RAYONIER ADVANCED MATERIALS INC.

1. Nature of Operations and Basis of Presentation

Nature of Operations

RYAM is a global leader of high purity cellulose commonly used in the production of filters, food, pharmaceuticals, high performance plastics, propellants and various other industrial applications. The Company’s specialized assets, capable of creating the world’s leading cellulose specialties products, are also used to produce cellulose viscose pulp, cellulose fluff pulp, paperboard, high yield pulp and various value-added co-products, including biofuels, bioelectricity and lignin.

Basis of Presentation

The Financial Statements and notes thereto have been prepared in accordance with GAAP for interim financial information and in accordance with the rules and regulations of the SEC. In the opinion of management, the Financial Statements and notes reflect all adjustments, including all normal recurring adjustments, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. The December 31, 2025 consolidated balance sheet was derived from audited annual financial statements but does not contain all the footnote disclosures from the audited annual financial statements. These Financial Statements and notes should be read in conjunction with the consolidated financial statements and supplementary data included in the Company’s 2025 Form 10-K. Certain amounts in prior periods have been reclassified to conform with the current period presentation.

As a result of the sale of its lumber and newsprint assets in August 2021, the Company presents the historical results for those operations, and any subsequent directly associated impacts, as discontinued operations. Unless otherwise stated, information in these notes to condensed consolidated financial statements relates to continuing operations. See Note 3—Discontinued Operations for further information.

New Segment Structure

Beginning in January 2026, the Company reorganized its segment structure and now operates intwo segments:

•High Purity Cellulose: formerly the segments of Cellulose Specialties, Cellulose Commodities and Biomaterials

•Paperboard & High Yield Pulp: formerly the segments of Paperboard and High Yield Pulp

Prior period segment results have been recast to align with this new segment reporting structure. See Note 16—Segments for further information.

Recent Accounting Developments

Accounting Standards Updates Not Yet Implemented

In May 2026, the FASB issued ASU 2026-02 “'Environmental Credits and Environmental Credit Obligations (Topic 818),” which provides recognition, measurement, presentation and disclosure requirements for environmental credits and environmental credit obligations for all entities that generate, purchase or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. This ASU is effective for RYAM’s interim and annual reporting periods beginning in Q1 2028. Early adoption is permitted as of the beginning of an annual reporting period. ASU 2026-02 should be applied on a retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Subsequent Events

Events and transactions subsequent to the consolidated balance sheets date have been evaluated for potential recognition and disclosure through the date of issuance of these consolidated financial statements. No subsequent events were identified.

2. Temiscaming Operations

High Purity Cellulose Operations

In July 2024, the Company indefinitely suspended operations at its Temiscaming HPC plant, idling the plant in a safe and environmentally sound manner. Since the start of the suspension in 2024, the Company has incurred total one-time operating charges of $19 million, including $8 million of mothballing costs, $6 million of severance and other employee costs and $5 million of other costs. No additional one-time charges are expected to be incurred. In conjunction with the suspension of operations, in the third quarter of 2024, the Company recognized a non-cash asset impairment of $25 million, as it was determined that the Temiscaming HPC plant’s net carrying value exceeded its estimated fair value.

In the first quarter of 2026, the Company determined to permanently cease DWP production at the site, which removed the primary economic reason for operating the HPC plant. Consequently, the plant assets’ useful lives were reduced to zero and other impacted assets at the Temiscaming site were also reviewed for potential obsolescence. This resulted in non-cash accelerated depreciation charges of $35 million and other asset adjustments of $6 million, which were recorded to the High Purity Cellulose segment in “Temiscaming HPC permanent idling charges” in the condensed consolidated statements of operations.

Certain infrastructure assets of the Temiscaming HPC plant continue to run in support of the ongoing energy and other needs of the Temiscaming PBD and HYP plants, which continue to operate at full capacity, subject to market conditions.

The following table presents the accrued liability balance activity related to the suspension during the six months ended June 27, 2026:

The following table presents total suspension charges incurred by cost type:

These charges were recorded to the High Purity Cellulose segment in “suspension charges” in the condensed consolidated statements of operations.

High Yield Pulp Operations

In the second quarter of 2026, the Company recognized a non-cash asset impairment of $13 million, as it was determined that the HYP plant asset group’s net carrying value exceeded its estimated fair value as a result of weakened market conditions and reduced future cash flow projections. The impairment was recorded to the PBD & HYP segment in “asset impairment” in the condensed consolidated statements of operations. See Note 9—Fair Value Measurements for further information on the fair value measurement of the HYP plant asset group.

3. Discontinued Operations

In August 2021, the Company completed the sale of its lumber and newsprint facilities and certain related assets located in Canada. During the quarter and six months ended June 28, 2025, the Company recognized $4 million ofpre-tax income related to its remaining CEWS benefit claims deferred since 2021.

