Neenah Annual Report 2014

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FY2014 Annual Report · Neenah

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Financial Highlights

Continued Operations

F I N AN C I A L

(Dollar in millions, except share data)

Consolidated Statement of Operations Data

Continued Operations

Net Sales

Adj. EBIT

% ROS

Net Sales

Adjusted EBITDA

Adjusted EBIT

% ROS

(Dollars in millions, except share data)

696.0

Consolidated Statement of Operations Data
$

59.0

HIGHLIGHTS

Year End December 31,

2011

2012

2013

Net Sales
(In millions of U.S. dollars)

Year End December 31,

2012

808.8

2013

844.5

2014

$696.0

80.3

85.2
$808.8 $844.5 $902.7
10.1%

9.9%

$274.9

$80.3
113.2

$85.1
118.7

$94.1

9.9%

10.1% 10.4%

8.5%

93.3

$808.8

Net Sales
(In millions of U.S. dollars)

29.5

$808.8

$844.5

$372.7

$29.5

$26.6

$844.5

26.6

$902.7
$401.7
$27.1

$401.8

$409.0

Earnings (loss) Per Diluted Common Share

Adjusted EBITDA

$113.2 $118.7 $129.1

$372.7

Adjusted Earnings from continuing operations

Earnings (loss) per Diluted Common Share

1.91

2.78

2.93

$421.1

$406.6

$416.1

Weighted Average Common Diluted Shares Outstanding (in thousands)

Adjusted Earnings from Continuing Operations

15,649

Cash Dividend (Average)

0.44
Weighted-Average Shares Outstanding (in thousands)

Consolidated Balance Sheet Data

Total Assets

Total Stockholders’ Equity

Total stockholders' equity

Total Debt

565.1

166.7

16,072
$2.78
0.48
16,072

16,405
$2.93
0.70
16,403

$3.28

16,872

$406.6

$416.1

$466.6
13

Technical Products

Fine Paper

Other

$610.7 $675.9

$730.6

$197.8 $267.5
610.7
$

679.7

$182.3 $211.9
$

197.8

260.6

$288.7

$234.3

2012

2013

2014

 Technical  Fine Paper
Products
& Packaging

 Other

Total Debt

Cash and Cash Equivalents

186.2

$7.8
182.3

$73.4
211.9

$72.6

Adjusted EBIT
(In millions of U.S. dollars)

Debt to EBITDA

Debt to Capital

2.0x

53%

1.6x
1.6x

48%
48%

1.8x
1.8x

44%
45%

Other Financial Data

Net Cash Flow Provided by (used for):

Other Financial Data

Operating Activities

Net Cash flow provided by (used for):

Capital Expenditures

Operating activities

Capital expenditures

Stock Price Year-End

Return on Invested Capital

Cash Dividends Paid

$40.1

$83.5

$94.5
8.0%

$(25.1)
40.1

$(28.7)
83.6

$(27.9)
7.0%

$28.47
(25.1)

$42.77 $60.27
(28.7)

6.0%

57.2

(23.1)

9.3%

$0.48
11.8%

$0.70
12.0%

$1.02
5.0%

A reconciliation of adjusted income measures to comparable GAAP measures

A reconciliation of adjusted income measures to comparable GAAP measures
is shown below:

is show below:

GAAP Reconciliation

Year End December 31,

GAAP Reconciliation

(Dollars in millions, except share data)

Year End December 31,

2012

2013

2014

(Dollars in millions, except share data)

EBIT (Operating Income)

2011

$70.4
2012

$83.8
2013

$87.5

$59.0

8.5%

$80.3
Adjusted EBIT
(In millions of U.S. dollars)

9.9%

$80.3

9.9%

$85.1

10.1%

$85.2

10.1%

$94.1

10.4%

Adjusted EBIT

Adjusted EBIT Margins

90.0

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0

2012

2013

2014

 Adjusted EBIT

% of Sales

EBIT (Operating Income)

Integration/Restructuring Costs

56.6

5.8
70.4

83.8

0.6

Adjusted Earnings Per Diluted Share
2.9

Acquisition Integration Costs

Pension Settlement Charge

SERP Settlement Charge

Cost for Early Redemption of Debt

Cost of Early Redemption of Bonds

Adjusted EBIT

Depreciation & Amortization

2.4

59.0

Depreciation & Amortization

0.7
0.2
0.2
0.5
0.5
85.1
85.2
28.7
28.5

5.8
3.5
3.5
0.6
0.6
80.3
80.3
28.0
28.0
4.9
4.9

30.0

4.3

Amortization Equity-Based Compensation

Adjusted EBITDA

93.3

4.9
5.0
$113.2 $118.7 $129.1
113.2
118.7

1.5

Diluted Earnings per Share

$2.41

$2.96

Diluted Earnings per Share

Integration/Restructuring Costs

1.82

Acquisition Integration Costs

Pension Settlement Charge

SERP Settlement Charge

Cost for Early Redemption of Debt

Cost of Early Redemption of Bonds

Prior Year R&D Tax Credit

R&D Tax Credit

Diluted Adjusted Earnings per Share

0.09

1.91

2.41
0.22
0.22
0.13
0.13
0.02
0.02
–

$2.78
2.78

2.96
0.02
0.02
0.01
0.01
0.02
0.02
(0.08)
(0.08)
$2.93
2.93

Adjusted Earnings
Per Share

$2.78

$2.93

$3.28

$1.91

$2.93

$2.78

$1.91

2012

2013

2014

Neenah Paper, Inc. 2014 Annual Report

1.8x

11.0%

45%
10.0%

9.0%

3.5

3
0.2

94.1
2.5

29.0
2
6.0

1
$4.03

0.5
0.11

0.13
0

0.01

(1.00)

$3.28

T O O U R
T O O U R

SHAREHOLDERS
SHAREHOLDERS

It’s my pleasure to report that 2014 – our 10th year as
2012 was a highly successful year for Neenah.
2012 was a highly successful year for Neenah.
a stand-alone public company – was another successful
At the front and center of our efforts was the
At the front and center of our efforts was the
year for Neenah Paper, with each of our businesses
disciplined execution of our strategy, motivated
disciplined execution of our strategy, motivated
delivering record results. This was due to the talents
by a clear and consistent vision: To create value for
by a clear and consistent vision: To create value for
and determination of our employees, the quality and
our customers and shareholders by improving the
our customers and shareholders by improving the
strength of our businesses, and a focus on effectively
image and performance of everything we touch.
image and performance of everything we touch.
executing our strategies to increase shareholder value.
Our continuing efforts to implement that vision led
Our continuing efforts to implement that vision led

to substantial growth in 2012, both top-line and
to substantial growth in 2012, both top-line and
Consolidated sales were up 7%, with organic growth
bottom-line, and allowed us to deliver returns to our
bottom-line, and allowed us to deliver returns to our
of 6% in Technical Products and 2% in Fine Paper &
shareholders of 30%, more than twice that of the
shareholders of 30%, more than twice that of the
Packaging. Results were further enhanced by the mid-
broad markets.
broad markets.
year acquisition of an attractive filtration business in

North America. At the same time, adjusted operating
OUR STRATEGY IS BUILT ON A PLATFORM OF
OUR STRATEGY IS BUILT ON A PLATFORM OF

THREE IMPERATIVES:
THREE IMPERATIVES:
income and earnings per share grew 11% and 12%,

(cid:127)
(cid:127)
% Change
2014 vs. 2013

Focus on proﬁtable, specialty niche markets
Focus on proﬁtable, specialty niche markets
we increased
market
market

where we can establish
where we can establish

12%

respectively, as

positions based on our core strengths.
positions based on our core strengths.

11%

margins through

(cid:127)
(cid:127)

Increase our size, growth rate and portfolio
Increase our size, growth rate and portfolio

mix of products,
diversiﬁcation in both Fine Paper and Technical
diversiﬁcation in both Fine Paper and Technical

continued focus on

a higher-value

Products through organic means and
Products through organic means and

cost control, and

complementary acquisitions.
complementary acquisitions.
Net Sales
Adj.EBIT
Adj.EPS

appropriate selling

(cid:127) Deliver consistent, attractive returns to our
(cid:127) Deliver consistent, attractive returns to our

price adjustments.

Our businesses generate substantial cash flow and we

shareholders through disciplined
shareholders through disciplined

continue to deploy our capital in a disciplined manner.

management.
management.

In addition to spending on organic initiatives and a

is evidence of our progress in each of these areas.
is evidence of our progress in each of these areas.
value-adding acquisition, we increased our dividend

payment by almost 50%, consistent with our strategy
DELIVERING PROFITABLE GROWTH AND
DELIVERING PROFITABLE GROWTH AND
of providing investors with an attractive cash return.
SHAREHOLDER VALUE
SHAREHOLDER VALUE
Our balance sheet remains strong, with low debt,

in 2014, putting our performance well within the top
including new initiatives in specialized market niches,
including new initiatives in specialized market niches,
quartile of the Russell 2000 and helping to push our
which we achieved despite challenging economic
which we achieved despite challenging economic
market capitalization over $1 billion for the first time
headwinds in Europe throughout most of the year.
headwinds in Europe throughout most of the year.
in our history.

% Change 2012 vs 2011
% Change 2012 vs 2011
FINANCIAL HIGHLIGHTS

Operating
Operating

income increased
income increased

• Net sales increased 7% to $902.7 million

36% over 2011
36% over 2011

compared with $844.5 million in 2013.

after adjusting
after adjusting

• Adjusted operating income increased 11%

for acquisition
for acquisition

6%
6%

to $94.1 million from $85.1 million in 2013.
4%
4%
integration
integration
After including charges for a non-cash pension
and other one-
and other one-

5%
5%

Adj. EPS
Adj. EPS

Adj. EBIT
Adj. EBIT

Net Sales
Net Sales

settlement, integration costs and other items,

time costs. Our
time costs. Our
GAAP operating income increased 4% to $87.5
higher sales and disciplined approach to managing
higher sales and disciplined approach to managing
million compared with $83.8 million in 2013.
overhead and other costs allowed us to leverage
overhead and other costs allowed us to leverage
• Adjusted earnings per share increased 12% to
Neenah’s infrastructure, and helped boost operating
Neenah’s infrastructure, and helped boost operating
$3.28 from $2.93 in the prior year. After
margins to 9.9% versus 8.5% in 2011.
margins to 9.9% versus 8.5% in 2011.
including prior year tax credits and one-time
During the year, we also actively managed our
During the year, we also actively managed our
charges noted above, GAAP earnings per share
capital structure, redeeming $68 million of bonds
capital structure, redeeming $68 million of bonds
grew 36% to $4.03 in 2014 from $2.96 in 2013

and income from continuing operations

entered into a new lending facility and improved the
entered into a new lending facility and improved the
increased 39% to $68.7 million from $49.4

terms and extended the maturity of our revolver—
terms and extended the maturity of our revolver—
million in 2013.

