RAYONIER ADVANCED MATERIALS INC. 10-K

Item 9A. Controls and Procedures Management’s Evaluation of 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 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 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 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. Item 9B. Other Information 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. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 38 Table of Contents Part III Certain information required by Part III is incorporated by reference from our definitive Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for our 2024 Annual Meeting of Stockholders. We will make the Proxy Statement available on our website at www.ryam.com as soon as it is filed with the SEC. Item 10. 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. 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. Item 11. Executive Compensation The information required by this Item 11 is incorporated by reference to sections “Compensation Discussion and Analysis,” “Report of the Compensation and Management Development Committee,” “Executive Compensation Tables and Related Information” and “Commitment to Best Practices in Corporate Governance-Director Compensation” of our Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item 12 is incorporated by reference to sections “Executive Compensation Tables and Related Information-Stock Ownership of Directors and Executive Officers,” “Security Ownership of Certain Beneficial Owners” and “Equity Compensation Plan Information” of our Proxy Statement. Item 13. 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. Item 14. 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. 39 Table of Contents Part IV Item 15. Exhibit and Financial Statement Schedules (a) Documents filed as a part of this 2023 Form 10-K 1. Financial Statements See page F-1 of this 2023 Form 10-K. 2. Financial Statement Schedules See page F-1 of this 2023 Form 10-K. 3. Exhibits Exhibit No. Description Location 2.1 Separation and Distribution Agreement between Rayonier Advanced Materials Inc. and Rayonier Inc., dated as of May 28, 2014 Incorporated herein by reference to Exhibit 2.1 to the Registrant’s Amendment No. 4 to the Registration Statement on Form 10 filed on May 29, 2014 2.2 * Arrangement Agreement by and between Tembec Inc. and Rayonier Advanced Materials Inc. dated as of May 24, 2017 Incorporated herein by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed on May 25, 2017 2.3 Amending Agreement, dated as of July 23, 2017, to the Arrangement Agreement by and between Tembec Inc. and Rayonier Advanced Materials Inc. dated as of May 24, 2017 Incorporated herein by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed on July 24, 2017 3.1 Amended and Restated Certificate of Incorporation of Rayonier Advanced Materials Inc. Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on June 30, 2014 3.2 Certificate of Designations of 8.00% Series A Mandatory Convertible Preferred Stock of Rayonier Advanced Materials Inc., filed with the Secretary of State of the State of Delaware and effective August 10, 2016 Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on August 10, 2016 3.3 Certificate of Designations of Series A Junior Participating Preferred Stock Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on March 21, 2022 3.4 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 4.1 Description of Common Stock Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Form 10-K filed on March 2, 2020 4.2 Indenture, dated as of December 23, 2020, by and among Rayonier A.M. Products Inc., the Guarantors party thereto and Wells Fargo Bank, National Association as trustee and as notes collateral agent Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed on December 23, 2020 4.3 Form of 7.625% Senior Secured Notes due 2026, included as Exhibit A to the Indenture Pursuant to Regulation S-K, Item 601(b)(4)(iii)(A), Rayonier Advanced Materials Inc. by this filing agrees, upon request, to furnish to the SEC a copy of other instruments defining the rights of holders of long-term debt of Rayonier Advanced Materials Inc. Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Form 8-K filed on December 23, 2020 10.1 Transition Services Agreement, dated as of June 27, 2014, by and between Rayonier Inc. and Rayonier Advanced Materials Inc. Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on June 30, 2014 10.2 Tax Matters Agreement, dated as of June 27, 2014, by and among Rayonier Inc., Rayonier Advanced Materials Inc., Rayonier TRS Holdings Inc. and Rayonier A.M. Products Inc. Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on June 30, 2014 40 Table of Contents Exhibit No. Description Location 10.3 Employee Matters Agreement, dated as of June 27, 2014, by and between Rayonier Inc. and Rayonier Advanced Materials Inc. Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on June 30, 2014 10.4 Intellectual Property Agreement, dated as of June 27, 2014, by and between Rayonier Inc. and Rayonier Advanced Materials Inc. Incorporated herein by reference to Exhibit 10.4 to the Registrant’s Form 8-K filed on June 30, 2014 10.5 † Rayonier Advanced Materials Inc. Incentive Stock Plan, as amended effective May 23, 2016 Incorporated herein by reference to Appendix C to the Registrant’s Proxy Statement filed on April 8, 2016 10.6 † Rayonier Advanced Materials Inc. 2017 Incentive Stock Plan, effective May 22, 2017 Incorporated herein by reference to Appendix B to the Registrant’s Proxy Statement filed on April 7, 2017 10.7 † Rayonier Advanced Materials Inc. 2017 Incentive Stock Plan (as amended effective December 15, 2017) Incorporated herein by reference to Appendix A to the Registrant’s Proxy Statement filed on April 6, 2018 10.8 † First Amendment to the Rayonier Advanced Materials Inc. 2017 Incentive Stock Plan, effective May 22, 2017 Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed on November 7, 2019 10.9 † Rayonier Advanced Materials Inc. 2021 Incentive Stock Plan effective May 17, 2021 Incorporated herein by reference to Appendix B to the Registrant’s Proxy Statement filed on April 2, 2021 10.10 † 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 10.1 1 † Form of Rayonier Advanced Materials Inc. 2021 Restricted Stock Unit Award Agreement Incorporated herein by reference to Exhibit 10.11 to the Registrant’s Form 10-K filed on March 1, 2021 10.12 † Form of Rayonier Advanced Materials Inc. 2022 Restricted Stock Unit Award Agreement Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on May 5, 2022 10. 1 3 † Form of Rayonier Advanced Materials Inc. 2024 Restricted Stock Unit Award Agreement Filed herewith 10. 14 † Form of Rayonier Advanced Materials Inc. 2024 Restricted Stock Unit Award Agreement for De Lyle Bloomquist and James L. Posze, Jr Filed herewith 10.1 5 † 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 10.1 6 † Form of Rayonier Advanced Materials Inc. 2022 Performance Share Unit Award Agreement Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed on May 5, 2022 10.1 7 † 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 10. 1 8 † Form of Rayonier Advanced Materials Inc. 2024 Performance Share Unit Award Agreement Filed herewith 10. 19 † Form of Rayonier Advanced Materials Inc. 2024 Performance Share Unit Award Agreement for De Lyle Bloomquist and James L. Posze, Jr Filed herewith 10. 2 0 † 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 10. 2 1 † Form of Rayonier Advanced Materials Inc. 2022 Performance Cash Unit Award Agreement Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Form 10-Q filed on May 5, 2022 10. 2 2 † 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 10. 2 3 † Form of Rayonier Advanced Materials Inc. 2024 Performance Cash Unit Award Agreement Filed herewith 10. 2 4 † Form of Rayonier Advanced Materials Inc. 2024 Performance Cash Unit Award Agreement for De Lyle Bloomquist and James L. Posze, Jr Filed herewith 10. 2 5 † 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 10. 2 6 † Form of Rayonier Advanced Materials Inc. Incentive Stock Plan Supplemental Terms Applicable to the 2021 Equity Award Grant Incorporated herein by reference to Exhibit 10.16 to the Registrant’s Form 10-K filed on March 1, 2021 41 Table of Contents Exhibit No. Description Location 10. 2 7 † Form of Rayonier Advanced Materials Inc. Incentive Stock Plan Supplemental Terms Applicable to the 2022 Equity Award Grant Incorporated herein by reference to Exhibit 10.15 to the Registrant’s Form 10-K filed on March 1, 2022 10. 2 8 † 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 10. 29 † Form of Rayonier Advanced Materials Inc. Incentive Stock Plan Supplemental Terms Applicable to the 2024 Equity Award Grant Filed herewith 10. 3 0 † # Description of Rayonier Advanced Materials Inc. 2021 Performance Share Award Program Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed on August 5, 2021 10. 3 1 † # Description of Rayonier Advanced Materials Inc. 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 10. 3 2 † # 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 10. 3 3 † # Description of Rayonier Advanced Materials Inc. 2024 Equity Incentive Program Design Filed herewith 10. 3 4 † Rayonier Advanced Materials Inc. Non-Equity Incentive Plan, as amended effective May 23, 2016 Incorporated herein by reference to Appendix B to the Registrant’s Proxy Statement filed on April 8, 2016 10 .3 5 † Rayonier Advanced Materials Inc. Executive Severance Pay Plan, Amended and Restated effective October 21, 2019 Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Form 10-Q filed on November 7, 2019 10. 3 6 † Rayonier Advanced Materials Inc. Non Change In Control Executive Severance Plan Incorporated herein by reference to Exhibit 10.20 to the Registrant’s Form 10-K filed on February 26, 2016 10. 3 7 † First Amendment to the Rayonier Advanced Materials Inc. Non Change In Control Executive Severance Plan Incorporated herein by reference to Exhibit 10.4 to the Registrant’s Form 10-Q filed on November 7, 2019 10. 3 8 † Trust Agreement for Rayonier Advanced Materials Inc. Legal Resources Trust, dated June 28, 2014, by and between Rayonier Advanced Materials Inc. and Wells Fargo Bank, National Association Incorporated herein by reference to Exhibit 10.23 to the Registrant’s Form 10-Q/A filed on September 4, 2014 10. 