Income from discontinued operations was composed of the following:

4. Accounts Receivable, Net

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

5. Inventory

6. Accrued and Other Current Liabilities

(a)Included at June 27, 2026 and December 31, 2025 were prepayment balances of $3 million and $5 million, respectively, for the Company’s insurance claim related to the fire that occurred at the Jesup plant in October 2024. The claim remains in process and seeks recovery for (i) emergency repairs required to return the plant to operating status, (ii) long-term repair work to implement permanent fixes for the emergency repairs and (iii) lost profits due to business interruption. In the first quarter of 2026, a second prepayment of $3 million was received, and in the first and second quarters of 2026, the Company recognized $4 million and $1 million, respectively, in “other operating income (expense), net” for the High Purity Cellulose segment in the condensed consolidated statements of operations. This income recognition represents approved claim amounts to date in excess of the $15 million combined deductible. The Company is continuing long-term repair work while concurrently discussing a potential claim settlement with the insurers.

(b)Included at both June 27, 2026 and December 31, 2025 were $19 million of energy-related payables associated with Tartas facility operations.

7. Debt and Finance Leases

(a)At June 27, 2026, the Company had $175 million of gross availability and net available borrowings of $76 million after taking into account the facility’s quarter end balance of $36 million, outstanding letters of credit of $37 million and required availability of $26 million to avoid triggering the facility’s fixed charge coverage ratio covenant.

(b)Consists of green loans associated with the France bioethanol plant, part of the net assets contributed by the Company to its subsidiary, BioNova.

(c)Consist of loans for energy projects in France.

As of June 27, 2026, there wereno borrowings outstanding under the BioNova Term Loan.

As of June 27, 2026, the Company was in compliance with all covenants under its debt agreements.

Asset Financing Obligation

In March 2026, the Company entered into a sale-leaseback agreement for the equipment of its chip mills located in Georgia and its ERP systems and received net proceeds of $20 million. The Company determined that control of the assets was not transferred and therefore the transaction does not qualify as a sale under GAAP. Accordingly, the transaction is accounted for as a financing arrangement, with the assets continuing to depreciate within “property, plant and equipment, net” and the proceeds recorded as a financing obligation within “long-term debt” in the condensed consolidated balance sheets.

The arrangement has an initial term of 33 months and will continue for successive three-month periods until terminated by either party with appropriate notice. The Company retains a one dollar ($1.00) purchase option at the end of the lease term. Monthly rental payments of $0.7 million will be allocated between interest expense and principal reduction using the effective interest rate method. The financing obligation bears an effective interest rate of 10.6%.

8. Environmental Liabilities

The Company’s environmental liabilities balance changed as follows during the six months ended June 27, 2026:

Port Angeles, Washington

The Company operated a pulp mill at this site from 1930 until 1997. Since 2000, the Company has been evaluating remediation of the pulp mill site and adjacent marine areas (a portion of Port Angeles harbor) pursuant to an agreed order with the Washington DOE under the Washington MTCA. In the first quarter of 2025, in response to negotiations with the Washington DOE on expanded remedial actions for the site, the Company increased its estimated remediation liability and recorded an expense of $10 million. In the second quarter of 2026, the Washington DOE finalized the consent decree and cleanup plan.

Augusta, Georgia

The Company operated this site as a wood treatment plant from 1928 to 1988. This site operates under a 10-year RCRA hazardous waste facility permit managed by the Georgia EPD. The most recent permit was issued in 2015 and is currently in the renewal process. In connection with the Company’s submittal of its permit renewal application, Georgia EPD notified the Company that a revised corrective action plan for site soil and sediment was required. To reflect the additional remedial activities required for the site, in the first quarter of 2025, the Company increased its estimated remediation liability and recorded an expense of $2 million. The revised corrective action plan is currently in review with the Georgia EPD.

Other

In addition to the estimated liabilities for the above remediation sites, 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 June 27, 2026, the Company estimates this exposure could range up to approximately $84 million. However, 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 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 environmental liabilities. 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.

9. Fair Value Measurements

Liabilities Measured at Fair Value on a Recurring Basis

Redeemable Noncontrolling Interest — Put Option

In 2024, BioNova issued 111,111 preferred shares to SWEN in return for a redeemable noncontrolling interest of approximately 14%. The preferred shares contain an embedded put option that was determined should be bifurcated and recognized separately at fair value, with subsequent changes in fair value recorded in earnings.