• Cash from operations, which included significant

working capital benefits, increased to $94.5

million from $83.5 million in the prior year.
These factors combined to drive a 50% increase in
These factors combined to drive a 50% increase in

adjusted net income, which reached $46 million, or
adjusted net income, which reached $46 million, or
OUR STRATEGIES ARE WORKING
$2.78 per share. This was our highest level ever.
$2.78 per share. This was our highest level ever.
Our performance is evidence that our strategies

Increased income levels along with our continued
Increased income levels along with our continued
are working – investing and building positions in

defensible niches that enhance our growth profile

Invested Capital (ROIC) of over 11% for 2012, up
Invested Capital (ROIC) of over 11% for 2012, up
and diversify our business portfolio, and creating

Sales increased 16% from 2011 and exceeded
Sales increased 16% from 2011 and exceeded
plenty of financing capacity and no near-term needs

sharply from 9% in 2011. This remains a key metric
sharply from 9% in 2011. This remains a key metric
value for our shareholders.

$800 million. This was mainly due to our successful
$800 million. This was mainly due to our successful
for funding – and our Return on Capital is steady at

acquisition of the Wausau premium paper brands
acquisition of the Wausau premium paper brands
over 12%.

Shareholders have seen the impact of these actions in

our share price, which increased by more than 40%

guiding our investment decisions.
guiding our investment decisions.
Expanding our presence in specialty markets – In

our core profitable niche markets, we are
execution enabled us to deliver on our commitment
execution enabled us to deliver on our commitment
broadening our lead positions and growing share.
to enhance shareholder value. Our total shareholder
to enhance shareholder value. Our total shareholder
We are doing this by expanding our geographic
return for the past year was 30%, anchored by a
return for the past year was 30%, anchored by a

Neenah Paper, Inc. 2014 Annual Report
Neenah Paper, Inc. 2014 Annual Report

•

presence in transportation filtration, building our

global evolution to higher-value filter products for which

global business in specialty backings, and leveraging

we are known. Backings and specialties grew by 4%

our strong market position in premium fine paper,

FINE PAPER

among other initiatives.

Diversifying our portfolio – We are also

looking beyond our core markets as we invest both

Neenah is the leader in the North American premium
Fine Paper market. Built on a tradition of quality
and service, we market some of the most recognized
and preferred premium papers in North America,

organically and through acquisitions in profitable,

growing markets like specialty filtration media,

with distinguished brands including CLASSIC®,
performance-oriented technical products and premium

ASTROBRIGHTS®,

ROYAL SUNDANCE®,

packaging. With our most recent acquisition, for
Southworth®, and ENVIRONMENT® Papers.
example, we were able to broaden our filtration end

markets, acquire new technologies, and add to product

and 8%, respectively, with new and customized products

that deliver performance through unique coating and

chemistry applications.

Fine Paper and Packaging, with 2014 revenues of $409

Neenah’s leadership role is supported by our
broad range of colors, textures and other product
features and we have world-class manufacturing,
million, focuses on image-enhancing, textured and
with three facilities located in Wisconsin.

colored graphic papers for high-end commercial and
We are also a pioneer in eco-friendly paper
retail print communications, as well as packaging needs
products. Our ENVIRONMENT® Paper is the premier
offering of recycled content papers in the market.
for premium goods, such as cosmetics and jewelry,

spirits, retail and electronics. Sales for Fine Paper and

Packaging increased by 2% in 2014, and operating

development capabilities for both existing and new

OUR PRODUCTS ARE IN DEMAND WHEREVER IMAGE MATTERS:

margins remained steady at an attractive 15%, despite

markets. This further reinforces our demonstrated
•

success in evolving our portfolio into higher growth

for high-end traditional / digital printing for graphic imaging needs,
such as business identification, marketing and promotional materials
and writing papers

winter months.

significantly higher costs for natural gas during the 2014

specialty materials categories.

for specialized uses such as upscale packaging and labels

Delivering attractive returns – Because of

for unique brightly colored papers for home, school or organization

Our brands are effectively distributed across all

the discipline we have shown in deploying capital,

continuously improving efficiencies, and creating value

channels, supporting our position as the clear leader

in the premium fine paper market in North America.

GRAPHIC IMAGING

for our customers, we’ve been able to maintain a

Unique colors, textures and finishes for identity, print collateral, invitations, advertising and envelopes

We are growing organically through share gains and

double-digit return on capital and deliver consistent,

continued expansion in premium packaging, where

attractive returns to our shareholders through stock

price appreciation and meaningful dividend growth.

BUSINESS SEGMENTS

With 2014 net sales of $467 million, Technical Products

sales increased by 21% in 2014. While today premium

packaging represents only 10% of the Fine Paper and

Packaging business, we are excited about this business

and its future potential and recently renamed our Fine

Paper segment “Fine Paper and Packaging,” to reflect

is our largest segment and includes performance-

PREMIUM PACKAGING & LABEL

based products such as filtration, industrial backings

the growing importance of premium packaging in our
Image enhancing colors and textures of premium folded cartons, box wrap, bags, premium wine, beverage and
spirit labels, food labels and hang tags
and other specialty materials. Revenue increased

portfolio.

12% in 2014, with very strong organic growth of 6%

CATALYSTS FOR GROWTH

boosted by the July 1 filtration acquisition. Operating

As we move further into 2015 and beyond, our market

margins increased to 10.1% from 9.3% in 2013.

Transportation filtration media, our largest and most

profitable product group, grew by 7%. Our continued

BRIGHTS

and financial positions remain strong. We will build

on our success by continuing to focus on innovation,

customer intimacy, cost and capital management. All of

our employees have incentive plans tied to performance,

Deep, rich, vivid colors for flyers, posters, school supplies, crafting, direct mail advertising and promotions

success in this business reflects share gains in Europe,

which keeps us focused on improving efficiencies as we

our biggest market, and double-digit growth in export

markets like NAFTA and Asia, all supported by the

grow, and aligned with shareholder goals.

Neenah Paper, Inc. 2014 Annual Report

T O O U R

SHAREHOLDERS
SHAREHOLDERS

A number of catalysts are in place that provide new
2012 was a highly successful year for Neenah.
2012 was a highly successful year for Neenah.

• We are leveraging global management of our
including new initiatives in specialized market niches,

including new initiatives in specialized market niches,

growth opportunities and continue our expansion and
At the front and center of our efforts was the

At the front and center of our efforts was the

production capabilities in the U.S. and Europe
which we achieved despite challenging economic

which we achieved despite challenging economic

portfolio diversification into profitable and growing
disciplined execution of our strategy, motivated
disciplined execution of our strategy, motivated

by a clear and consistent vision: To create value for

our customers and shareholders by improving the

markets:
by a clear and consistent vision: To create value for
• We recently announced plans to meet
our customers and shareholders by improving the
growing global demand for our
image and performance of everything we touch.
transportation filtration products by
Our continuing efforts to implement that vision led

image and performance of everything we touch.

Our continuing efforts to implement that vision led

repurposing one of our fine paper machines
to substantial growth in 2012, both top-line and

to substantial growth in 2012, both top-line and

in Wisconsin. Since we expect to consume
bottom-line, and allowed us to deliver returns to our

bottom-line, and allowed us to deliver returns to our

remaining capacity in Germany over the
shareholders of 30%, more than twice that of the

shareholders of 30%, more than twice that of the

next few years, this is a capital-efficient way
broad markets.

broad markets.

to meet the needs of our global filtration
OUR STRATEGY IS BUILT ON A PLATFORM OF
OUR STRATEGY IS BUILT ON A PLATFORM OF
customers. At the same time, it allows us
THREE IMPERATIVES:
to take advantage of capacity available in

THREE IMPERATIVES:

fine paper – the result of productivity gains
(cid:127)

Focus on proﬁtable, specialty niche markets

(cid:127)

over the past few years – as we continue to
market

where we can establish

market

serve these customers.

positions based on our core strengths.

(cid:127)

(cid:127)
• The recent filtration acquisition has

Increase our size, growth rate and portfolio

diversiﬁcation in both Fine Paper and Technical

strengthened our expertise in this

Products through organic means and

Products through organic means and
category and added new 100% synthetic
complementary acquisitions.
wet-laid nonwoven technologies. As a

complementary acquisitions.

result, we have the opportunity to meet
(cid:127) Deliver consistent, attractive returns to our

(cid:127) Deliver consistent, attractive returns to our

a wider range of product and customer
shareholders through disciplined

shareholders through disciplined

needs from a new manufacturing base in the

management.

U.S. and expand into adjacent, high-growth

filtration categories that value performance
is evidence of our progress in each of these areas.

is evidence of our progress in each of these areas.

and innovation.

DELIVERING PROFITABLE GROWTH AND

SHAREHOLDER VALUE

• With our high-end color and texture
SHAREHOLDER VALUE

$800 million. This was mainly due to our successful

Sales increased 16% from 2011 and exceeded

capabilities, we see significant growth
Sales increased 16% from 2011 and exceeded
potential in targeted premium packaging
$800 million. This was mainly due to our successful
niches. Combined, these represent a $300
acquisition of the Wausau premium paper brands
million targeted market where we only have

acquisition of the Wausau premium paper brands

a small share today.

