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Item 9A. Controls and Procedures

2024-02-29 compared with 2023-03-01 · 565 added, 572 removed, 1233 unchanged (48% of the section changed)

1 unchanged sentence

Management’s Evaluation of Disclosure Controls and Procedures

RYAM management is responsible for establishing and maintaining adequate disclosure controls and procedures.

Our management is responsible for establishing and maintaining adequate disclosure controls and procedures.

Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are designed with the objective of ensuring that information required to be disclosed in reports filed under the Exchange Act, such as this 2023 Form 10-K, is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Because of the inherent limitations in all control systems, no control evaluation can provide absolute assurance all control exceptions and instances of fraud have been prevented or detected on a timely basis.

Because of the inherent limitations in all control systems, no control evaluation can provide absolute assurance that all control exceptions and instances of fraud have been prevented or detected on a timely basis.

Even systems determined to be effective can provide only reasonable assurance their objectives are achieved.

Based on an evaluation of our disclosure controls and procedures as of the end of the period covered by this annual report on 2022 Form 10-K, our management, including the Chief Executive Officer and Chief Financial Officer, concluded the design and operation of the disclosure controls and procedures were effective as of December 31, 2022.

Based on an evaluation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that the design and operation of our disclosure controls and procedures were effective as of December 31, 2023.

Internal Control over Financial Reporting

With regard to our internal control over financial reporting as defined in Rule 13a-15(f), our Management’s Report on Internal Control over Financial Reporting on page F-2, and the Reports of Independent Registered Public Accounting Firm on page F-3, included in Item 8 — Financial Statements and Supplementary Data of this 2022 Form 10-K, are incorporated by reference into this Item 9A.

With regard to our internal control over financial reporting as defined in Rule 13a-15(f), our Management’s Report on Internal Control over Financial Reporting on page F-2 , and the Reports of Independent Registered Public Accounting Firm beginning on page F-3 , included in Item 8—Financial Statements and Supplementary Data of this 2023 Form 10-K, are incorporated by reference into this Item 9A.

For the quarter ended December 31, 2023, based upon the evaluation required by Rule 13a-15(d), there were no changes in our internal control over financial reporting that would materially affect or are reasonably likely to materially affect our internal control over financial reporting.

Other Information

Not applicable.

During the quarter ended December 31, 2023, no director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as defined under Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Officers and Corporate Governance

The information required by this Item 10 is incorporated by reference to sections “Commitment to Best Practices in Corporate Governance,” “Proposal 1:

Election of Directors,” “Executive Compensation Tables and Related Information-Executive Officers,” “Delinquent Section 16(a) Reports,” “Proposal 6:

Ratification of the Appointment of Independent Registered Public Accounting Firm” and “Audit Committee Financial Experts” of our Proxy Statement.

The information required by this Item 10 is incorporated by reference to sections “Commitment to Best Practices in Corporate Governance,” “Proposal 1 — Election of Directors,” “Executive Compensation Tables and Related Information-Executive Officers,” “Delinquent Section 16(a) Reports,” “Proposal 6 — Ratification of the Appointment of Independent Registered Public Accounting Firm” and “Audit Committee Financial Experts” of our Proxy Statement.

Our Standard of Ethics and Code of Corporate Conduct, which is applicable to our principal executive officer and financial and accounting officers, is available on our website www.ryam.com at the “Investors” tab under “Corporate Governance.” Any amendments to or waivers of the Standard of Ethics and Code of Corporate Conduct will also be disclosed on our website.

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Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 is incorporated by reference to sections “Proposal 1:

Election of Directors,” “Commitment to Best Practices in Corporate Governance-Corporate Governance Principles,” “Director Independence” and “Related Person Transactions” of our Proxy Statement.

The information required by this Item 13 is incorporated by reference to sections “Proposal 1 — Election of Directors,” “Commitment to Best Practices in Corporate Governance-Corporate Governance Principles,” “Director Independence” and “Related Person Transactions” of our Proxy Statement.

Principal Accounting Fees and Services

The information required by this Item 14 is incorporated by reference to section “Proposal 6:

Ratification of the Appointment of Independent Registered Public Accounting Firm-Information Regarding Independent Registered Public Accounting Firm” of our Proxy Statement.

The information required by this Item 14 is incorporated by reference to section “Proposal 6 — Ratification of the Appointment of Independent Registered Public Accounting Firm-Information Regarding Independent Registered Public Accounting Firm” of our Proxy Statement.

Exhibit and Financial Statement Schedules

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Amended and Restated Bylaws of Rayonier Advanced Materials Inc., effective October 19, 2022 Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on October 19, 2022

Indenture among Rayonier A.M.

Products Inc., the guarantors party thereto from time to time and Wells Fargo Bank, National Association, as Trustee, dated as of May 22, 2014

Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Amendment No.

4 to Registration Statement on Form 10 filed on May 29, 2014

Description of Common Stock

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Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Form 8-K filed on December 23, 2020

Description Location

Rights Agreement, dated as of March 21, 2022, between Rayonier Advanced Materials Inc.

and Computershare Trust Company, N.A., which includes the form of Certificate of Designations as Exhibit A, the form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Shares as Exhibit C Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed on March 21, 2022

Transition Services Agreement, dated as of June 27, 2014, by and between Rayonier Inc.

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Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on June 30, 2014

Description Location

Employee Matters Agreement, dated as of June 27, 2014, by and between Rayonier Inc.

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Incorporated herein by reference to Appendix B to the Registrant’s Proxy Statement filed on April 2, 2021

Rayonier Advanced Materials Inc.

2023 Incentive Stock Plan, effective May 17, 2023 Incorporated herein by reference to Appendix D to the Registrant's Definitive Proxy Statement on Schedule 14A filed on March 31, 2023

Form of Rayonier Advanced Materials Inc.

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Form of Rayonier Advanced Materials Inc.

2024 Restricted Stock Unit Award Agreement Filed herewith

Form of Rayonier Advanced Materials Inc.

2024 Restricted Stock Unit Award Agreement for De Lyle Bloomquist and James L.

Posze, Jr Filed herewith

Form of Rayonier Advanced Materials Inc.

2021 Performance Share Unit Award Agreement Incorporated herein by reference to Exhibit 10.12 to the Registrant’s Form 10-K filed on March 1, 2021

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Form of Rayonier Advanced Materials Inc.

2023 Performance Share Unit Award Agreement Incorporated herein by reference to Exhibit 10.14 to the Registrant’s Form 10-K filed on March 1, 2023

Form of Rayonier Advanced Materials Inc.

2024 Performance Share Unit Award Agreement Filed herewith

Form of Rayonier Advanced Materials Inc.

2024 Performance Share Unit Award Agreement for De Lyle Bloomquist and James L.

Posze, Jr Filed herewith

Form of Rayonier Advanced Materials Inc.

2021 Performance Cash Unit Award Agreement Incorporated herein by reference to Exhibit 10.13 to the Registrant’s Form 10-K filed on March 1, 2021

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Form of Rayonier Advanced Materials Inc.

2023 Performance Cash Unit Award Agreement Incorporated herein by reference to Exhibit 10.17 to the Registrant’s Form 10-K filed on March 1, 2023

Form of Rayonier Advanced Materials Inc.

2024 Performance Cash Unit Award Agreement Filed herewith

Form of Rayonier Advanced Materials Inc.

2024 Performance Cash Unit Award Agreement for De Lyle Bloomquist and James L.

Posze, Jr Filed herewith

Form of Rayonier Advanced Materials Inc.

2022 Leveraged Performance Unit Award Agreement Incorporated herein by reference to Exhibit 10.4 to the Registrant’s Form 10-Q filed on May 5, 2022

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Incorporated herein by reference to Exhibit 10.16 to the Registrant’s Form 10-K filed on March 1, 2021

Description Location

Form of Rayonier Advanced Materials Inc.

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Form of Rayonier Advanced Materials Inc.

Incentive Stock Plan Supplemental Terms Applicable to the 2023 Equity Award Grant Incorporated herein by reference to Exhibit 10.21 to the Registrant’s Form 10-K filed on March 1, 2023

Form of Rayonier Advanced Materials Inc.

Incentive Stock Plan Supplemental Terms Applicable to the 2024 Equity Award Grant Filed herewith

Description Location

Description of Rayonier Advanced Materials Inc.

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Description of Rayonier Advanced Materials Inc.

2022 Senior Team Equity Incentive Program Structure Filed herewith

2022 Senior Team Equity Incentive Program Structure Incorporated herein by reference to Exhibit 10.23 to the Registrant’s Form 10-K filed on March 1, 2023

Description of Rayonier Advanced Materials Inc.

2023 Equity Incentive Program Design Incorporated herein by reference to Exhibit 10.24 to the Registrant’s Form 10-K filed on March 1, 2023

Description of Rayonier Advanced Materials Inc.

2024 Equity Incentive Program Design Filed herewith

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Investment and Savings Plan for Salaried Employees, effective January 1, 2016 Incorporated herein by reference to Exhibit 10.26 to the Registrant’s Form 10-K filed on February 24, 2017

Description Location

Amendment to Rayonier Advanced Materials Inc.

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Investment and Savings Plan for Salaried Employees, effective February 13, 2017 Incorporated herein by reference to Exhibit 10.29 to the Registrant’s Form 10-K filed on February 24, 2017

Description Location

Form of Indemnification Agreement between Rayonier Advanced Materials Inc.

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Products Inc., the other subsidiaries of Rayonier Advanced Materials Inc.

party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent.

Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on December 23, 2020

party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on December 23, 2020

Amendment No.

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Products, Inc., the other subsidiaries of Rayonier Advanced Materials Inc.

party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent.

Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on January 17, 2023

Amendment No.

2 to Revolving Credit Agreement, dated as of July 20, 2023, among Rayonier Advanced Materials Inc., Rayonier A.M.

Products Inc., the lenders and issuing banks party thereto and Bank of America, N.A.

as administrative agent and collateral agent Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on July 20, 2023

Term Loan Credit Agreement, dated as of July 20, 2023, by and among RYAM Lux SARL, Rayonier Advanced Materials Inc., the other subsidiaries of Rayonier Advanced Materials Inc.

party thereto, the lenders party thereto, Oaktree Fund Administration, LLC, as administrative agent, and Computershare Trust Company, N.A., as collateral agent Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on July 20, 2023

Loan Agreement, dated as of July 20, 2023, by and among RYAM Lux SARL, Rayonier Advanced Materials Inc.

and the other subsidiaries of Rayonier Advanced Materials Inc.

party thereto Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on July 20, 2023

Amendment No.

1 to Term Loan Credit Agreement, dated as of January 2, 2024, by and among RYAM Lux SARL, Rayonier Advanced Materials Inc., the other subsidiaries of Rayonier Advanced Materials Inc.

party thereto, the lenders party thereto, and Oaktree Fund Administration, LLC, as administrative agent Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on January 3, 2024

Asset Purchase Agreement by and between 9437-6001 Quebec Inc., as purchaser and GreenFirst Forest Products Inc., as Purchaser guarantor, and Rayonier A.M.

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Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on January 20, 2022

Description Location

Letter Agreement, dated May 28, 2022 between Rayonier Advanced Materials Inc.

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Filed herewith

Power of Attorney Incorporated herein by reference to the signature page of this Annual Report on Form 10-K

Chief Executive Officer’s Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Furnished herewith

Rayonier Advanced Materials Inc.

Incentive Compensation Recovery Policy Filed herewith

101 Interactive data files (formatted in Inline XBRL) pursuant to Rule 405 of Regulation S-T Filed herewith

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Senior Vice President, Finance

March 1, 2023

February 29, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

1 unchanged sentence

/s/ DE LYLE W.

BLOOMQUIST Chief Executive Officer and President March 1, 2023

BLOOMQUIST Chief Executive Officer, President

and Director February 29, 2024

(Principal Executive Officer)

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MOELTNER Chief Financial Officer and

Senior Vice President, Finance March 1, 2023

Senior Vice President, Finance February 29, 2024

(Principal Financial Officer)

/s/ GABRIELA GARCIA Chief Accounting Officer and

Vice President, Corporate Controller March 1, 2023

Vice President, Corporate Controller February 29, 2024

Gabriela Garcia

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/s/ CHARLES R.

EGGERT Director February 1, 2023

EGGERT Director January 15, 2024

KIRSCH Director January 24, 2024

MARIANO Director January 17, 2024

/s/ THOMAS I.

MORGAN Director January 19, 2023

/s/ IVONA SMITH Director January 19, 2024

/s/ BRYAN YOKLEY Director January 16, 2024

Index to Financial Statements

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Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248 )

Consolidated Statements of Operations for the Three Years Ended December 31, 2022

Consolidated Statements of Comprehensive Income for the Three Years Ended December 31, 2022

Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Statements of Stockholders' Equity for the Three Years Ended December 31, 2022

Consolidated Statements of Cash Flows for the Three Years Ended December 31, 202 2

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Balance Sheets

Consolidated Statements of Stockholders' Equity

Consolidated Statements of Cash Flows

Notes to Financial Statements

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We have audited the accompanying consolidated balance sheets of Rayonier Advanced Materials Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 1, 2023 expressed an unqualified opinion.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on the criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 29, 2024 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Accruals for environmental liabilities

As described further in Note 10 to the financial statements, the Company records accruals for environmental liabilities based on its current interpretation of environmental laws and regulations when it is probable a liability has been incurred and the amount of such liability is estimable.

As described further in Note 10 to the consolidated financial statements, the Company records accruals for environmental liabilities based on its current interpretation of environmental laws and regulations when it is probable a liability has been incurred and the amount of such liability is estimable.

Accruals for environmental liabilities totaled approximately $170 million at December 31, 2023.

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The Company estimates this exposure could range up to approximately $85 million in addition to the liabilities recorded and has disclosed this exposure in Note 10.

We identified the accruals for environmental liabilities as a critical audit matter.

The principal considerations for our determination that the accruals for environmental liabilities is a critical audit matter is that the length of time over which the obligation will be resolved is significant and the estimate requires specialized knowledge of environmental engineering.

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Our audit procedures related to the accruals for environmental liabilities included the following, among others.

We evaluated the design and tested the operating effectiveness of relevant controls over the Company’s estimation process and accounting for the accruals, and the completeness and accuracy of the underlying data used in the reserve estimates as well as the related financial statement disclosures.

We performed a public domain search to determine whether the sites being accounted for by the Company are complete and whether all information from regulators is being considered in the estimation process.

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With the support of our environmental specialist, we evaluated the competency of the specialist used by the Company in addition to whether the method, models, and assumptions utilized in estimating the reserve balances were appropriate based on testing of engineering studies and historical experience and evaluated the sufficiency of the Company’s disclosures.

Impairment of long-lived assets

As described further in Note 7 and Note 12 to the consolidated financial statements, the Company reviews long-lived assets for impairment whenever events or changes in circumstances, known as triggering events, indicate that the carrying amount of a long-lived asset or asset group, may not be recoverable.

Management considers various factors when determining if long-lived assets should be evaluated for impairment, including a significant adverse change in the business climate or industry conditions (such as sustained decreases in commodity prices, volatility in energy costs, and the global economy), a current period operating or cash flow loss combined with a history of losses, a significant adverse change in the extent or manner in which an asset is used, or a current expectation that the asset will be sold or otherwise disposed of before the end of its useful life.

As a result of changes to the intended use of high purity cellulose assets located in Temiscaming, Canada, the Company completed an impairment analysis of this asset group in the fourth quarter of 2023 and recorded a charge of $25 million in the accompanying Consolidated Statement of Operations.

We identified the impairment of high purity cellulose assets located in Temiscaming, Canada as a critical audit matter.

The principal considerations for our determination that the impairment of high purity cellulose assets located in Temiscaming, Canada is a critical audit matter is the significant judgments made by management to estimate the impairment charge.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the future production, pricing estimates, capital and operating costs, market-based weighted average cost of capital and risk adjustment factors.

Our audit procedures related to the impairment analysis included the following, among others.

