related to continuing operations in the fourth
quarter of 2023 amounted to a net after-tax charge of $0 million
($0.00 per diluted share) compared with a net after-tax charge of
$14 million ($0.33 per diluted share) in the third quarter of
2023.
Earnings Webcast
The company will host an audio webcast at 10 a.m. EST / 9 a.m.
CST. All interested parties are invited to listen at investors.sylvamo.com.
Parties who wish to participate should call +1-877-336-4440
(U.S.) or +1-409-207-6984 (international) and use access code
763504. Participants should call in no later than 9:45 a.m. EST /
8:45 a.m. CST.
Replays are available at investors.sylvamo.com for one year and by phone
for 90 days, beginning at approximately 2 p.m. EST / 1 p.m. CST the
day of the call. To listen to the replay by phone, call
+1-866-207-1041 (U.S.) or +1-402-970-0847 (international) and use
access code 3732910.
About Sylvamo
Sylvamo Corporation (NYSE: SLVM) is the world's paper company
with mills in Europe, Latin America and North America. Our vision
is to be the employer, supplier and investment of choice. We
transform renewable resources into papers that people depend on for
education, communication and entertainment. Headquartered in
Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales
for 2023 were $3.7 billion. For more information, please visit
Sylvamo.com.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, including the
information under the headings "First Quarter Outlook" and
"Management Summary from Chairman and Chief Executive Officer
Jean-Michel Ribiéras." Any or all forward-looking statements may
turn out to be incorrect, and our actual actions and results could
differ materially from what they express or imply, because they
involve known and unknown risks, uncertainties and other factors,
many of which are beyond our control. These risks, uncertainties,
and other factors include those disclosed in the heading "Risk
Factors" in our Annual Report on Form 10-K for the year ended Dec.
31, 2022, filed with the U.S. Securities and Exchange Commission
(SEC) and in our subsequent filings with the SEC, available on our
website, Sylvamo.com. These forward-looking statements reflect our
current expectations, and we undertake no obligation to publicly
update any forward-looking statements, whether as a result of new
information, future events or otherwise.
SYLVAMO CORPORATION
Consolidated Statement of
Operations
Preliminary and Unaudited
(In millions, except per share
amounts)
Three Months Ended
December 31,
Three Months Ended
September 30,
2023
Twelve Months Ended
December 31,
2023
2022
2023
2022
Net Sales
$
964
$
927
$
897
$
3,721
$
3,628
Costs and Expenses
Cost of products sold
762
(a)
654
(h)
665
(e)
2,809
(a)
2,619
(h)
Selling and administrative expenses
87
(b)
97
(i)
89
(f)
343
(b)
325
(i)
Depreciation, amortization and cost of
timber harvested
38
32
36
143
125
Taxes other than payroll and income
taxes
4
5
7
23
23
Interest expense (income), net
6
(c)
17
(j)
9
34
(c)
69
(j)
Income From Continuing Operations
Before Income Taxes
67
122
91
369
467
Income tax provision
18
34
33
(g)
116
(d)
131
(l)
Net Income From Continuing
Operations
49
88
58
253
336
Discontinued operations, net of
tax
—
6
(k)
—
—
(218
)
(m)
Net Income (Loss)
$
49
$
94
$
58
$
253
$
118
Basic Earnings Per Share
Income from continuing operations
$
1.18
$
2.02
$
1.39
$
6.02
$
7.65
Discontinued operations, net of taxes
—
0.14
—
—
(4.97
)
Net earnings (loss)
$
1.18
$
2.16
$
1.39
$
6.02
$
2.68
Diluted Earnings Per Share
Income from continuing operations
$
1.16
$
1.99
$
1.37
$
5.93
$
7.57
Discontinued operations, net of taxes
—
0.14
—
—
(4.91
)
Net earnings (loss)
$
1.16
$
2.13
$
1.37
$
5.93
$
2.66
Average Shares of Common Stock
Outstanding - Diluted
42
44
42
42
44
The accompanying notes are an
integral part of this consolidated statement of operations.