SWEN’s put option is remeasured at the end of each reporting period. The fair value of the put option is estimated using a Monte Carlo simulation model, which is a Level 3 measurement, with changes in fair value recorded in “other income (expense), net” in the condensed consolidated statements of operations. The SWEN put option’s liability balance and activity were as follows:

There is inherent uncertainty of the fair value measurement of Level 3 securities due to the use of unobservable inputs, including timing and amount of expected cash flows. A material change in the unobservable inputs used may result in a higher or lower fair value measurement. Key inputs into the Monte Carlo simulation model used to determine the fair value of the SWEN put option at the fair value measurement date were as follows:

(a)Based on a peer group of companies in the same or a similar industry.

See Note 10—Redeemable Noncontrolling Interest for further information on the SWEN put option.

Assets Measured at Fair Value on a Nonrecurring Basis

High Yield Pulp Operations

In the second quarter of 2026, the Company recognized a $13 million non-cash impairment after determining that the HYP plant asset group’s net carrying value exceeded its estimated fair value. Determining the fair value of an asset group is judgmental in nature and involves the use of significant estimates and assumptions. The fair value of the HYP 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 2—Temiscaming Operations for further information on this impairment.

Financial Instruments

The carrying amounts of the Company’s cash and cash equivalents, 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, 2029 Term Loan and short-term factoring facility approximate fair value due to their variable interest rates and no significant changes in the Company's credit risk.

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:

(a)Excludes finance lease obligations.

10. Redeemable Noncontrolling Interest

In November 2024, the Company and one of its subsidiaries entered into a shareholder agreement with SWEN, pursuant to which SWEN will fund up to €30 million in exchange for up to 222,222 preferred shares, representing an expected 20% total noncontrolling equity interest in BioNova. Of this commitment, €15 million was funded at the closing of the shareholder agreement in exchange for 111,111 preferred shares, which currently represents an equity interest in BioNova of approximately 14%. Subsequent funding is contingent on the achievement of certain project milestones.

The value of SWEN’s redeemable noncontrolling interest is reflected in temporary equity and is accreted to its estimated redemption value at each period end using the interest method. The following table presents the redeemable noncontrolling interest balance and activity:

Results attributable to RYAM, after attribution to the redeemable noncontrolling interest, were as follows:

11. Accumulated Other Comprehensive Loss

(a)The AOCI components for defined benefit pension and post-retirement plans are included in the computation of net periodic benefit cost. See Note 14—Employee Benefit Plans for further information.

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

(c)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 and the foreign operations are considered indefinitely invested outside the U.S.

12. 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 available for common stockholders by the weighted average number of shares of common stock outstanding, adjusted for the potentially dilutive effect of outstanding performance-based stock and restricted stock.

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

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

13. Incentive Stock Plans

(a)Included equity award expense of $1 million during each of the quarters ended June 27, 2026 and June 28, 2025, and $2 million and $3 million during the six months ended June 27, 2026 and June 28, 2025, respectively.

The Company made new grants of restricted stock units, performance-based stock units, performance-based cash and LPU awards during the first and second quarters of 2026 as follows:

•2026 restricted stock unit awards: cliff vest after three years, except for director awards, which vest afterone year.

•2026 performance-based stock unit and cash awards: cliff vest after three years and are based on TSR relative to peers over athree-year performance period. Participants can earn between 0% and 200% of the target award for the TSR metric. Performance below the threshold for this metric would result inzero payout. The performance-based cash award is paid in cash and is classified as a liability and remeasured to fair value at the end of each reporting period until settlement.

•2026 LPU awards: cliff vest after three years and are based on share price growth over athree-year performance period. The participant can earn between 0% and 250% of the target award, with the number of earned LPUs subject to a value cap of 15 x the initial grant value.

In March 2026, the performance-based awards granted in 2023 were settled with an issuance of 238,855 shares of common stock for the stock unit awards, including incremental shares of 109,053, and cash of $2 million for the cash awards.

The following table summarizes the 2026 activity of the Company’s incentive stock awards (not in thousands):

14. Employee Benefit Plans

Defined Benefit Plans

The Company has defined benefit pension and other long-term and postretirement benefit 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. The liabilities for these plans are calculated using actuarial estimates and management assumptions. These estimates are based on historical information and certain assumptions about future events.

The following tables present the components of net periodic benefit cost of the Company’s plans:

Service cost is included in “cost of sales” or “selling, general and administrative expense” in the condensed 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” in the condensed consolidated statements of operations.

15. Income Taxes

Effective Tax Rate

The Company’s effective tax rates were as follows:

The effective tax rate for the quarter and six months ended June 27, 2026 differed from the federal statutory rate of 21% primarily due to changes in valuation allowances, different statutory tax rates in foreign jurisdictions and U.S. tax credits. Also driving the difference for the quarter was the foreign-derived income deduction.