39 † Rayonier Advanced Materials Inc. Excess Benefit Plan, effective June 27, 2014 Incorporated herein by reference to Exhibit 10.24 to the Registrant’s Form 10-Q/A filed on September 4, 2014 10. 4 0 † First Amendment to Rayonier Advanced Materials Inc. Excess Benefit Plan, effective December 31, 2022 Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed on November 2, 2022 10. 4 1 † Rayonier Advanced Materials Inc. Excess Savings and Deferred Compensation Plan, effective June 28, 2014 Incorporated herein by reference to Exhibit 10.25 to the Registrant’s Form 10-Q/A filed on September 4, 2014 10. 4 2 † Form of Rayonier Advanced Materials Inc. Excess Savings and Deferred Compensation Plan Agreements, effective June 28, 2014 Incorporated herein by reference to Exhibit 10.18 to the Registrant’s Form 10-K filed on February 27, 2015 10. 4 3 † Retirement Plan for Salaried Employees of Rayonier Advanced Materials Inc., effective June 27, 2014 and Amended and Restated as of October 21, 2019 Incorporated herein by reference to Exhibit 10.5 to the Registrant’s Form 10-Q filed on November 7, 2019 10. 4 4 † Seventh Amendment to Retirement Plan for Salaried Employees of Rayonier Advanced Materials Inc., effective December 31, 2022 Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on November 2, 2022 10 .4 5 † Rayonier Advanced Materials Inc. Investment and Savings Plan for Salaried Employees, effective January 1, 2015 Incorporated herein by reference to Exhibit 10.24 to the Registrant’s Form 10-K filed on February 24, 2017 10. 4 6 † Amendment to Rayonier Advanced Materials Inc. Investment and Savings Plan for Salaried Employees, effective January 1, 2015 Incorporated herein by reference to Exhibit 10.25 to the Registrant’s Form 10-K filed on February 24, 2017 10. 4 7 † Amendment to Rayonier Advanced Materials Inc. 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 42 Table of Contents Exhibit No. Description Location 10. 4 8 † Amendment to Rayonier Advanced Materials Inc. Investment and Savings Plan for Salaried Employees, effective January 1, 2016 Incorporated herein by reference to Exhibit 10.27 to the Registrant’s Form 10-K filed on February 24, 2017 10. 49 † Amendment to Rayonier Advanced Materials Inc. Investment and Savings Plan for Salaried Employees, effective October 1, 2016 Incorporated herein by reference to Exhibit 10.28 to the Registrant’s Form 10-K filed on February 24, 2017 10. 5 0 † Amendment to Rayonier Advanced Materials Inc. 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 10. 5 1 † Form of Indemnification Agreement between Rayonier Advanced Materials Inc. and individual directors or officers Incorporated herein by reference to Exhibit 10.5 to the Registrant’s Amendment No. 4 to the Registration Statement on Form 10 filed on May 29, 2014 10. 5 2 † Form of Rayonier Advanced Materials Inc. Outside Directors Compensation Program/Cash Deferral Option Agreement, effective January 1, 2020 Incorporated herein by reference to Exhibit 10.35 to the Registrant’s Form 10-K filed on March 1, 2021 10. 5 3 Revolving Credit Agreement, dated as of December 10, 2020, among Rayonier Advanced Materials Inc., Rayonier A.M. 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 10. 5 4 Amendment No. 1 to Revolving Credit Agreement, dated as of January 17, 2023, by and among Rayonier Advanced Materials Inc., Rayonier A.M. 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 10. 5 5 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 10. 5 6 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 10. 5 7 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 10. 5 8 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 10. 59 # Asset Purchase Agreement by and between 9437-6001 Quebec Inc., as purchaser and GreenFirst Forest Products Inc., as Purchaser guarantor, and Rayonier A.M. Canada G.P. and Rayonier A.M. Canada Industries Inc., collectively the Seller, dated as of April 10, 2021 Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on May 6, 2021 10. 6 0 † Separation and Release Agreement dated January 19, 2022 between Paul G. Boynton and Rayonier Advanced Materials Inc. Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on January 20, 2022 43 Table of Contents Exhibit No. Description Location 10 . 6 1 † Letter Agreement, dated May 28, 2022 between Rayonier Advanced Materials Inc. and De Lyle W. Bloomquist Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on May 31, 2022 21 Subsidiaries of the registrant Filed herewith 23.1 Consent of Grant Thornton LLP Filed herewith 24 Power of Attorney Incorporated herein by reference to the signature page of this Annual Report on Form 10-K 31.1 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 Filed herewith 31.2 Chief Financial Officer’s Certification Pursuant to Rule 13a-14(a)/15d-14-(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 32 Certification of Periodic Financial Reports Under Section 906 of the Sarbanes-Oxley Act of 2002 Furnished herewith 97 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 104 Cover page interactive data file (formatted in Inline XBRL and contained in Exhibit 101) pursuant to Rule 406 of Regulation S-T Filed herewith * The exhibits to the Arrangement Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish copies of any such schedules and exhibits to the SEC upon request. † Management contract or compensatory plan. # Certain confidential portions of this exhibit were omitted by means of marking such portions with asterisks because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed. 44 Table of Contents Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Rayonier Advanced Materials Inc. By: /s/ MARCUS J. MOELTNER Marcus J. Moeltner Chief Financial Officer and Senior Vice President, Finance Date: 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. Signature Title Date /s/ DE LYLE W. BLOOMQUIST Chief Executive Officer, President and Director February 29, 2024 De Lyle W. Bloomquist (Principal Executive Officer) /s/ MARCUS J. MOELTNER Chief Financial Officer and Senior Vice President, Finance February 29, 2024 Marcus J. Moeltner (Principal Financial Officer) /s/ GABRIELA GARCIA Chief Accounting Officer and Vice President, Corporate Controller February 29, 2024 Gabriela Garcia (Principal Accounting Officer) 45 Table of Contents Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that the persons whose signatures appear below constitute and appoint Marcus J. Moeltner and R. Colby Slaughter, his/her true and lawful attorneys-in-fact, with full power in each to act without the other and with full power of substitution and resubstitution, to sign in the name of such person and in each of his/her offices and capacities with Rayonier Advanced Materials Inc., the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, together with any amendments thereto, and to file same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission. 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 indicated. Signature Title Date /s/ LISA M. PALUMBO Chair January 18, 2024 Lisa M. Palumbo /s/ CHARLES E. ADAIR Director January 23, 2024 Charles E. Adair /s/ JULIE A. DILL Director January 15, 2024 Julie A. Dill /s/ CHARLES R. EGGERT Director January 15, 2024 Charles R. Eggert /s/ JAMES F. KIRSCH Director January 24, 2024 James F. Kirsch /s/ DAVID C. MARIANO Director January 17, 2024 David C. Mariano /s/ IVONA SMITH Director January 19, 2024 Ivona Smith /s/ BRYAN YOKLEY Director January 16, 2024 Bryan Yokley 46 Table of Contents Index to Financial Statements Page Management’s Report on Internal Control over Financial Reporting F- 2 Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) F- 3 Consolidated Statements of Operations F- 6 Consolidated Statements of Comprehensive Income (Loss) F- 7 Consolidated Balance Sheets F- 8 Consolidated Statements of Stockholders' Equity F- 9 Consolidated Statements of Cash Flows F- 10 Notes to Financial Statements F- 12 Index to Financial Statement Schedules Schedule II - Valuation and Qualifying Accounts F- 47 All other financial statement schedules are omitted because they are not applicable or the required information is otherwise supplied in the Financial Statements or the notes thereto. F-1 Table of Contents Management’s Report on Internal Control over Financial Reporting The management of Rayonier Advanced Materials Inc. and its subsidiaries is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Our system of internal controls over financial reporting is designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of the inherent limitations of internal control over financial reporting, misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Rayonier Advanced Materials Inc.’s management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, we used the framework included in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on our management’s assessment and the criteria set forth in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. Grant Thornton LLP, the independent registered public accounting firm that audited the Company’s Financial Statements, has audited and issued a report on the Company’s internal control over financial reporting as of December 31, 2023. The report appears on page F-5 of this 2023 Form 10-K. F-2 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Rayonier Advanced Materials Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Rayonier Advanced Materials Inc. (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 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 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 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 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. These liabilities are established based on projected spending over many years and require significant estimates and specialized knowledge to determine the proper amount at any point in time. In addition to the estimated liabilities recorded, 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. 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. F-3 Table of Contents 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. The estimate, which involves assumptions such as the nature and extent of contamination at each site, the nature and extent of required cleanup efforts, the duration and effectiveness of the chosen remedial strategy and changes in environmental regulations, is subjective in nature and involved our complex and subjective judgment. 