We evaluated the design and tested the operating effectiveness of the key controls over the Company’s determination of triggering events and the key assumptions underlying the fair value determination and the completeness and accuracy of the data used in the determination of the fair value.

We evaluated the reasonableness of the key assumptions used in management’s cash flow forecast by comparing them to historical amounts and current industry and economic trends.

We evaluated the reasonableness of management’s assessment of future market prices of the revenue- generating commodity and cellulose specialties products and future input costs necessary for operations by comparing these amounts against available forward market pricing data and historical amounts.

Additionally, we performed sensitivity analyses around certain cost of sales assumptions underlying management’s fair value assessment.

We assessed the qualifications and competence of management and its valuation professional primarily responsible with the determination of the fair value of the long-lived assets.

We involved valuation professionals, with specialized skills and knowledge, to assist in our evaluation of the valuation methodologies applied and the significant assumptions used to determine the fair value of the asset group, including the weighted average cost of capital and risk adjustment factors.

/s/ GRANT THORNTON LLP

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Jacksonville, Florida

March 1, 2023

February 29, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2022, and our report dated March 1, 2023 expressed an unqualified opinion on those financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2023, and our report dated February 29, 2024 expressed an unqualified opinion on those consolidated financial statements.

Basis for opinion

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Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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Jacksonville, Florida

March 1, 2023

February 29, 2024

Rayonier Advanced Materials Inc.

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Gross margin 88,154 123,083 74,722

Selling, general and administrative expenses ( 91,475 ) ( 75,789 ) ( 77,942 )

Foreign exchange gains (losses) 4,726 875 ( 5,677 )

Selling, general and administrative expense ( 75,712 ) ( 91,475 ) ( 75,789 )

Foreign exchange gain (loss) ( 2,999 ) 4,726 875

Asset impairment ( 62,300 ) — —

Other operating expense, net (Note 18) ( 12,407 ) ( 10,199 ) ( 10,253 )

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Interest expense ( 73,810 ) ( 66,183 ) ( 66,394 )

Interest income and other income (expense), net 5,418 785 ( 7,064 )

Other components of pension and OPEB, excluding service costs

Components of pension and OPEB, excluding service costs (Note 17)

98 4,960 ( 4,337 )

Gain (loss) on GreenFirst equity securities 5,197 ( 3,597 ) —

Gain (loss) on debt extinguishment 651 1,116 ( 7,841 )

Loss from continuing operations before income taxes ( 23,822 ) ( 82,872 ) ( 98,228 )

Gain (loss) on GreenFirst equity securities (Note 3) — 5,197 ( 3,597 )

Other income, net 6,502 6,069 1,901

Loss from continuing operations before income tax ( 132,474 ) ( 23,822 ) ( 82,872 )

Income tax (expense) benefit (Note 19) 32,311 ( 902 ) 34,688

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Loss from continuing operations ( 102,147 ) ( 27,377 ) ( 49,769 )

Income from discontinued operations, net of taxes (Note 3) 12,458 116,183 38,624

Income from discontinued operations, net of tax (Note 3) 312 12,458 116,183

Net income (loss) $ ( 101,835 ) $ ( 14,919 ) $ 66,414

Basic earnings per common share (Note 15)

Loss from continuing operations $ ( 0.42 ) $ ( 0.78 ) $ ( 0.60 )

Income from discontinued operations 0.19 1.83 0.61

Net income (loss) per common share-basic $ ( 0.23 ) $ 1.05 $ 0.01

Diluted earnings per common share (Note 15)

Basic and Diluted earnings per common share (Note 15)

Loss from continuing operations $ ( 1.57 ) $ ( 0.42 ) $ ( 0.78 )

Income from discontinued operations — 0.19 1.83

Net income (loss) per common share-diluted $ ( 0.23 ) $ 1.05 $ 0.01

Net income (loss) $ ( 1.57 ) $ ( 0.23 ) $ 1.05

See Notes to Consolidated Financial Statements.

Rayonier Advanced Materials Inc.

Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

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Other comprehensive income (loss), net of tax (Note 14)

Foreign currency translation adjustments ( 12,763 ) ( 17,919 ) 25,024

Foreign currency translation adjustment 7,530 ( 12,763 ) ( 17,919 )

Unrealized gain (loss) on derivative instruments 194 280 ( 2,681 )

Net gain (loss) on pension and postretirement plans 33,155 69,765 ( 19,976 )

Total other comprehensive income 20,672 49,165 5,592

Comprehensive income $ 5,753 $ 115,579 $ 6,147

Net gain on employee benefit plans 10,157 33,155 69,765

Total other comprehensive income (loss) 17,881 20,672 49,165

Comprehensive income (loss) $ ( 83,954 ) $ 5,753 $ 115,579

See Notes to Consolidated Financial Statements.

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Inventory (Note 6) 207,474 265,334

Prepaid and other current assets 59,671 50,597

Investment in GreenFirst equity securities (Note 3) — 38,510

Income tax receivable (Note 19) 19,455 1,196

Prepaid and other current assets 74,904 59,671

Total current assets 575,058 689,530

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Stockholders’ equity (Note 13)

Common stock, 140,000,000 shares authorized at $ 0.01 par value, 64,020,761 and 63,738,409 issued and outstanding, respectively

Common stock:

140,000,000 shares authorized at $ 0.01 par value, 65,393,014 and 64,020,761 issued and outstanding, respectively

Additional paid-in capital 419,122 418,048

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Other comprehensive income, net of tax

— — — — 49,165 49,165

Issuance of common stock under incentive stock plans 509,713 5 ( 5 ) — — —

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Balance at December 31, 2021 63,738,409 637 408,834 489,342 ( 84,470 ) 814,343

Net income — — — 66,414 — 66,414

Net loss — — — ( 14,919 ) — ( 14,919 )

Other comprehensive income, net of tax

6 unchanged sentences

Balance at December 31, 2022 64,020,761 640 418,048 474,423 ( 63,798 ) 829,313

Net income — — — ( 14,919 ) — ( 14,919 )

Net loss — — — ( 101,835 ) — ( 101,835 )

Other comprehensive income, net of tax — — — — 17,881 17,881

4 unchanged sentences

Balance at December 31, 2023 65,393,014 $ 654 $ 419,122 $ 372,588 $ ( 45,917 ) $ 746,447

——————————————

(a) Repurchased to satisfy tax withholding requirements related to the issuance of stock under the Company’s incentive stock plans .

7 unchanged sentences

Net income (loss) $ ( 101,835 ) $ ( 14,919 ) $ 66,414

Income from discontinued operations ( 12,458 ) ( 116,183 ) ( 38,624 )

Adjustments to reconcile net income (loss) to cash provided by operating activities:

Income from discontinued operations ( 312 ) ( 12,458 ) ( 116,183 )

Depreciation and amortization 139,983 134,576 138,299

Stock-based incentive compensation expense 9,650 5,099 6,432

Asset impairment 62,300 — —

Stock-based compensation expense 6,507 9,650 5,099

Amortization of debt discount and issuance costs 6,050 4,033 3,802

2 unchanged sentences

(Gain) loss on GreenFirst equity securities — ( 5,197 ) 3,597

(Gain) loss on debt extinguishment ( 651 ) ( 1,866 ) 7,841

Net periodic benefit cost of pension and postretirement plans 3,578 5,290 16,095

Loss on disposal of property, plant and equipment 3,742 1,010 481

Unrealized (gain) loss on foreign currency 1,900 ( 5,666 ) 3,978

Loss on disposal of property, plant and equipment 731 3,742 1,010

Other ( 361 ) ( 651 ) ( 5,556 )

Changes in operating assets and liabilities:

Receivables ( 33,824 ) ( 11,518 ) 4,539

Accounts receivable 19,979 ( 33,824 ) ( 11,518 )

Inventories 58,949 ( 35,113 ) ( 58,310 )

Income tax receivables 19,795 32,915 ( 52,568 )

Income tax receivable ( 7,137 ) 19,795 32,915

Accounts payable 13,757 ( 8,266 ) 7,376

1 unchanged sentence

Other ( 15,729 ) ( 8,359 ) 8,871

Contributions for pension and other postretirement plans ( 7,915 ) ( 8,552 ) ( 9,654 )

Contributions to pension and other postretirement plans ( 11,533 ) ( 7,915 ) ( 8,552 )

Expenditures for environmental liabilities ( 5,385 ) ( 4,461 ) ( 6,556 )

3 unchanged sentences

Investing activities

Capital expenditures, net ( 138,223 ) ( 93,217 ) ( 61,868 )

Capital expenditures, net of proceeds ( 127,670 ) ( 138,223 ) ( 93,217 )

Investment in equity method investment ( 780 ) ( 379 ) ( 4,142 )

Cash used in investing activities-continuing operations ( 128,450 ) ( 138,602 ) ( 97,359 )

Cash provided by (used in) investing activities-discontinued operations 44,428 182,750 ( 11,527 )

Cash provided by investing activities-discontinued operations 1,169 44,428 182,750

Cash provided by (used in) investing activities ( 127,281 ) ( 94,174 ) 85,391

1 unchanged sentence

Borrowings of long-term debt 465,030 5,721 4,393

Revolving credit facility and other borrowings — — 29,043

Repayments of long-term debt ( 537,845 ) ( 75,250 ) ( 161,025 )

Repayments of revolving credit facility and other borrowings — — ( 30,328 )

Short-term financing, net 1,369 ( 3,153 ) 2,028

Repurchase of common stock ( 433 ) ( 1,422 ) ( 457 )

Debt issuance costs ( 10,082 ) — ( 636 )

Repurchase of common stock ( 5,419 ) ( 433 ) ( 1,422 )

Cash used in financing activities ( 86,947 ) ( 73,115 ) ( 156,662 )

6 unchanged sentences

Supplemental cash flow information:

Interest paid on debt $ 58,053 $ 46,770 $ 49,294

Interest paid $ ( 51,017 ) $ ( 58,053 ) $ ( 46,770 )

Income taxes refunded (paid), net ( 7,239 ) 15,200 34,715

Capital assets purchased on account 37,363 29,726 25,580

Assets acquired under operating leases 2,975 6,774 182

See Notes to Consolidated Financial Statements.

20 unchanged sentences

The Financial Statements include the accounts and operations of the Company and its wholly owned, majority owned and controlled subsidiaries.

The Company applies the equity method of accounting for investments in which it has an ownership interest from 20 percent to 50 percent or exercises significant influence over the related investee’s operations.

All intercompany accounts and transactions are eliminated in consolidation.

7 unchanged sentences

Discontinued Operations

As a result of the sale of its lumber and newsprint assets, the Company presents the results for those operations as discontinued operations.

Unless otherwise stated, information in these Notes to Financial Statements relates to continuing operations.

The Company presents businesses that represent components as discontinued operations when they meet the criteria for held for sale or are sold, and their disposal represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results.

As a result of the sale of its lumber and newsprint assets in August 2021, the Company presents the results for those operations and any associated impacts as discontinued operations.

Unless otherwise stated, information in these notes to consolidated financial statements relates to continuing operations.

See Note 3—Discontinued Operations for further information.

3 unchanged sentences

Subsequent Events

In January 2023, the USDOC released the preliminary results of its fourth administrative review of duties applied to Canadian softwood lumber exports to the U.S., which indicate a reduction in rates to a combined 8.2 percent.

The Company will adjust its long-term receivable as appropriate when these rates are finalized and issued, which is expected later in 2023.

See Note 3 — Discontinued Operations and Note 21 — Commitments and Contingencies for further information.

Term Loan Amendment

In January 2024, the Company amended the 2027 Term Loan to increase the maximum consolidated secured net leverage ratio that it must maintain in the fourth quarter of 2023 and through its 2024 fiscal year.

See Note 9—Debt and Finance Leases for further information.

Significant Accounting Policies and Recent Accounting Developments

7 unchanged sentences

Cash and cash equivalents include time deposits and other investments that are highly liquid with original maturities of three months or less.

Allowance for Expected Credit Losses

Accounts Receivable and Allowance for Credit Loss

Trade accounts receivable are stated at the net amount expected to be collected.

4 unchanged sentences

Write-offs are recorded at the time a customer receivable is deemed uncollectible and collection efforts have been exhausted.

Finished goods, work-in-process and raw materials inventories are valued at the lower of cost, as determined on the first-in first-out basis, or net realizable value.

Finished goods, work-in-process and raw materials inventories are valued at the lower of cost, as determined on the first-in first-out basis, and net realizable value.

Manufacturing and maintenance supplies are valued at average cost.

8 unchanged sentences

Buildings and land improvements are depreciated using the straight-line method over 15 to 35 years and 5 to 30 years, respectively.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Recoverability of assets that are held and used is measured by net undiscounted cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying value exceeds the fair value of the assets, which is based on a discounted cash flows model.

Assets to be disposed of are reported at the lower of the carrying amount or fair value, less cost to sell.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Property, plant and equipment are primarily grouped at the combined plant level, the lowest level for which independent cash flows are identifiable.

Recoverability of assets that are held and used is measured by net undiscounted cash flows expected to be generated by the asset.

Assets to be disposed of are reported at the lower of the carrying amount or fair value, less cost to sell.

In the fourth quarter of 2023, in conjunction with the optimization and realignment of High Purity Cellulose assets, the Company recorded a non-cash impairment of $ 62 million related to certain assets at the Temiscaming and Jesup facilities.

See Note 7—Property, Plant and Equipment, Net for further details of this impairment.

Asset Retirement Obligations

6 unchanged sentences

During 2023, no obligations were incurred or settled:

the change in balance was due to a revision in estimated cash flows and less than $ 1 million of accretion.

For the years ended December 31, 2021 and 2020, the accretion related to asset retirement obligations was immaterial.

the change in balance was due to $ 1 million of accretion.

Accretion expense during the years ended December 31, 2022 and 2021 was immaterial.

Capitalized Software

1 unchanged sentence

These costs are generally amortized over a period of 5 years, once the assets are ready for their intended use.

Amortization expense for software is recorded in “cost of sales” and “selling, general and administrative expenses” in the consolidated statements of operations and totaled $ 4 million, $ 7 million and $ 6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2023 and 2022, the Company had $ 40 million and $ 22 million, respectively, of capitalized software included in “other assets” in the consolidated balance sheets.

Accumulated amortization was $ 23 million and $ 16 million at December 31, 2023 and 2022, respectively.

Amortization expense for capitalized software is recorded in “cost of sales” and “selling, general and administrative expense” in the consolidated statements of operations and totaled $ 4 million, $ 4 million and $ 7 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Maintenance Costs

The Company performs scheduled inspections, repairs and maintenance of plant machinery and equipment at the Company’s high purity cellulose, paperboard and high-yield pulp manufacturing facilities during a full plant shutdown.

The Company performs scheduled inspections and major repairs and maintenance of plant machinery and equipment at the Company’s manufacturing facilities during a full plant shutdown.

Costs associated with these planned outage periods are referred to as shutdown costs and are incurred to ensure the long-term reliability and safety of the manufacturing operations.

Shutdown costs are accounted for using the deferral method, under which expenditures related to shutdown are capitalized when incurred and amortized to production costs on a straight-line basis over the period benefited or the period of time until the next scheduled shutdown, which generally ranges from one year to 18 months.

Major maintenance shutdown costs are accounted for by the deferral method, under which expenditures related to shutdown are capitalized when incurred and amortized to production cost on a straight-line basis over the period benefited or the period of time until the next scheduled major maintenance shutdown, which generally ranges from one year to 18 months.

Shutdown costs are classified as operating activities in the consolidated statements of cash flows.

As of December 31, 2022 and 2021, the Company had $ 23 million and $ 19 million, respectively, in shutdown costs capitalized in “prepaid and other current assets” in the consolidated balance sheets.

As of December 31, 2023 and 2022, the Company had $ 34 million and $ 23 million, respectively, in deferred major maintenance shutdown costs recorded in “prepaid and other current assets” in the consolidated balance sheets.

Emissions Allowances

1 unchanged sentence

In order to comply with certain of these regulations and ordinances, the Company is allotted certain allowances or credits by governing authorities to offset the obligations created by the Company’s operations.