Neenah Paper, Inc. 2014 Annual Report

with world-class supply chain programs to optimize

headwinds in Europe throughout most of the year.

headwinds in Europe throughout most of the year.
our products and services to satisfy growing
Operating

% Change 2012 vs 2011

Operating

customer needs in these markets, as well as in

emerging markets.

income increased

36% over 2011

• Last but not least, we have the financial

after adjusting

capabilities and strength to act on these

for acquisition

4%
opportunities.

integration

and other one-

time costs. Our

Net Sales

CULTURE AND PEOPLE

Adj. EBIT

Adj. EPS

A great deal of our success derives directly from our
higher sales and disciplined approach to managing
higher sales and disciplined approach to managing
strong teams and a cultural framework where we
overhead and other costs allowed us to leverage

overhead and other costs allowed us to leverage

Neenah’s infrastructure, and helped boost operating

encourage internal debate, align quickly on direction
Neenah’s infrastructure, and helped boost operating
and move forward together – fueled by a high level of

margins to 9.9% versus 8.5% in 2011.

personal ownership and a “play-to-win” attitude. We also

During the year, we also actively managed our

accept the responsibility to look out for each other, take

capital structure, redeeming $68 million of bonds

time to recognize others’ accomplishments and celebrate

our success.

entered into a new lending facility and improved the

entered into a new lending facility and improved the
This kind of spirited culture supports continuous
terms and extended the maturity of our revolver—
terms and extended the maturity of our revolver—
improvement in everything we do, and helps us to

avoid unwanted volatility while delivering consistently

strong results.

These factors combined to drive a 50% increase in

adjusted net income, which reached $46 million, or

SAFETY AND ENVIRONMENT

$2.78 per share. This was our highest level ever.

As we strive to meet our business objectives, we want to

$2.78 per share. This was our highest level ever.

be sure our employees are working safely and that we are

Increased income levels along with our continued

minimizing the company’s impact on the environment.

Invested Capital (ROIC) of over 11% for 2012, up

In 2014, with a continued focus on employee
Invested Capital (ROIC) of over 11% for 2012, up
engagement across our mills, we achieved a 15%
sharply from 9% in 2011. This remains a key metric
sharply from 9% in 2011. This remains a key metric

reduction in accident rates versus 2013, as we worked

guiding our investment decisions.

together to increase awareness and eliminate unsafe

conditions and processes.

execution enabled us to deliver on our commitment

to enhance shareholder value. Our total shareholder

return for the past year was 30%, anchored by a

As a user of natural resources, we have an

environmental management process designed not only

FINE PAPER

to meet regulatory requirements 100% of the time, but

to go above and beyond – such as using wood fiber

endorsed for sustainability by independent third party

organizations, including grades produced with “green

Neenah is the leader in the North American premium
Fine Paper market. Built on a tradition of quality
and service, we market some of the most recognized
and preferred premium papers in North America,

energy”, “carbon neutral” and post-consumer fibers.

CONFIDENCE IN THE FUTURE

with distinguished brands including CLASSIC®,

ROYAL SUNDANCE®,
Let me close by saying again how pleased I am with

ASTROBRIGHTS®,

Southworth®, and ENVIRONMENT® Papers.

Neenah’s leadership role is supported by our
broad range of colors, textures and other product
features and we have world-class manufacturing,
with three facilities located in Wisconsin.

We are also a pioneer in eco-friendly paper
products. Our ENVIRONMENT® Paper is the premier
offering of recycled content papers in the market.

how our businesses are performing and with the plans

and strategies we have in place for the future. Neenah

has undergone many changes in the past ten years

OUR PRODUCTS ARE IN DEMAND WHEREVER IMAGE MATTERS:

that have made us the strong company we are today.

Looking ahead, we will build on our historical success

for high-end traditional / digital printing for graphic imaging needs,
such as business identification, marketing and promotional materials
and writing papers

by following our well-defined course of action and

for specialized uses such as upscale packaging and labels

commitment to uniquely meet customer needs while

for unique brightly colored papers for home, school or organization

•

creating value for our shareholders.

Achieving the kind of success we’ve had takes

GRAPHIC IMAGING

teamwork, and I want to recognize the talent,

Unique colors, textures and finishes for identity, print collateral, invitations, advertising and envelopes

passion and commitment of our employees, the

guidance from our board of directors, and the

support of our shareholders.

Because of this, we continue to look to the future – and

our next ten years– with great confidence.
PREMIUM PACKAGING & LABEL

Image enhancing colors and textures of premium folded cartons, box wrap, bags, premium wine, beverage and
spirit labels, food labels and hang tags

Sincerely,

John P. O’Donnell

President and Chief Executive Officer

BRIGHTS

Deep, rich, vivid colors for flyers, posters, school supplies, crafting, direct mail advertising and promotions

Neenah Paper, Inc. 2014 Annual Report

TECHNICAL PRODUCTS

Neenah is a leading producer of Technical Products,
using various substrates to produce specialized materials
that employ saturation, coating and other function-
enhancing processes

and abrasive backings, labels and other

transportation, and water filtration, industrial applications,
medical packaging, image transfer papers and
many others.

The Technical Products group serves customers in

more than 70 countries through manufacturing facilities
in the U.S. and Germany, supported by R&D efforts
focused on developing new processes and products
that will meet customers’ needs and drive our growth.

OUR PRODUCTS DELIVER HIGH-PERFORMANCE SOLUTIONS:

(cid:127)

providing essential filtration capabilities for transportation, water and other uses

(cid:127) meeting specialized needs for strength, durability resistance to water and contamination in products

as diverse as medical packaging, labels, and outdoor advertising

(cid:127)

sepat dna sevisarba sa hcus snoitacilppa lairtsudni rof stcudorp ni ecnamrofrep roirepus gnilbane

FILTRATION

High-performance filtration media for transportation, industrial water and other markets

BACKINGS

Saturated and coated papers used for backing of specialty abrasives and tapes to enhance their performance

SPECIALTIES

Products for a variety of end markets including labels, durable printing, and medical packaging applications

Neenah Paper, Inc. 2014 Annual Report

FINE PAPER

& PACKAGING

Neenah is the leader in the North American premium
fine paper market. Built on a tradition of quality
and service, we market some of the most recognized
and preferred premium papers in North America,

with distinguished brands including CLASSIC®,

ASTROBRIGHTS®,

ROYAL SUNDANCE®,

Southworth®, and ENVIRONMENT®, the premier
offering of recycled content papers in the market.

Our products are also used in premium packaging
and label applications for goods such as spirits, jewelry,
cosmetics and electronics.

Neenah’s leadership role is supported by our
broad range of colors, textures and other product
features and world-class manufacturing, with
four facilities located in Wisconsin.

OUR PRODUCTS ARE IN DEMAND WHEREVER IMAGE MATTERS:

(cid:127)

for high-end traditional / digital printing for graphic imaging needs
such as marketing and promotional materials, business identification,
and writing papers

for specialized uses such as upscale packaging and labels

for unique brightly colored papers for home, school or organization

GRAPHIC IMAGING

PREMIUM PACKAGING

Image-enhancing colors and textures of premium folded cartons, box wrap, bags, premium wine, beverage,
spirit and food labels and hang tags

Neenah Paper, Inc. 2014 Annual Report

NEENAH PAPER, INC. 2013 ANNUAL REPORT

31OCT201109101132

NOTICE OF 2015 ANNUAL MEETING
AND
PROXY STATEMENT

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

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April 7, 2015

31OCT201109101132

Dear Stockholder:

On behalf of the Board of Directors, it is my pleasure to invite you to attend the 2015 Annual

Meeting of Stockholders of Neenah Paper, Inc. to be held at the Company’s headquarters located at
Preston Ridge III, 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005 on Thursday,
May 21, 2015 at 10:00 a.m., Eastern Time.

2014 was a successful year for Neenah and for our shareholders. Our teams delivered strong top
and bottom line organic growth in core categories, and we increased our presence in targeted growth
markets like filtration with the July acquisition of a US-based technical materials company. Our focus
on asset management was reflected in a Return on Invested Capital of over 12 percent and with a
balance sheet with low net debt and plenty of financial flexibility. Our businesses generate strong cash
flows and we continue to deploy these in a disciplined and value-creating manner, including a
commitment to direct cash returns to shareholders through an attractive dividend. With three increases
in the past 18 months, our dividend has increased 50 percent from where it was at the end of 2013. All
of these actions helped deliver the consistent and profitable growth our shareholders have come to
expect. We are proud of our results and of the contributions of Neenah’s dedicated employees around
the world that helped to create this value and provided attractive returns for our shareholders.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

The formal business to be transacted at the 2015 Annual Meeting includes:

(cid:127) The election of the two nominees detailed in this Proxy Statement as Class II directors for a

three-year term;

(cid:127) Approval of an advisory vote on the Company’s executive compensation; and

(cid:127) The ratification of the appointment of Deloitte & Touche LLP as the Company’s independent

registered public accounting firm for the fiscal year ending December 31, 2015.

At the meeting, we will provide a brief report on our results and strategies. Our directors and
executive officers, as well as representatives from Deloitte & Touche LLP, will be in attendance to
answer any questions you may have.

Regardless of whether you choose to attend or not, please either vote electronically using the

Internet, vote by telephone, or follow the procedures for requesting written copies of the proxy
materials described in the attached Proxy Statement and mark, date, sign and return the proxy card
included with those materials at your earliest convenience. This will assure your shares will be
represented and voted at the Annual Meeting.

Sincerely,

15MAR201217460616

JOHN P. O’DONNELL
President and Chief Executive Officer

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31OCT201109101132

Neenah Paper, Inc.

Preston Ridge III
3460 Preston Ridge Road, Suite 600
Alpharetta, Georgia 30005

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 2015

NOTICE HEREBY IS GIVEN that the 2015 Annual Meeting of Stockholders of Neenah
Paper, Inc. will be held at the Company’s headquarters located at Preston Ridge III, 3460 Preston
Ridge Road, Suite 600, Alpharetta, Georgia 30005 on Thursday, May 21, 2015 at 10:00 a.m., Eastern
time, for the purpose of considering and voting upon:

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

1. A proposal to elect the two nominees named as Class II directors in the attached Proxy

Statement to serve until the 2018 Annual Meeting of Stockholders;

2. A proposal to approve, on an advisory basis, the Company’s executive compensation;

3. A proposal to ratify the appointment of Deloitte & Touche LLP as the independent registered
public accounting firm of Neenah Paper, Inc. for the fiscal year ending December 31, 2015;
and

Such other business as properly may come before the Annual Meeting or any adjournments
thereof. The Board of Directors is not aware of any other business to be presented to a vote
of the stockholders at the Annual Meeting.

Information relating to the above matters is set forth in the attached Proxy Statement.

