Sylvamo Releases Third Quarter Earnings

Sylvamo (NYSE: SLVM), the world’s paper company, is releasing third quarter earnings. The company will host an audio webcast at 10 a.m. EST at investors.sylvamo.com.

Management Summary from Chief Executive Officer John Sims

As we announced earlier this morning, we entered into a put option agreement with Midas Atlantic Partners, in partnership with The Najafi Companies, for a binding offer to acquire our Europe business, including our uncoated freesheet paper mills in Saillat, France, and Nymolla, Sweden, as well as our forestry and supporting business operations.

We believe this potential transaction represents an important strategic step for our Europe business and Sylvamo. In Europe, it would create the opportunity to move forward with an owner experienced in corporate carve-outs and positioning businesses for long-term success. After the proposed transaction, Sylvamo would be a more focused company, with greater ability to invest in our business, strengthen our performance and pursue world-class excellence. We believe that focus will make us a stronger company and better position us to create sustainable value for our employees, customers and investors.

Our long-term strategy and investment thesis is unchanged: we are focusing on uncoated freesheet, investing to strengthen our competitive advantages and leveraging our strengths to generate high returns on invested capital.

Our Europe business is now reported as discontinued operations. Unless otherwise noted, all results and comparisons are for continuing operations excluding Europe. Prior periods have been recast.

-Financial Highlights – Third Quarter

• Net sales from continuing operations were $645 million. Net sales of our European operations, which are reported in discontinued operations, were $178 million in the third quarter of 2026.

• Net income from continuing operations of $85 million ($2.13 per diluted share), a 13% margin, while our discontinued operations reported a $284 million loss, primarily driven by a noncash impairment charge

• Adjusted operating earnings* of $53 million ($1.33 per diluted share) from continuing operations

• Adjusted EBITDA* of $128 million, a 20% margin, from continuing operations

• Cash provided by operating activities from continuing operations of $70 million and free cash flow* of $16 million

• Continuing operations include approximately $6 million to $7 million per quarter of corporate costs previously allocated to our European operations

• We declared a dividend of $0.45 per share, which we paid Oct. 16

-Commercial and Operational Highlights from Continuing Operations – Third Quarter vs. Second Quarter

• Price and mix improved by $25 million, primarily from previously communicated paper price increases

• Volume was relatively flat

• Operations and other costs were favorable by $6 million from improved operational performance

• Planned maintenance outage costs were $38 million lower, as expected

• Input and transportation costs were unfavorable by $6 million, primarily due to higher transportation costs

-Eastover Strategic Investments

Our teams continue to make good progress on our high-return strategic investments at our Eastover mill.

• The paper machine optimization project is underway. The project, which remains on schedule and within budget, will add an additional 60,000 short tons of uncoated freesheet capacity annually.

• We made a strategic decision to keep our three existing cutsize sheeters operational and add a new state-of-the-art sheeter rather than replacing one. The new sheeter will add approximately 200,000 short tons of cutsize converting capacity, with startup expected early in the third quarter of 2027.

• In addition, the woodyard softwood line and the warehouse expansion at our sheeting plant remain on track to start up in the first quarter of 2027

-Regional Business Conditions

• In Latin America, demand is seasonally stronger in the second half of the year. In September, Colombia canceled its antidumping duties on uncoated freesheet imports from Brazil, which restores access to a market we previously served.

• In North America, the industry supply and demand balance remains healthy and our paper price increases are mostly implemented with our customers

• Imports in both regions continue to increase year over year

• Supply chain pressures are driving higher input and transportation costs. Lower supply availability and higher fuel costs affected ocean transportation, while elevated diesel prices and reduced driver availability increased trucking costs in the U.S. Input costs, including chemicals, energy and fiber, continue to be impacted by persistently high oil prices.

-Looking Ahead

In January, I committed that we would allocate capital wisely, focus on long-term value creation and communicate transparently. The proposed sale of our Europe business will make Sylvamo a more focused company, concentrated in Latin America and North America, where we see the greatest opportunities to create value. Our Eastover strategic investments are progressing, our lean transformation is improving performance across our mills and our flagship growth strategy and disciplined capital allocation principles are unchanged. We will continue to invest in low-risk, high-return projects in uncoated freesheet, maintain a strong balance sheet and return cash to shareowners.

Earnings Webcast

The company will host an audio webcast at 10 a.m. EST at investors.sylvamo.com.

To participate in Q&A, use the analyst registration to receive a unique passcode.

Replays will be available at investors.sylvamo.com for one year.