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 consolidated 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. We engaged an environmental specialist to assist us in evaluating the appropriateness of the Company’s remediation plans and the reasonableness of management’s estimates in relation to the regulatory requirements and to review the estimated costs used by the Company, including consideration of information available from external data from other sources. 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 We have served as the Company’s auditor since 2016. Jacksonville, Florida February 29, 2024 F-4 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Rayonier Advanced Materials Inc. Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Rayonier Advanced Materials Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). 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, 2023, and our report dated February 29, 2024 expressed an unqualified opinion on those consolidated financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. 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 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 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; 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 consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP Jacksonville, Florida February 29, 2024 F-5 Table of Contents Rayonier Advanced Materials Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Year Ended December 31, 2023 2022 2021 Net sales $ 1,643,330 $ 1,717,267 $ 1,407,558 Cost of sales ( 1,555,176 ) ( 1,594,184 ) ( 1,332,836 ) Gross margin 88,154 123,083 74,722 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 ) Operating income (loss) ( 65,264 ) 26,135 ( 10,445 ) Interest expense ( 73,810 ) ( 66,183 ) ( 66,394 ) Components of pension and OPEB, excluding service costs (Note 17) 98 4,960 ( 4,337 ) 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 Equity in loss of equity method investment ( 1,984 ) ( 2,653 ) ( 1,585 ) Loss from continuing operations ( 102,147 ) ( 27,377 ) ( 49,769 ) Income from discontinued operations, net of tax (Note 3) 312 12,458 116,183 Net income (loss) $ ( 101,835 ) $ ( 14,919 ) $ 66,414 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) $ ( 1.57 ) $ ( 0.23 ) $ 1.05 See Notes to Consolidated Financial Statements. F-6 Table of Contents Rayonier Advanced Materials Inc. Consolidated Statements of Comprehensive Income (Loss) (in thousands) Year Ended December 31, 2023 2022 2021 Net income (loss) $ ( 101,835 ) $ ( 14,919 ) $ 66,414 Other comprehensive income (loss), net of tax (Note 14) Foreign currency translation adjustment 7,530 ( 12,763 ) ( 17,919 ) Unrealized gain (loss) on derivative instruments 194 280 ( 2,681 ) 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. F-7 Table of Contents Rayonier Advanced Materials Inc. Consolidated Balance Sheets (in thousands, except share amounts) December 31, 2023 2022 Assets Current assets Cash and cash equivalents $ 75,768 $ 151,803 Accounts receivable, net (Note 5) 197,457 211,526 Inventory (Note 6) 207,474 265,334 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 Property, plant and equipment, net (Note 7) 1,075,105 1,151,268 Deferred tax assets (Note 19) 345,181 322,164 Intangible assets, net (Note 2) 17,414 24,423 Other assets 169,942 160,143 Total assets $ 2,182,700 $ 2,347,528 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 186,226 $ 163,962 Accrued and other current liabilities (Note 8) 154,488 164,369 Debt due within one year (Note 9) 25,283 14,617 Current environmental liabilities (Note 10) 9,833 10,732 Total current liabilities 375,830 353,680 Long-term debt (Note 9) 752,174 838,508 Non-current environmental liabilities (Note 10) 160,458 159,949 Pension and other postretirement benefits (Note 17) 101,493 119,571 Deferred tax liabilities (Note 19) 15,190 17,021 Other liabilities 31,108 29,486 Commitments and contingencies (Note 21) Stockholders’ equity (Note 13) Common stock: 140,000,000 shares authorized at $ 0.01 par value, 65,393,014 and 64,020,761 issued and outstanding, respectively 654 640 Additional paid-in capital 419,122 418,048 Retained earnings 372,588 474,423 Accumulated other comprehensive loss (Note 14) ( 45,917 ) ( 63,798 ) Total stockholders’ equity 746,447 829,313 Total liabilities and stockholders’ equity $ 2,182,700 $ 2,347,528 See Notes to Consolidated Financial Statements. F-8 Table of Contents Rayonier Advanced Materials Inc. Consolidated Statements of Stockholders’ Equity (in thousands, except share data) Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Par Value Balance at December 31, 2020 63,359,839 $ 633 $ 405,161 $ 422,928 $ ( 133,635 ) $ 695,087 Net income — — — 66,414 — 66,414 Other comprehensive income, net of tax — — — — 49,165 49,165 Issuance of common stock under incentive stock plans 509,713 5 ( 5 ) — — — Stock-based compensation — — 5,099 — — 5,099 Repurchase of common stock (a) ( 131,143 ) ( 1 ) ( 1,421 ) — — ( 1,422 ) Balance at December 31, 2021 63,738,409 637 408,834 489,342 ( 84,470 ) 814,343 Net loss — — — ( 14,919 ) — ( 14,919 ) Other comprehensive income, net of tax — — — — 20,672 20,672 Issuance of common stock under incentive stock plans 360,495 4 ( 4 ) — — — Stock-based compensation — — 9,650 — — 9,650 Repurchase of common stock (a) ( 78,143 ) ( 1 ) ( 432 ) — — ( 433 ) Balance at December 31, 2022 64,020,761 640 418,048 474,423 ( 63,798 ) 829,313 Net loss — — — ( 101,835 ) — ( 101,835 ) Other comprehensive income, net of tax — — — — 17,881 17,881 Issuance of common stock under incentive stock plans 2,032,375 20 ( 20 ) — — — Stock-based compensation — — 6,507 — — 6,507 Repurchase of common stock (a) ( 660,122 ) ( 6 ) ( 5,413 ) — — ( 5,419 ) 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 . See Notes to Consolidated Financial Statements. F-9 Table of Contents Rayonier Advanced Materials Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2023 2022 2021 Operating activities Net income (loss) $ ( 101,835 ) $ ( 14,919 ) $ 66,414 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 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 Deferred income tax benefit ( 27,713 ) ( 3,948 ) ( 37,094 ) Increase in environmental liabilities 4,764 4,595 6,099 (Gain) loss on GreenFirst equity securities — ( 5,197 ) 3,597 Net periodic benefit cost of pension and postretirement plans 3,578 5,290 16,095 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: Accounts receivable 19,979 ( 33,824 ) ( 11,518 ) Inventories 58,949 ( 35,113 ) ( 58,310 ) Income tax receivable ( 7,137 ) 19,795 32,915 Accounts payable 13,757 ( 8,266 ) 7,376 Accrued liabilities ( 12,219 ) 27,909 23,900 Other ( 15,729 ) ( 8,359 ) 8,871 Contributions to pension and other postretirement plans ( 11,533 ) ( 7,915 ) ( 8,552 ) Expenditures for environmental liabilities ( 5,385 ) ( 4,461 ) ( 6,556 ) Cash provided by operating activities-continuing operations 136,274 68,813 73,686 Cash provided by operating activities-discontinued operations — — 159,538 Cash provided by operating activities 136,274 68,813 233,224 Investing activities 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 investing activities-discontinued operations 1,169 44,428 182,750 Cash provided by (used in) investing activities ( 127,281 ) ( 94,174 ) 85,391 Financing activities Borrowings of long-term debt 465,030 5,721 4,393 Repayments of long-term debt ( 537,845 ) ( 75,250 ) ( 161,025 ) Short-term financing, net 1,369 ( 3,153 ) 2,028 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 ) Net increase (decrease) in cash and cash equivalents ( 77,954 ) ( 98,476 ) 161,953 Net effect of foreign exchange on cash and cash equivalents 1,919 ( 3,028 ) ( 2,299 ) Balance, beginning of period 151,803 253,307 93,653 Balance, end of period $ 75,768 $ 151,803 $ 253,307 F-10 Table of Contents Year Ended December 31, 2023 2022 2021 Supplemental cash flow information: 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 See Notes to Consolidated Financial Statements. F-11 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 1. Nature of Operations and Basis of Presentation Nature of Operations The Company is a leading manufacturer of high purity cellulose, paperboard and high-yield pulp products and operates in the following business segments: High Purity Cellulose, Paperboard and High-Yield Pulp. High Purity Cellulose The Company, through its four production facilities located in the U.S., Canada and France, manufactures and markets high purity cellulose, which is sold as either cellulose specialties or commodity products. Cellulose specialties are primarily used in dissolving chemical applications that require a highly purified form of cellulose. Commodity products are used for absorbent materials and viscose pulp applications. Absorbent materials, typically referred to as fluff fibers, are used as an absorbent medium in consumer products. Commodity viscose pulp is a raw material required for the manufacture of viscose staple fibers which are used in woven and non-woven applications. Sales of chemicals and energy, a majority of which are by-products of the manufacturing process, are also included in the High Purity Cellulose segment. Paperboard The Company, through its production facility in Canada, manufactures and markets lightweight multi-ply paperboard products. Paperboard is used for packaging, printing documents, brochures, promotional materials, paperback book and catalog covers, file folders, tags and lottery tickets. High-Yield Pulp The Company, through its production facility in Canada, manufactures and markets bulky high-yield pulp. High-yield pulp is used by paper manufacturers to produce paperboard, packaging, printing and writing papers and a variety of other paper products. Basis of Presentation 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 operations. All intercompany accounts and transactions are eliminated in consolidation. Certain amounts in prior periods have been reclassified to conform with current period presentation. The Financial Statements are prepared in accordance with GAAP and the rules and regulations of the SEC. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and disclosures of contingent assets and liabilities. Because of the inherent uncertainties in using estimates, actual results could differ from those expected as of the reporting date. Management believes that the estimates and assumptions used are reasonable. The Company’s fiscal year end is the last day of the calendar year. For interim reporting periods, the Company uses the last Saturday of the fiscal quarter. Discontinued Operations 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. F-12 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Subsequent Events 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. 2. Significant Accounting Policies and Recent Accounting Developments Significant Accounting Policies Translation of Foreign Currency Assets and liabilities of consolidated subsidiaries whose functional currency is other than the USD are translated into USD using currency exchange rates at the balance sheet date. Revenues and expenses are translated using the average currency exchange rates during the period. Foreign currency translation gains and losses are reported as a component of AOCI. Realized and unrealized gains and losses resulting from foreign currency transactions are included in operating results as incurred. Cash and Cash Equivalents Cash and cash equivalents include time deposits and other investments that are highly liquid with original maturities of three months or less. Accounts Receivable and Allowance for Credit Loss Trade accounts receivable are stated at the net amount expected to be collected. All customers are granted credit on a short-term basis and related credit risks are considered minimal. The Company maintains an allowance for expected credit losses resulting from the inability of its customers to make required payments. The Company’s allowance is established based on historical patterns of accounts receivable collections and expected losses, including consideration of general economic conditions. Outstanding accounts receivable balances are reviewed quarterly or more frequently when circumstances indicate a review is warranted, such as a significant change in the aging of the Company’s receivables or a customer’s financial condition. Write-offs are recorded at the time a customer receivable is deemed uncollectible and collection efforts have been exhausted. Inventory 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. Inventory costs include material, labor and manufacturing overhead. The need for a provision for estimated losses from obsolete, excess or slow-moving inventories is reviewed periodically. Property, Plant and Equipment Depreciation Property, plant and equipment are recorded at cost, including applicable freight, interest, construction and installation costs. High purity cellulose, paperboard and high-yield pulp production-related plant and equipment are depreciated using the units-of-production method. The total units of production used to calculate depreciation expense is determined by factoring annual production days, based on normal production conditions, by the economic useful life of the asset involved. Production-related assets under finance leases are depreciated using the straight-line method over the related lease term. The Company depreciates its non-production assets, including office, lab and transportation equipment, using the straight-line depreciation method over 3 to 25 years. Buildings and land improvements are depreciated using the straight-line method over 15 to 35 years and 5 to 30 years, respectively. F-13 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Impairment 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. 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. 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 The Company is obligated to close out its operating sites’ landfills in accordance with certain legal requirements and records a liability for these obligations when the fair value can be reasonably estimated. In connection with these obligations, asset retirement liabilities are initially estimated and recorded based on discounted expected cash flows with a corresponding asset, capitalized as part of the related long-lived asset. Initial cost estimates are updated whenever events and circumstances indicate a new estimate is more appropriate. The asset is depreciated on a straight-line basis over the remaining useful life of the related asset. Accretion expense in connection with the discounted liability is also recognized over the same time period. As of December 31, 2023 and 2022, the Company had accrued $ 12 million and $ 11 million, respectively, for asset retirement obligations in “other liabilities.” Related depreciation and accretion expenses are included in “other operating expense, net” in the consolidated statements of operations. During 2023, no obligations were incurred or settled: 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 The Company capitalizes certain costs in connection with obtaining software for internal use. These costs are generally amortized over a period of 5 years, once the assets are ready for their intended use. 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 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. 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, 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 The Company is subject to numerous international, federal and state-level rules, initiatives and proposals that address domestic and global climate issues, including those governing emissions. 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 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, 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. F-14 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Research and Development Expense 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 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 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. The Company’s definite-lived intangible assets were as follows: December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life Customer lists $ 51,680 $ ( 39,348 ) $ 12,332 1.9 years Trade names 8,604 ( 3,522 ) 5,082 8.9 years Total definite-lived intangibles $ 60,284 $ ( 42,870 ) $ 17,414 4.0 years December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life Customer lists $ 51,680 $ ( 32,914 ) $ 18,766 2.9 years Trade names 8,604 ( 2,947 ) 5,657 9.9 years 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, 2023, 2022 and 2021. Estimated future amortization expense related to intangible assets held as of December 31, 2023 was as follows: 2024 $ 7,009 2025 6,473 2026 575 2027 575 2028 575 Thereafter 2,207 Total $ 17,414 F-15 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Equity Method Investments Anomera, Inc . The Company is an investor in Anomera, a Canadian start-up corporation headquartered in Montreal, Quebec. Anomera manufactures CNC, a patented, biodegradable product, with uses in the cosmetics industry and various other industrial applications, including concrete, inks and pigments, polymer composites, coatings and adhesives industries. Anomera has a product development lab in Mississauga, Ontario and a production facility on the Company’s Temiscaming site that was constructed during 2021. In exchange for voting and non-voting interests, the Company has invested a total of $ 12 million in Anomera through December 31, 2023. The Company and Anomera have entered into various service, leasing and supply agreements to support Anomera’s operations at the production facility. 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. The Company has evaluated this investment and has concluded it is not a variable interest entity. The Company accounts for this investment under the equity method of accounting and records its share of net earnings and losses on the investment in “equity in loss of equity method investment” in the consolidated statements of operations. 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. LignoTech Florida LLC The Company holds a 45 percent interest in LTF, a joint venture accounted for under the equity method of accounting. 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 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. 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. The Company is liable for certain financing agreements related to LTF. See Note 21—Commitments and Contingencies for further information. Revenue Recognition and Measurement 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. Generally, control passes upon delivery to a location in accordance with terms and conditions of the sale. Changes in customer contract terms and conditions, as well as the timing of orders and shipments, may have an impact on the timing of revenue recognition. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring its products and is generally based upon contractual arrangements with customers or published indices. The Company sells its products both directly to customers and through distributors and agents typically under agreements with payment terms less than 90 days. The Company elected to account for shipping and handling as activities to fulfill the promise to transfer the goods. As such, shipping and handling costs incurred are recorded in cost of sales. In addition, the Company has excluded from net sales any value-add, sales and other taxes which are collected concurrent with its revenue-producing activities. The nature of the Company’s contracts may give rise to variable consideration, which may be constrained, including sales volume-based rebates to customers. The Company estimates the level of sales volumes based on anticipated purchases at the beginning of the period and records a rebate accrual for each purchase toward the requisite rebate volume. These estimated rebates are included in the transaction price as a reduction to net sales. F-16 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (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 The Company has established liabilities to assess, remediate, maintain and monitor sites related to disposed operations from which no current or future benefit is discernible. These obligations are established based on projected spending over the next 20 years and require significant estimates to determine the proper amount at any point in time. The projected period, from 2024 through 2044, reflects the time during which potential future costs are both estimable and probable. 