Three Months and Twelve Months Ended December 31,
2023
(a)
Includes a pre-tax gain of $5
million ($4 million after taxes) for the three months and twelve
months ended December 31, 2023, to adjust the recognition of a
foreign value-added tax refund in Brazil, a pre-tax loss of $3
million ($2 million after taxes) for the twelve months ended
December 31, 2023, for certain severance costs related to our
salaried workforce and incremental expense of $9 million ($7
million after taxes) for the twelve months ended December 31, 2023,
related to the impact of the step-up of acquired Nym�lla inventory
sold during the first quarter.
(b)
Includes a pre-tax loss of $10
million ($8 million after taxes) for the twelve months ended
December 31, 2023, for certain severance costs related to our
salaried workforce. Also includes pre-tax loss of $9 million ($7
million after taxes) for the three months ended December 31, 2023,
and a pre-tax loss of $17 million ($13 million after taxes) for the
twelve months ended December 31, 2023, for transaction and
integration costs related to the Nym�lla acquisition. Finally,
includes a pre-tax loss of $4 million ($3 million after taxes) for
the twelve months ended December 31, 2023 for professional and
legal fees related to negotiations resulting in a shareholder
cooperation agreement.
(c)
Includes a pretax gain of $4
million ($4 million after taxes) for the three months and twelve
months ended December 31, 2023, to adjust interest income
associated with the recognition of a foreign value-added tax refund
in Brazil. Also includes $9 million ($6 million after taxes) of
interest income related to tax settlements and a pre-tax loss of $5
million ($4 million after taxes) related to debt extinguishment
costs for the twelve months ended December 31, 2023.
(d)
Includes a $2 million tax expense
for the twelve months ended December 31, 2023 related to a
change in valuation allowances for certain deferred tax assets.
Three Months Ended September
30, 2023
(e)
Includes pre-tax loss of $3
million ($2 million after taxes) for certain severance costs
related to our salaried workforce.
(f)
Includes a pre-tax loss of $10
million ($8 million after taxes) for certain severance costs
related to our salaried workforce and a pre-tax loss of $3 million
($2 million after taxes) for transaction and integration costs
related to the Nym�lla acquisition.
(g)
Includes a $2 million tax expense
related to a change in valuation allowances for certain deferred
tax assets.
Three Months and Twelve Months
Ended December 31, 2022
(h)
Includes a pre-tax gain of $10
million ($8 million after taxes) for the three months and twelve
months ended December 31, 2022, related to hedging the foreign
exchange exposure of the Nymolla mill purchase price and a pre-tax
loss of $4 million ($3 million after taxes) for the twelve months
ended December 31, 2022, for one-time costs associated with the
spinoff.
(i)
Includes a pre-tax loss of $3
million ($2 million after taxes) for the three months ended
December 31, 2022, and a pre-tax loss of $20 million ($15 million
after taxes) for the twelve months ended December 31, 2022, for
one-time costs associated with the spinoff from International
Paper. Also includes a pre-tax loss of $1 million ($1 million after
taxes) for the three months ended December 31, 2022, and a pre-tax
loss of $2 million ($2 million after taxes) for the twelve months
ended December 31, 2022 for transaction costs related to the
Nymolla acquisition.
(j)
Includes a pre-tax loss of $5
million ($4 million after taxes) for the three months and twelve
months ended December 31, 2022 related to debt extinguishment
costs.
(k)
Includes a pre-tax income of $6
million ($6 million after taxes) for the final gain on the disposal
of our Russian operations.
(l)
Includes a $4 million tax benefit
related to a change in valuation allowances for certain deferred
tax assets.
(m)
Includes a pre-tax charge of $228
million ($228 million after taxes) to reserve for the elimination
of the cumulative foreign currency translation loss related to our
Russian operations and a pre-tax charge of $68 million ($57 million
after taxes) related to the impairment of our Russian fixed
assets.