Stockholders of record at the close of business on March 31, 2015 are entitled to receive notice of and
to vote at the Annual Meeting and any adjournments thereof.

The Proxy Statement and the 2014 Annual Report to Stockholders are available at

www.neenah.com/proxydocs.

By order of the Board of Directors.

29APR200510193718

STEVEN S. HEINRICHS
Senior Vice President, General Counsel and
Secretary

Alpharetta, Georgia
April 7, 2015

PLEASE READ THE ATTACHED PROXY STATEMENT AND THEN VOTE

ELECTRONICALLY, BY TELEPHONE, OR REQUEST PRINTED PROXY MATERIALS AND
PROMPTLY COMPLETE, EXECUTE AND RETURN THE PROXY CARD INCLUDED WITH
THE PROXY MATERIALS IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.

Table of Contents

ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

BENEFICIAL OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ELECTION OF DIRECTORS (ITEM 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . .

CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2013 DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

COMPENSATION COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ADVISORY VOTE ON EXECUTIVE COMPENSATION (ITEM 2) . . . . . . . . . . . . . . . . . . . . .

ADDITIONAL EXECUTIVE COMPENSATION INFORMATION . . . . . . . . . . . . . . . . . . . . . .

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION . . . . . . . . .

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE . . . . . . . . . . . . . . .

AUDIT COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM (ITEM 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM . . . . . . . . . . . . . . . . . . . . . . .

FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

STOCKHOLDERS’ PROPOSALS FOR 2015 ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . .

OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING . . . . . . . . . . . . .

HOUSEHOLDING OF NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS .

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31OCT201109101132

PROXY STATEMENT

General Information

Our Board of Directors is soliciting proxies from our stockholders in connection with Neenah’s
Annual Meeting of Stockholders. When used in this Proxy Statement, the terms ‘‘we,’’ ‘‘us,’’ ‘‘our,’’ ‘‘the
Company’’ and ‘‘Neenah’’ refer to Neenah Paper, Inc. This Proxy Statement and our 2014 Annual
Report are first being mailed to stockholders who requested copies, or made available on April 7, 2015.

Questions and Answers about the Annual Meeting and Voting

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

When and where is the Annual Meeting?

When:

Thursday, May 21, 2015, at 10:00 A.M. Eastern Standard Time

Where: Company headquarters located at Preston Ridge III, 3460 Preston Ridge Road, Suite 600,

Alpharetta, Georgia 30005

Who is entitled to vote at the Annual Meeting?

You are entitled to vote at the Annual Meeting if you owned our common stock, par value $0.01

per share, as of the close of business March 31, 2015 (the ‘‘Record Date’’), with each share entitling its
owner to one vote on each matter submitted to the stockholders. On the record date 16,725,959 shares
of common stock were outstanding and eligible to be voted at the Annual Meeting. The presence, in
person or by proxy, of the holders of a majority of the issued and outstanding shares of our common
stock is necessary to constitute a quorum at the Annual Meeting.

How do I vote at the Annual Meeting?

You may vote in person at the Annual Meeting or by proxy. We recommend you vote by proxy

even if you plan to attend the Annual Meeting. You can always change your vote at the meeting.
Giving us your proxy means you authorize us to vote your shares at the Annual Meeting in the manner
you direct. If you plan to attend the meeting in person you must provide proof of your ownership of
our common stock as of the record date, such as an account statement, and a form of personal
identification for admission to the meeting. If you hold your shares in street name and you also wish to
be able to vote at the annual meeting, you are required to obtain a proxy from your bank or broker,
executed in your favor.

If your shares are held in your name, you can vote by proxy in three convenient ways:

(cid:127) Via the Internet: Go to http://www.proxyvote.com and follow the instructions.

(cid:127) By Telephone: Call toll-free 1-800-690-6903 and follow the instructions.

(cid:127) By Mail: Request a printed copy of the proxy materials disclosed in this Proxy Statement and

complete, sign, date and return your proxy card in the envelope included with your printed proxy
materials.

If your shares are held in street name, the availability of telephone and internet voting will depend

on the voting processes of the applicable bank or brokerage firm; therefore, it is recommended that
you follow the voting instructions on the form you receive from your bank or brokerage firm. All
properly executed proxies received by Neenah in time to be voted at the Annual Meeting and not
revoked will be voted at the Annual Meeting in accordance with the directions noted on the proxy
card. If any other matters properly come before the Annual Meeting, the persons named as proxies will
vote upon such matters according to their judgment.

We are also sending the Notice and voting materials to participants in various employee benefit
plans of Neenah. The trustee of each plan, as the stockholder of record of the shares of common stock
held in the plan, will vote whole shares of stock attributable to each participant’s interest in the plan in
accordance with the directions the participant gives or, if no directions are given by the participant, in
accordance with the directions received from the applicable plan committees.

Can I Change My Vote?

Any stockholder of record delivering a proxy has the power to revoke it at any time before it is

voted: (i) by giving written notice to Steven S. Heinrichs, Senior Vice President, General Counsel and
Secretary of Neenah, at Preston Ridge III, 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia,
30005; (ii) by submitting a proxy card bearing a later date, including a proxy submitted via the Internet
or by telephone; or (iii) by voting in person at the Annual Meeting. Please note, however, that any
beneficial owner of our common stock whose shares are held in street name may (a) revoke his or her
proxy and (b) attend and vote his or her shares in person at the Annual Meeting only in accordance
with applicable rules and procedures as then may be employed by such beneficial owner’s brokerage
firm or bank.

What Proposals am I being asked to vote on at the Annual Meeting and what is required to approve
each proposal?

You are being asked to vote on three proposals; (Proposal 1) the election of the proposed
nominees as Class II directors, (Proposal 2) approve, by non-binding vote, Neenah’s executive
compensation, and (Proposal 3) ratify the appointment of our independent public accounting firm.

In voting with regard to Proposal 1, you may vote for all nominees listed herein, withhold your
vote as to all nominees or withhold your vote as to specific nominees. The vote required to approve
Proposal 1 is a majority of the shares of common stock represented and entitled to vote on Proposal 1,
provided a quorum is present. Votes that are withheld will be considered as shares present and entitled
to vote for the proposal, and therefore will have the same legal effect as votes against the proposal.

In voting with regard to Proposal 2, you may vote in favor of the proposal, against the proposal, or
may abstain from voting. The vote required to approve Proposal 2 is majority of the shares of common
stock represented and entitled to vote on Proposal 2, provided a quorum is present. Abstentions will be
considered in determining the number of votes required to obtain the necessary majority vote for the
proposal, and therefore will have the same legal effect as votes against the proposal.

In voting with regard to Proposal 3, you may vote in favor of the proposal, against the proposal, or

may abstain from voting. The vote required to approve Proposal 3 is a majority of the shares of
common stock represented and entitled to vote at the Annual Meeting, provided a quorum is present.
Abstentions will be considered as shares present and entitled to vote for the proposal, and therefore
will have the same legal effect as votes against the proposal.

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Neenah is not aware, as of the date hereof, of any matters to be voted upon at the Annual
Meeting other than those stated in this Proxy Statement. If any other matters are properly brought
before the Annual Meeting, your proxy gives discretionary authority to the persons named as proxies to
vote the shares represented thereby in their discretion.

What happens if I don’t return my proxy card or vote my shares?

31OCT201109101132

If you hold your shares directly your shares will not be voted if you do not return your proxy card

or vote in person at the Annual Meeting. If your shares are held in the name of a bank or brokerage
firm (in ‘‘street name’’) and you do not vote your shares, your bank or brokerage firm can only vote
your shares in their discretion for proposals which are considered ‘‘discretionary’’ proposals. We believe
that Proposal 3 is a discretionary proposal. Brokers are prohibited from exercising discretionary
authority for beneficial owners who have not provided voting instructions to the broker for proposals
which are considered ‘‘non-discretionary’’ (a ‘‘broker non-vote’’). We believe Proposals 1 and 2 are
non-discretionary proposals. As such, broker non-votes will be counted for the purpose of determining
if a quorum is present, but will not be considered as shares entitled to vote on Proposals 1 and 2, and
therefore will have no effect on the outcome of these proposals.

What happens if I sign, date and return my proxy card but do not specify how to vote my shares?

NOTICE OF 2013 ANNUAL MEETING
AND
If a signed proxy card is received which does not specify a vote or an abstention, then the shares
PROXY STATEMENT

represented by that proxy card will be voted FOR the election of all Class II director nominees
described herein, FOR the approval of the Company’s executive compensation, and FOR the
ratification of the appointment of Deloitte & Touche LLP as our independent registered public
accounting firm for the year ending December 31, 2015.

Why haven’t I received a printed copy of the Proxy Statement or annual report?

We are choosing to follow the Securities and Exchange Commission (‘‘SEC’’) rules that allow
companies to furnish proxy materials to stockholders via the Internet. If you received a Notice of
Internet Availability of Proxy Materials, or ‘‘Notice,’’ by mail, you will not receive a printed copy of the
proxy materials, unless you specifically request one. The Notice instructs you on how to access and
review all of the important information contained in the proxy statement and annual report as well as
how to submit your proxy over the Internet. If you received the Notice and would still like to receive a
printed copy of our proxy materials, you should follow the instructions for requesting these materials
included in the Notice. We plan to mail the Notice to stockholders by April 7, 2015.

Who pays for the cost of this proxy solicitation?

We will bear the cost of preparing, printing and filing the Proxy Statement and related proxy

materials. In addition to soliciting proxies through the mail, we may solicit proxies through our
directors, officers and employees, in person and by telephone or email and facsimile. We expect to
retain Okapi Partners LLC to aid in the solicitation at a cost of approximately $8,000, plus
reimbursement of out-of-pocket expenses. Brokerage firms, nominees, custodians and fiduciaries also
may be requested to forward proxy materials to the beneficial owners of shares held of record by them.
We will pay all expenses incurred in connection with the solicitation of proxies.

When will voting results be made available?

We will announce the final results on our web site at www.neenah.com shortly after the meeting

and on Form 8-K immediately following the meeting.