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 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 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. 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 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. Income Taxes 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 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 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. See Note 19—Income Taxes for further information. The Company’s income tax returns are subject to audit by U.S. federal and state taxing authorities as well as foreign jurisdictions, including Canada and France. In evaluating the tax benefits associated with various tax filing positions, the Company records a tax benefit for an uncertain tax position if it is more likely than not to be realized upon ultimate settlement of the issue. 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 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 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. F-17 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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. 3. 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. The TSA included support related to information technology, accounting, treasury, human resources and payroll, tax, supply chain and procurement functions. Costs incurred by the Company in connection with the TSA were reimbursed by GreenFirst. 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 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. F-18 Table of Contents 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, 2023 2022 2021 Net sales (a) $ — $ — $ 442,583 Cost of sales — 155 ( 236,670 ) Gross margin — 155 205,913 Selling, general and administrative expense and other operating income, net 424 16,808 ( 27,119 ) Operating income 424 16,963 178,794 Interest expense (b) — ( 13 ) ( 7,294 ) Other non-operating income — — 967 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 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, net of tax $ 312 $ 12,458 $ 116,183 (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. Other discontinued operations information included the following: Year Ended December 31, 2023 2022 2021 Depreciation and amortization $ — $ — $ 3,172 Capital expenditures — — 9,607 4. Leases The Company’s operating and finance leases are primarily for corporate offices, warehouse space, rail cars and equipment. 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. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants. 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. Financial and other information related to the Company’s operating and finance leases follow: Year Ended December 31, 2023 2022 2021 Operating lease cost $ 7,441 $ 7,751 $ 6,049 Finance lease cost Amortization of ROU assets 405 377 352 Interest 110 138 163 Total lease cost $ 7,956 $ 8,266 $ 6,564 F-19 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) December 31, Balance Sheet Location 2023 2022 Operating leases ROU assets Other assets $ 17,475 $ 15,623 Lease liabilities, current Accrued and other current liabilities 4,499 4,741 Lease liabilities, non-current Other liabilities 14,666 11,399 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. December 31, 2023 2022 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: 2024 $ 5,828 2025 5,109 2026 4,289 2027 3,192 2028 1,947 Thereafter 4,133 Total minimum lease payments 24,498 Less: imputed interest ( 5,333 ) Present value of future minimum lease payments $ 19,165 F-20 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 5. Accounts Receivable, Net Accounts receivable, net included the following: December 31, 2023 2022 Accounts receivable, trade $ 166,137 $ 171,144 Accounts receivable, other (a) 31,973 41,446 Allowance for credit loss ( 653 ) ( 1,064 ) Accounts receivable, net $ 197,457 $ 211,526 (a) Consists primarily of value-added/consumption taxes, grants receivable and accrued billings due from government agencies. 6. Inventory Inventory included the following: December 31, 2023 2022 Finished goods $ 147,930 $ 198,931 Work-in-progress 6,987 5,230 Raw materials 46,120 52,967 Manufacturing and maintenance supplies 6,437 8,206 Inventory $ 207,474 $ 265,334 7. Property, Plant and Equipment, Net Property, plant and equipment, net included the following: December 31, 2023 2022 Land and land improvements $ 35,837 $ 37,346 Buildings 251,196 257,592 Machinery and equipment 2,501,882 2,515,827 Other 4,929 5,265 Construction in progress 78,790 57,136 Property, plant and equipment 2,872,634 2,873,166 Accumulated depreciation ( 1,797,529 ) ( 1,721,898 ) 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. F-21 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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. 8. Accrued and Other Current Liabilities Accrued and other current liabilities included the following: December 31, 2023 2022 Accrued customer incentives $ 30,036 $ 28,702 Accrued payroll and benefits 13,552 13,763 Accrued interest 32,256 18,877 Accrued income taxes 4,605 9,321 Accrued property and other taxes 2,547 3,065 Deferred revenue (a) 24,061 21,645 Other current liabilities (b) 47,431 68,996 Accrued and other current liabilities $ 154,488 $ 164,369 (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, 2023 and 2022 was $ 13 million and $ 30 million, respectively, of energy-related payables associated with Tartas facility operations. F-22 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 9. Debt and Finance Leases Debt and finance leases included the following: December 31, 2023 2022 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 250,000 — 7.625 % Senior Secured Notes due January 2026 464,640 475,000 5.50 % Senior Unsecured Notes due June 2024 — 322,675 5.50 % CAD-based term loan due April 2028 30,479 36,585 Other loans (a) 44,754 19,598 Short-term factoring facility 5,292 3,773 Finance lease obligations 1,355 1,760 Total principal payments due 796,520 859,391 Less: unamortized premium, discount and issuance costs ( 19,063 ) ( 6,266 ) Total debt 777,457 853,125 Less: debt due within one year ( 25,283 ) ( 14,617 ) Long-term debt $ 752,174 $ 838,508 (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: Finance Lease Minimum Lease Payments Interest Net Present Value Debt Principal Payments 2024 $ 515 $ 81 $ 434 $ 24,849 2025 515 50 465 17,394 2026 472 16 456 482,658 2027 — — — 244,584 2028 — — — 9,410 Thereafter — — — 16,270 Total debt and finance lease payments due $ 1,502 $ 147 $ 1,355 $ 795,165 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. As of December 31, 2023, the Company had $ 151 million of gross availability under the ABL Credit Facility and net available borrowings of $ 118 million after taking into account $ 33 million outstanding letters of credit. Additionally, the Company is subject to cash dominion if net availability falls below a certain threshold, currently $ 25 million. F-23 Table of Contents 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. However, the agreement requires the Company to meet a fixed charge coverage ratio of not less than 1.0 if net availability falls below a certain threshold, currently $ 25 million. The agreement also contains various customary covenants that limit the ability of the Company and its restricted subsidiaries, as defined by the ABL Credit Facility, 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 ABL Credit Facility 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. At December 31, 2023, the Company was in compliance with all covenants under the ABL Credit Facility. 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 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 below). 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; and • 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. Senior Notes 2026 Notes 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. F-24 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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 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. 2024 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. 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. Eligibility of receivables is based on invoices issued to the Company’s subsidiary from customers previously approved by BNP. Upon collection of these receivables, on average no longer than 60 days, amounts outstanding under this agreement are paid off. 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, 2023 and 2022 was 4.2 percent and 0.9 percent, respectively. Other Loans The Company has fixed rate loans with various financial institutions primarily related to energy projects in France. The weighted average interest rate on the loans outstanding at December 31, 2023 and 2022 was 2.6 percent and 0.8 percent, respectively. F-25 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 10. Environmental Liabilities The Company’s environmental liabilities relate to sawmills, pulp, paper and wood treating plants which have ceased operations other than environmental investigation and remediation activities. The Company owns or has liability for approximately 20 sites that are subject to various federal, state or provincial statutes, including but not limited to RCRA, CERCLA and the Environmental Protection Act in the U.S., and similar laws in Canada and France, related to the investigation and remediation of environmentally-impacted sites. The Company estimates its 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. The Company calculates estimates based on a number of factors, including the application and interpretation of current environmental laws, regulations and other requirements; reports and advice of internal and third-party environmental specialists; 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 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. The following table presents the activity of the Company’s environmental liabilities, including those of specific sites where current estimates exceed 10 percent of the total liabilities for disposed operations at December 31, 2023, 2022 or 2021: December 31, 2021 Liability Payments Increase (Decrease) to Liability (a) December 31, 2022 Liability Payments Increase (Decrease) to Liability (a) December 31, 2023 Liability Port Angeles, Washington $ 52,564 $ ( 558 ) $ 648 $ 52,654 $ ( 484 ) $ 498 $ 52,668 Augusta, Georgia 21,120 ( 1,069 ) 1,051 21,102 ( 777 ) 2,330 22,655 Baldwin, Florida 16,362 ( 431 ) 256 16,187 ( 733 ) 437 15,891 East Point, Georgia 17,259 ( 889 ) 1,699 18,069 ( 1,168 ) 2,811 19,712 All other sites 63,917 ( 1,514 ) 266 62,669 ( 2,223 ) ( 1,081 ) 59,365 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 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 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 2023 and 2022, the estimated liability was relatively unchanged. Augusta, Georgia The Company operated a wood treatment plant at this site from 1928 to 1988. This site operates under a 10 -year hazardous waste permit renewed and issued pursuant to RCRA in 2015. Ongoing remediation activities currently consist primarily of groundwater recovery and treatment. 