SYLVAMO CORPORATION
Reconciliation of Net Income
to Adjusted Operating Earnings
Preliminary and Unaudited
(In millions, except per share
amounts)
Three Months Ended
December 31,
Three Months Ended
September 30,
2023
Twelve Months Ended
December 31,
2023
2022
2023
2022
Net Income (Loss)
$
49
$
94
$
58
$
253
$
118
Less: Discontinued operations, net of
tax
—
6
—
—
(218
)
Net income From Continuing
Operations
49
88
58
253
336
Add back: Net special items expense
(income)
—
(1
)
14
25
12
Adjusted Operating Earnings
$
49
$
87
$
72
$
278
$
348
Three Months Ended
December 31,
Three Months Ended
September 30,
2023
Twelve Months Ended
December 31,
2023
2022
2023
2022
Diluted Earnings (Loss) Per Common
Share as Reported
$
1.16
$
2.13
$
1.37
$
5.93
$
2.66
Less: Discontinued operations, net of
tax
—
0.14
—
—
(4.91
)
Continuing Operations
1.16
1.99
1.37
5.93
7.57
Add back: Net special items expense
(income)
—
(0.02
)
0.33
0.58
0.27
Adjusted Operating Earnings Per
Share
$
1.16
$
1.97
$
1.70
$
6.51
$
7.84
SYLVAMO CORPORATION
Sales and Earnings by Business
Segment
Preliminary and Unaudited
(In millions)
Net Sales by Business Segment
Three Months Ended
December 31,
Three Months Ended
September 30,
2023
Twelve Months Ended
December 31,
2023
2022
2023
2022
Europe
$
197
$
119
$
184
$
821
$
501
Latin America
288
289
246
1,006
1,023
North America
496
527
476
1,951
2,173
Inter-segment Sales
(17
)
(8
)
(9
)
(57
)
(69
)
Net Sales
$
964
$
927
$
897
$
3,721
$
3,628
Operating Profit by Business
Segment
Three Months Ended
December 31,
Three Months Ended
September 30,
2023
Twelve Months Ended
December 31,
2023
2022
2023
2022
Europe
$
(23
)
$
12
$
(14
)
$
(25
)
$
50
Latin America
48
56
55
197
212
North America
52
65
75
269
291
Business Segment Operating
Profit
$
77
$
133
$
116
$
441
$
553
Income from Continuing Operations
Before Income Taxes
$
67
$
122
$
91
$
369
$
467
Interest expense (income), net
6
(a)
17
(d)
9
34
(a)
69
(d)
Net special items expense (income)
4
(b)
(6
)
(e)
16
(c)
38
(b)
17
(e)
Business Segment Operating Profit
(f)
$
77
$
133
$
116
$
441
$
553
Three Months and Twelve Months Ended December 31, 2023
(a)
Includes a pretax gain of $4 million ($4
million after taxes) for the three months and twelve months ended
December 31, 2023, to adjust interest income associated with the
recognition of a foreign value-added tax refund in Brazil. Also
includes $9 million ($6 million after taxes) of interest income
related to tax settlements and a pre-tax loss of $5 million ($4
million after taxes) related to debt extinguishment costs for the
twelve months ended December 31, 2023.
(b)
Includes a pre-tax gain of $5 million ($4
million after taxes) for the three months and twelve months ended
December 31, 2023, to adjust the recognition of a foreign
value-added tax refund in Brazil and a pre-tax loss of $9 million
($7 million after taxes) for the three months ended December 31,
2023, and a pre-tax loss of $17 million ($13 million after taxes)
for the twelve months ended December 31, 2023, for transaction and
integration costs related to the Nym�lla acquisition. Also includes
pre-tax loss of $13 million ($10 million after taxes) for the
twelve months ended December 31, 2023, for certain severance costs
related to our salaried workforce. Finally, includes a pre-tax loss
of $4 million ($3 million after taxes) for professional and legal
fees related to negotiations resulting in a shareholder cooperation
agreement and incremental expense of $9 million ($7 million after
taxes) related to the impact of the step-up of acquired
Nym�lla inventory sold during the first quarter for the twelve
months ended December 31, 2023.
Three Months Ended September 30, 2023
(c)
Includes pre-tax loss of $13 million ($10
million after taxes) for certain severance costs related to our
salaried workforce and a pre-tax loss of $3 million ($2 million
after taxes) for transaction and integration costs related to the
Nym�lla acquisition.
Three Months and Twelve Months Ended December 31,
2022
(d)
Includes a pre-tax loss of $5 million ($4
million after taxes) for the three months and twelve months ended
December 31, 2022 related to debt extinguishment costs.