There is no value assigned to the government-allotted emissions allowances recorded on the consolidated balance sheets.

There is no value assigned to the government-allotted emissions allowances in the consolidated balance sheets.

Income or expense from the sale or purchase of emission allowances are recognized within “cost of sales” in the consolidated statements of operations.

During the years ended December 31, 2022, 2021 and 2020, the Company recorded $ 12 million, $ 12 million and $ 2 million, respectively, of sales of excess emission allowances associated with our Tartas, France operations.

Research and Development Expenses

R&D capabilities and activities are primarily focused on the High Purity Cellulose segment.

These efforts are directed at further developing products and technologies, including improving the quality of cellulose fiber grades, improving manufacturing efficiency and environmental controls and reducing fossil fuel consumption.

R&D expenses were $ 7 million for each of the years ended December 31, 2022, 2021 and 2020.

During the years ended December 31, 2023, 2022 and 2021, the Company recorded $ 11 million, $ 12 million and $ 12 million, respectively, of sales of excess emission allowances associated with its Tartas, France operations.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

Research and Development Expense

R&D capabilities and activities are primarily focused on the High Purity Cellulose segment.

R&D expense was $ 6 million, $ 7 million and $ 7 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Intangible Assets

The Company has definite-life intangible assets which it acquired through a business combination.

The definite-life intangible assets consist of customer lists and trade-names and are amortized over their estimated useful lives generally for periods ranging from 8 to 15 years.

The Company evaluates the recovery of its definite-life intangible assets by comparing the net carrying value of the asset group to the undiscounted net cash flows expected to be generated from the use and eventual disposition of that asset group when events or changes in circumstances indicate that its carrying amount may not be recoverable.

The Company has definite-life intangible assets that it acquired through a business combination.

The definite-life intangible assets consist of customer lists and trade names and are amortized over their estimated useful lives for periods generally ranging from 8 to 15 years.

The Company evaluates the recoverability of its definite-life intangible assets by comparing the net carrying value of the asset group to the undiscounted net cash flows expected to be generated from the use and eventual disposition of that asset group when events or changes in circumstances indicate that its carrying amount may not be recoverable.

If the carrying amount of the asset group is not recoverable, the fair value of the asset group is measured, and, if the carrying amount exceeds the fair value, an impairment loss is recognized.

10 unchanged sentences

Total definite-lived intangibles $ 60,284 $ ( 35,861 ) $ 24,423 4.5 years

Total amortization expense related to definite-lived intangible assets was $ 7 million for each of the years ended December 31, 2022, 2021 and 2020, respectively.

The following table presents the estimated future amortization expense related to intangible assets held as of December 31, 2022:

Total amortization expense related to definite-lived intangible assets was $ 7 million for each of the years ended December 31, 2023, 2022 and 2021.

Estimated future amortization expense related to intangible assets held as of December 31, 2023 was as follows:

Thereafter 2,207

Total $ 17,414

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Equity Method Investments

5 unchanged sentences

The Company and Anomera have entered into various service, leasing and supply agreements to support Anomera’s operations at the production facility.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

There are no financing agreements at Anomera for which the Company is liable.

The Company has a 44 percent voting interest in Anomera and is able to exercise significant influence, but not control, as it does not have the ability to direct the decisions that most significantly impact its economic performance.

2 unchanged sentences

During the years ended December 31, 2023, 2022 and 2021, the Company recorded losses of $ 2 million, $ 3 million and $ 2 million, respectively, on its equity investment in Anomera.

There are no financing agreements at Anomera for which the Company is liable.

LignoTech Florida LLC

1 unchanged sentence

Borregaard ASA, a public company in Norway traded on the Oslo Exchange, owns the remaining 55 percent interest.

LTF purchases sulfite liquor from the Company’s Fernandina Beach, Florida plant and converts it to purified lignins and ligno-sulfonates, which are used in concrete, textile dyes, pesticides, batteries and other products.

LTF purchases sulfite liquor from the Company’s Fernandina Beach, Florida plant and converts it to purified lignins and lignosulfonates, which are used in concrete, textile dyes, pesticides, batteries and other products.

The Company recorded $ 14 million, $ 20 million and $ 14 million of lignin sales to the LTF joint venture during the years ended December 31, 2023, 2022 and 2021, respectively.

The Company records its share of net earnings and losses on the investment in “other operating expense, net” in the consolidated statements of operations.

During the years ended December 31, 2022, 2021 and 2020, the Company recorded losses of $ 3 million, $ 2 million and $ 4 million, respectively, on its equity investment in LTF.

The Company recorded immaterial income on its equity investment in LTF during the year ended December 31, 2023.

During the years ended December 31, 2022 and 2021, the Company recorded losses of $ 3 million and $ 2 million, respectively.

See Note 18—Other Operating Expense, Net for further information.

2 unchanged sentences

Revenue Recognition and Measurement

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers.

The core principle of ASC 606 is that a company should recognize revenue when it transfers control of goods or services to customers for an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services.

Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied.

The majority of the Company’s contracts have a single performance obligation to transfer products.

Revenue is recognized when the performance obligations under a customer contract are satisfied.

The Company’s customer contracts have a single performance obligation to transfer products.

Accordingly, it recognizes revenue when control has been transferred to the customer.

9 unchanged sentences

These estimated rebates are included in the transaction price as a reduction to net sales.

The Company has certain contracts which contain performance obligations which are not significant in the context of the contract with the customer and have elected not to assess whether these promised goods or services are performance obligations.

The Company did not have any material contract assets or contract liabilities as of December 31, 2022 or 2021.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

The Company has certain contracts that contain performance obligations that are not significant in the context of the customer contract and has elected not to assess whether these promised goods or services are performance obligations.

The Company did not have any material contract assets or contract liabilities as of December 31, 2023 or 2022.

Environmental Costs

3 unchanged sentences

As new information becomes available, these cost estimates are updated and the recorded liabilities are adjusted appropriately.

Environmental liabilities are accounted for on an undiscounted basis and are reflected in current and non-current liabilities for disposed operations in the consolidated balance sheets.

Environmental liabilities are accounted for on an undiscounted basis and are reflected in “current environmental liabilities” and “non-current environmental liabilities” in the consolidated balance sheets.

Employee Benefit Plans

The determination of expense and funding requirements for the Company’s defined benefit pension and postretirement health care and life insurance plans are largely based on a number of actuarial assumptions.

The key assumptions include discount rate, return on assets, salary increases, health care cost trends, mortality rates, longevity and service lives of employees.

The components of periodic pension and post retirement costs, other than service costs, are presented separately outside of operating income in “other components of pension and OPEB, excluding service costs” on the consolidated statements of operations.

The key assumptions include discount rate, return on assets, salary increases, health care cost trends, mortality rates and service lives of employees.

The components of periodic pension and postretirement costs, other than service costs, are presented separately, outside of operating income, in “components of pension and OPEB, excluding service costs” in the consolidated statements of operations.

The service cost component of net periodic benefit cost is presented in “cost of sales” and “selling, general and administrative expense,” which correlates with the related employee compensation costs arising from services rendered during the period.

Only the service cost component of the net periodic benefit cost is eligible for capitalization in assets.

Only the service cost component of the net periodic benefit cost is eligible for capitalization.

Changes in the funded status of the Company’s plans are recorded through comprehensive income in the year in which the changes occur.

Actuarial gains and losses, which occur when actual experience differs from actuarial assumptions, are reflected in stockholders’ equity, net of taxes.

If actuarial gains and losses exceed ten percent of the greater of plan assets or plan liabilities, the Company will amortize them over the average future service period of employees.

Actuarial gains and losses, which occur when actual experience differs from actuarial assumptions, are reflected net of taxes in stockholders’ equity.

If actuarial gains and losses exceed ten percent of the greater of plan assets or plan liabilities, the Company amortizes them over the average future service period.

The Company uses the asset and liability method of accounting for income taxes.

Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, operating loss carryforwards and tax credit carryforwards.

Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement asset and liability carrying amounts and their respective tax bases, operating loss carryforwards and tax credit carryforwards.

Deferred tax assets and liabilities are measured pursuant to tax laws using rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled.

The Company records a valuation allowance to reduce the carrying amounts of DTAs if it is more likely than not that such DTAs will not be realized, with the exception of DTAs for suspended U.S.

The Company records a valuation allowance to reduce the carrying amounts of its DTAs if it is more likely than not that such DTAs will not be realized, with the exception of DTAs for suspended U.S.

interest deductions, which do not have a full valuation allowance in accordance with specific AICPA guidance.

4 unchanged sentences

The Company records a liability or an offset to the corresponding DTA for any uncertain tax position that does not meet this criterion.

The Company adjusts its liabilities for unrecognized tax benefits in the period in which it is determined the issue is settled with the taxing authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position or when new facts or information becomes available.

Interest expense and penalties, if applicable, related to unrecognized tax benefits are recorded in “income tax (expense) benefit” in the consolidated statements of operations.

Recent Accounting Developments

There have been no newly issued or adopted accounting pronouncements impacting the Financial Statements during 2022.

Discontinued Operations

In August 2021, the Company completed the sale of its lumber and newsprint facilities and certain related assets located in Ontario and Quebec, Canada, to GreenFirst for $ 232 million, including cash of $ 193 million, 28.7 million shares of GreenFirst common stock with a deemed fair value of $ 42 million and a credit note issued to the Company by GreenFirst in the amount of CAD $ 8 million (approximately USD $ 5 million after present value discount).

The credit note may be offset equally over the next 5 years against future amounts owed by the Company to GreenFirst for wood chip purchases.

In August 2023, the FASB issued ASU 2023-05 “Business Combinations—Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement,” which provides specific guidance on how a joint venture, upon formation, should recognize and initially measure assets contributed and liabilities assumed.

This ASU should be applied on a prospective basis to all joint ventures with a formation date on or after January 1, 2025.

Early adoption is permitted and joint ventures formed prior to adoption date may elect to apply the new guidance retrospectively back to their original formation date.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

The cash consideration received at closing was preliminary and subject to final purchase price and other sale-related adjustments.

In connection with the sale, the Company recorded a net-of-tax gain on sale of $ 4 million in 2021, inclusive of purchase price adjustments estimated as of closing.

In the first quarter of 2022, the Company trued up certain sale-related items with GreenFirst for a total net cash outflow of $ 3 million, as expected and previously disclosed.

Pursuant to the terms of the asset purchase agreement, GreenFirst and the Company were engaged in efforts to finalize the closing inventory valuation adjustment, which could have impacted the final purchase price.

In November 2022, the arbitration proceeding was resolved in favor of the Company and no changes were made to the gain on sale recorded during 2021.

The Company sold the GreenFirst common shares for $ 43 million in the second quarter of 2022.

Prior to the sale, the GreenFirst common shares were accounted for at fair value, with changes in fair value recorded in the consolidated statements of operations.

See Note 12 — Fair Value Measurements to Financial Statements for further information.

The shares sale agreement contains a purchase price protection clause whereby the Company is entitled to participate in further share price appreciation under certain circumstances until December 2023.

In connection with the sale, GreenFirst and the Company entered into a 20 -year wood chip and residual fiber supply agreement, securing supply for the Company’s operations at the Temiscaming plant.

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which requires disclosures about significant segment expenses and other segment items on an interim and annual basis.

ASU 2023-07 should be applied retrospective to all prior periods presented in the financial statements and is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of this standard on its disclosures, with no impact expected to its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires enhanced income tax disclosures, primarily through changes to the rate reconciliation and income taxes paid information.

ASU 2023-09 should be applied on a prospective basis and is effective for annual periods beginning after December 15, 2024.

Early adoption and retrospective application are permitted.

The Company is currently evaluating the impact of this standard on its disclosures, with no impact expected to its consolidated financial statements.

Discontinued Operations

In August 2021, the Company completed the sale of its lumber and newsprint facilities and certain related assets located in Canada to GreenFirst for $ 232 million, including cash of $ 193 million, 28.7 million shares of GreenFirst common stock with a deemed fair value of $ 42 million and a credit note issued to the Company by GreenFirst in the amount of CAD $ 8 million (USD $ 5 million after present value discount), which may be offset equally over the next 5 years against future amounts owed by the Company to GreenFirst for wood chip purchases.

The Company recorded a net-of-tax gain on the sale of $ 4 million.

In the second quarter of 2022, the Company sold the GreenFirst common shares for $ 43 million.

Prior to the sale of shares, the GreenFirst common shares were accounted for at fair value, with changes in fair value recorded in the consolidated statements of operations.

In connection with the sale, GreenFirst and the Company entered into a 20 -year assignable wood chip and residual fiber supply agreement, securing supply for the Company’s operations at the Temiscaming plant.

Additionally, the parties entered into a TSA whereby the Company provided certain transitional services to GreenFirst following the sale closing and through its termination in the second quarter of 2022.

1 unchanged sentence

Costs incurred by the Company in connection with the TSA were reimbursed by GreenFirst.

During the third quarter of 2022, the USDOC completed its third administrative review of duties applied to Canadian softwood lumber exports to the U.S.

As part of the sale of the lumber assets, the Company retained all rights and obligations to softwood duties generated or incurred through the closing date of the sale.

In total, the Company paid $ 112 million in softwood lumber duties from 2017 through August 2021, and expects to receive the vast majority of these duties upon final resolution of the dispute between the USDOC and Canada.

During the third quarter of 2023, the USDOC completed its fourth administrative review of duties applied to Canadian softwood lumber exports to the U.S.

during 2021 and reduced rates applicable to the Company to a combined 8.05 percent.

In connection with this development, the Company recorded a $ 16 million pre-tax gain and increased the long-term receivable related to all of the administrative reviews to date to $ 38 million.

In total, the Company paid $ 112 million in softwood lumber duties from 2017 through 2021, and expects to receive all or the vast majority of these duties upon settlement of the dispute.

In connection with this development, the Company recorded a pre-tax gain of $ 2 million in “income from discontinued operations, net of taxes.” During the third quarter of 2022, the USDOC completed its third administrative review of duties applied to Canadian softwood lumber exports during 2020 and reduced applicable rates to a combined 8.6 percent, for which the Company recorded a pre-tax gain of $ 16 million.

As of December 31, 2023 , the Company had a $ 40 million long-term receivable associated with the USDOC’s determinations of revised rates for the 2017, 2018, 2019, 2020 and 2021 periods.

During the second quarter of 2023, the Company incurred a $ 2 million loss related to the settlement of a claim pursuant to the representations and warranties in the asset purchase agreement.

The lumber and newsprint assets sold were previously reported within the Forest Products and Pulp and Newsprint segments, respectively.

Income (loss) from discontinued operations was comprised of the following:

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Income from discontinued operations was comprised of the following:

Year Ended December 31,

4 unchanged sentences

Gross margin — 155 205,913

Selling, general and administrative expenses and other 16,808 ( 27,119 ) ( 16,916 )

Selling, general and administrative expense and other operating income, net 424 16,808 ( 27,119 )

Operating income 424 16,963 178,794

2 unchanged sentences

Other non-operating income — — 967

Income from discontinued operations before income taxes 16,950 172,467 52,198

Income from discontinued operations before income tax 424 16,950 172,467

Income tax expense ( 112 ) ( 4,492 ) ( 60,400 )

Income from discontinued operations, net of taxes 12,458 112,067 37,916

Gain on sale of discontinued operation, pre-tax — 8,751 956

Income tax expense on gain — ( 4,635 ) ( 248 )

Income from discontinued operations, net of tax 312 12,458 112,067

Gain on sale of discontinued operations — — 8,751

Income tax expense on gain on sale of discontinued operations — — ( 4,635 )

Gain on sale of discontinued operations, net of tax — — 4,116

Income from discontinued operations $ 12,458 $ 116,183 $ 38,624

Income from discontinued operations, net of tax

$ 312 $ 12,458 $ 116,183

(a) Net of intercompany sales of $ 31 million and $ 44 million for 2021 and 2020, respectively.

There were no intercompany sales in 2022.