BENEFICIAL OWNERSHIP

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding the beneficial ownership of our common stock
as of March 31, 2015 with respect to: (i) each of our directors; (ii) each of the named executive officers
appearing elsewhere herein; and (iii) all executive officers and directors as a group, based in each case
on information furnished to us by such persons. As used in this Proxy Statement, ‘‘beneficial
ownership’’ means that a person has, as of March 31, 2015, or may have within 60 days thereafter, the
sole or shared power to vote or direct the voting of a security and/or the sole or shared investment
power to dispose of or direct the disposition of a security.

Name

Shares
Beneficially
Owned(1)

Percent of
Class(2)

Margaret S. Dano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sean T. Erwin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Edward Grzedzinski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Steven S. Heinrichs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mary Ann Leeper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonnie C. Lind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Timothy S. Lucas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John F. McGovern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Philip C. Moore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John P. O’Donnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Julie A Schertell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Armin Schwinn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stephen M. Wood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All directors and executive officers as a group (14 persons) . . . . . . . . . . . . . . .

0(3)
22,285(4)
16,025(5)
24,163(6)
11,785(7)
46,440(8)
13,915(9)
4,155

15,150(10)
61,454(11)
6,586(12)
3,420
32,335(13)
309,535(14)

*
*
*
*
*
*
*
*
*
*
*
*
*
1.8

(1) Except as otherwise noted, the directors and executive officers, and all directors and executive

officers as a group, have sole voting power and sole investment power over the shares listed.
Shares of common stock held by the trustee of Neenah’s 401(k) Retirement Plan and Retirement
Contribution Plan for the benefit of, and which are attributable to our executive officers are
included in the table.

(2) An asterisk indicates that the percentage of common stock beneficially owned by the named

individual does not exceed 1% of the total outstanding shares of our common stock.

(3) Ms. Dano was appointed as a director on March 24, 2015.

(4) Includes 675 shares of common stock issuable upon conversion of restricted stock units that are

vested or will vest within 60 days of March 31, 2015. This total does not include 1,870 vested Stock
Appreciation Rights.

(5) Includes 1,350 shares of common stock issuable upon conversion of restricted stock units that are

vested or will vest within 60 days of March 31, 2015.

(6) This total does not include 1,343 vested Stock Appreciation Rights.

(7) Includes 1,350 shares of common stock issuable upon conversion of restricted stock units that are

vested or will vest within 60 days of March 31, 2015. This total does not include 8,761 vested Stock
Appreciation Rights.

(8) This total does not include 8,761 vested Stock Appreciation Rights.

(9) Includes 1,350 shares of common stock issuable upon conversion of restricted stock units that are

vested or will vest within 60 days of March 31, 2015.

(10) Includes 683 shares of common stock issuable upon conversion of restricted stock units that are

vested or will vest within 60 days of March 31, 2015.

(11) This total does not include 14,489 vested Stock Appreciation Rights.

(12) This total does not include 9,323 vested Stock Appreciation Rights.

31OCT201109101132

(13) Includes 1,350 shares of common stock issuable upon conversion of restricted stock units that are

vested or will vest within 60 days of March 31, 2015.

(14) On July 1, 2014 the Company converted all outstanding Stock Options to Stock Appreciation

Rights which are not included in the calculation of beneficial ownership. Stock Appreciation Rights
are disclosed in detail under the Outstanding Equity at the End of 2014 section of this Proxy
Statement.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

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THIRD PARTIES

The following table sets forth information regarding the beneficial ownership of our common stock

as of December 31, 2014 for each person known to us to be the beneficial owner of more than 5% of
our outstanding common stock.

Name and Address of Beneficial Owner

Common Stock Beneficially Owned

Number of Shares

Percent of Class

Blackrock, Inc.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,483,222(1)

8.9%

40 East 52nd Street
New York, NY 10022

Royce & Associates LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,468,906(2)

8.8%

745 Fifth Ave.
New York, NY 10151

Allianz Global Investors U.S. Holdings LLC . . . . . . . . . . . . . . . . . . .

1,019,353(3)

6.1%

680 Newport Center Drive, Suite 250
Newport Beach, CA 92660

(1) The amount shown and the following information is derived from the Schedule 13G filed by

BlackRock, Inc. on January 22, 2015, reporting beneficial ownership as of December 31, 2014. Of
the 1,483,222 shares shown, BlackRock, Inc. has sole dispositive power over all of the shares and
sole voting power over 1,438,386 shares.

(2) The amount shown and the following information is derived from the Schedule 13G filed by

Royce & Associates, LLC on January 15, 2015, reporting beneficial ownership as of December 31,
2014. Of the 1,468,906 shares shown, Royce & Associates, LLC has sole dispositive power over all
of the shares and sole voting power over all shares.

(3) The amount shown and the following information is derived from the Schedule 13G filed by

Allianz Global Investors U.S. LLC, NFJ Investment Group LLC and Allianz Global Investors
Europe GmbH, on February13, 2015, each of which does not affirm the existence of a group,
reporting beneficial ownership as of December 31, 2014. Of the 1,019,353 shares shown, NFJ
Investment Group LLC has sole dispositive power and sole voting power over 925,910 shares,
Allianz Global Investors U.S. LLC has sole dispositive power and sole voting power over 57,767
shares and Allianz Global Investors GmbH has sole dispositive power and sole voting power over
35,676 shares.

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ELECTION OF DIRECTORS (ITEM 1)

The Board currently consists of nine members divided into three classes of three directors.
Effective upon the retirement of Dr. Mary Ann Leeper as a Class II director as of the 2015 Annual
Meeting, the Board will consist of eight members divided into two classes of three directors and one
class of two directors. The directors in each class serve three year terms, with the terms of the Class II
directors expiring at the 2015 Annual Meeting. The Board has nominated Stephen M. Wood and
Margaret S. Dano, each a current director of Neenah, for re-election as Class II directors at the 2015
Annual Meeting. If elected, the nominees will serve a three-year term expiring at the 2018 Annual
Meeting of Stockholders and until his or her successor has been duly elected and qualified.

31OCT201109101132

Each of the nominees has consented to serve another term as a director if re-elected. If any of the

nominees should be unavailable to serve for any reason (which is not anticipated), the Board may
designate a substitute nominee or nominees (in which event the persons named on the enclosed proxy
card will vote the shares represented by all valid proxy cards for the election of such substitute nominee
or nominees), allow the vacancies to remain open until a suitable candidate or candidates are located,
or by resolution provide for a lesser number of directors.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

If any incumbent nominee for director in an uncontested election should fail to receive the
required affirmative vote of the holders of a majority of the shares represented and entitled to vote at
the Annual Meeting, under Delaware law the director remains in office as a ‘‘holdover’’ director until
his or her successor is elected and qualified or until his or her earlier resignation, retirement,
disqualification, removal from office or death. In the event of a holdover director, the Board of
Directors in its discretion may request the director to resign from the Board. If the director resigns, the
Board of Directors may immediately fill the resulting vacancy, allow the vacancy to remain open until a
suitable candidate is located and appointed or adopt a resolution to decrease the authorized number of
directors.

The Board unanimously recommends that the stockholders vote ‘‘FOR’’ the proposal to elect

Stephen M. Wood and Margaret S. Dano as Class II directors for a three-year term expiring at the
2018 Annual Meeting of Stockholders and until their successors have been duly

Set forth below is certain information as of March 31, 2015, regarding the nominees and each

director continuing in office, including their ages, principal occupations (which have continued for at
least the past five years unless otherwise noted), current Board experience and participation, and how
the background, experience and qualification of each nominee and director make them well suited to
serve on Neenah’s Board.

Information Regarding Directors Nominated for Reelection

Margaret S. Dano, born in 1959, is Chairman of the Board for Superior Industries

International, Inc., a leading manufacturer of aluminum road wheels for use in the automobile and
light truck industry. Ms. Dano was appointed as Chairman of the Board in 2014 and has served as a
director for Superior since 2007. In addition, Ms. Dano currently serves as a director of Douglas
Dynamics, Inc., a manufacturer of snow and ice control equipment for the global light truck market, a
position she has held since 2012. From 2002-2005 Ms. Dano served as Vice President, Worldwide
Integrated Supply Chain and Operations for Honeywell Corporation. Prior to that she served as Vice
President, Worldwide Supply Chain Office Products & GM Printer Papers for Avery Dennison
Corporation from 1999 to 2002 and Vice President of Corporate Manufacturing & Engineering from
1996-1999. Ms. Dano received a BS in mechanical engineering from Kettering University (formerly the
General Motors Institute). Ms. Dano was appointed to Neenah’s Board in 2015. Ms. Dano’s senior
executive experience in global manufacturing and supply chain and her public board experience and
leadership with manufacturing companies makes her an effective member of Neenah’s Board.

Stephen M. Wood, Ph.D., born in 1946, is an Operating Partner with Snow Phipps Group LLC, a

diversified international investment company. Prior to this he served as Chairman of the Board for
FiberVisions Corporation which is a leading global manufacturer of synthetic fibers for consumer
products, construction and industrial applications. Dr. Wood was President and Chief Executive Officer
of FiberVisions from 2006 to 2012. Dr. Wood was also Chairman of the Board of ESFV which is a
global joint Venture with JNC Corporation, a leading Japanese Chemical Company. From 2001 to 2004,
Dr. Wood served as President and Chief Executive Officer of Kraton Polymers, a specialties chemical
company, and Chairman and Representative Director of JSR Kraton Elastomers, a Japanese joint
venture company. Prior to this Dr. Wood was President of the Global Elastomers business of Shell
Chemicals, Ltd., and a Vice President of that company. Dr. Wood was also elected International
President of the International Institute of Synthetic Rubber Producers. Dr. Wood has a BSc in
Chemistry and a Ph.D. in Chemical Engineering from Nottingham University, United Kingdom and is a
graduate of the Institute of Chemical Engineers. Dr. Wood has served as a director of Neenah since
November 30, 2004. Dr. Wood’s educational background and his experience as a senior executive of a
chemical manufacturing company provides the knowledge base and experience to make him an effective
member of Neenah’s Board.