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, 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. F-26 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Baldwin, Florida The Company operated a wood treatment plant at this site from 1954 to 1987. This site operates under a 10 -year hazardous waste permit renewed and issued pursuant to RCRA in 2017. Ongoing remediation activities currently consist primarily of groundwater recovery and treatment. Additional remedial activities may be necessary in the future that may result in changes to current cost estimates and the corresponding liability. During 2023 and 2022, the estimated liability was relatively unchanged. East Point, Georgia The Company operated a wood treatment plant at this site from 1920 to 1984. Current site activities are governed by a 2009 Consent Order that will conclude with a new 10 -year RCRA permit, which will replace the current 1996 permit. Onsite remediation activities consist primarily of groundwater recovery and treatment. 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 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; changes in governmental agency personnel, direction, philosophy or enforcement policies; developments in remediation technologies; 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; the outcome of negotiations with governmental agencies or non-governmental parties; and changes in accounting rules or interpretations. Based on information available as of December 31, 2023, the Company estimates this exposure could range up to approximately $ 85 million, although no assurances can be given that this amount will not be exceeded given the factors described above. These potential additional costs are attributable to several of the above sites and other applicable liabilities. 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 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. 11. Derivative Instruments The Company’s earnings and cash flows are subject to fluctuations due to changes in interest rates and foreign currency exchange rates. The Company has used derivative financial instruments to manage interest rate and foreign currency exchange rate exposure. The Company does not use derivatives for trading or speculative purposes. Derivative instruments are recognized on the consolidated balance sheets at their fair value and are either designated as a hedge of a forecasted transaction or are undesignated. Changes in the fair value of a derivative designated as a hedge are recorded in other comprehensive income (loss) until earnings are affected by the hedged transaction and are then reported in current earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current earnings. In December 2020, the Company terminated all its outstanding derivative instruments, which had been previously designated as hedging instruments and had various maturity dates through 2028. 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. F-27 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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 Foreign currency contracts $ — $ — Other operating expense, net Foreign currency contracts — 4,088 Cost of sales 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: December 31, 2023 2022 Foreign exchange cash flow hedges, net of tax $ 373 $ 567 12. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy prioritizes the inputs used to measure fair value as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 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. F-28 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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: December 31, 2023 2022 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. 13. Stockholders’ Equity Common Stock Buyback On January 29, 2018, the Board of Directors authorized a share buyback program pursuant to which the Company may, from time to time, purchase shares of its common stock with an aggregate purchase price of up to $ 100 million. No shares were repurchased in connection with the program during the years ended December 31, 2023, 2022 and 2021. The Company does not expect to utilize any further authorization in the near future. Stockholder Rights Plan 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 . F-29 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 14. Accumulated Other Comprehensive Loss Year Ended December 31, 2023 2022 2021 Unrecognized components of employee benefit plans, net of tax Balance, beginning of year $ ( 43,694 ) $ ( 76,849 ) $ ( 146,614 ) 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) — — 7,618 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 ) 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 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 (loss) on derivative instruments, net of tax Balance, beginning of year ( 567 ) ( 847 ) 1,834 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 ) Balance, end of year (c) ( 373 ) ( 567 ) ( 847 ) Foreign currency translation Balance, beginning of year ( 19,537 ) ( 6,774 ) 11,145 Foreign currency translation adjustment, net of tax (d) 7,530 ( 12,763 ) ( 17,919 ) Balance, end of year ( 12,007 ) ( 19,537 ) ( 6,774 ) 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 benefit cost. See Note 17—Employee Benefit Plans for further information. (b) During 2021, the Company purchased annuity contracts from a third-party insurance company who assumed responsibility for future pension benefits for certain participants in its U.S. defined benefit plan and recorded a loss of $ 6 million on the settlement and de-recognition of the projected benefit obligation. Additionally, the Company continued the process of winding up certain Canadian pension plans and as a result recorded a settlement loss of $ 2 million. See Note 17—Employee Benefit Plans for further information. (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. 15. 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. F-30 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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 $ ( 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 Shares used in determining basic earnings per common share 65,108,397 63,910,010 63,645,245 Dilutive effect of: Stock options — — — Performance and restricted stock — — — Shares used in determining diluted earnings per common share 65,108,397 63,910,010 63,645,245 Anti-dilutive instruments excluded from the computation of diluted earnings per share included (not in thousands): Year Ended December 31, 2023 2022 2021 Stock options 46,798 77,767 111,124 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 16. Incentive Stock 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 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. 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 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. 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. F-31 Table of Contents 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 . 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 December 31, 2022 77,767 $ 39.98 Forfeited — — Exercised — — Expired ( 30,969 ) 43.32 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 46,798 $ 37.77 — $ — 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. The following table summarizes the details of the restricted stock and stock units granted to employees: Year Ended December 31, 2023 2022 2021 Restricted stock and stock units granted (not in thousands) 992,830 1,328,931 561,025 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 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 December 31, 2022 1,697,587 $ 6.21 Granted 992,830 5.27 Forfeited ( 28,363 ) 5.95 Vested ( 775,360 ) 5.50 Outstanding at December 31, 2023 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. F-32 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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) 611,528 2,861,963 534,172 Weighted average fair value of performance-based stock units granted (not in thousands) $ 9.09 $ 6.21 $ 12.29 Intrinsic value of outstanding performance-based stock units $ 5,551 $ 18,786 $ 8,335 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 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 1,370,601 $ 7.83 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. F-33 Table of Contents 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. 17. Employee Benefit Plans Defined Benefit Plans The Company has defined benefit pension and other postretirement plans covering certain union and non-union employees, primarily in the U.S. and Canada. The defined benefit pension plans are closed to new participants. Certain Canadian plans were included with the sale of the Company’s lumber and newsprint assets. 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. defined benefit plan and recorded a loss of $ 6 million on the settlement and de-recognition of the projected benefit obligation. 