Sylvamo Corp
For the period ended Dec 31, 2023. Filed Feb 21, 2024.
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FY2023 · Filed Feb 21, 2024
Contents
ITEM 1A.
NOTE 8 DIVESTITURE AND IMPAIRMENT OF BUSINESS
RUSSIAN OPERATIONS
During the first quarter of 2022, as a result of the significant changes in the business climate impacting our Russian operations, a determination was made that the current carrying value of our Russian operations exceeded the estimated fair value. The fair value of the Russian operations was estimated based on a probability-weighted average approach of the potential cash flows from various paths the Company evaluated to exit the business. As a result, a pre-tax charge of $68 million ($57 million) was recorded for the impairment of the Russian fixed assets during the first quarter of 2022. These charges are included in “Impairment of business” within the summarized income statement for our Russian operations included in this footnote and is included in “Discontinued operations, net of taxes” in the consolidated statement of operations.
During the second quarter of 2022, management committed to a plan to sell the Company’s Russian operations. In October 2022, the Company completed the sale of its Russian operations to Pulp Invest Limited Liability Company, a company incorporated in the Russian Federation, for $420 million. After transaction and foreign currency exchange costs of $35 million, Sylvamo received $385 million in cash proceeds.
As a result, all historical operating results of the Russian operations are presented as “Discontinued operations, net of taxes” in the consolidated statement of operations. The Russian operations were previously part of the Europe business segment. The following summarizes the major classes of line items comprising Income (Loss) Before Income Taxes reconciled to Discontinued Operations, net of taxes, related to the Russian operations for all periods presented in the consolidated and combined statements of operations.
| In millions for the years ended December 31 | 2022 | 2021 |
|---|---|---|
| NET SALES | $518 | $674 |
| COSTS AND EXPENSES | ||
| Cost of products sold (exclusive of depreciation, amortization and cost of timber harvested shown separately below) | 425 | 518 |
| Selling and administrative expenses | 10 | 6 |
| Depreciation, amortization and cost of timber harvested | 4 | 17 |
| Taxes other than payroll and income taxes | 1 | 2 |
| Impairment of business | 296 | — |
| Interest expense (income), net | (3) | (1) |
| INCOME BEFORE INCOME TAXES | (215) | 132 |
| Income tax provision | 3 | 28 |
| DISCONTINUED OPERATIONS, NET OF TAXES | $(218) | $104 |
The following summarizes the total cash provided by operating activities from discontinued operations, net and total cash provided by (used for) investing activities from discontinued operations, net and included in the consolidated and combined statements of cash flows:
| In millions for the years ended December 31 | 2022 | 2021 |
|---|---|---|
| Cash Provided by Operating Activities | $20 | $126 |
| Cash Provided by (Used for) Investment Activities (a) | $(5) | $14 |
(a) Includes cash invested in capital projects of $5 million and $7 million for the years ended December 31, 2022 and 2021, respectively.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.