(a) Net of intercompany sales of $ 31 million in 2021.

(b) Allocated based on the total portion of debt not attributable to other operations repaid as a result of the transaction.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Other discontinued operations information included the following:

4 unchanged sentences

The Company’s operating and finance leases are primarily for corporate offices, warehouse space, rail cars and equipment.

As of December 31, 2022, the Company’s leases had remaining lease terms of one year to 13.8 years with standard renewal and termination options available at the Company’s discretion.

As of December 31, 2023, the Company’s leases have remaining lease terms of less than one year to 12.8 years with standard renewal and termination options available at the Company’s discretion.

Certain equipment leases have purchase options at the end of the term of the lease, which are not included in the ROU assets, as it is not reasonably certain that the Company will exercise such options.

1 unchanged sentence

The Company uses its incremental borrowing rate in determining the present value of lease payments unless the lease provides an implicit or explicit interest rate.

The weighted average discount rate used in determining the operating lease ROU assets and liabilities as of December 31, 2022 and 2021 was 8.9 percent and 7.6 percent, respectively.

The weighted average discount rate used in determining the finance lease ROU assets and liabilities as of both December 31, 2022 and 2021 was 7.0 percent.

The Company’s operating and finance lease cost were comprised of the following:

Financial and other information related to the Company’s operating and finance leases follow:

Year Ended December 31,

2023 2022 2021

Operating Leases $ 7,751 $ 6,049 $ 6,034

Finance Leases:

Operating lease cost $ 7,441 $ 7,751 $ 6,049

Finance lease cost

Amortization of ROU assets 405 377 352

1 unchanged sentence

Total lease cost $ 7,956 $ 8,266 $ 6,564

As of December 31, 2022, the weighted average remaining lease term was 5.8 years and 3.8 years for operating leases and financing leases, respectively.

As of December 31, 2021, the weighted average remaining lease term was 5.3 years and 4.9 years for operating leases and finance leases, respectively.

Cash provided by operating activities included $ 8 million, $ 6 million and $ 6 million from operating lease payments made during the years ended December 31, 2022, 2021 and 2020, respectively.

Finance lease cash flows were immaterial during the years ended December 31, 2022, 2021 and 2020.

As of December 31, 2022 and 2021, the Company had assets acquired under finance leases of $ 1 million and $ 2 million, respectively, included in “ property, plant and equipment, net ” in the consolidated balance sheets.

The Company’s finance leases liabilities are included in “ long-term debt” and their maturities are disclosed in Note 9 — Debt and Finance Leases .

The Company’s consolidated balance sheets included the following operating lease assets and liabilities:

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Balance Sheet Location 2023 2022

Operating leases

ROU assets Other assets $ 17,475 $ 15,623

1 unchanged sentence

Lease liabilities, non-current Other liabilities 14,666 11,399

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Finance leases

ROU assets Property, plant and equipment, net 1,078 1,448

Lease liabilities Long-term debt 1,355 1,760

Year Ended December 31,

2023 2022 2021

Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 6,996 $ 7,694 $ 6,391

Operating lease ROU assets obtained in exchange for lease liabilities 7,676 2,975 6,774

Finance lease cash flows were immaterial during the years ended December 31, 2023, 2022 and 2021.

Operating leases

Weighted average remaining lease term (in years) 5.5 5.8

Weighted average discount rate 8.3 % 8.9 %

Finance leases

Weighted average remaining lease term (in years) 2.8 3.8

Weighted average discount rate 7.0 % 7.0 %

Operating lease maturities as of December 31, 2023 were as follows:

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Present value of future minimum lease payments $ 19,165

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Accounts Receivable, Net

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Accounts receivable, net $ 197,457 $ 211,526

——————————————

(a) Consists primarily of value-added/consumption taxes, grants receivable and accrued billings due from government agencies.

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Property, plant and equipment, net $ 1,075,105 $ 1,151,268

Depreciation expense recorded in the consolidated statements of operations was $ 129 million, $ 124 million and $ 125 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company received proceeds from the sale of assets of $ 3 million, $ 0 million and $ 2 million during the years ended December 31, 2023, 2022 and 2021, respectively.

Asset Impairment

In the fourth quarter of 2023, the Company began efforts towards the optimization and realignment of its High Purity Cellulose assets that included the consolidation of commodity viscose production into the Temiscaming plant and fluff production into the Jesup plant’s C Line.

This realignment reflects a strategic decision expected to reduce commodity exposure and earnings volatility and allow the Company to better manage excess capacity of cellulose specialties by operating assets based on current demand for each end market.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

Depreciation expense reflected in the consolidated statements of operations was $ 124 million, $ 125 million and $ 124 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The realignment materially impacts the way the assets have been and will be managed, which resulted in the need for an impairment analysis and, ultimately, the recognition of a non-cash impairment of $ 62 million.

The impairment was recorded to “asset impairment” in the consolidated statements of operations and was comprised of the amount by which the Temiscaming plant’s net carrying value exceeded its estimated fair value and the write-off of certain assets at the Jesup plant that are no longer expected to be used.

Determining the fair value of an asset group is judgmental in nature and involves the use of significant estimates and assumptions.

The Company determined the fair value of the Temiscaming plant asset group using discounted cash flows under the income approach, which required the use of key assumptions and significant estimates.

See Note 12—Fair Value Measurements for further information on the fair value measurement of the Temiscaming plant asset group.

Accrued and Other Current Liabilities

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Accrued and other current liabilities $ 154,488 $ 164,369

——————————————

(a) Included at both December 31, 2022 and 2021 was CAD $ 25 million (USD $ 18 million and $ 20 million, respectively) associated with funds received in 2021 for the CEWS.

(a) Included at both December 31, 2023 and 2022 was CAD $ 25 million (USD $ 19 million) associated with funds received in 2021 for the CEWS.

All CEWS claims are subject to mandatory audit.

The Company will recognize amounts from these claims in income at the time there is sufficient evidence that it will not be required to repay such amounts.

(b) Included at December 31, 2022 was $ 30 million of energy-related payables associated with Tartas facility operations.

(b) Included at December 31, 2023 and 2022 was $ 13 million and $ 30 million, respectively, of energy-related payables associated with Tartas facility operations.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Debt and Finance Leases

Debt and finance leases included the following:

ABL Credit Facility due 2025, $ 130 million available and bearing interest of 6.64 % ( 4.39 % LIBOR plus 2.25 %) at December 31, 2022

7.625 % Senior Secured Notes due 2026

475,000 475,000

5.50 % Senior Notes due 2024

ABL Credit Facility due December 2025:

$ 118 million net availability, bearing interest of 7.45 % ( 5.45 % adjusted SOFR plus 2.00 % margin) at December 31, 2023

Term Loan due July 2027:

bearing interest of 13.33 % ( 5.33 % three-month Term SOFR plus 8.00 % margin) at December 31, 2023

7.625 % Senior Secured Notes due January 2026

464,640 475,000

5.50 % CAD-based term loan due 2028

5.50 % Senior Unsecured Notes due June 2024

5.50 % CAD-based term loan due April 2028

30,479 36,585

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44,754 19,598

Short-term factoring facility-France 3,773 7,118

Short-term factoring facility 5,292 3,773

Finance lease obligations 1,355 1,760

Total principal payments due 796,520 859,391

debt premium, original issue discount and issuance costs ( 6,266 ) ( 8,461 )

unamortized premium, discount and issuance costs ( 19,063 ) ( 6,266 )

Total debt 777,457 853,125

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Long-term debt $ 752,174 $ 838,508

——————————————

(a) Consist of loans for energy and bioethanol projects in France.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

(a) Consist of loans for energy and other loans intended for use in biomaterials projects in France.

Future debt and finance lease payments as of December 31, 2023 included:

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Total debt and finance lease payments due $ 1,502 $ 147 $ 1,355 $ 795,165

ABL Credit Facility due 2025

The Company’s $ 200 million ABL Credit Facility matures in 2025 and is secured by certain U.S.

and Canadian assets, including a first priority lien on inventory, accounts receivable and bank accounts, and a second priority lien on certain of the assets securing the Senior Secured Notes.

ABL Credit Facility

The Company’s $ 200 million ABL Credit Facility matures in December 2025 and is secured by certain U.S.

and Canadian assets, including a first priority lien on inventory, accounts receivable and bank accounts, and a second priority lien on certain of the assets securing the 2026 Notes.

Availability under the ABL Credit Facility fluctuates based on eligible accounts receivable and inventory levels.

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Additionally, the Company is subject to cash dominion if net availability falls below a certain threshold, currently $ 25 million.

The ABL Credit Facility has a springing maturity covenant whereby its 2025 maturity is accelerated to be 121 days prior to the final maturity of the Senior Notes, or February 2024, unless the aggregate outstanding principal balance of the Senior Notes on that date is less than $ 30 million.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

The credit agreement governing the ABL Credit Facility does not contain an ongoing financial maintenance covenant.

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At December 31, 2023, the Company was in compliance with all covenants under the ABL Credit Facility.

7.625 % Senior Secured Notes due 2026

In December 2020, the Company issued $ 500 million aggregate principal amount of 7.625 percent senior secured notes due 2026, at an offering price of 100 percent.

The Company used the net proceeds from the issuance towards the repayment of the outstanding obligations under the Company’s previous credit facility and recorded a loss on extinguishment of $ 8 million to “gain (loss) on debt extinguishment” in the consolidated statements of operations.

The Senior Secured Notes were issued and sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act and non-U.S.

persons pursuant to Regulation S under the Securities Act.

The lenders under the Senior Secured Notes have a first priority security interest in substantially all of the Company’s current and future U.S.

and Canadian material assets, while the Senior Secured Notes have a second priority lien on certain of the assets securing the ABL Credit Facility.

During the third quarter of 2021, the Company repurchased $ 25 million of the Senior Secured Notes at a redemption price of 103 percent and recorded a loss on extinguishment of $ 1 million to “gain (loss) on debt extinguishment” in the consolidated statements of operations.

2027 Term Loan

In July 2023, the Company secured term loan financing of $ 250 million in aggregate principal amount and received net proceeds of $ 243 million after a non-cash original issue discount of $ 7 million.

In addition, the Company incurred issuance costs of $ 10 million, which, together with the original issue discount, were recorded in “long-term debt” in the consolidated balance sheets and will be amortized to “interest expense” in the consolidated statements of operations over the term of the loan.

The net proceeds, together with cash on hand, were used to redeem the 2024 Notes and pay transaction costs.

The 2027 Term Loan matures in July 2027, requires quarterly principal payments of $ 1.25 million, bears interest at an annual rate equal to three-month Term SOFR (or, if greater, 3.00 percent) plus 8.00 percent and had an effective interest rate of 14.4 percent at December 31, 2023.

The Company may voluntarily make prepayments at any time, subject to customary breakage costs and, if within the first three anniversaries of closing, an additional make-whole premium.

The agreement governing the 2027 Term Loan contains various customary covenants that limit the ability of the Company and its restricted subsidiaries, as defined by the term loan agreement and in particular the Company’s French subsidiaries, to take certain specified actions, subject to stated exceptions, including:

incurring debt or liens, making investments, entering into mergers, consolidations, and acquisitions, paying dividends and making other restricted payments.

Additionally, the 2027 Term Loan contains customary affirmative covenants and customary events of default (subject, in certain cases, to customary grace or cure periods), including, without limitation, late payment, breach of covenant, bankruptcy, judgment and defaults under certain other indebtedness and changes in control.

In addition, should the Company exceed the 4.50 to 1.00 maximum ratio established by the original agreement in any of these quarters, it will incur a fee of 0.25 % of the principal balance outstanding at the end of the applicable quarter.

The Company incurred total fees of $ 3 million related to this amendment, including $ 1 million in legal and advisory fees recorded to “selling, general and administrative expense” in the consolidated statements of operations in the fourth quarter of 2023, and $ 2 million in lender fees that will be recorded as deferred financing costs in the first quarter of 2024 and amortized to “interest expense” over the remaining term of the loan.

The Company is required to maintain various financial covenants, including a consolidated secured net leverage ratio, based on covenant EBITDA, as follows:

• 5.25 to 1.00 for the fourth quarter of 2023 through the second quarter of 2024;

• 5.00 to 1.00 for the third fiscal quarter of 2024;

• 4.75 to 1.00 for the fourth fiscal quarter of 2024;

• 4.50 to 1.00 for each fiscal quarter thereafter.

At December 31, 2023, the Company was in compliance with all covenants under the 2027 Term Loan Agreement.

In December 2020, the Company issued $ 500 million aggregate principal amount of 7.625 percent senior secured notes due January 2026, at an offering price of 100 percent.

The notes had an effective interest rate of 8.3 percent at December 31, 2023.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

The Senior Secured Notes have a springing maturity covenant whereby their 2026 maturity is accelerated to be 91 days prior to the final maturity of the Senior Notes, or March 2024, unless the aggregate outstanding principal balance of the Senior Notes on that date is less than $ 50 million.

The indenture governing the Senior Secured Notes contains various customary covenants that limit the ability of the Company and its restricted subsidiaries, as defined by the Senior Secured Notes, to take certain specified actions, subject to certain exceptions, including:

The 2026 Notes were issued and sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act and non-U.S.

persons pursuant to Regulation S under the Securities Act.

The lenders under the 2026 Notes have a first priority security interest in substantially all of the Company’s current and future U.S.

and Canadian material assets, while the 2026 Notes have a second priority lien on certain of the assets securing the ABL Credit Facility.

In April 2023, the Company repurchased $ 10 million of the 2026 Notes through open-market transactions and retired the notes for cash of $ 9 million.

A gain on extinguishment of $ 1 million for the repurchase was recorded to “other income, net” in the consolidated statements of operations.

During the third quarter of 2021, the Company repurchased $ 25 million of the 2026 Notes at a redemption price of 103 percent and recorded a loss on extinguishment of $ 1 million to “other income, net” in the consolidated statements of operations.

The indenture governing the 2026 Notes contains various customary covenants that limit the ability of the Company and its restricted subsidiaries, as defined by the 2026 Notes, to take certain specified actions, subject to certain exceptions, including:

creating liens, incurring indebtedness, making investments and acquisitions, engaging in mergers and other fundamental changes, making dispositions, making restricted payments, including dividends and distributions, and consummating transactions with affiliates.

Additionally, the Senior Secured Notes contain customary affirmative covenants and customary events of default (subject, in certain cases, to customary grace or cure periods), including, without limitation, late payment, breach of covenant, bankruptcy, judgment and defaults under certain other indebtedness and changes in control.

At December 31, 2022, the Company was in compliance with all covenants under the Senior Secured Notes.

5.50 % Senior Notes due 2024

In May 2014, the Company issued $ 550 million aggregate principal amount of 5.50 percent senior notes due 2024.

The Senior Notes were issued and sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act and non-U.S.

Additionally, the 2026 Notes contain customary affirmative covenants and customary events of default (subject, in certain cases, to customary grace or cure periods), including, without limitation, late payment, breach of covenant, bankruptcy, judgment and defaults under certain other indebtedness and changes in control.

At December 31, 2023, the Company was in compliance with all covenants under the 2026 Notes.

In May 2014, the Company issued $ 550 million aggregate principal amount of 5.50 percent senior unsecured notes due June 2024.

The 2024 Notes were issued and sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act and non-U.S.

persons pursuant to Regulation S under the Securities Act.

During the second, third and fourth quarters of 2022, the Company repurchased a total $ 47 million of the Senior Notes through open-market transactions and retired the notes for cash of $ 47 million.

A net gain on extinguishment of $ 1 million for the repurchases was recorded to “gain (loss) on debt extinguishment” in the consolidated statements of operations.

During the year ended December 31, 2021, the Company repurchased $ 127 million of the Senior Notes through open-market transactions and retired them for $ 124 million in cash.

A net gain on extinguishment of $ 2 million for the repurchase was recorded to “gain (loss) on debt extinguishment” in the consolidated statements of operations.

