NewPage Holdings Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

  Three Months Ended June 30, 2014 and 2013 

 Dollars in millions, except per share amounts  

2014

2013

Net sales

$

733

$

720

Cost of sales

714

686

Selling, general and administrative expenses

28

34

Interest expense

21

13

Income (loss) before income taxes

(30)

(13)

Income tax (benefit)

—

—

Net income (loss)

$

(30)

$

(13)

Net income (loss) per share:

     Basic and diluted

$

(4.24)

$

(1.84)

Weighted average common shares outstanding:

     Basic and diluted

7,092,477

7,080,000

NewPage Holdings Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

 Six Months Ended June 30, 2014 and 2013 

 Dollars in millions, except per share amounts  

2014

2013

Net sales

$

1,490

$

1,476

Cost of sales

1,469

1,401

Selling, general and administrative expenses

52

75

Interest expense

70

24

Income (loss) before income taxes

(101)

(24)

Income tax (benefit)

—

—

Net income (loss)

$

(101)

$

(24)

Net income (loss) per share:

     Basic and diluted

$

(14.25)

$

(3.34)

Weighted average common shares outstanding:

     Basic and diluted

7,090,989

7,080,000

 Cash dividends paid per common share 

$

34.35

$

—

NewPage Holdings Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)

June 30, 2014 and December 31, 2013

Dollars in millions, except per share amounts

2014

2013

ASSETS

Cash and cash equivalents

$

8

$

83

Restricted cash

7

—

Accounts receivable, net

216

204

Inventories

530

520

Other current assets

17

25

     Total current assets

778

832

Property, plant and equipment, net

1,156

1,208

Other assets

159

135

TOTAL ASSETS

$

2,093

$

2,175

LIABILITIES AND EQUITY 

Accounts payable

$

195

$

168

Other current liabilities

142

177

Current maturities of long-term debt

45

—

     Total current liabilities

382

345

Long-term debt

737

487

Other long-term obligations

298

308

Commitments and contingencies

EQUITY 

Preferred stock, 100,000 shares authorized, $0.001 per share par value

—

—

Common stock, par value $0.001 (16,000,000 shares authorized with 7,104,079

     shares issued and 7,092,477 outstanding on June 30, 2014, and with

     7,093,924 shares issued and 7,087,239 outstanding on December 31, 2013)

—

—

Treasury stock, at cost (11,602 shares on June 30, 2014 and 6,685 shares on

     December 31, 2013)

(1)

—

Additional paid-in capital

572

814

Accumulated deficit

(103)

(2)

Accumulated other comprehensive income (loss)

208

223

     Total equity 

676

1,035

TOTAL LIABILITIES AND EQUITY 

$

2,093

$

2,175

NewPage Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

Six Months Ended June 30, 2014 and 2013

 Dollars in millions 

2014

2013

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$

(101)

$

(24)

Adjustments to reconcile net income (loss) to

net cash provided by (used for) operating activities:

  Depreciation and amortization

92

91

  Non-cash interest expense

3

3

  Non-cash loss on extinguishment/modification of debt 

23

—

  (Gain) loss on disposal of assets

1

1

  Pension expense (income)

(5)

2

  Pension funding

(15)

(9)

  Equity award expense (income)

(2)

8

  Deferred income taxes

1

—

  Changes in operating assets and liabilities:

        Accounts receivable

(12)

(1)

        Inventories

(10)

(63)

        Other operating assets

(13)

(19)

        Accounts payable

27

(18)

        Accrued expenses and other obligations

(40)

6

    Net cash provided by (used for) operating activities

(51)

(23)

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures

(39)

(31)

Proceeds from sales of assets

4

—

Restricted cash

(7)

—

    Net cash provided by (used for) investing activities

(42)

(31)

CASH FLOWS FROM FINANCING ACTIVITIES

Payment of financing costs

(28)

(1)

Proceeds from issuance of long-term debt

735

—

Repayments of long-term debt

(495)

(3)

Common stock cash dividends paid

(243)

—

Acquisition of treasury stock

(1)

—

Borrowings on revolving credit facility

319

171

Payments on revolving credit facility

(269)

(152)

    Net cash provided by (used for) financing activities

18

15

Net increase (decrease) in cash and cash equivalents

(75)

(39)

  Cash and cash equivalents at beginning of period

83

43

  Cash and cash equivalents at end of period

$

8

$

4

NewPage Holdings Inc. and Subsidiaries

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA (unaudited)

Dollars in millions

Six

Three

Six

Twelve

Months

Year

Months

Months

Months

Ended

Ended

Ended

Ended

Ended

June 30,

December 31,

June 30,

June 30,

June 30,

2013

2013

2014

2014

2014

Net income (loss)

$

(24)

$

(2)

$

(30)

$

(101)

$

(79)

Interest expense

24

47

21

70

93

Income tax (benefit)

—

(2)

—

—

(2)

Depreciation and amortization

91

184

46

92

185

EBITDA

$

91

$

227

$

37

$

61

$

197

Equity awards

8

14

1

(2)

4

(Gain) loss on disposal of assets

1

2

—

1

2

Integration and related severance costs and other charges

8

14

—

—

6

Post-emergence bankruptcy-related items

3

4

1

1

2

Merger related costs

1

8

4

6

13

Other

(1)

—

—

1

2

Adjusted EBITDA⁽¹⁾

$

111

$

269

$

43

$

68

$

226

Pro forma effects of project cost savings program⁽²⁾

56

Adjusted EBITDA (including pro forma effects of 

   cost savings program)

$

282

  ⁽¹⁾

Does not include pro forma effects of our project cost savings program used in certain covenants under our credit facilities.

  ⁽²⁾

Represents cost savings expected to be realized as part of our project cost savings program.

EBITDA is defined as net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA and Adjusted EBITDA (as described in the table above) are not measures of our performance under accounting principles generally accepted in the United States ("U.S. GAAP"), are not intended to represent net income (loss), and should not be used as alternatives to net income (loss) as indicators of performance. EBITDA and Adjusted EBITDA are shown because they are bases upon which our management assesses performance and are primary components of certain covenants under our credit facilities. In addition, our management believes EBITDA and Adjusted EBITDA are useful to investors because they and similar measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies. The use of EBITDA and Adjusted EBITDA instead of net income (loss) has limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Our measures of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.