Class III Directors—Term Expiring at the 2016 Annual Meeting

Edward Grzedzinski, born in 1955, served as the Chief Executive Officer of NOVA Information

Systems from 1993 to 2001, and Vice Chairman of US Bancorp from November 2001 to 2004.
Mr. Grzedzinski has over 25 years of experience in the electronic payments industry and was a
co-founder of NOVA Information Systems in 1991. Mr. Grzedzinski served as a member of the
Managing Committee of US Bancorp, and was a member of the Board of Directors of US Bank, N.A.
Mr. Grzedzinski also served as Chairman of euroConex Technologies, Limited, a European payment
processor owned by US Bancorp until November 2004 and was a member of the Board of Directors of
Indus International, a global provider of enterprise asset management products and services until April
2005. Mr. Grzedzinski has served as a director of Marlin Business Services since May of 2005 and
Neenah Paper since November 30, 2004. Mr. Grzedzinski’s experience as chief executive officer and
chairman of a financial services company and experience on other boards makes him an effective
member of Neenah’s Board.

Sean T. Erwin, born in 1951, is the Chairman of our Board of Directors. Mr. Erwin served as
Neenah’s President and Chief Executive Officer from 2004 through May 2011. Prior to the spin-off of
Neenah from Kimberly-Clark Corporation on November 30, 2004 (the ‘‘spin-off’’), Mr. Erwin had been
an employee of Kimberly-Clark since 1978, and had held increasingly senior positions in both finance
and business management. In January 2004, Mr. Erwin was named President of Kimberly-Clark’s Pulp
and Paper Sector, which comprised the businesses transferred to us by Kimberly-Clark in the spin-off.
He served as the President of the Global Nonwoven business from early 2001. He has also served as
the President of the European Consumer Tissue business, Managing Director of Kimberly-Clark
Australia, as well as previously serving as President of the Pulp and Paper Sector, and President of the
Technical Paper business. Mr. Erwin received his BS in Accounting and Finance from Northern Illinois
University. Mr. Erwin currently serves as a director of Carmike Cinemas, Inc. Mr. Erwin has served as
a director of Neenah since November 30, 2004. Mr. Erwin’s extensive experience as former CEO of the
Company and his vast industry experience and leadership positions make him an effective member of
Neenah’s Board.

John F. McGovern, born in 1946, is the founder, and since 1999 a partner, of Aurora Capital LLC,
a private investment and consulting firm based in Atlanta, Georgia. Prior to founding Aurora Capital,
Mr. McGovern served in a number of positions of increasing responsibility at Georgia-Pacific
Corporation from 1981 to 1999, including Executive Vice President/Chief Financial Officer from 1994
to 1999. Previously, Mr. McGovern had been Vice President and Director, Forest Products and Package

Division of Chase Manhattan Bank. He currently serves as a director of Xerium Technologies, Inc.
where he serves as audit committee chairman. Mr. McGovern also served as a director of NewPage
Corporation from 2012 to 2015 and Collective Brands Inc. from 2003 to 2012. From 2006 to 2010
Mr. McGovern served as lead director of Neenah’s Board for all executive sessions of non-management
directors. Mr. McGovern has served as a director of Neenah since January 10, 2006. Mr. McGovern
received his BS from Fordham University. Mr. McGovern’s extensive experience as the senior financial
executive of a multi-national paper products company and his experience as an executive in the
financial services industry as well as his experience on other public company boards make him an
effective member of Neenah’s Board.

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Class I Directors—Term Expiring at the 2017 Annual Meeting

Timothy S. Lucas, CPA, born in 1946, has served as an independent consultant on financial
reporting issues practicing as Lucas Financial Reporting since 2002. From 1988 to 2002, Mr. Lucas
worked at the Financial Accounting Standards Board (‘‘FASB’’), where he was the Director of Research
and Technical Activities, and Chairman of the FASB’s Emerging Issues Task Force. Mr. Lucas has
served as a director of Neenah since November 30, 2004. Mr. Lucas received his BA in Economics and
BS in Accounting from Rice University and his Master of Accounting from the Jesse H. Jones
Graduate School, Rice University. Mr. Lucas’ experience at FASB and his educational background
make him an effective member of Neenah’s Board.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT
Philip C. Moore, born in 1953, is Senior Vice President, Deputy General Counsel and Corporate
Secretary of TD Bank Group, Toronto, Canada. Mr. Moore joined TD Bank Group in May, 2013, prior
to which he had been a partner at McCarthy T´etrault LLP, Canada’s national law firm where he
practiced corporate and securities law, with particular emphasis on corporate governance and finance,
mergers and acquisitions and other business law issues. He has been involved in many corporate
mergers, acquisitions, dispositions and reorganizations, as well as capital markets transactions in a
variety of industries and geographies. Mr. Moore has extensive experience in corporate transactions
involving the pulp and paper industries. Mr. Moore has been awarded the designation ‘‘Chartered
Director’’ from the Directors College, Canada’s leading director education program run by McMaster
University and the Conference Board of Canada. He has advised on the design and implementation of
numerous executive compensation plans, as well as on executive compensation governance matters.
From 1994 until 2000 he was a director of Imax Corporation and is currently a director of a number of
private corporations. Mr. Moore has served as a director of Neenah since November 30, 2004.
Mr. Moore received his BA from McMaster University and his LLB from Queen’s University.
Mr. Moore’s educational background and extensive experience in corporate governance and business
law makes him an effective member of Neenah’s Board.

John P. O’Donnell, born in 1960, is President and Chief Executive Officer of the Company. Prior to

being CEO, Mr. O’Donnell served as Chief Operating Officer of the Company and President, Fine
Paper. Mr. O’Donnell was employed by Georgia-Pacific Corporation from 1985 until 2007 and held
increasingly senior management positions in the Consumer Products division. Mr. O’Donnell served as
President of the North American Retail Business from 2004 through 2007, and as President of the
North American Commercial Tissue business from 2002 through 2004. Mr. O’Donnell received his BS
from Iowa State University. Mr. O’Donnell has served as a director of Neenah since November 2010.
Mr. O’Donnell’s extensive experience in the paper and consumer products industries, and his leadership
positions in the Company, make him an effective member of Neenah’s Board.

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Director Retiring effective as of the 2015 Annual Meeting

Mary Ann Leeper, Ph.D., born in 1940, retired from The Female Health Company as Senior

Strategic Advisor, effective December 31, 2013. She stepped down as its President and Chief Operating
Officer in May 2006; a position she held since 1996. Dr. Leeper was President and Chief Operating
Officer of The Female Health Company Division of the Wisconsin Pharmacal Company from 1994 to
1996, and held other senior positions from 1987 to 1994 in the Wisconsin Pharmacal Company
(renamed The Female Health Company in 1996). Dr. Leeper served as a Director of The Female
Health Company from 1987 to 2013. Dr. Leeper was an Adjunct Professor at the University of
Virginia’s Darden Graduate School of Business MBA program from 2001 to 2012. She held senior
positions at G D Searle, was Assistant Professor at Temple University Schools of Pharmacy and
Medicine, as well as a biochemist for Wyeth Laboratories and McNeil Laboratories. Dr. Leeper’s
educational background includes a B.S., Drexel University; M.S., Temple University, M.M.,
Northwestern University and Ph.D. from Temple University. Dr. Leeper has served as a director of
Neenah since November 30, 2004. Dr. Leeper’s educational background and her experience as senior
executive of a technical manufacturing company makes her an effective member of Neenah’s Board.

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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors conducts its business through meetings of the full Board and through

committees of the Board, consisting of an Audit Committee, a Compensation Committee and a
Nominating and Corporate Governance Committee, which we refer to as the Nominating Committee.
The Board of Directors held 5 meetings in 2014. The Company’s Corporate Governance Policies
provide that all directors are expected to regularly attend and participate in Board and Committee
meetings and encourage the directors to attend the Company’s Annual Meeting. In 2014 all of our
directors attended more than 75% of the meetings of the Board and meetings of the committees of
which he or she is a member. Neenah holds regularly scheduled executive sessions of the independent
directors at each Board meeting. As Chairman of the Board Mr. Erwin presides at all the executive
sessions. All but one of the Company’s directors were in attendance at the 2014 Annual Meeting.

31OCT201109101132

The following table describes the current membership of each of the committees and the number

of meetings held during 2014:

Audit Committee

Nominating and Corporate
Governance Committee

Compensation Committee

Philip C. Moore . . . . . . . . . . . . . . . . .
Timothy S. Lucas . . . . . . . . . . . . . . . .
Mary Ann Leeper . . . . . . . . . . . . . . . .
Edward Grzedzinski
. . . . . . . . . . . . . .
John F. McGovern . . . . . . . . . . . . . . .
Stephen M. Wood . . . . . . . . . . . . . . . .

NOTICE OF 2013 ANNUAL MEETING
X
AND
Chair*
Chair
PROXY STATEMENT
X
X

Number of Meetings . . . . . . . . . . . . . .

Chair

X
X

The Board has determined, based on his experience at the FASB, that Mr. Lucas is an audit
committee financial expert within the meaning of the SEC’s rules.

Effective as of the date of the 2015 Annual Meeting, and in conjunction with Dr. Leeper’s
retirement and Ms. Dano’s appointment to the Board, committee membership will be modified as
follows:

Audit Committee

Nominating and Corporate
Governance Committee

Compensation Committee

Sean T. Erwin . . . . . . . . . . . . . . . . . . .
Philip C. Moore . . . . . . . . . . . . . . . . .
Timothy S. Lucas . . . . . . . . . . . . . . . .
Edward Grzedzinski
. . . . . . . . . . . . . .
John F. McGovern . . . . . . . . . . . . . . .
Stephen M. Wood . . . . . . . . . . . . . . . .
Margaret S. Dano . . . . . . . . . . . . . . . .

X
X
Chair*

Chair

X
X
Chair

The Board has determined, based on his experience at the FASB, that Mr. Lucas is an audit
committee financial expert within the meaning of the SEC’s rules.

Audit Committee

The Audit Committee is comprised solely of directors who meet the independence requirements of

the New York Stock Exchange (‘‘NYSE’’) and the Securities Exchange Act of 1934, as amended
(‘‘Exchange Act’’), and are financially literate, as required by NYSE rules. At least one member of the
Audit Committee is an audit committee financial expert, as defined by the rules and regulations of

SEC. The Audit Committee has been established in accordance with applicable rules promulgated by
the NYSE and SEC. The Audit Committee assists the Board in monitoring:

(cid:127) the quality and integrity of our financial statements;

(cid:127) our compliance with ethical policies contained in our Code of Business Conduct and Ethics and
legal and regulatory requirements as well as the administration of our policy regarding related
party transactions;

(cid:127) the independence, qualification and performance of our registered public accounting firm;

(cid:127) the performance of our internal auditors; and

(cid:127) related party transactions.

The Audit Committee is governed by the Audit Committee Charter approved by the Board. The

charter is available on our website at www.neenah.com.

Nominating and Corporate Governance Committee

The Nominating Committee is comprised solely of directors who meet the NYSE independence

requirements. The Nominating Committee:

(cid:127) oversees the process by which individuals are nominated to our Board;

(cid:127) reviews the qualifications, performance and independence of members of our Board;

(cid:127) reviews and recommends policies with respect to composition, organization, processes and

practices of our Board, including diversity; and

(cid:127) identifies and investigates emerging corporate governance issues and trends that may affect us.

The Nominating Committee is governed by the Nominating and Corporate Governance Committee

Charter approved by the Board. The charter is available on our website at www.neenah.com.

Compensation Committee

The Compensation Committee is comprised solely of directors who meet NYSE independence
requirements, meet the requirements for a ‘‘nonemployee director’’ under the Exchange Act, and meet
the requirements for an ‘‘outside director’’ under Section 162(m) of the Internal Revenue Code of
1986, as amended (the ‘‘Code’’). The Compensation Committee:

(cid:127) reviews and approves corporate goals and objectives relevant to the compensation of our Chief

Executive Officer and sets such compensation;

(cid:127) approves, in consultation with our Chief Executive Officer, the compensation of our officers who

are elected by our Board;

(cid:127) makes recommendations to our Board with respect to our equity-based plans and executive

incentive compensation plans; and

(cid:127) reviews with management and approves awards under our long-term incentive-compensation

plans and equity-based plans.

The Compensation Committee is governed by the Compensation Committee Charter approved by

the Board. The charter is available on our website at www.neenah.com.

Additional information regarding the Compensation Committee’s processes and procedures for

consideration of executive compensation is provided in the Compensation Discussion and Analysis
below.

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CORPORATE GOVERNANCE

Board Leadership

The Board selects from among its members the Chairman of the Board. The Board also elects the

Chief Executive Officer of the Company. The current Board Leadership is as Follows:

31OCT201109101132

Chairman of the Board:
Chief Executive Officer:

Sean T. Erwin
John P. O’Donnell

The Board believes that at this time it is appropriate for Sean T. Erwin to serve as independent

Chairman while John P. O’Donnell serves as Chief Executive Officer and a member of the Board.
Mr. O’Donnell’s position as both CEO and a Director provides a continuity of leadership between the
senior executive team and the Board and enhances the corporate governance environment of the
Board.

Independent Directors

Our Amended and Restated Bylaws provide that a majority of the directors on our Board shall be
NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

independent and currently eight out of our nine directors are independent and as of the 2015 Annual
Meeting seven out of the eight directors will be independent. In addition, the Corporate Governance
Policies adopted by the Board, described further below, provide for independence standards consistent
with NYSE listing standards. Generally, a director does not qualify as an independent director if the
director (or in some cases, members of the director’s immediate family) has, or in the past three years
has had, certain material relationships or affiliations with the Company, its external or internal
auditors, or other companies that do business with the Company. Having eight out of nine independent
directors (and seven out of eight independent directors as of the 2015 Annual Meeting) provides
Neenah with a sufficient level of oversight, governance and independence without unduly limiting the
senior executives from acting in the best interest of the Company and its shareholders. As of the date
of the Annual Meeting in 2014, Mr. Erwin was three years removed from his retirement as Chief
Executive Officer of the Company, at which time he became an independent director. As such, the
Board did not appoint a Presiding Director for 2015.

In evaluating the independence of our independent directors, the Board also considered whether

any of the independent directors had any material relationships with Neenah and concluded that no
such material relationship existed that would impair their independence. See ‘‘Approval of Related
Party Transactions’’ below. In making this determination, the Board relied both on information
provided by our directors as well as information developed internally by Neenah. As is currently the
case, immediately after the election of the nominees to the Board of Directors, a majority of all
directors holding office will be independent directors. The Nominating Committee and the Board have
affirmatively determined that eight of the Company’s nine directors do not have any relationship that
would interfere with the exercise of independent judgment in carrying out their responsibilities as
directors and are independent in accordance with NYSE listing standards, Securities and Exchange
Commission (‘‘SEC’’) rules and regulations and our Corporate Governance Policies. Neenah’s
independent directors are Sean T. Erwin, Margaret S. Dano, Mary Ann Leeper, Stephen M. Wood,
John F. McGovern, Edward Grzedzinski, Timothy S. Lucas and Philip C. Moore.

Nomination of Directors

The Board of Directors is responsible for approving candidates for Board membership. The Board

has delegated the screening and recruitment process to the Nominating Committee, in consultation
with the Chairman of the Board and Chief Executive Officer. More specifically, our Nominating
Committee has adopted, and the Board has ratified, the ‘‘Neenah Paper, Inc. Policy Regarding
Qualification and Nomination of Director Candidates.’’

The Nominating Committee seeks to create a Board that is as a whole strong in its collective

knowledge of, and diversity of skills and experience with respect to, accounting and finance,
management and leadership, vision and strategy, business operations, business judgment, crisis
management, risk assessment, industry knowledge, corporate governance, education, background and
global markets.

Qualified candidates for director are those who, in the judgment of the Nominating Committee,

possess all of the following personal attributes and a sufficient mix of the following experience
attributes to assure effective service on the Board. Personal attributes of a Board candidate considered
by the Nominating Committee include: leadership, ethical nature, contributing nature, independence,
interpersonal skills, and effectiveness. Experience attributes of a Board candidate considered by the
Nominating Committee include: financial acumen, general business experience, industry knowledge,
diversity of view-points, special business experience and expertise. When the Nominating Committee
reviews a potential new candidate, the Nominating Committee looks specifically at the candidate’s
qualifications in light of the needs of the Board and our company at that time, given the then current
mix of director attributes. Although the Company does not have a specific Board diversity policy, the
Nominating Committee looks at the diversity of experience, background and Board composition in
recommending director candidates as required by the Nominating Committee’s charter.

The Nominating Committee utilizes a variety of methods for identifying and evaluating nominees

for director. The Nominating Committee periodically assesses the appropriate size of the Board and
whether any vacancies on the Board are expected. In the event that vacancies are anticipated or
otherwise arise, the Nominating Committee will seek to identify director candidates based on input
provided by a number of sources, including: (i) Nominating Committee members; (ii) other directors of
Neenah; (iii) management of Neenah; and (iv) stockholders of Neenah. The Nominating Committee
also has the authority to consult with or retain advisors or search firms to assist in the identification of
qualified director candidates.

The Nominating Committee will consider nominees recommended by stockholders as candidates
for election to the Board. A stockholder wishing to nominate a candidate for election to the Board at
the Annual Meeting is required to give written notice to the Secretary of Neenah of his or her
intention to make a nomination. Pursuant to our Amended and Restated Bylaws, the notice of
nomination must be received by Neenah not less than 50 days nor more than 75 days prior to the
Annual Meeting, or if Neenah gives less than 60 days’ notice of the meeting date, the notice of
nomination must be received within 10 days after the Annual Meeting date is announced.

To recommend a nominee, a stockholder should write to Steven S. Heinrichs, Senior Vice

President, General Counsel and Secretary of Neenah, at 3460 Preston Ridge Road, Preston Ridge III,
Suite 600, Alpharetta, Georgia 30005. Any such recommendation must include:

(cid:127) the name and address of the stockholder and a representation that the stockholder is a holder of

record of shares of our common stock;

(cid:127) a brief biographical description for the nominee, including his or her name, age, business and

residence addresses, occupation for at least the last five years, and a statement of the
qualifications of the candidate, taking into account the qualification requirements set forth
above;

(cid:127) a description of all arrangements or understandings between the stockholder and each nominee;

and

(cid:127) the candidate’s consent to serve as a director if elected.

Once director candidates have been identified, the Nominating Committee will then evaluate each

candidate in light of his or her qualifications and credentials and any additional factors that the

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Nominating Committee deems necessary or appropriate, including those set forth above. Qualified
prospective candidates will be interviewed by the Chairman of the Board, the Chief Executive Officer
and at least one member of the Nominating Committee. The full Board will be kept informed of the
candidate’s progress. Using input from such interviews and other information obtained by the
Nominating Committee, the Nominating Committee will evaluate whether a prospective candidate is
qualified to serve as a director and, if so qualified, will seek full Board approval of the nomination of
the candidate or the election of such candidate to fill a vacancy on the Board.

31OCT201109101132

Existing directors who are being considered for re-nomination will be re-evaluated by the

Nominating Committee based on each director’s satisfaction of the qualifications described above and
his or her performance as a director during the preceding year. All candidates submitted by
stockholders will be evaluated in the same manner as candidates recommended from other sources,
provided that the procedures set forth above have been followed.

Corporate Governance Policies

All of the current nominees for director are current members of the Board. Based on the
Nominating Committee’s evaluation of each nominee’s satisfaction of the qualifications described
above, the Nominating Committee determined to recommend the three directors for re-election. The
Nominating Committee has not received any nominations from stockholders for the Annual Meeting.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT
We have adopted the Neenah Paper, Inc. Corporate Governance Policies that guide the Company

and the Board on matters of corporate governance, including director responsibilities, Board
committees and their charters, director independence, director qualifications, director evaluations,
director orientation and education, director access to management, Board access to independent
advisors, and management development and succession planning. Copies of the Corporate Governance
Policies are available on our website at www.neenah.com.

Code of Business Conduct and Ethics

We have adopted the Neenah Paper, Inc. Code of Business Conduct and Ethics, which applies to

all of our directors, officers and employees. The Code of Business Conduct and Ethics meets the
requirements of a ‘‘code of ethics’’ as defined by SEC rules and regulations. The Code of Business
Conduct and Ethics also meets the requirements of a code of conduct under NYSE listing standards.
The Code of Business Conduct and Ethics is available on our website at www.neenah.com.

Risk Oversight

The Board participates in risk oversight through the Company’s Enterprise Risk Evaluation
conducted by our Chief Financial Officer and General Counsel, in conjunction with the Company’s
senior management team. Annual findings are reported to the Audit Committee pursuant to the
requirements of its charter and the full Board reviews an annual report of the findings as required by
our Corporate Governance Policies.