The indenture governing the Senior Notes contains various customary covenants that limit the ability of the Company and its restricted subsidiaries, as defined by the Senior Notes, to take certain specified actions, subject to certain exceptions, including:

creating liens;

incurring indebtedness;

making investments and acquisitions;

engaging in mergers and other fundamental changes;

making dispositions;

making restricted payments, including dividends and distributions;

and consummating transactions with affiliates.

Additionally, the Senior Notes contain customary affirmative covenants and customary events of default (subject, in certain cases, to customary grace or cure periods), including, without limitation, late payment, breach of covenant, bankruptcy, judgment and defaults under certain other indebtedness and changes in control.

At December 31, 2022, the Company was in compliance with all covenants under the Senior Notes.

CAD Term Loan

During the third and fourth quarters of 2022, the Company repaid CAD fixed interest rate term loans in the total amount of CAD $ 24 million (USD $ 18 million).

Short-term Factoring Facility-France

In August 2023, the Company redeemed the $ 318 million outstanding principal balance and accrued interest of $ 4 million of the 2024 Notes.

A loss on extinguishment of $ 1 million related to the redemption was recorded to “other income, net” in the consolidated statements of operations.

At the time of the full redemption, the Company was in compliance with all covenants under the 2024 Notes.

Prior to the full redemption of its 2024 Notes, in March 2023, the Company repurchased $ 5 million of the 2024 Notes through open-market transactions and retired the notes for cash of $ 5 million.

An immaterial gain on extinguishment for the repurchase was recorded to “other income, net.”

During 2022, the Company repurchased a total $ 47 million of the 2024 Notes through open-market transactions and recorded a net gain on extinguishment of $ 1 million to “other income, net” for the repurchases.

During 2021, the Company repurchased a total $ 127 million of the 2024 Notes through open-market transactions and recorded a net gain on extinguishment of $ 2 million to “other income, net” for the repurchases.

Short-term Factoring Facility

The Company’s subsidiary in France entered into a factoring agreement with BNP pursuant to which it submits the value of eligible receivables up to USD $ 3 million and euro € 24 million for immediate payment.

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The Company pays interest on a monthly basis for these borrowings based on the value of factored invoices at the Euribor 3-month rate, with floor at zero percent, plus 0.55 percent.

The weighted-average interest rate on total short-term borrowings associated with this agreement at December 31, 2022 was 0.90 percent.

The weighted average interest rate on total short-term borrowings associated with this agreement at December 31, 2023 and 2022 was 4.2 percent and 0.9 percent, respectively.

The Company has fixed rate loans with various financial institutions primarily related to energy projects in France.

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and management’s knowledge and experience with these and similar types of environmental matters.

These estimates include potential costs for investigation, assessment, remediation, ongoing operation and maintenance (where applicable), and post-remediation monitoring of the sites, as well as the cost of legally-required financial assurance relating to the Company’s obligations on an undiscounted basis, generally for a period of 20 years.

These estimates include potential costs for investigation, assessment, remediation, ongoing operation and maintenance (where applicable) and post-remediation monitoring of the sites, as well as the cost of legally-required financial assurance related to the Company’s obligations on an undiscounted basis, generally for a period of 20 years.

These environmental liabilities do not include potential third-party recoveries to which the Company may be entitled unless they are probable and estimable.

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All other sites 63,917 ( 1,514 ) 266 62,669 ( 2,223 ) ( 1,081 ) 59,365

Total 171,679 $ ( 6,556 ) $ 6,099 171,222 $ ( 4,461 ) $ 3,920 170,681

Current portion ( 8,684 ) ( 11,303 ) ( 10,732 )

Non-current portion $ 162,995 $ 159,919 $ 159,949

——————————————

(a) Included in the increase (decrease) to liability during the year ended December 31, 2022 was a $ 1 million increase due to foreign currency fluctuations.

The liability as of December 31, 2021 was not significantly impacted by foreign currency fluctuations.

Total environmental liabilities 171,222 $ ( 4,461 ) $ 3,920 170,681 $ ( 5,385 ) $ 4,995 170,291

Current environmental liabilities ( 11,303 ) ( 10,732 ) ( 9,833 )

Non-current environmental liabilities $ 159,919 $ 159,949 $ 160,458

(a) Included in the increase (decrease) to liability during the year ended December 31, 2022 was an increase of $ 1 million due to foreign currency fluctuations.

The liability as of December 31, 2023 was not materially impacted by foreign currency fluctuations.

Port Angeles, Washington

The Company operated a pulp mill at this site from 1930 until 1997.

The site and the adjacent marine areas (a portion of Port Angeles harbor) have been in various stages of the assessment process under the MTCA since 2000, and several voluntary interim soil clean-up actions have been performed during this time.

The site and the adjacent marine areas (a portion of Port Angeles harbor) have been in various stages of the assessment process under the Washington MTCA since 2000, and several voluntary interim soil clean-up actions have been performed during this time.

In addition, the Company may be liable under CERCLA for “natural resource damages” caused by releases from the site.

As a result of an agreed order with Ecology, the remainder of the MTCA regulatory process will be completed on a set timetable, subject to approval of all reports and studies by Ecology.

As a result of an agreed order with Washington Ecology, the remainder of the Washington MTCA regulatory process will be completed on a set timetable, subject to approval of all reports and studies by Washington Ecology.

Upon completion of all work required under the agreed order and negotiation of an approved remedy, additional remedial measures for the site and off-site areas may be necessary and, as a result, current cost estimates and the corresponding liability could change.

During 2022, the estimated liability was relatively unchanged as payments nearly equaled the increase in estimated costs related to the site’s operation and maintenance.

During 2021, the estimated liability decreased $ 1 million due to spend in the year.

During 2023 and 2022, the estimated liability was relatively unchanged.

Augusta, Georgia

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Current cost estimates and the corresponding liability could vary if recovery or discharge volumes change or if changes to current remediation activities are required in the future.

During 2022 and 2021, the estimated liability was relatively unchanged as payments nearly equaled the increase in estimated costs related to the site’s operation and maintenance.

During 2022, the estimated liability was relatively unchanged as payments approximated the increase in estimated costs related to the site’s operation and maintenance.

During 2023, the estimated liability increased primarily due to changes in estimates related to site operations and maintenance.

Rayonier Advanced Materials Inc.

6 unchanged sentences

Additional remedial activities may be necessary in the future that may result in changes to current cost estimates and the corresponding liability.

During 2022 and 2021, the estimated liability was relatively unchanged as payments nearly equaled the increase in estimated remediation costs.

During 2023 and 2022, the estimated liability was relatively unchanged.

East Point, Georgia

3 unchanged sentences

Current cost estimates and the corresponding liability could vary if changes to current remediation activities are required in the future.

During 2022, the reserve increased $ 1 million due to an increase in cost estimates related to the remediation activities.

During 2021, the reserve was relatively unchanged as payments nearly equaled the increase in estimated costs.

During 2022, the reserve increased primarily due to an increase in cost estimates related to the remediation activities.

During 2023, the reserve increased primarily due to increases in financial assurance rates and estimates related to site operations and maintenance.

In addition to these estimated liabilities, the Company is subject to the risk of reasonably possible additional liabilities in excess of the established liabilities due to potential changes in circumstances and future events, including, without limitation, changes to current laws and regulations;

1 unchanged sentence

developments in remediation technologies;

increases in the cost of remediation, operation, maintenance and monitoring of its disposed operations sites and providing financial assurance relating thereto;

increases in the cost of remediation, operation, maintenance and monitoring of its environmental liability sites;

changes in the volume, nature or extent of contamination to be remediated or monitoring to be undertaken;

3 unchanged sentences

These potential additional costs are attributable to several of the above sites and other applicable liabilities.

This estimate excludes liabilities which would otherwise be considered reasonably possible but for the fact that they are not currently estimable primarily due to the factors discussed above.

This estimate excludes liabilities that would otherwise be considered reasonably possible but for the fact that they are not currently estimable primarily due to the factors discussed above.

Subject to the previous paragraph, the Company believes its estimates of liabilities are sufficient for probable costs expected to be incurred over the next 20 years with respect to its disposed operations.

However, no assurances are given that these estimates of liabilities will be sufficient for the reasons described above and additional liabilities could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

However, no assurance is given that these estimates will be sufficient for the reasons described above and additional liabilities could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

Derivative Instruments

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Accumulated gains and losses associated with these instruments were deferred as a component of AOCI to be recognized in earnings as the underlying hedged transactions occur and affect earnings.

Foreign Currency Exchange Rate Risk

Foreign currency fluctuations affect investments in foreign subsidiaries and foreign currency cash flows related to third party purchases, product shipments and foreign-denominated debt.

The Company is also exposed to the translation of foreign currency earnings to the USD.

Management may use foreign currency forward contracts to selectively hedge its foreign currency cash flows exposure and manage risk associated with changes in currency exchange rates.

The Company’s principal foreign currency exposure is to the CAD, and to a lesser extent, the euro.

Rayonier Advanced Materials Inc.

2 unchanged sentences

The effect of derivative instruments designated as cash flow hedges, the related changes in AOCI and the gains and losses in income were as follows:

December 31, 2021

Derivatives Designated as

Hedging Instruments Gain (Loss) Recognized in OCI Gain (Loss) Reclassified from AOCI into Income Location on Statements of Operations

December 31, 2022

Interest rate swaps $ — $ — Interest expense

Foreign currency contracts $ — $ — Other operating expense, net

Foreign currency contracts — 4,088 Cost of sales

Foreign currency contracts — — Interest income and other income (expense), net

December 31, 2021

Interest rate swaps $ — $ — Interest expense

Foreign currency contracts — — Other operating expense, net

Foreign currency contracts — 4,088 Cost of sales

Foreign currency contracts — ( 397 ) Interest income and other income (expense), net

December 31, 2020

Interest rate swaps $ ( 2,027 ) $ ( 2,666 ) Interest expense

Foreign currency contracts ( 13,045 ) 702 Other operating expense, net

Foreign currency contracts 6,481 ( 6,481 ) Cost of sales

Foreign currency contracts ( 197 ) ( 918 ) Interest income and other income (expense), net

The effects of derivative instruments not designated as hedging instruments on the statements of operations were as follows:

Derivatives Not Designated as Hedging Instruments Statements of Operations Location Year Ended December 31,

2022 2021 2020

Foreign exchange contracts Other operating expense, net $ — $ — $ ( 703 )

The unrealized gain (loss) in AOCI related to hedge derivatives is presented below:

Foreign currency contracts — ( 397 ) Other income, net

Losses reclassified from AOCI into income were immaterial during the years ended December 31, 2023 and 2022.

The unrealized loss in AOCI related to hedge derivatives is presented below:

Foreign exchange cash flow hedges, net of tax $ 373 $ 567

6 unchanged sentences

This includes certain pricing models, discounted cash flows methodologies and similar techniques that use significant unobservable inputs.

Assets Measured at Fair Value on a Nonrecurring Basis

Asset Impairment

In the fourth quarter of 2023, the Company recorded a $ 25 million non-cash impairment related to the Temiscaming plant asset group.

The fair value of the Temiscaming plant assets was determined using discounted cash flows under the income approach from the perspective of a market participant assuming the highest and best use of the asset group.

Discounted cash flows were estimated using key assumptions regarding production levels, price levels, profit margins, capital expenditures and discount rate, which are Level 3 measurements.

See Note 7—Property, Plant and Equipment, Net for further information on this impairment.

Financial Instruments

The carrying amounts of the Company’s cash, receivables and payables approximate fair value due to the short-term nature of those instruments.

The carrying amount of borrowings outstanding under the ABL Credit Facility, 2027 Term Loan and short-term factoring facility approximate fair value due to their variable interest rates.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

The following table presents the carrying amount, estimated fair values and categorization under the fair value hierarchy for financial instruments held by the Company, using market information and what management believes to be appropriate valuation methodologies:

December 31, 2022 December 31, 2021

Carrying Amount Fair Value Carrying Amount Fair Value

Level 1 Level 2 Level 1 Level 2

Cash and cash equivalents

Cash $ 127,288 $ 127,288 $ — $ 231,607 $ 231,607 $ —

Money market and similar funds 24,515 24,515 — 21,700 21,700 —

Investment in GreenFirst equity securities — — — 38,510 — 38,510

Fixed-rate long-term debt $ 847,591 $ — $ 838,502 $ 919,455 $ — $ 964,308

The fair value of the Company’s fixed rate debt is estimated using quoted market prices for debt with similar terms and maturities, which are Level 2 inputs, and was as follows:

Carrying amount of fixed rate debt (a)

$ 536,393 $ 847,591

Fair value of fixed rate debt 497,563 838,502

(a) Excludes finance lease obligations.

The Company uses the following methods and assumptions in estimating the fair value of its financial instruments:

Cash and cash equivalents — Cash and cash equivalents are all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase and the carrying amount is equal to fair market value.

The Company had investments in money market and similar funds of $ 25 million and $ 22 million as of December 31, 2022 and 2021, respectively, measured using level 1 inputs.

Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities.

The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value.

Investment in GreenFirst shares — The Company received 28.7 million shares of GreenFirst common stock in connection with the sale of the lumber and newsprint assets to GreenFirst, which the Company was required to hold for a minimum of six months following the close of the transaction.

Accordingly, prior to February 28, 2022, the fair value of these shares reflected a DLOM given the restriction on sale by the Company.

The primary inputs in the fair value estimate during the minimum holding period were expected term, dividend yield, volatility and risk-free rate.

All inputs to the DLOM were observable.

In May 2022, the Company sold the 28.7 million common shares for $ 43 million.

The following are the key inputs at each measurement date:

(not in thousands) December 31, 2021 At closing of transaction

Expected Term 0.16 years 0.5 years

Risk-free rate 0.10 % 0.20 %

Dividend yield — —

Volatility 73.77 % 92.04 %

DLOM 6.77 % 14.38 %

Stockholders’ Equity

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The Company does not expect to utilize any further authorization in the near future.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Stockholder Rights Plan

In March 2022, the Company adopted the Rights Agreement whereby a significant penalty is imposed upon any person or group which acquires beneficial ownership of 10 % or more of the Company’s common stock without the approval of the Board of Directors.

Also on this date, the Board of Directors declared a dividend of one preferred share Purchase Right for each outstanding share of common stock of the Company, par value $ 0.01 per share Company common stock, which was paid to Company stockholders of record as of the close of business on March 31, 2022.

The Purchase Rights trade with, and are inseparable from, shares of the Company common stock.

Each Purchase Right will allow its holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock for $ 35.00 , once the Purchase Rights become exercisable.

This portion of a Preferred Share will give the stockholder approximately the same dividend, voting and liquidation rights as would one share of Company common stock.

The Purchase Rights expire on March 20, 2023 and are exercisable 10 days after the public announcement or public disclosure that a person or group has acquired a beneficial ownership of 10 % or more of the outstanding Company common stock (including certain derivative positions), subject to certain exceptions.

In March 2022, the Company adopted a stockholder rights plan whereby a significant penalty is imposed upon any person or group which acquires beneficial ownership of 10 % or more of the Company’s common stock without the approval of the Board of Directors.

On the same date, the Board of Directors declared a dividend of one preferred share Purchase Right for each outstanding share of common stock of the Company, par value $ 0.01 per share, which was paid to Company stockholders of record as of March 31, 2022.

On March 20, 2023, the Purchase Rights expired .