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 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 and certain assumptions about future events. F-34 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (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 defined benefit pension and postretirement plan amounts recognized in the consolidated balance sheets: Pension Postretirement 2023 2022 2023 2022 Projected benefit obligation at beginning of year $ 594,455 $ 784,426 $ 29,944 $ 36,525 Service cost 4,877 7,906 1,116 1,516 Interest cost 28,724 21,028 1,351 818 Actuarial (gain) loss 21,015 ( 157,828 ) ( 7,198 ) ( 7,617 ) Participant contributions 700 723 115 133 Benefits paid ( 41,059 ) ( 40,220 ) ( 1,559 ) ( 1,334 ) Settlement 2,982 — — — Curtailment — ( 8,000 ) — — Effects of foreign currency exchange rates 4,424 ( 13,580 ) 95 ( 97 ) Projected benefit obligation at end of year $ 616,118 $ 594,455 $ 23,864 $ 29,944 Fair value of plan assets at beginning of year $ 507,270 $ 658,177 $ — $ — Actual return on plan assets 63,682 ( 101,914 ) — — Employer contributions (a) 1,923 3,811 1,430 1,201 Participant contributions 700 723 115 133 Benefits paid ( 41,059 ) ( 40,152 ) ( 1,545 ) ( 1,334 ) Settlement ( 2,317 ) ( 964 ) — — Effects of foreign currency exchange rates 2,444 ( 12,411 ) — — Fair value of plan assets at end of year $ 532,643 $ 507,270 $ — $ — Funded Status at end of year $ ( 83,475 ) $ ( 87,185 ) $ ( 23,864 ) $ ( 29,944 ) (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 2023 2022 2023 2022 Non-current assets $ — $ 8,742 $ — $ — Current liabilities ( 4,474 ) ( 4,513 ) ( 1,372 ) ( 1,787 ) Non-current liabilities ( 79,001 ) ( 91,414 ) ( 22,492 ) ( 28,157 ) 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: Pension Postretirement 2023 2022 2021 2023 2022 2021 Net gain (loss) $ 9,202 $ 30,531 $ 64,173 $ 6,639 $ 7,574 $ ( 1,025 ) Prior service costs $ ( 2,982 ) $ — $ — $ — $ — $ — F-35 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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 Pension settlement loss (a) $ — $ — $ 7,618 $ — $ — $ — 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) 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 2023 2022 2021 2023 2022 2021 Prior service cost (credit) $ ( 3,852 ) $ ( 1,204 ) $ ( 1,455 ) $ 659 $ 757 $ 879 Net gain (loss) ( 50,796 ) ( 67,770 ) ( 95,470 ) 10,343 3,920 ( 3,547 ) Curtailment — 8,000 — — — — 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 projected and accumulated benefit obligations and the fair value of plan assets were as follows: December 31, 2023 2022 Projected benefit obligation $ 616,118 $ 594,455 Accumulated benefit obligation 606,072 585,404 Fair value of plan assets 532,643 507,270 For pension plans with a projected benefit obligation exceeding plan assets, the projected benefit obligation and fair value of plan assets were $ 587 million and $ 502 million, respectively, at December 31, 2023, and $ 566 million and $ 467 million, respectively, at December 31, 2022. For pension plans with an accumulated benefit obligation exceeding plan assets, the accumulated benefit obligation and fair value of plan assets were $ 577 million and $ 502 million, respectively, at December 31, 2023 and $ 557 million and $ 467 million, respectively, at December 31, 2022. F-36 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) The following table presents the components of net periodic benefit cost of the plans: Pension Postretirement 2023 2022 2021 2023 2022 2021 Service cost $ 4,877 $ 7,906 $ 10,322 $ 1,116 $ 1,516 $ 1,437 Interest cost 28,724 21,028 17,331 1,351 818 650 Expected return on plan assets ( 31,425 ) ( 32,419 ) ( 37,255 ) — — — 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 ) Net periodic benefit cost (a) $ 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 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. Under this method, individual spot rates along the yield curve that correspond with the timing of each benefit payment will be used. 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 plans: Pension Postretirement 2023 2022 2021 2023 2022 2021 Assumptions used to determine benefit obligations at December 31: Discount rate 4.71 % 4.95 % 2.82 % 4.72 % 4.93 % 2.77 % Rate of compensation increase 2.50 % 2.66 % 2.65 % 3.11 % 3.53 % 3.90 % Assumptions used to determine net periodic benefit cost for years ended December 31: Discount rate 4.97 % 4.21 % 2.57 % 4.94 % 4.94 % 2.42 % Expected long-term return on plan assets 5.92 % 5.88 % 5.93 % N/A N/A N/A Rate of compensation increase 2.50 % 2.66 % 2.65 % 3.11 % 3.53 % 3.90 % The estimated return on plan assets is based on historical and expected long-term rates of return on broad equity and bond indices and consideration of the actual annualized rate of return. The Company, with the assistance of external consultants, utilizes this information in developing assumptions for returns, risks and correlation of asset classes, which are then used to establish the asset allocation ranges. Assumed health care cost trends have a significant effect on the amounts reported for the postretirement benefit plans. The following table sets forth the assumed health care cost trend rates as of period end: Postretirement 2023 2022 U.S. Canada U.S. Canada Health care cost trend rate assumed for next year 6.80 % 5.93 % 6.60 % 6.00 % Rate to which cost trend is assumed to decline (ultimate trend rate) 4.00 % 5.00 % 3.70 % 5.00 % Year that ultimate trend rate is reached 2031 2037 2074 2037 F-37 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Investment of Plan Assets The Company’s Pension and Savings Plan Committee and the Audit Committee of the Board of Directors oversee the defined benefit pension plans’ investment program. The investment approach of each defined benefit pension plan is designed to maximize returns and provide sufficient liquidity to meet each plans obligations while maintaining acceptable risk levels. For certain defined benefit plans, investment target allocation percentages for equity securities can range up to 65 percent. In other more well-funded plans, 100 percent is allocated to fixed income securities. 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 2023 2022 U.S. equity securities 23 % 21 % International equity securities 22 % 24 % U.S. fixed income securities 32 % 26 % International fixed income securities 18 % 18 % Other (a) 5 % 11 % Total 100 % 100 % (a) Includes cash balances related to the timing of portfolio management activities. Investments within the equity categories may include large capitalization, small capitalization and emerging market securities, while the international fixed income portfolio may include emerging markets debt. Pension assets did not include a direct investment in RYAM common stock at December 31, 2023 or 2022. Fair Value Measurements The following tables present, by level within the fair value hierarchy (see Note 12—Fair Value Measurements), the assets of the plans: December 31, 2023 Level 1 Level 2 Level 3 Total Mutual funds and collective trusts $ 141,043 $ — $ — $ 141,043 Corporate bonds — 96,069 — 96,069 U.S. government securities — 78,652 — 78,652 Derivative instruments — 421 — 421 Investments at net asset value: Common collective trust funds 216,458 Total assets at fair value $ 532,643 December 31, 2022 Level 1 Level 2 Level 3 Total Mutual funds and collective trusts $ 126,188 $ — $ — $ 126,188 Corporate bonds — 65,326 — 65,326 U.S. government securities — 36,162 — 36,162 Investments at net asset value: Common collective trust funds 279,594 Total assets at fair value $ 507,270 F-38 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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 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. U.S. 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; however, in the majority of cases, the unit price calculation is based on observable market inputs of the funds’ underlying assets. There were no changes in the methodology used during the years ended December 31, 2023 and 2022. Cash Flows Expected benefit payments for the next ten years were as follows: Pension Postretirement 2024 $ 39,581 $ 1,563 2025 40,167 1,628 2026 40,765 1,799 2027 41,227 1,782 2028 41,485 1,829 2029 — 2033 206,156 8,804 The Company has mandatory pension contribution requirements of $ 3 million in 2024 and may make additional discretionary contributions. Defined Contribution Plans The Company provides defined contribution plans to all of its hourly and salaried employees. The Company’s contributions charged to expense for these plans were $ 6 million, $ 7 million and $ 8 million for the years ended December 31, 2023, 2022 and 2021, respectively. 18. Other Operating Expense, Net Other operating expense, net was comprised of the following: Year Ended December 31, 2023 2022 2021 Environmental liability expense (a) $ ( 5,784 ) $ ( 4,903 ) $ ( 6,709 ) 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. See Note 10—Environmental Liabilities for further information. F-39 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 19. Income Taxes 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 Income tax (expense) benefit from continuing operations consisted of the following: Year Ended December 31, 2023 2022 2021 Current tax (expense) benefit: Federal $ 1,623 $ 2,815 $ 2,676 Foreign 3,119 ( 7,511 ) ( 4,924 ) State and other ( 144 ) ( 154 ) ( 158 ) Total current 4,598 ( 4,850 ) ( 2,406 ) Deferred tax (expense) benefit: Federal 15,542 6,635 ( 5,241 ) Foreign 12,028 ( 2,842 ) 41,962 State and other 143 155 373 Total deferred 27,713 3,948 37,094 Income tax (expense) benefit $ 32,311 $ ( 902 ) $ 34,688 The following table reconciles the effective income tax rate on continuing operations to the U.S. federal statutory rate: Year Ended December 31, 2023 2022 2021 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % Change in valuation allowance ( 7.7 ) ( 38.2 ) ( 3.6 ) Adjustment to previously filed tax returns 2.0 11.3 5.2 Tax credits (excluding foreign tax credit) 5.4 17.8 2.1 Nondeductible compensation for executives and share-based awards 0.5 ( 10.5 ) ( 3.0 ) Net changes in uncertain tax positions ( 0.1 ) ( 5.6 ) ( 2.2 ) Difference in foreign statutory rates 2.1 ( 8.2 ) 1.0 U.S. tax on foreign earnings (GILTI and Subpart F, net of FTC) ( 0.1 ) ( 0.9 ) ( 2.2 ) Change in blended statutory rate (a) — — 23.2 Interest on tax payments/receipts 0.6 10.1 — Other 0.7 ( 0.6 ) 0.4 Effective income tax rate on continuing operations 24.4 % ( 3.8 ) % 41.9 % (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. Less