(e)
Includes a pre-tax gain of $10 million ($8
million after taxes) for the three months and twelve months ended
December 31, 2022, related to hedging the foreign exchange exposure
of the Nymolla mill purchase price, a pre-tax loss of $3 million
($2 million after taxes) for the three months ended December 31,
2022, and a pre-tax loss of $24 million ($18 million after taxes)
for the twelve months ended December 31, 2022, for one-time costs
associated with the spinoff from International Paper, and a pre-tax
loss of $1 million ($1 million after taxes) for the three months
ended December 31, 2022, and a pre-tax loss of $2 million ($2
million after taxes) for the twelve months ended December 31, 2022
for transaction costs related to the Nymolla acquisition.
(f)
As set forth in the chart above, business
segment operating profit is defined as income from continuing
operations before income taxes, but excluding net interest expense
(income) and net special items. Business segment operating profit
is a measure reported to our management for purposes of making
decisions about allocating resources to our business segments and
assessing the performance of our business segments.
Reconciliation of Net Income
to Adjusted EBITDA and Adjusted EBITDA Margin
Preliminary and Unaudited
(In millions)
Three Months Ended
December 31,
Three Months Ended
September 30,
2023
Twelve Months Ended
December 31,
2023
2022
2023
2022
Net Income (Loss)
$
49
$
94
$
58
$
253
$
118
Less: Discontinued operations, net of
tax
—
6
—
—
(218
)
Net Income From Continuing
Operations
49
88
58
253
336
Adjustments:
Income tax provision
18
34
33
116
131
Interest expense (income), net
6
17
9
34
69
Depreciation, amortization and cost of
timber harvested
38
32
36
143
125
Stock-based compensation
2
4
6
23
20
Transition service agreement expense
—
1
—
—
23
Net special items expense (income)
4
(6
)
16
38
17
Adjusted EBITDA
$
117
$
170
$
158
$
607
$
721
Net Sales
$
964
$
927
$
897
$
3,721
$
3,628
Adjusted EBITDA Margin
12.1
%
18.3
%
17.6
%
16.3
%
19.9
%
Adjusted EBITDA and Adjusted EBITDA
Margin by Business Segment
Three Months Ended
December 31,
Three Months Ended
September 30,
2023
Twelve Months Ended
December 31,
2023
2022
2023
2022
Adjusted EBITDA
Europe
$
(16
)
$
16
$
(5
)
$
7
$
70
Latin America
67
72
74
271
281
North America
66
82
89
329
370
Total Business Segment Adjusted
EBITDA
$
117
$
170
$
158
$
607
$
721
Net Sales (excluding discontinued
operations and inter-segment sales eliminations)
Europe
$
197
$
119
$
184
$
821
$
501
Latin America
288
289
246
1,006
1,023
North America
496
527
476
1,951
2,173
Total Business Segment Net
Sales
$
981
$
935
$
906
$
3,778
$
3,697
Adjusted EBITDA Margin
Europe
(8
)%
13
%
(3
)%
1
%
14
%
Latin America
23
%
25
%
30
%
27
%
27
%
North America
13
%
16
%
19
%
17
%
17
%
SYLVAMO CORPORATION
Consolidated Balance
Sheet
Preliminary and Unaudited
(In millions)
December 31, 2023
December 31, 2022
Assets
Current Assets
Cash and temporary investments
$
220
$
360
Restricted cash
60
—
Accounts and notes receivable, net
428
450
Contract assets
27
30
Inventories
404
364
Other current assets
54
39
Total Current Assets
1,193
1,243
Plants, Properties and Equipment, Net
1,002
817
Forestlands
364
322
Goodwill
139
128
Right of Use Assets
58
35
Deferred Charges and Other Assets
116
165
Total Assets
$
2,872
$
2,710
Liabilities and Equity
Current Liabilities
Accounts payable
$
421
$
453
Notes payable and current maturities of
long-term debt
28
29
Accrued payroll and benefits
63
81
Other current liabilities
183
165
Total Current Liabilities
695
728
Long-Term Debt
931
1,003
Deferred Income Taxes
189
183
Other Liabilities
156
118
Equity
Common stock, $1 par value, 200.0 shares
authorized, 44.5 shares and 42.6 shares issued and 41.2 shares and
42.6 shares outstanding at December 31, 2023 and December 31, 2022,
respectively
45
44
Paid-In Capital
48
25
Retained Earnings
2,222
2,029
Accumulated Other Comprehensive Loss
(1,256
)
(1,338
)
1,059
760
Less: Common stock held in treasury, at