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Loss

Year Ended December 31,

3 unchanged sentences

$ ( 43,694 ) $ ( 76,849 ) $ ( 146,614 )

Other comprehensive gain (loss) before reclassifications 38,105 63,147 ( 37,515 )

Income tax on other comprehensive gain (loss) ( 9,229 ) ( 13,365 ) 8,940

Reclassifications to earnings:

Pension settlement loss (gain) (b)

Other comprehensive gain before reclassifications 12,859 38,105 63,147

Income tax on other comprehensive gain ( 2,283 ) ( 9,229 ) ( 13,365 )

Reclassifications to earnings (a)

Pension settlement loss (b)

Amortization of (gain) loss ( 705 ) 5,534 15,491

Amortization of prior service cost 196 25 550

Income tax on reclassifications (e)

90 ( 1,280 ) ( 6,649 )

Amortization of losses 5,534 15,491 12,838

Amortization of prior service costs 25 550 564

Income tax on reclassifications ( 1,280 ) ( 6,649 ) ( 2,255 )

Plans included in sale of assets to GreenFirst — — 4,012

Income tax on plans included in sale of assets to GreenFirst — — ( 1,039 )

Net comprehensive gain (loss) on employee benefit plans, net of tax 33,155 69,765 ( 19,976 )

Net comprehensive gain on employee benefit plans, net of tax 10,157 33,155 69,765

Balance, end of year ( 33,537 ) ( 43,694 ) ( 76,849 )

Unrealized gain on derivative instruments, net of tax:

Unrealized gain (loss) on derivative instruments, net of tax

Balance, beginning of year

( 567 ) ( 847 ) 1,834

Other comprehensive income before reclassifications — — ( 8,788 )

Income tax on other comprehensive income — — 2,171

Reclassifications to earnings:

Interest rate contracts — — 2,666

Foreign exchange contracts 323 ( 3,691 ) 6,697

Income tax on reclassifications ( 43 ) 1,010 ( 2,202 )

Reclassifications to earnings - foreign currency exchange contracts (c)

224 323 ( 3,691 )

Income tax on reclassifications (e)

( 30 ) ( 43 ) 1,010

Net comprehensive gain (loss) on derivative instruments, net of tax 194 280 ( 2,681 )

3 unchanged sentences

Balance, beginning of year ( 19,537 ) ( 6,774 ) 11,145

Foreign currency translation, net of tax effects of $ 0 , $ 0 , and $ 0 (d)

Foreign currency translation adjustment, net of tax (d)

7,530 ( 12,763 ) ( 17,919 )

1 unchanged sentence

Accumulated other comprehensive loss, end of year $ ( 45,917 ) $ ( 63,798 ) $ ( 84,470 )

——————————————

(a) The AOCI components for defined benefit pension and post-retirement plans are included in the computation of net periodic pension cost.

(a) The AOCI components for defined benefit pension and post-retirement plans are included in the computation of net periodic benefit cost.

See Note 17—Employee Benefit Plans for further information.

2 unchanged sentences

Additionally, the Company continued the process of winding up certain Canadian pension plans and as a result recorded a settlement loss of $ 2 million.

During 2020, the Company finalized the wind up process of certain Canadian pension plans and as a result recorded a settlement gain of $ 3 million.

See Note 17—Employee Benefit Plans for further information.

Reclassifications of foreign currency exchange contracts are recorded in “cost of sales,” “other operating income” or non-operating income as appropriate.

Additional details about the reclassifications related to derivative instruments is included in Note 11 — Derivative Instruments for further information.

(d) Foreign currency translation is net of tax effects of zero for all periods presented as the French operations are taxed on the foreign functional currency, not the translated Company’s reporting currency.

(c) Reclassifications of foreign currency exchange contracts are recorded in “cost of sales,” “other operating expense, net” or “other income, net,” as appropriate.

See Note 11—Derivative Instruments for further information.

(d) Foreign currency translation is net of tax effects of $ 0 for all periods presented, as the French operations are taxed on the foreign functional currency, not the translated reporting currency.

(e) Income tax effects are released from AOCI in the period in which the underlying item is realized in earnings.

Earnings per Common Share

Basic earnings per share is calculated by dividing net income available for common stockholders by the weighted average number of shares of common stock outstanding during the year.

Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding adjusted by the potentially dilutive effect of outstanding stock options, performance-based stock and restricted stock.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

Earnings per Common Share

Basic earnings per share is calculated by dividing net income available for common stockholders by the weighted-average number of shares of common stock outstanding during the year.

Diluted earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding adjusted to include the potentially dilutive effect of outstanding stock options, performance shares, restricted shares and Preferred Stock.

The following table provides details of the calculations of basic and diluted earnings per common share (share and per share amounts not in thousands):

The following table provides the inputs to the calculations of basic and diluted earnings per common share (share amounts not in thousands):

Year Ended December 31,

2023 2022 2021

Loss from continuing operations attributable to common stockholders $ ( 27,377 ) $ ( 49,769 ) $ ( 38,069 )

Income from discontinued operations 12,458 116,183 38,624

Loss from continuing operations $ ( 102,147 ) $ ( 27,377 ) $ ( 49,769 )

Income from discontinued operations, net of tax 312 12,458 116,183

Net income (loss) available for common stockholders $ ( 101,835 ) $ ( 14,919 ) $ 66,414

2 unchanged sentences

Stock options — — —

Performance and restricted shares — — —

Performance and restricted stock — — —

Shares used in determining diluted earnings per common share 65,108,397 63,910,010 63,645,245

Basic earnings per common share

Loss from continuing operations $ ( 0.42 ) $ ( 0.78 ) $ ( 0.60 )

Income from discontinued operations 0.19 1.83 0.61

Net income (loss) $ ( 0.23 ) $ 1.05 $ 0.01

Diluted earnings per common share

Loss from continuing operations $ ( 0.42 ) $ ( 0.78 ) $ ( 0.60 )

Income from discontinued operations 0.19 1.83 0.61

Net income (loss) $ ( 0.23 ) $ 1.05 $ 0.01

Anti-dilutive instruments excluded from the computation of diluted earnings per share were as follows:

Anti-dilutive instruments excluded from the computation of diluted earnings per share included (not in thousands):

Year Ended December 31,

1 unchanged sentence

Stock options 46,798 77,767 111,124

Performance and restricted shares 3,654,506 2,387,272 2,650,357

Total 3,732,273 2,498,396 2,802,638

Performance and restricted stock 3,257,295 3,654,506 2,387,272

Total anti-dilutive instruments 3,304,093 3,732,273 2,498,396

Incentive Stock Plans

As of December 31, 2022, the Company had three stock-based incentive plans.

The Prior Plans provided for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, performance shares, restricted stock, and restricted stock units, subject to certain limitations.

The Company no longer issues shares under the Prior Plans.

As of December 31, 2023, the Company had four stock-based incentive plans.

The Prior Incentive Stock Plans provided for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, performance stock, restricted stock and restricted stock units, subject to certain limitations.

The Company no longer issues shares under the Prior Incentive Stock Plans.

The 2023 Plan provides for up to 3.9 million shares to be granted for stock options, non-qualified stock options, stock appreciation rights, performance shares, restricted stock and restricted stock units.

Under the 2021 Plan, shares available for issuance may be increased by any shares of common stock subject to awards under the Prior Plan that, in whole or in part, are forfeited, terminated or expire unexercised, settled in cash in lieu of stock, or released from a reserve for failure to meet the maximum payout under a program.

Under the 2023 Plan, shares available for issuance may be increased by any shares of common stock subject to awards under the Prior Incentive Stock Plans that, in whole or in part, are forfeited, terminated or expire unexercised, settled in cash in lieu of stock, or released from a reserve for failure to meet the maximum payout under a program.

At December 31, 2023, approximately 3 million shares were available for future grants under the 2023 Plan.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

During the year ended December 31, 2022, the Company made new grants of restricted stock units and performance-based stock units to certain employees.

The 2022 restricted stock unit awards cliff vest after three years .

The 2022 performance-based stock unit awards measure TSR on an absolute basis and relative to peers.

Participants can earn between 0 and 250 percent of the target award.

Performance below the threshold for the absolute TSR would result in a zero payout for the TSR metric.

There is a performance-based stock award and cash unit stock award that will be measured using the same objectives but paid and accounted for separately.

As required by ASC 718, Compensation-Stock Compensation , the portion of the award to be settled in cash is classified as a liability and remeasured to fair value at the end of each reporting period until settlement.

In March 2022, the performance-based share units granted in 2019 vested without meeting the performance thresholds, resulting in no stock units being awarded.

In March 2021, the performance-based share units granted in 2018 were settled at an average of 60 percent of the performance-based stock units awarded, resulting in the issuance of 182,811 shares of common stock.

The Company recognizes stock-based compensation expense on a straight-line basis, net of forfeitures, over the service period of the award.

The Company does not estimate a forfeiture rate for non-vested shares.

Forfeitures are recognized and will lower stock-based compensation during the period in which they occur.

The Company’s total stock-based compensation cost, including allocated amounts, for the years ended December 31, 2022, 2021 and 2020 was $ 10 million, $ 5 million and $ 6 million, respectively.

These amounts may not reflect the cost of current or future equity awards.

The Company’s employee stock option compensation program generally provides accelerated vesting (i.e., a waiver of the remaining period of service required to earn an award) for awards held by employees at the time of their retirement.

Stock-based compensation expense for stock option awards is recognized over the shorter of:

(1) the service period (i.e., the stated period of time required to earn the award) or (2) the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement.

Fair Value Calculations by Award

All restricted stock and performance share awards are presented for RYAM stock only.

Option awards include RYAM awards held by employees of its former parent Rayonier Inc.

Forfeitures are recognized and reduce stock-based compensation expense during the period in which they occur.

Stock-based compensation expense was as follows:

Year Ended December 31,

2023 2022 2021

Stock-based compensation expense

$ 6,507 $ 9,650 $ 5,099

Non-Qualified Employee Stock Option Awards

Stock option awards include RYAM awards held by employees of its former parent Rayonier Inc.

Stock options are granted with an exercise price equal to the market value of the underlying stock on the grant date.

They generally vest ratably over three years and have a maximum term of 10 years and two days from the grant date.

Stock-based compensation expense for stock option awards is recognized over the shorter of:

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

The fair value of each option grant is estimated on the grant date using the Black-Scholes option-pricing model.

The Company has elected to value each grant in total and recognize the expense for stock options on a straight-line basis over three years .

No options were granted during the years ended December 31, 2022, 2021 and 2020.

A summary of the Company’s stock option activity is presented below:

The fair value of options vested at December 31, 2023, 2022 and 2021 was zero .

No options were granted or exercised during the years ended December 31, 2023, 2022 and 2021.

The outstanding options at December 31, 2023 expired in January 2024.

A summary of the Company’s stock option activity follows:

(not in thousands) Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value

Outstanding at January 1, 2022 111,124 $ 39.47

Outstanding at December 31, 2022

77,767 $ 39.98

Forfeited — —

2 unchanged sentences

Outstanding at December 31, 2023

46,798 $ 37.77 — $ —

Options vested and expected to vest 46,798 $ 37.77 — $ —

Options exercisable at December 31, 2023

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Additional information pertaining to stock options granted to employees is presented below:

Year Ended December 31,

46,798 $ 37.77 — $ —

Intrinsic value of options exercised $ — $ — $ —

Fair value of options vested — — —

Restricted Stock and Stock Unit Awards

Restricted stock and stock units granted in connection with the Company’s performance share plan generally vest upon completion of periods ranging from one year to three years .

The 2023 restricted stock unit awards cliff vest after three years .

The fair value of each share granted is equal to the share price of the underlying stock on the date of grant.

As of December 31, 2022, there was $ 5 million of unrecognized compensation cost related to the Company’s outstanding restricted stock.

This cost is expected to be recognized over a weighted average period of 1.7 years.

The following table summarizes the activity of restricted stock and stock units granted to employees:

The following table summarizes the details of the restricted stock and stock units granted to employees:

Year Ended December 31,

2 unchanged sentences

992,830 1,328,931 561,025

Weighted average price of restricted stock or units granted (not in thousands)

Weighted average price of restricted stock or stock units granted (not in thousands)

$ 5.27 $ 5.50 $ 9.71

Intrinsic value of restricted stock and units outstanding $ 16,297 $ 5,296 $ 5,405

Fair value of restricted stock and units vested $ 3,772 $ 4,412 $ 4,420

The Company’s restricted stock and stock units activity is summarized below:

Intrinsic value of restricted stock and stock units outstanding $ 7,641 $ 16,297 $ 5,296

Fair value of restricted stock and stock units vested $ 4,264 $ 3,772 $ 4,412

The following table summarizes the 2023 restricted stock and stock units activity:

(not in thousands) Restricted Stock and Stock Unit Awards Weighted Average Grant Date Fair Value

Outstanding at January 1, 2022 927,556 $ 8.72

Outstanding at December 31, 2022

1,697,587 $ 6.21

Granted 992,830 5.27

2 unchanged sentences

Outstanding at December 31, 2023

Performance-Based Stock Unit Awards

The Company’s performance-based stock unit awards generally vest upon completion of a three-year period.

The performance-based stock unit award payout is calculated using a combination of Company specific performance metrics and TSR, which is measured on an absolute basis as well as relative to a peer group of companies.

Depending on performance against these targets, the awards will pay out in common stock amounts between 0 and 250 percent of the performance-based stock units awarded.

The performance-based stock unit awards which are measured against a market condition or incorporate market conditions are valued using a Monte Carlo simulation model.

The model generates the fair value of the market-based award or market-based portion of the award at the grant date.

The related expense is then amortized over the award’s vesting period.

As of December 31, 2022, there was $ 4 million of unrecognized compensation cost related to the Company’s performance-based stock unit awards.

This cost is expected to be recognized over a weighted average period of 1.6 years.

1,886,694 $ 6.01

As of December 31, 2023, there was $ 5 million of unrecognized compensation cost related to the Company’s outstanding restricted stock that is expected to be recognized over a weighted average period of 1.6 years.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

The following table summarizes the activity of the Company’s performance-based stock units awarded to its employees:

Performance-Based Stock Unit and Cash Awards

The Company’s performance-based awards generally vest upon completion of a three-year period.

The performance-based stock unit award payout is calculated using a combination of Company-specific performance metrics and TSR, which is measured on an absolute basis as well as relative to a peer group of companies.

Performance-based cash awards are measured using the same objectives as the performance-based stock unit awards but are classified as a liability and remeasured to fair value at the end of each reporting period until settlement.

The 2021, 2022 and 2023 performance-based awards cliff vest after three years and are based equally on TSR relative to peers and adjusted EBITDA.

Participants of the 2021 and 2023 awards can earn between 0 and 200 percent of the target award.

Participants of the 2022 award can earn between 0 and 250 percent of the target award.

Performance below the threshold for the TSR would result in zero payout for the TSR metric for all years’ awards.

The performance-based stock unit awards that are measured against a market condition or incorporate market conditions are valued using a Monte Carlo simulation model.

The model generates the fair value of the market-based award or market-based portion of the award at the grant date.

The related expense is then amortized over the award’s vesting period.

Expected volatility is based on representative price returns using the stock price of several peer companies.

The risk-free rate was based on the 3-year U.S.

treasury rate on the date of the award.

The following table provides a tabular overview of the weighted average assumptions used in calculating the fair value of the awards granted:

Year Ended December 31,

2023 2022 2021

Expected volatility 77.6 % 75.0 % 93.0 %

Risk-free rate 4.1 % 4.3 % 0.3 %

The following table summarizes the details of the performance-based stock units awarded to employees:

Year Ended December 31,

2023 2022 2021

Common shares of stock reserved for performance-based stock units (not in thousands)

3 unchanged sentences

Intrinsic value of outstanding performance-based stock units $ 5,551 $ 18,786 $ 8,335

The Company’s performance-based stock unit award activity is summarized below:

The following table summarizes the 2023 performance-based stock unit award activity:

(not in thousands) Performance-Based Stock Unit Awards Weighted Average Grant Date Fair Value

Outstanding at January 1, 2022 1,459,716 $ 6.51

Outstanding at December 31, 2022

1,956,919 $ 6.79

Granted 305,764 9.09

Forfeited ( 5,433 ) 4.73

Vested ( 886,649 ) 5.95

Outstanding at December 31, 2023

The expected volatility is based on representative price returns using the stock price of several peer companies.

The risk-free rate was based on the 3-year U.S.

treasury rate on the date of the award.

The following chart provides a tabular overview of the weighted average assumptions used in calculating the fair value of the awards granted:

Year Ended December 31,

1,370,601 $ 7.83

Expected volatility 75.0 % 93.0 % 67.8 %

Risk-free rate 4.3 % 0.3 % 0.9 %

In March 2023, the performance-based stock units granted in 2020 were settled with the issuance of 1,257,015 shares of common stock, including incremental shares of 370,366 , based on performance results.