The effective tax rates for the quarter and six months ended June 28, 2025 differed from the federal statutory rate of 21% primarily due to the full write-off of the Company’s Canadian DTAs. See Deferred Taxes below. Also driving the differences were different statutory tax rates in foreign jurisdictions, valuation allowances on nondeductible U.S. interest expense, U.S. tax credits and nondeductible executive compensation.

Deferred Taxes

In the second quarter of 2025, the Company determined that it was more likely than not that its Canadian DTAs would not be fully realizable and recorded a full valuation allowance against these assets and a corresponding $337 million tax expense to write off the previously recognized net DTA. Barring positive evidence that changes this conclusion, future Canadian earnings will not result in tax expense or benefit on the Company’s financial statements. The valuation allowance does not impact the Company’s legal right to use the deferred tax assets against cash taxes and future recognition continues to be evaluated as market conditions evolve.

As of June 27, 2026 and December 31, 2025, the Company’s net DTA included $19 million and $16 million, respectively, of disallowed U.S. interest deductions that the Company does not believe will be realized. The increase in this asset was a result of a $3 million net tax benefit recognized in the current year. In strict compliance with the American Institute of Certified Public Accountants’ 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 hasnot recognized a valuation allowance on this portion of the net DTA generated from disallowed interest.

16. Segments

As mentioned in Note 1—Nature of Operations and Basis of Presentation, beginning in the first quarter of 2026, the Company reorganized its segment structure and now operates intwo segments:

•High Purity Cellulose: composed of the former segments of Cellulose Specialties, Cellulose Commodities and Biomaterials

•Paperboard & High Yield Pulp: composed of the former segments of Paperboard and High Yield Pulp

Corporate & Other 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.

Prior period segment results have been recast to align with this new segment reporting structure.

The Company’s segment structure is determined based primarily on how its CODM reviews and evaluates Company operations. Historically, RYAM’s CODM has been its CEO. In January 2026, a new CEO was appointed and an analysis was performed to determine whether a change in CODM and/or reportable segments had occurred. The analysis identified the Company’s new CEO as the CODM and determined thetwo reportable segments listed above to be the level at which the CEO assesses performance and makes decisions regarding resource allocation. In April 2026, the new CEO resigned and an interim Office of the CEO was established that was composed of four existing RYAM executives. A new analysis determined that (i) the Office of the CEO was the new CODM and (ii) there was no change in the approach to evaluating the business and therefore no change in reportable segments from those listed above for the second quarter. The appointment of a new, permanent CEO in the last week of June will necessitate a third quarter analysis to determine the new CODM and whether a change in reportable segments is warranted.

The significant integration of the Company’s operations forms the basis of the CODM’s method of performance evaluation and resource allocation. At the Company’s HPC plants — Jesup, Fernandina and Tartas — fixed costs support the production and sale of all products across the specialties, commodities and biomaterials markets that the Company serves. Additionally, bioethanol production in France is dependent on feedstock from the Tartas HPC plant. Likewise, the Company’s PBD and HYP operations at Temiscaming are highly interconnected, with HYP being used as feedstock for PBD production and extensive shared site costs supporting the production of all products at the site. Given the integrated nature of these operations, the CODM assesses performance and allocates resources to maximize the profitability of the combined business units according to the optimal product mix of any given period.

The CODM uses “operating income (loss)” as a measure of segment profitability, predominantly within the monthly budgeting and forecasting process, where it reviews forecast and budget-to-actual variances to assess performance and inform its decisions on capital allocation within the Company.

Net sales by product line, by segment, were as follows:

Significant segment expenses included the following:

(a)Primarily includes salaries, wages and benefits, depreciation and amortization, logistics costs and maintenance costs.

(b)Primarily includes foreign exchange gain (loss), environmental remediation expense, gain (loss) on disposal of property, plant and equipment and income (loss) from equity method investments.

Identifiable assets by segment include the Company’s current assets and were as follows:

17. Commitments and Contingencies

Commitments

The Company had no material changes outside the ordinary course of business to the purchase and lease obligations presented in its 2025 Form 10-K during the six months ended June 27, 2026. The Company’s purchase obligations primarily consist of commitments for the purchase of natural gas, electricity and wood chips. The Company’s lease obligations relate to certain buildings, machinery and equipment under various operating and finance leases.

Litigation and Contingencies

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 business, 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 June 27, 2026, the Company had net exposure of $39 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 $92 million as of June 27, 2026, 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%, and its partner, Borregaard ASA, owns 55%. 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 $22 million at June 27, 2026.

The Company has not recorded any liabilities for these financial guarantees in its condensed consolidated balance sheets because the Company has recorded the underlying liability associated with the guarantee, the guarantee is dependent on the Company’s own performance and, therefore, is not subject to the measurement requirements or 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 June 27, 2026, all the Company’s collective bargaining agreements covering its unionized employees were current.