cost, 3.3 shares and 1.6 shares at December 31, 2023 and December
31, 2022, respectively
(158
)
(82
)
Total Equity
901
678
Total Liabilities and Equity
$
2,872
$
2,710
Consolidated Statement of Cash
Flows
Preliminary and Unaudited
(In millions)
Twelve Months Ended
December 31,
2023
2022
Operating Activities
Net income from continuing operations
$
253
$
336
Depreciation, amortization, and cost of
timber harvested
143
125
Deferred income tax provision (benefit),
net
—
(7
)
Stock-based compensation
23
20
Changes in operating assets and
liabilities and other
Accounts and notes receivable
104
(45
)
Inventories
6
(99
)
Accounts payable and accrued
liabilities
(73
)
48
Other
48
40
Cash Provided By Operating Activities from
Continuing Operations
504
418
Cash Provided By Operating Activities from
Discontinued Operations, net
—
20
Cash Provided By Operating
Activities
504
438
Investment Activities
Invested in capital projects
(210
)
(149
)
Cash proceeds on disposal of business, net
of cash divested
—
324
Acquisition of business
(167
)
—
Other
—
10
Cash Provided By (Used for) Investment
Activities from Continuing Operations
(377
)
185
Cash Provided By (Used for) Investment
Activities from Discontinued Operations, net
—
(5
)
Cash Provided By (Used for) Investment
Activities
(377
)
180
Financing Activities
Dividends paid
(57
)
(10
)
Issuance of debt
446
75
Reduction of debt
(526
)
(450
)
Repurchases of common stock
(70
)
(80
)
Other
(12
)
(4
)
Cash Provided By (Used for) Financing
Activities from Continuing Operations
(219
)
(469
)
Cash Provided By (Used for) Financing
Activities from Discontinued Operations, net
—
(1
)
Cash Provided By (Used for) Financing
Activities
(219
)
(470
)
Effect of Exchange Rate Changes on
Cash
12
32
Change in Cash Included in Assets Held
for Sale
—
(21
)
Change in Cash, Temporary Investments
and Restricted Cash
(80
)
201
Cash, Temporary Investments and
Restricted Cash
Beginning of the period
360
159
End of the period
$
280
$
360
SYLVAMO CORPORATION
Reconciliation of Cash
Provided by Operations to Free Cash Flow
Preliminary and Unaudited
(In millions)
Three Months Ended
December 31,
Three Months Ended
September 30,
2023
Twelve Months Ended
December 31,
2023
2022
2023
2022
Cash Provided By Operating Activities
From Continuing Operations
$
167
$
142
$
197
$
504
$
418
Adjustments:
Cash invested in capital projects
(63
)
(58
)
(42
)
(210
)
(149
)
Free Cash Flow
$
104
$
84
$
155
$
294
$
269
SYLVAMO CORPORATION
Reconciliation of Net Income
From Continuing Operations to Adjusted EBITDA - First Quarter 2024
Outlook
Estimates
(In millions)
Three Months Ended
March 31,
2024
Net Income From Continuing
Operations
$33 - $47
Adjustments:
Income tax provision
15 - 21
Interest expense (income), net
10
Depreciation, amortization and cost of
timber harvested
38
Stock-based compensation
6
Net special items expense
3
Adjusted EBITDA
$105 - $125
The non-GAAP financial measures presented in this release have
limitations as analytical tools and should not be considered in
isolation or as a substitute for an analysis of our results
calculated in accordance with GAAP. In addition, because not all
companies use identical calculations, the Company’s presentation of
non-GAAP measures in this release may not be comparable to
similarly titled measures disclosed by other companies, including
companies in the same industry as Sylvamo.
Management believes certain non-U.S. GAAP financial measures,
when used in conjunction with information presented in accordance
with U.S. GAAP, can facilitate a better understanding of the impact
of various factors and trends on the Company’s financial condition
and results of operations. Management also uses these non-U.S. GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the Company’s performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240215483551/en/
Investor Contact: Hans Bjorkman, 901-519-8030,
hans.bjorkman@sylvamo.com Media Contact: Adam Ghassemi,
901-519-8115, adam.ghassemi@sylvamo.com
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