In March 2022, the performance-based stock units granted in 2019 vested without meeting the performance thresholds, resulting in no stock units being awarded.

In March 2021, the performance-based stock units granted in 2018 were settled at an average of 60 percent of the performance-based stock units awarded, resulting in the issuance of 182,811 shares of common stock.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

As of December 31, 2023, there was $ 4 million of unrecognized compensation cost related to the Company’s performance-based stock unit awards that is expected to be recognized over a weighted average period of 1.7 years.

Employee Benefit Plans

3 unchanged sentences

Certain Canadian plans were included with the sale of the Company’s lumber and newsprint assets.

In the fourth quarter of 2022, the Company adopted a full freeze on future benefits for salaried participants in the U.S.

defined benefit plans.

The impact of the curtailment reduced the benefit obligation and the accumulated net loss within other comprehensive income by $ 8 million.

In 2021, the Company purchased annuity contracts from a third-party insurance company that assumed responsibility for future pension benefits for certain participants in its U.S.

1 unchanged sentence

Additionally, the Company continued the process of winding up certain Canadian pension plans and as a result recorded a settlement loss of $ 2 million.

During 2020, the Company started the process of winding up certain Canadian pension plans and as a result recorded a settlement gain of $ 3 million.

During 2022, the Company recorded a $ 1 million loss related to the asset surplus distribution to the plans’ participants.

The settlements were recognized in “other components of pension and OPEB, excluding service costs” in the Company’s consolidated statements of operations for the year ended December 31, 2022, 2021 and 2020.

During 2022, the Company recorded a $ 1 million loss related to the final asset surplus distribution to the plan participants of the wound-up Canadian pension plans mentioned above.

In addition, in the fourth quarter of 2022, the Company adopted a full freeze on future benefits for salaried participants in the U.S.

defined benefit plans.

The impact of the curtailment reduced the benefit obligation and the accumulated net loss within other comprehensive income by $ 8 million.

During the first quarter of 2023, the Company recorded a $ 2 million loss related to the final asset surplus distribution to the plan participants of certain other wound-up Canadian pension plans.

These settlements were recognized in “components of pension and OPEB, excluding service costs” in the consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021.

Defined benefit pension and other postretirement plan liabilities are calculated using actuarial estimates and management assumptions.

These estimates are based on historical information, along with certain assumptions about future events.

Changes in assumptions, as well as changes in actual experience, could cause the estimates to change.

These estimates are based on historical information and certain assumptions about future events.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

The following tables present the changes in the projected benefit obligation and plan assets and reconciles funded status and the amounts recognized in the consolidated balance sheets of the defined benefit pension and postretirement plans:

The following tables present the changes in the projected benefit obligation and plan assets and reconciles funded status and the defined benefit pension and postretirement plan amounts recognized in the consolidated balance sheets:

Pension Postretirement

3 unchanged sentences

Interest cost 28,724 21,028 1,351 818

Actuarial loss (gain) ( 157,828 ) ( 32,221 ) ( 7,617 ) 1,220

Actuarial (gain) loss 21,015 ( 157,828 ) ( 7,198 ) ( 7,617 )

Participant contributions 700 723 115 133

14 unchanged sentences

Funded Status at end of year $ ( 83,475 ) $ ( 87,185 ) $ ( 23,864 ) $ ( 29,944 )

——————————————

(a) In 2022, the Company received cash of $ 3 million related to surplus assets of unwound pension plans.

The projected benefit obligation decreased during the year ended December 31, 2022 due to the settlements of certain Canadian and U.S.

pension plans, actuarial gains resulting from an increase in the discount rate assumed and foreign currency exchange rates.

(a) The Company received cash of $ 6 million and $ 3 million in 2023 and 2022, respectively, related to surplus assets of unwound pension plans.

Pension Postretirement

4 unchanged sentences

Net amount recognized $ ( 83,475 ) $ ( 87,185 ) $ ( 23,864 ) $ ( 29,944 )

The projected benefit obligation increased during the year ended December 31, 2023 primarily due to the settlements of certain Canadian pension plans, actuarial losses resulting from a decrease in the discount rate assumed and foreign currency exchange rates.

Net gain (loss) recognized in other comprehensive income for the three years ended December 31 was as follows:

2 unchanged sentences

Net gain (loss) $ 9,202 $ 30,531 $ 64,173 $ 6,639 $ 7,574 $ ( 1,025 )

Prior service costs $ ( 2,982 ) $ — $ — $ — $ — $ —

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

Net gains or losses and prior service costs or credits reclassified from other comprehensive income and recognized as a component of pension and postretirement expense for the three years ended December 31 were as follows:

Net gain (loss) and prior service cost (credit) reclassified from other comprehensive income and recognized as a component of pension and postretirement expense for the three years ended December 31 were as follows:

Pension Postretirement

2023 2022 2021 2023 2022 2021

Continuing operations:

Pension settlement (gain) loss (a)

$ — $ 7,618 $ ( 1,571 ) $ — $ — $ —

Amortization of losses 5,462 15,471 13,084 72 20 ( 188 )

Amortization of prior service cost (credit) 147 703 717 ( 122 ) ( 153 ) ( 153 )

Discontinued operations:

Pension settlement (gain) loss (a)

Pension settlement loss (a)

$ — $ — $ 7,618 $ — $ — $ —

Amortization of losses — — ( 58 ) — — —

Amortization of (gain) loss ( 490 ) 5,462 15,471 ( 215 ) 72 20

Amortization of prior service cost (credit) 294 147 703 ( 98 ) ( 122 ) ( 153 )

——————————————

(a) The year ended December 31, 2020 included settlement gains for Canadian plans in the process of winding-up.

During 2021, the Company completed the wind-up of certain Canadian pension plans and began the process of winding up additional Canadian plans, recognizing a loss.

In 2021, the Company purchased annuity contracts from a third-party insurance company that assumed responsibility for future pension benefits for certain participants in the Company’s U.S.

defined benefit plans and recognized a loss on the settlement and de-recognition of the projected benefit obligation.

Net losses, prior service costs or credits and plan amendments that have not yet been included in pension and postretirement expense and have been recognized as a component of AOCI for the three years ended December 31 were as follows:

(a) During 2021, the Company completed the wind-up of certain Canadian pension plans and began the process of winding up additional Canadian plans, recognizing a loss.

Also in 2021, the Company purchased annuity contracts from a third-party insurance company that assumed responsibility for future pension benefits for certain participants in the Company’s U.S.

defined benefit plans and recognized a loss on the settlement and derecognition of the projected benefit obligation.

Net gain (loss), prior service cost (credit) and plan amendments that have not yet been included in pension and postretirement expense and have been recognized as a component of AOCI for the three years ended December 31 were as follows:

Pension Postretirement

1 unchanged sentence

Prior service cost (credit) $ ( 3,852 ) $ ( 1,204 ) $ ( 1,455 ) $ 659 $ 757 $ 879

Net gains (losses) ( 67,770 ) ( 95,470 ) ( 187,533 ) 3,920 ( 3,547 ) ( 1,820 )

Net gain (loss) ( 50,796 ) ( 67,770 ) ( 95,470 ) 10,343 3,920 ( 3,547 )

Curtailment — 8,000 — — — —

Deferred income tax benefit (expense) 13,750 22,243 43,731 ( 1,147 ) 501 90

Deferred income tax (expense) benefit 12,630 13,750 22,243 ( 2,521 ) ( 1,147 ) 501

Accumulated other comprehensive income (loss) $ ( 42,018 ) $ ( 47,224 ) $ ( 74,682 ) $ 8,481 $ 3,530 $ ( 2,167 )

For defined benefit pension plans, the following table presents the projected and accumulated benefit obligations and the fair value of plan assets:

For defined benefit pension plans, the projected and accumulated benefit obligations and the fair value of plan assets were as follows:

Projected benefit obligation $ 616,118 $ 594,455

6 unchanged sentences

(in thousands unless otherwise stated)

The following tables present the components of net pension and postretirement benefit cost that have been recognized in continuing operations for the three years ended December 31:

The following table presents the components of net periodic benefit cost of the plans:

Pension Postretirement

3 unchanged sentences

Expected return on plan assets ( 31,425 ) ( 32,419 ) ( 37,255 ) — — —

Amortization of prior service (credit) cost 147 703 717 ( 122 ) ( 153 ) ( 153 )

Amortization of losses 5,553 15,471 13,084 72 20 ( 188 )

Pension settlement (gain) loss 964 7,618 ( 1,571 ) — — —

Amortization of prior service cost (credit) 294 147 703 ( 98 ) ( 122 ) ( 153 )

Amortization of (gain) loss ( 490 ) 5,553 15,471 ( 215 ) 72 20

Pension settlement loss 2,317 964 7,618 — — —

Other — — — ( 556 ) ( 173 ) ( 49 )

1 unchanged sentence

$ 4,297 $ 3,179 $ 14,190 $ 1,598 $ 2,111 $ 1,905

——————————————

(a) Service cost is included in “cost of sales” or “selling, general and administrative expenses” in the consolidated statements of operations, as appropriate.

Interest cost, expected return on plan assets, amortization of prior service cost, amortization of losses and amortization of negative plan amendment are included in non-operating income on the consolidated statements of operations.

(a) Service cost is included in “cost of sales” or “selling, general and administrative expense” in the consolidated statements of operations, as appropriate.

Interest cost, expected return on plan assets, amortization of prior service cost (credit) and amortization of (gain) loss are included in “components of pension and OPEB, excluding service costs” on the consolidated statements of operations.

The Company uses the spot rate approach method to determine the service and interest cost components of net periodic benefit cost.

1 unchanged sentence

The Company believes this provides a more precise measurement of service and interest costs by improving the correlation between projected cash outflows and corresponding spot rates on the yield curve.

The following table presents the weighted average principal assumptions inherent in the determination of benefit obligations and net periodic benefit cost of the pension and postretirement benefit plans:

The following table presents the weighted average principal assumptions inherent in the determination of benefit obligations and net periodic benefit cost of the pension and postretirement plans:

Pension Postretirement

23 unchanged sentences

In other more well-funded plans, 100 percent is allocated to fixed income securities.

All plans were within their respective targeted ranges.

The Company’s weighted average defined benefit pension plan asset allocation at December 31, 2022 and 2021, by asset category were as follows:

All plans were within their respective targeted ranges at December 31, 2023.

The Company’s weighted average defined benefit pension plan asset allocations at December 31, by asset category, were as follows:

Percentage of Plan Assets

4 unchanged sentences

Total 100 % 100 %

——————————————

(a) Includes cash balances related to the timing of portfolio management activities.

8 unchanged sentences

government securities — 78,652 — 78,652

Derivative instruments — 421 — 421

Investments at net asset value:

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(in thousands unless otherwise stated)

The valuation methodology used for measuring the fair value of these asset categories was as follows:

The valuation methodologies used for measuring the fair value of these asset categories were as follows:

Mutual funds and collective trusts — Net asset value in an observable market.

Corporate bonds — Valued using pricing models maximizing the use of observable inputs for similar securities.

This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings.

government securities — Valued using pricing models maximizing the use of observable inputs for similar securities.

Common collective trust funds — Common collective trusts are measured at NAV per share, as a practical expedient for fair value, as provided by the Plan trustee.

The NAV is calculated by determining the fair value of the fund’s underlying assets, deducting its liabilities, and dividing by the units outstanding as of the valuation date.

Corporate bonds — Valued using pricing models that maximize the use of observable inputs for similar securities, including basing value on yields currently available on comparable securities of issuers with similar credit ratings.

government securities — Valued using pricing models that maximize the use of observable inputs for similar securities.

Common collective trust funds — Measured at net asset value per share, as a practical expedient for fair value, as provided by the Plan trustee.

The net asset value is calculated by determining the fair value of the fund’s underlying assets, deducting its liabilities, and dividing by the units outstanding as of the valuation date.

These funds are not publicly traded;

2 unchanged sentences

Expected benefit payments for the next ten years were as follows:

Pension Benefits Postretirement Benefits

Pension Postretirement

2024 $ 39,581 $ 1,563

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$ ( 5,784 ) $ ( 4,903 ) $ ( 6,709 )

Loss on sale or disposal of property, plant and equipment

( 3,742 ) ( 1,010 ) ( 481 )

Equity income (loss) from joint venture ( 2,737 ) ( 2,048 ) ( 3,706 )

Loss on disposal of property, plant and equipment ( 2,872 ) ( 3,742 ) ( 1,010 )

Equity in income (loss) of joint venture 204 ( 2,737 ) ( 2,048 )

Miscellaneous income (expense) ( 3,955 ) 1,183 ( 486 )

Other operating expense, net $ ( 12,407 ) $ ( 10,199 ) $ ( 10,253 )

——————————————

(a) Reflects adjustments to the Company’s estimates of the environmental liability for the assessment, remediation and long-term monitoring and maintenance of the disposed operations sites over the next 20 years and other related costs.

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(in thousands unless otherwise stated)

Loss from continuing operations before income tax consisted of the following:

Year Ended December 31,

2023 2022 2021

United States $ ( 65,413 ) $ ( 53,012 ) $ ( 64,645 )

Foreign ( 67,061 ) 29,190 ( 18,227 )

Loss from continuing operations before income tax

$ ( 132,474 ) $ ( 23,822 ) $ ( 82,872 )

Income Tax (Expense) Benefit from Continuing Operations

13 unchanged sentences

Income tax (expense) benefit $ 32,311 $ ( 902 ) $ 34,688

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

The following table reconciles the effective income tax rate on continuing operations to the U.S.

3 unchanged sentences

federal statutory income tax rate 21.0 % 21.0 % 21.0 %

CARES Act and other tax regulations (a)

— ( 0.8 ) 20.2

Change in valuation allowance (b)

( 38.2 ) ( 3.6 ) 13.9

Change in valuation allowance ( 7.7 ) ( 38.2 ) ( 3.6 )

Adjustment to previously filed tax returns 2.0 11.3 5.2

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tax on foreign earnings (GILTI and Subpart F, net of FTC) ( 0.1 ) ( 0.9 ) ( 2.2 )

Change in blended statutory rate (c)

Change in blended statutory rate (a)

Interest on tax payments/receipts 0.6 10.1 —

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Effective income tax rate on continuing operations 24.4 % ( 3.8 ) % 41.9 %

——————————————

(a) As part of the CARES Act, the Company is able to carry 2019 and 2020 tax NOLs back to tax years when the U.S.

federal statutory rate was 35 percent compared with the current 21 percent.

The Company recognized a $ 20 million tax benefit arising from the remeasured increased value of the tax NOLs in 2019 and 2020.

(b) The tax benefit for the year ended December 31, 2020 includes an adjustment to reverse a valuation allowance, which was initially recorded for the year ended December 31, 2019, on a DTA generated from a disallowed interest deduction.

Under the Internal Revenue Code Section 163(j), U.S.

interest is only deductible up to 30 percent of ATI.

The disallowed interest deduction can be carried forward indefinitely but will only be realized to the extent the Company has net U.S.

interest expense below 30 percent of ATI in any given year after first utilizing its current year interest expense.

Based on its projected interest expense and ATI, the Company does not believe it will be able to realize any of the existing suspended interest deductions and, as a result, recorded a full valuation allowance on these DTAs as of December 31, 2019.

However, in December of 2019 the AICPA issued TQA 3300.01-02, which asserts that a valuation allowance should only be recognized to the extent that the reversal of existing deferred tax assets and liabilities is not sufficient to realize the disallowed interest carryforward, ignoring material evidence, including the expectation of future earnings or losses and future interest expense.

In strict compliance with this TQA, in 2020, the Company reversed all of the valuation allowance on the DTAs generated from disallowed interest through December 31, 2020, resulting in a $ 14 million increase in the tax benefit, of which $ 9 million related to recognition of DTAs recorded on December 31, 2019.