About Sylvamo

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

Segment Information

Sylvamo uses business segment operating profit (loss) to measure the earnings performance of its businesses, see definition within “Non-GAAP Financial Measures”. Third quarter 2026 sales by business segment and operating profit (loss) by business segment compared with the second quarter of 2026 and the third quarter of 2025 are as follows:

Operating profits in the third quarter of 2026:

Latin America – $22 million compared with $(18) million in the second quarter of 2026. Earnings were higher due to lower planned maintenance outages, higher sales price and mix, higher volumes and lower operating costs, which were slightly offset by higher input costs.

North America – $65 million compared with $46 million in the second quarter of 2026. Earnings were higher due to lower planned maintenance outages, higher sales price and mix and lower operating costs which were partially offset by lower volumes and higher input costs.

Effective Tax Rate

The reported effective tax (benefit) rate from continuing operations for the third quarter of 2026 was (20)%, compared to 88% for the second quarter of 2026. The rate in the third quarter was primarily driven by a tax benefit related to our investment in our European subsidiaries of $36 million. The rate in the second quarter was primarily driven by a $12 million valuation allowance on certain foreign deferred tax assets due to an internal merger.

The effective operational tax rate for the third quarter of 2026 was 30%, compared with 30% for the second quarter of 2026.

The effective operational tax rate is a non-GAAP financial measure and is calculated by adjusting the income tax provision (benefit) and rate from continuing operations to exclude the tax effect at the applicable statutory rate of net special items and the impact of foreign exchange on an intercompany note receivable from our Brazilian subsidiary. Management believes that this presentation provides useful information to investors by providing a more meaningful comparison of the income tax rate between past and present periods.

Effects of Net Special Items

Net special items related to continuing operations in the third quarter of 2026 amounted to a net after-tax benefit of $33 million ($0.83 per diluted share), compared with a net after-tax charge of $13 million ($0.33 per diluted share) in the second quarter of 2026.

Non-GAAP Financial Measures

Adjusted Operating Earnings (Loss) (non-GAAP) are net income (loss) from continuing operations (GAAP), plus the impact of foreign exchange on an intercompany note receivable from our Brazilian subsidiary, and, when applicable for the periods reported, net special items. Management uses this measure to focus on ongoing operations and believes it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. The Company believes that using this information, along with net income (loss), provides for a more complete analysis of the results of operations. Net income (loss) is the most directly comparable GAAP measure. For more information regarding net special items, see the information under the heading Effects of Net Special Items and the Consolidated Statement of Operations and related notes included later in this release.

Adjusted EBITDA (non-GAAP) is net income (loss) from continuing operations (GAAP), plus the sum of income taxes, net interest expense, depreciation, amortization and cost of timber harvested, stock-based compensation, the impact of foreign exchange on an intercompany note receivable from our Brazilian subsidiary, and, when applicable for the periods reported, net special items. Management uses these measures in managing the operating performance of our business and believes that adjusted EBITDA along with adjusted EBITDA margin provide investors and analysts meaningful insights into our operating performance and is a relevant metric for the third-party debt. Adjusted EBITDA is reconciled to net income (loss), the most directly comparable GAAP measure. Adjusted EBITDA margin (adjusted EBITDA divided by net sales) is reconciled to net income (loss) from continuing operations margin (net income (loss) divided by net sales), the most directly comparable GAAP measure. For more information regarding net special items, see the information under the heading Effects of Net Special Items and the Consolidated Statement of Operations and related notes included later in this release.

Business Segment Operating Profit (Loss) (non-GAAP) is net income (loss) from continuing operations (GAAP), plus the sum of income taxes, net interest expense, the impact of foreign exchange on an intercompany note receivable from our Brazilian subsidiary, and, when applicable for the periods reported, net special items. We believe that business segment operating profit (loss) is an important indicator of operating performance as it is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments. For more information regarding net special items, see the information under the heading Effects of Net Special Items and the Consolidated Statement of Operations and related notes included later in this release.

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

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including the information under the heading “Management Summary from Chief Executive Officer John Sims.” Any or all forward-looking statements may turn out to be incorrect, and our actual actions and results could differ materially from what they express or imply, because they involve known and unknown risks, uncertainties and other factors, many of which are beyond our control. These risks, uncertainties, and other factors include those disclosed in the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended Dec. 31, 2025, filed with the U.S. Securities and Exchange Commission (SEC) and in our subsequent filings with the SEC, available on our website, Sylvamo.com. These forward-looking statements reflect our current expectations, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

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