significantly, France enacted scheduled decreases to the federal statutory tax rate between 2021 and 2022. The annual impact of remeasuring the French deferred tax liabilities to the scheduled statutory tax rates is also included here. F-40 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Deferred Taxes 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: December 31, 2023 2022 Deferred tax assets: Net operating losses (a) $ 116,353 $ 117,939 Canadian pool of SR&ED (a) 96,113 95,483 Property, plant and equipment basis differences 123,521 110,092 Tax credit carryforwards (a) 71,741 72,238 Pension, postretirement and other employee benefits 25,114 26,533 Environmental liabilities 39,258 38,069 Deferred U.S. interest deductions (a) 33,188 25,731 Deferred foreign interest deductions (a) 3,290 — Other compensation 5,412 5,206 State net operating losses (a) 3,536 3,431 Capitalized costs 19,868 9,677 Other deferred tax assets 21,003 21,047 Total gross deferred tax assets 558,397 525,446 Valuation allowance (a) ( 78,858 ) ( 71,353 ) Total deferred tax assets, net of valuation allowance (b) 479,539 454,093 Deferred tax liabilities: Property, plant and equipment basis differences ( 115,315 ) ( 118,072 ) Intangible assets ( 4,377 ) ( 7,069 ) Prepaid expenses ( 19,253 ) ( 15,847 ) Other deferred tax liabilities ( 10,603 ) ( 7,962 ) Total deferred tax liabilities ( 149,548 ) ( 148,950 ) Net deferred tax asset $ 329,991 $ 305,143 Net deferred tax asset as reflected in consolidated balance sheets: Deferred tax assets $ 345,181 $ 322,164 Deferred tax liabilities ( 15,190 ) ( 17,021 ) $ 329,991 $ 305,143 (a) Further detail of these items as of December 31, 2023 follows: Gross Amount Tax Effected Valuation Allowance Expiration Foreign R&D credit carryforwards $ 35,842 $ 35,842 $ ( 35,842 ) 2024-2042 U.S. tax credit carryforwards 41,017 35,899 ( 19,256 ) 2024-2033 State net operating losses 74,832 3,536 ( 1,790 ) 2024-2043 Canada non-capital losses 476,808 102,039 — 2025-2037 Canada pool of SR&ED 416,679 96,113 — None U.S. interest limitation carryforward 150,854 33,188 ( 18,680 ) None U.S. 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 F-41 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 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. 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 The Company recognizes the impact of a tax position if it is more likely than not to prevail, based on technical merit, in the case of an audit. As of December 31, 2023, there were several positions resulting in unrecognized tax benefits that, if recognized, would affect income tax expense. A reconciliation of beginning and ending unrecognized tax benefits balances follows: Year Ended December 31, 2023 2022 2021 Balance at beginning of period $ 11,015 $ 12,073 $ 11,438 Decreases related to prior year tax positions ( 1,612 ) ( 255 ) ( 1,330 ) Increases related to prior year tax positions 2,804 440 1,019 Decreases related to current year tax positions — ( 2,386 ) — Increases related to current year tax positions 1,373 1,143 946 Balance at end of period $ 13,580 $ 11,015 $ 12,073 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, 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. Tax Statutes In the normal course of business, the Company is regularly audited by tax authorities and is currently under audit in the U.S. and Canada. The following table provides the tax years that remain open to examination by significant taxing jurisdictions: Open Tax Years U.S. 2015-2023 France 2020-2023 Canada 2019-2023 Other Tax Items Several provisions passed in 2017 as part of the Tax Cuts and Jobs Act went into effect in 2022. 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. interest deductibility under Internal Revenue Code §163(j). Under this section, companies may only deduct U.S. interest expenses up to a portion of ATI. Beginning in 2022, ATI was reduced from a tax EBITDA measurement to tax EBIT, which resulted in a significant decrease in U.S. interest deductibility. Additional provisions that impact the Company’s U.S. taxes include the requirement to capitalize and amortize research expenditures and the phase-out of immediate expensing of U.S. capital asset additions. F-42 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) 20. Segment and Geographical Information After the 2021 sale of the lumber and newsprint assets, the Company operates in the following business segments: High Purity Cellulose, Paperboard and High-Yield Pulp. 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 lumber and newsprint assets. See also Note 1—Nature of Operations and Basis of Presentation for a description of the operating businesses. Corporate consists primarily of senior management, accounting, information systems, human resources, treasury, tax and legal administrative functions that provide support services to the operating business units. 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 (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. 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: Year Ended December 31, 2023 2022 2021 High Purity Cellulose Cellulose Specialties $ 783,424 $ 866,225 $ 711,574 Commodity Products 431,902 354,612 279,307 Other sales (a) 97,438 115,009 100,268 Total High Purity Cellulose 1,312,764 1,335,846 1,091,149 Paperboard 219,408 250,167 208,332 High-Yield Pulp 135,954 159,704 135,676 Eliminations ( 24,796 ) ( 28,450 ) ( 27,599 ) Net sales $ 1,643,330 $ 1,717,267 $ 1,407,558 (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 (a) $ ( 41,567 ) $ 31,498 $ 19,738 Paperboard 37,160 37,158 13,379 High-Yield Pulp ( 3,155 ) 16,199 6,686 Corporate ( 57,702 ) ( 58,720 ) ( 50,248 ) 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. F-43 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Identifiable assets by segment were as follows: December 31, 2023 2022 High Purity Cellulose (a) $ 1,510,076 $ 1,654,214 Paperboard 105,804 112,757 High-Yield Pulp 43,811 50,947 Corporate 523,009 529,610 Total assets $ 2,182,700 $ 2,347,528 (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: December 31, 2023 2022 United States $ 710,896 $ 747,110 Canada 683,468 723,133 France 213,180 187,645 Other 98 110 Total long-life assets $ 1,607,642 $ 1,657,998 Depreciation and amortization and capital expenditures by segment were as follows: Year Ended December 31, 2023 2022 2021 Depreciation and amortization: High Purity Cellulose $ 122,925 $ 117,017 $ 116,757 Paperboard 12,933 13,130 14,320 High-Yield Pulp 2,025 2,364 2,544 Corporate 2,100 2,065 4,678 Total depreciation and amortization $ 139,983 $ 134,576 $ 138,299 Capital expenditures: (a) High Purity Cellulose $ 118,665 $ 136,866 $ 110,092 Paperboard 776 3,413 2,160 High-Yield Pulp 1,421 2,210 2,215 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. F-44 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Net sales geographical distribution was as follows: Year Ended December 31, 2023 % 2022 % 2021 % United States $ 544,864 33 $ 569,265 33 $ 472,440 34 China 473,778 29 346,026 20 295,515 21 Europe 222,778 13 343,058 20 283,685 20 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 21. Commitments and Contingencies Commitments The Company leases certain buildings, machinery and equipment under various operating and finance leases. Total rental expense for operating and finance leases amounted to $ 8 million, $ 8 million, and $ 7 million in 2023, 2022 and 2021, respectively. See Note 4—Leases and Note 9—Debt and Finance Leases for further information. At December 31, 2023, future minimum payments under purchase obligations were as follows: 2024 $ 112,007 2025 81,975 2026 72,636 2027 67,156 2028 63,348 Thereafter 331,284 Total (a) $ 728,406 (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 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 Duties on Canadian Softwood Lumber Sold to the U.S. The Company previously operated six softwood lumber mills in Ontario and Quebec, Canada, and exported softwood lumber into the U.S. from Canada . 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. F-45 Table of Contents Rayonier Advanced Materials Inc. Notes to Consolidated Financial Statements (in thousands unless otherwise stated) Other 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 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, 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. Guarantees and Other The Company provides financial guarantees as required by creditors, insurance programs and various governmental agencies. As of December 31, 2023, the Company had net exposure of $ 35 million from various standby letters of credit, primarily for financial assurance relating to environmental remediation, credit support for natural gas and electricity purchases and guarantees related to foreign retirement plan obligations. These standby letters of credit represent a contingent liability; the Company would only be liable upon its default on the related payment obligations. 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. These surety bonds expire at various dates and are expected to be renewed annually as required. LTF is a venture in which the Company owns 45 percent and its partner, Borregaard ASA, owns 55 percent. 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’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 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. F-46 Table of Contents Rayonier Advanced Materials Inc. Schedule II—Valuation and Qualifying Accounts (in thousands) Additions Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Allowance for credit losses December 31, 2023 $ 1,064 $ 105 $ — $ ( 516 ) $ 653 December 31, 2022 $ 774 $ 747 $ 27 $ ( 484 ) $ 1,064 December 31, 2021 $ 487 $ 346 $ 2 $ ( 61 ) $ 774 Allowance for sales returns December 31, 2023 $ 782 $ — $ ( 191 ) $ — $ 591 December 31, 2022 $ 737 $ — $ 45 $ — $ 782 December 31, 2021 $ 759 $ ( 15 ) $ — $ ( 7 ) $ 737 Deferred tax asset valuation allowance December 31, 2023 $ 71,353 $ 7,505 $ — $ — $ 78,858 December 31, 2022 $ 67,644 $ 3,709 $ — $ — $ 71,353 December 31, 2021 $ 81,133 $ ( 13,489 ) $ — $ — $ 67,644 Self-insurance liabilities December 31, 2023 $ 478 $ 448 $ — $ ( 377 ) $ 549 December 31, 2022 $ 982 $ ( 168 ) $ — $ ( 336 ) $ 478 December 31, 2021 $ 1,028 $ 273 $ — $ ( 319 ) $ 982 F-47