The continued application of this AICPA guidance is expected to result in future recognition of additional DTAs that the Company believes will not be realized.

(c) In 2021, the Company recorded a tax benefit on the remeasurement of the Company’s Canadian DTAs at a higher Canadian blended statutory tax rate.

(a) In 2021, the Company recorded a tax benefit on the remeasurement of the Company’s Canadian DTAs at a higher Canadian blended statutory tax rate.

The Canadian statutory rate is higher as a result of changing the allocation of income between the Canadian provinces after the sale of the lumber and newsprint assets.

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Deferred Taxes

Deferred income taxes result from recording revenues and expenses in different periods for financial reporting versus tax reporting.

Deferred income taxes result from recording revenue and expense in different periods for financial reporting versus tax reporting.

The nature of these temporary differences and the resulting net deferred tax balances follow:

Deferred tax assets:

Canadian net operating losses (a)

Net operating losses (a)

$ 116,353 $ 117,939

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Environmental liabilities 39,258 38,069

Deferred interest deductions (a)

Deferred U.S.

interest deductions (a)

33,188 25,731

Deferred foreign interest deductions (a)

Other compensation 5,412 5,206

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$ 329,991 $ 305,143

——————————————

(a) Further detail of these items as of December 31, 2023 follows:

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Canada non-capital losses 476,808 102,039 — 2025-2037

Canadian pool of SR&ED 414,293 95,483 — None

Canada pool of SR&ED 416,679 96,113 — None

interest limitation carryforward 150,854 33,188 ( 18,680 ) None

federal net operating losses 50,104 10,522 — None

Foreign interest limitation carryforward 13,192 3,290 ( 3,290 ) None

France net operating losses 13,285 3,792 — None

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

The Company’s net DTAs include $ 17 million of disallowed U.S.

At December 31, 2023 and 2022, the Company’s net DTA included $ 15 million and $ 17 million, respectively, of disallowed U.S.

interest deductions that the Company does not believe will be realized.

This asset increased $ 6 million as a result of a tax benefit recognized in the year ended December 31, 2022.

In strict compliance with the AICPA’s TQA 3300.01-02, which asserts that certain material evidence regarding the realizability of disallowed U.S.

interest deductions should be ignored when assessing the need for a valuation allowance, the Company has not recognized a valuation allowance on this portion of the DTAs generated from disallowed interest.

In strict compliance with the AICPA’s Technical Questions and Answers 3300.01-02, which asserts that certain material evidence regarding the realizability of disallowed U.S.

interest deductions should be ignored when assessing the need for a valuation allowance, the Company has not recognized a valuation allowance on this portion of the DTA generated from disallowed interest.

Unrecognized Tax Benefits

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Balance at end of period $ 13,580 $ 11,015 $ 12,073

For the year ended December 31, 2022, $ 13 million of the Company’s unrecognized tax benefits would impact the effective tax rate if recognized.

There is a $ 2 million reduction in unrecognized tax benefits that would impact only the timing of tax deductions and would not impact the tax rate.

For the years ended December 31, 2021 and 2020, all unrecognized tax benefits would impact the effective tax rate if recognized.

For the year ended December 31, 2023, all unrecognized tax benefits would impact the effective tax rate if recognized.

For the year ended December 31, 2022, $ 13 million of the Company’s unrecognized tax benefits would impact the effective tax rate if recognized as a result of a $ 2 million reduction in unrecognized tax benefits that would impact only the timing of tax deductions and would not impact the tax rate.

Total interest and penalties recorded in unrecognized tax benefits were $ 1 million for each of the years presented.

As of December 31, 2022, it is reasonably possible that the Company’s unrecognized tax position will change within a range of a decrease of $ 3 million and an increase of $ 5 million due to pending tax legislation, new tax regulations, conclusions of tax audits or the expiration of statute of limitations.

As of December 31, 2023, it is reasonably possible that the Company’s unrecognized tax position will change within a range of a decrease of $ 7 million and an increase of $ 3 million due to conclusions of tax audits or the expiration of statute of limitations.

In the normal course of business, the Company is regularly audited by tax authorities and is currently under audit in the U.S.

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Other Tax Items

In 2022, the Company received net cash refunds of $ 15 million, including interest of $ 2 million.

Several provisions passed in 2017 as part of the Tax Cuts and Jobs Act went into effect in 2022.

Certain of these provisions will negatively impact the Company’s U.S.

cash taxes in future years.

Certain of these provisions negatively impact the Company’s U.S.

cash taxes in present and future years.

The most impactful of these provisions is the further limitation of U.S.

14 unchanged sentences

All prior period amounts presented herein have been reclassified to conform to this segment structure.

See Note 3 — Discontinued Operations for further information on the sale of the Company’s lumber and newsprint assets.

See Note 3—Discontinued Operations for further information on the sale of the lumber and newsprint assets.

See also Note 1—Nature of Operations and Basis of Presentation for a description of the operating businesses.

1 unchanged sentence

The Company allocates a portion of the cost of maintaining these support functions to its operating units.

The Company evaluates the performance of its segments based on operating income.

Intersegment sales consist primarily of High-Yield Pulp sales to Paperboard.

The Company evaluates the performance of its segments based on operating income (loss).

Intersegment sales consist primarily of High-Yield Pulp sales to Paperboard and are eliminated in consolidation.

Intersegment sales prices are at rates that approximate market for the respective operating area.

No single customer accounted for 10 percent or more of total sales for the years ended December 31, 2022 and 2021.

One customer in the High Purity Cellulose segment represented 10 percent of total sales for the year ended December 31, 2023.

No single customer accounted for 10 percent or more of total sales during the years ended December 31, 2022 and 2021.

Net sales, disaggregated by product line, was comprised of the following:

11 unchanged sentences

Net sales $ 1,643,330 $ 1,717,267 $ 1,407,558

——————————————

(a) Other sales include sales of bioelectricity, lignin and other by-products to third parties.

Operating results by segment were comprised of the following:

(a) Include sales of bioelectricity, lignosulfonates and other by-products to third parties.

Operating income (loss) by segment was comprised of the following:

Year Ended December 31,

2023 2022 2021

High Purity Cellulose $ 31,498 $ 19,738 $ 6,994

High Purity Cellulose (a)

$ ( 41,567 ) $ 31,498 $ 19,738

Paperboard 37,160 37,158 13,379

2 unchanged sentences

Operating income (loss) $ ( 65,264 ) $ 26,135 $ ( 10,445 )

(a) In 2023, included a $ 62 million non-cash impairment recorded during the fourth quarter related to an asset realignment.

See Note 7—Property, Plant and Equipment, Net for further details.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Identifiable assets by segment were as follows:

High Purity Cellulose $ 1,654,214 $ 1,579,300

High Purity Cellulose (a)

$ 1,510,076 $ 1,654,214

Paperboard 105,804 112,757

2 unchanged sentences

Total assets $ 2,182,700 $ 2,347,528

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

(a) In 2023, included a $ 62 million non-cash impairment recorded during the fourth quarter related to an asset realignment.

See Note 7—Property, Plant and Equipment, Net for further details.

Long-life assets by country were as follows:

2 unchanged sentences

France 213,180 187,645

Other 110 125

Total long-life assets $ 1,607,642 $ 1,657,998

12 unchanged sentences

High-Yield Pulp 1,421 2,210 2,215

Corporate 3,790 205 1,621

Total capital expenditures $ 146,279 $ 114,672 $ 73,492

Corporate (b)

12,281 3,790 205

Total capital expenditures $ 133,143 $ 146,279 $ 114,672

(a) Amounts exclude the impact of changes in capital assets purchased on account and government grants.

(b) Reflects expenditures associated with the Company’s ERP transformation project.

The project is expected to be completed at the end of 2024.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

Net sales geographical distribution was as follows:

3 unchanged sentences

China 473,778 29 346,026 20 295,515 21

Canada 72,510 4 72,490 5 71,817 5

Japan 149,373 9 118,443 9 119,178 9

Europe 222,778 13 343,058 20 283,685 20

Latin America 23,886 1 18,880 1 12,688 1

Japan 158,106 10 149,373 9 118,443 9

Other Asia 126,072 8 181,952 11 130,189 9

Canada 62,657 4 72,510 4 72,490 5

All other 44,002 3 31,197 2 15,916 1

Latin America 11,073 — 23,886 1 18,880 1

Net sales $ 1,643,330 100 $ 1,717,267 100 $ 1,407,558 100

3 unchanged sentences

See Note 4—Leases and Note 9—Debt and Finance Leases for further information.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements

(in thousands unless otherwise stated)

At December 31, 2023, future minimum payments under purchase obligations were as follows:

1 unchanged sentence

Thereafter 331,284

—————————————

(a) Primarily consist of payments expected to be made on natural gas, steam energy and wood chips purchase contracts.

(a) Primarily consist of commitments for the purchase of natural gas, steam energy and wood chips.

These obligations are estimates and may vary based on changes in actual price and volume terms.

Remaining purchase obligations under the 20 -year wood chip and residual fiber supply agreement with GreenFirst total $ 367 million, or annual payments of $ 17 million, through the duration of the agreement.

Remaining purchase obligations under the 20 -year wood chip and residual fiber supply agreement with GreenFirst total approximately $ 333 million, or annual payments of approximately $ 19 million through the duration of the agreement to 2041.

Total required purchase volumes of wood chips and residual fiber are dependent on sawmill production.

Litigation and Contingencies

Final Settlement Reached in Dispute with IESO Relating to Investigation of the Kapuskasing Newsprint Facility

From the period from 2014 to early 2021, the MACD branch of the IESO, the governmental agency responsible for operating the wholesale electricity market and directing the operation of the bulk electrical system in the province of Ontario, Canada, had been engaged in reviewing the Company's compliance with the published rules that govern the operation of the wholesale electricity market in Ontario, Canada.

The inquiry was focused primarily on payments made by IESO to the Company between 2010 and 2019 under market rules in connection with multiple planned, extended and unplanned forced outages that caused extensive downtime, in full or in part, of the Company’s former Kapuskasing, Ontario newsprint facility.

In April 2021, the Company and IESO entered into a MOS pursuant to which the parties agreed to fully and finally settle all claims relating to all four of its investigations (whether completed or not) and related orders, judicial review proceedings and underlying disputes.

As part of the settlement, the Company agreed to pay a fixed sum of CAD $ 12 million over a period of 5 years, comprised of an immediate CAD $ 4.5 million payment and a CAD $ 7.5 million payment to be spread, on a front-weighted basis, over the next five anniversaries of the MOS, without interest.

In addition, the MOS provided that a sum of CAD $ 10.4 million would become due and payable in the event the Company fails to comply with any of the terms and conditions of the MOS or commits an event of default, as defined under the applicable market rules, unless such breach or event of default is remedied on a timely basis.

This contingent sum decreases annually as the scheduled fixed non-contingent payments are made under the MOS.

Assuming no uncured event of default or breach occurs during the repayment period, upon full payment of the CAD $ 12 million, the entire contingent sum shall be extinguished and the Company shall be released from any further payment obligation.

Given the parties’ entry into the MOS, the Company considers this matter concluded, subject only to the parties’ obligations yet to be performed under the MOS.

Duties on Canadian Softwood Lumber Sold to the U.S.

1 unchanged sentence

from Canada .

In connection with these exports, the Company paid approximately $ 112 million in softwood lumber duties through August 28, 2021, recorded as expense in the periods incurred.

As of December 31, 2022, the Company had a $ 38 million long-term receivable associated with the USDOC’s December 2020, December 2021 and August 2022 determinations of the revised rates for the 2017, 2018, 2019 and 2020 periods.

Preliminary results of th e USDOC’s fourth administrative review were released in January 2023, with final results expected later in 2023.

Cash is not expected to return to the Company until final resolution of the softwood lumber dispute, which remains subject to legal challenges and to USDOC administrative review of the remaining 2021 period.

As part of the sale of its lumber assets, the Company retained all rights and obligations to softwood duties, generated or incurred through the closing date of the transaction.

In connection with these exports, the Company paid approximately $ 112 million of softwood lumber duties between 2017 and August 2021, including $ 1 million of ancillary fees, which were recorded as expense in the periods incurred.

As part of the sale, the Company retained all rights and obligations to softwood duties generated or incurred through the closing date of the sale.

As of December 31, 2023 , the Company had a $ 40 million long-term receivable associated with the USDOC’s determinations of the revised rates for the 2017, 2018, 2019, 2020 and 2021 periods.

This amount does not include interest, which will be due on any amounts refunded.

The Company estimates that interest earned on the total amount of softwood lumber duties paid will exceed $ 10 million.

Cash is not expected to return to the Company until final resolution of the softwood lumber dispute, which remains subject to legal challenges.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands unless otherwise stated)

In addition to the above, the Company is engaged in various legal and regulatory actions and proceedings and has been named as a defendant in various lawsuits and claims arising in the ordinary course of its business.

While the Company has procured reasonable and customary insurance covering risks normally occurring in connection with its businesses, the Company has in certain cases retained some risk through the operation of self-insurance, primarily in the areas of workers’ compensation, property insurance and general liability.

While the Company has procured reasonable and customary insurance covering risks normally occurring in connection with its businesses, the Company has, in certain cases, retained some risk through the operation of self-insurance, primarily in the areas of workers’ compensation, property insurance, business interruption and general liability.

These other lawsuits and claims, either individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

4 unchanged sentences

the Company would only be liable upon its default on the related payment obligations.

The letters of credit have various expiration dates and are expected to be renewed as required.

The standby letters of credit have various expiration dates and are expected to be renewed as required.

The Company had surety bonds of $ 90 million as of December 31, 2023, primarily to comply with financial assurance requirements relating to environmental remediation and post-closure care, to provide collateral for the Company’s workers’ compensation program and to guarantee taxes and duties for products shipped internationally.

2 unchanged sentences

The Company is a guarantor of LTF’s financing agreements and, in the event of default, expects it would only be liable for its proportional share of any repayment under the agreements.

The Company proportion of the LTF financing agreement guarantee was $ 33 million at December 31, 2022.

The Company’s proportion of the LTF financing agreement guarantee was $ 28 million at December 31, 2023.

The Company has not recorded any liabilities for these financial guarantees in its consolidated balance sheets, either because the Company has recorded the underlying liability associated with the guarantee or the guarantee is dependent on the Company’s own performance and, therefore, is not subject to the measurement requirements or because the Company has calculated the estimated fair value of the guarantee and determined it to be immaterial based upon the current facts and circumstances that would trigger a payment obligation.

It is not possible to determine the maximum potential amount of the liability under these potential obligations due to the unique set of facts and circumstances likely to be involved with each provision.

The Company currently employs just over 2,500 people in the U.S., Canada and France.

As of December 31, 2022, 71 percent of the work force is unionized.

As a result, the Company is required to negotiate wages, benefits and other terms with unionized employees collectively.

As of December 31, 2022, a collective bargaining agreement covering approximately 660 unionized employees was expired.

The employees have continued to work under the terms of the expired contract while negotiations continue.

While there can be no assurances, the Company expects to reach agreements with the union.

However, a work stoppage could have a material adverse effect on the Company’s business, financial condition and results of operations.

It is not possible to determine the maximum potential amount of liability under these potential obligations due to the unique set of facts and circumstances likely to be involved with each provision.

As of December 31, 2023, the Company employed approximately 2,800 people in the U.S., Canada and France, of which 61 percent were unionized.

The Company is required to negotiate wages, benefits and other terms with unionized employees collectively.

At December 31, 2022, a collective bargaining agreement covering approximately 575 unionized employees was expired.

The employees continued to work under the terms of the expired contract until negotiations concluded in the second quarter of 2023 and final agreement with the union was reached.

As of December 31, 2023, all of the Company’s collective bargaining agreements covering its unionized employees were current.

Rayonier Advanced Materials Inc.

1 unchanged sentence

(in thousands)

Balance at Beginning of Period Charged to Cost and Expenses Charged to Other Accounts Deductions Balance at End of Period

Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period

Allowance for credit losses

15 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures