NewPage Holdings Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

  Three Months Ended September 30, 2014 and 2013 

 Dollars in millions, except per share amounts  

2014

2013

Net sales

$

796

$

780

Cost of sales

739

715

Selling, general and administrative expenses

28

34

Interest expense

21

11

Other (income) expense, net

—

(1)

Income before income taxes

8

21

Income tax (benefit)

—

—

Net income

$

8

$

21

Net income per share:

     Basic 

$

1.15

$

2.91

     Diluted

$

1.14

$

2.90

Weighted average common shares outstanding:

     Basic 

7,082,061

7,080,000

     Diluted

7,152,006

7,109,937

NewPage Holdings Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

 Nine Months Ended September 30, 2014 and 2013 

 Dollars in millions, except per share amounts  

2014

2013

Net sales

$

2,286

$

2,256

Cost of sales

2,208

2,116

Selling, general and administrative expenses

80

109

Interest expense

91

35

Other (income) expense, net

—

(1)

Income (loss) before income taxes

(93)

(3)

Income tax (benefit)

—

—

Net income (loss)

$

(93)

$

(3)

Net income (loss) per share:

     Basic and diluted

$

(13.11)

$

(0.43)

Weighted average common shares outstanding:

     Basic and diluted

7,087,981

7,080,000

 Cash dividends paid per common share 

$

34.35

$

—

NewPage Holdings Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)

September 30, 2014 and December 31, 2013

Dollars in millions, except per share amounts

2014

2013

ASSETS

Cash and cash equivalents

$

9

$

83

Restricted cash

7

—

Accounts receivable, net

233

204

Inventories

514

520

Other current assets

13

25

     Total current assets

776

832

Property, plant and equipment, net

1,127

1,208

Other assets

152

135

TOTAL ASSETS

$

2,055

$

2,175

LIABILITIES AND EQUITY 

Accounts payable

$

169

$

168

Other current liabilities

166

177

Current maturities of long-term debt

44

—

     Total current liabilities

379

345

Long-term debt

724

487

Other long-term obligations

271

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 7,080,192 outstanding on September 30, 2014, and with 7,093,924 shares issued and 7,087,239 outstanding on December 31, 2013)

—

—

Treasury stock, at cost (23,887 shares on September 30, 2014 and 6,685 shares on December 31, 2013)

(1)

—

Additional paid-in capital

572

814

Accumulated deficit

(95)

(2)

Accumulated other comprehensive income (loss)

205

223

     Total equity 

681

1,035

TOTAL LIABILITIES AND EQUITY 

$

2,055

$

2,175

NewPage Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

Nine Months Ended September 30, 2014 and 2013

 Dollars in millions 

2014

2013

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$

(93)

$

(3)

Adjustments to reconcile net income (loss) to

net cash provided by (used for) operating activities:

  Depreciation and amortization

138

137

  Non-cash interest expense

5

5

  Non-cash loss on extinguishment/modification of debt 

23

—

  (Gain) loss on disposal of assets

2

1

  Pension expense (income)

(8)

2

  Pension funding

(38)

(36)

  Equity award expense (income)

(1)

12

  Changes in operating assets and liabilities:

        Accounts receivable

(29)

(13)

        Inventories

6

(78)

        Other operating assets

(3)

(19)

        Accounts payable

1

(31)

        Accrued expenses and other obligations

(25)

7

    Net cash provided by (used for) operating activities

(22)

(16)

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures

(53)

(46)

Proceeds from sales of assets

5

—

Proceeds from sales of investment shares

—

4

Restricted cash

(7)

—

    Net cash provided by (used for) investing activities

(55)

(42)

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)

(4)

Common stock cash dividends paid

(243)

—

Acquisition of treasury stock

(1)

—

Borrowings on revolving credit facility

529

370

Payments on revolving credit facility

(494)

(346)

    Net cash provided by (used for) financing activities

3

19

Net increase (decrease) in cash and cash equivalents

(74)

(39)

  Cash and cash equivalents at beginning of period

83

43

  Cash and cash equivalents at end of period

$

9

$

4

NewPage Holdings Inc. and Subsidiaries

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

Dollars in millions

Nine

Three

Nine

Twelve

Months

Year

Months

Months

Months

Ended

Ended

Ended

Ended

Ended

September 30,

December 31,

September 30,

September 30,

September 30,

2013

2013

2014

2014

2014

Net income (loss)

$

(3)

$

(2)

$

8

$

(93)

$

(92)

Interest expense

35

47

21

91

103

Income tax (benefit)

—

(2)

—

—

(2)

Depreciation and amortization

137

184

46

138

185

EBITDA

$

169

$

227

$

75

$

136

$

194

Equity awards

12

14

1

(1)

1

(Gain) loss on disposal of assets

1

2

1

2

3

Integration and related severance costs and other charges

10

14

—

—

4

Post-emergence bankruptcy-related items

4

4

—

1

1

Merger related costs

1

8

6

12

19

Other

(1)

—

—

1

2

Adjusted EBITDA⁽¹⁾

$

196

$

269

$

83

$

151

$

224

Pro forma effects of project cost savings program⁽²⁾

36

Adjusted EBITDA (including pro forma effects of 

   cost savings program)

$

260

 ⁽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.