Communications with the Board of Directors

We have established a process for interested parties to communicate with members of the Board,

including non-management members of the Board. If you have any concern, question or complaint
regarding any accounting, auditing or internal controls matter, or any issue with regard to our Code of
Business Conduct and Ethics or other matters that you wish to communicate to our Board or
non-management directors, send these matters in writing to c/o General Counsel, Neenah Paper, Inc.,
Preston Ridge III, 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005. Information about
our Board communications policy and procedures for processing Board communications for all

interested parties can be found on our website at www.neenah.com under the link ‘‘Investor Relations—
Corporate Governance—Board of Directors—Board Communications Policy.’’

Approval of Related Party Transactions

The charter of the Audit Committee requires that the Audit Committee review and approve any

transactions that would require disclosure under SEC rules and regulations. To help identify related
party transactions and relationships, each director and named executive officer, as such term is used is
‘‘Additional Executive Compensation Information—Summary Compensation Table,’’ completes a
questionnaire on an annual basis that requires the disclosure of any transaction or relationships that
the person, or any member of his or her immediate family, has or will have with the Company.
Additionally, the Company’s Code of Business Conduct and Ethics prohibits related party transactions
and requires that any employee with knowledge of such a transaction provide written notice of the
relationship or transaction to the Company’s General Counsel. Neither Neenah nor the Board is aware
of any matter in 2014 that required the review and approval of the Audit Committee in accordance
with the terms of the charter.

Shareholder Rights Plan

The Company’s stockholder Rights Agreement expired on November 30, 2014. The Company has

decided at this time to not put a new plan in place. We will evaluate the need for such a plan in the
future as such need may arise.

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2014 DIRECTOR COMPENSATION

The Compensation Committee has responsibility for evaluating and making recommendations to

the Board of Directors regarding compensation for our nonemployee directors.

Each of our directors who are not employees receives the following compensation:

31OCT201109101132

Item

Amount

Annual cash retainer . . . . . . . . . . . . . . . . . .

$36,000

Board and committee meeting fee . . . . . . . . .

$1,500 per meeting

Additional cash retainers for Committee and

Board Chairs:

(cid:127) Board Chairman . . . . . . . . . . . . . . . .
(cid:127) Audit Committee Chairman . . . . . . . .
(cid:127) Compensation Committee Chairman . .
(cid:127) Nominating Committee Chairman . . . .

$25,000
$10,000
$10,000
$5,000

Annual value of equity grant . . . . . . . . . . . . .

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT
In 2014 the directors received either 100% RSUs, which grant was a total of 1,610 shares, or 50%

$50,000 (choice of 100% restricted
stock units or 50% restricted
stock units / 50% non-qualified
stock options)

RSUs and 50% options, which grant was 675 shares and 1930 Options. The number of stock options
and RSUs granted to nonemployee directors is calculated annually using a modified Black Scholes
formula used to provide a total equity value equal to the annual retainer fee in the same manner as
used to calculate grants for Company employees under the Long-Term Compensation Plan (‘‘LTCP’’).
Stock Options, when granted, become fully vested and exercisable on the first anniversary of the date
of grant. The RSUs become fully vested and convert to shares of our common stock on the first
anniversary of the date of grant. Employee directors receive no additional compensation and no
perquisites for serving on our Board. Neenah also established the Neenah Paper Directors’ Deferred
Compensation Plan (the ‘‘Directors’ Plan’’), which enables each of our nonemployee directors to defer
a portion of their cash compensation and RSU awards. In 2014 Mr. McGovern participated in the
Director’s Plan.

Each of our nonemployee directors are required to own Company stock equal to two times their

annual cash retainer. The valuation of restricted stock and options owned by our directors is calculated
pursuant to the same guidelines detailed in this Proxy Statement for our named executive officers. All
of our nonemployee directors met or exceeded the guidelines as of December 31, 2014.

The following table shows the total compensation paid to each of our nonemployee directors in

2014.

Name

Fees Earned or
Paid in Cash ($)

Sean T. Erwin . . . . . . . . . . . . . . . . . . . . . . . . . .
Edward Grzedzinski
. . . . . . . . . . . . . . . . . . . . .
Mary Ann Leeper . . . . . . . . . . . . . . . . . . . . . . .
Timothy S. Lucas . . . . . . . . . . . . . . . . . . . . . . .
John F. McGovern . . . . . . . . . . . . . . . . . . . . . .
Philip C. Moore . . . . . . . . . . . . . . . . . . . . . . . .
Stephen M. Wood . . . . . . . . . . . . . . . . . . . . . . .

68,500
48,000
54,500
64,000
55,500
67,000
60,000

Stock Awards Option Awards

($)(1)

35,528
65,056
65,056
65,056
65,056
35,528
65,056

($)(2)

Total ($)

27,888
—
—
—
—
27,888
—

131,916
113,056
119,556
129,056
120,556
130,416
125,056

(1) Amounts reported in this column represent the grant date fair value of the 2014 RSU award

granted to each director, calculated in accordance with Financial Accounting Standards Board
Statement ASC Topic 718 (‘‘ASC 718’’), excluding any estimate of forfeitures related to service-
based conditions. Due to restrictions imposed by Canadian law, Mr. Moore is not able to receive a
quarterly cash dividend on his RSUs. In lieu of receiving such dividends, Mr. Moore is granted
additional RSUs on the date of each dividend payment and in value to the cash dividend that he
would have received. Mr. Moore received 24 of these RSUs in 2014.

(2) Amounts reported in this column represent the grant date fair value with respect to stock options
granted to each director, calculated in accordance with ASC 718, excluding any estimate of
forfeitures related to service-based vesting conditions. The value reported in this column was
determined using a Black-Scholes stock option valuation model. See Note 8 to our audited
Financial Statements included in our 2014 Annual Report on Form 10-K for the assumptions used
in valuing and expensing these stock options.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The following section presents an analysis, summary and overview of our compensation policies

and programs, including material decisions made under those policies and programs in setting the
compensation levels for 2014 for our ‘‘named executive officers’’ listed below. Following this section
under the heading ‘‘Additional Executive Compensation Information’’ we have included certain tables
where you will find detailed compensation information for the named executive officers. This section is
intended to provide additional details regarding Neenah’s compensation practices, as well as the
information and process used to create and implement our compensation program for our named
executive officers and our other executive officers.

31OCT201109101132

Named Executive Officers

(cid:127) John P. O’Donnell, President and Chief Executive Officer

(cid:127) Bonnie C. Lind, Senior Vice President, Chief Financial Officer and Treasurer

(cid:127) Steven S. Heinrichs, Senior Vice President, General Counsel and Secretary

NOTICE OF 2013 ANNUAL MEETING
AND
(cid:127) Julie A. Schertell, Senior Vice President-Fine Paper & Packaging and Technical Products U.S.
PROXY STATEMENT

(cid:127) Armin Schwinn, Senior Vice President and Managing Director of Neenah Germany

Compensation Objectives and Philosophy

Neenah’s compensation policies are designed to accomplish the following key objectives:

(cid:127) Reward executives for long-term achievement of our strategic objectives and enhancement of

stockholder value;

(cid:127) Support a performance-oriented work environment that rewards achievement of identified
internal goals and recognizes the Company’s performance against that of the market and
selected peer companies; and

(cid:127) Attract and retain leaders whose abilities are essential to Neenah’s long-term success and

competitiveness.

We believe that executive compensation, both long-term and short-term, should be directly linked
with performance. Our measures of performance are keyed off of individual responsibilities, Neenah’s
operational and financial goals and the creation of shareholder value.

Decisions made concerning the total compensation package for our executives take into
consideration the individual executive’s level of responsibility within Neenah, the performance of
Neenah relative to internal targets and peer companies, and the creation of long term shareholder
value. We strive to achieve a balanced and competitive compensation package through a mix of base
salary, performance-based cash bonuses, long-term equity based incentives and awards, deferred
compensation plans, pension plans and welfare benefits.

Our Compensation-Setting Process

Role of Compensation Committee

The Compensation Committee is responsible for carrying out the Board’s responsibilities for
determining the compensation for our named executive officers. In that capacity, the Compensation
Committee (1) annually reviews and approves the corporate goals and objectives relating to our

executive compensation programs; (2) evaluates performance against those goals and objectives; and
(3) approves the compensation payable to our named executive officers.

The Role of Shareholder Say-on-Pay Votes

The Company provides its shareholders with the opportunity to cast an annual advisory vote on
executive compensation (a ‘‘say-on-pay proposal’’). At the Company’s annual meeting of shareholders
held on May 22, 2014, approximately 98% of the votes cast on the say-on-pay proposal at that meeting
were voted in favor of the proposal. The Compensation Committee considered these results and
believes the voting results reflect strong shareholder support for the Company’s approach to executive
compensation. The Compensation Committee will continue to consider the outcome of the Company’s
say-on-pay votes in order to understand the environment of future compensation decisions for the
named executive officers.

Use of Compensation Consultants

The Compensation Committee charter grants the Compensation Committee authority to
independently retain compensation consultants, and in 2014 the Compensation Committee again
engaged Hugessen Consulting Inc. (‘‘Hugessen’’) to provide it with independent advice and assistance
in its deliberations regarding compensation matters. At the Committee’s request, Hugessen originated
certain analyses, reviewed the information provided by management and assisted the Compensation
Committee in assessing 2014 compensation for Neenah’s named executive officers. In addition,
Hugessen provided input to assist the Compensation Committee in establishing the 2014 targeted
compensation levels and performance criteria under the Company’s incentive plans.

The Compensation Committee must pre-approve any additional work of a material nature assigned

to its consultants and will not approve any such work that, in its view, could compromise Hugessen’s
independence as advisor to the Committee. Hugessen does not provide any other services to Neenah.
Decisions made by the Compensation Committee are the responsibility of the Committee and reflect
factors and considerations in addition to the information and recommendations provided by Hugessen.

In 2014 Neenah retained Meridian Compensation Partners, LLC (‘‘Meridian’’) to advise

management and the Compensation Committee on developments relating to executive compensation
generally, provide support to management and the Compensation Committee in their ongoing
assessment of the effectiveness of Neenah’s compensation policies and programs and review materials
prepared by management related to benchmarking and plan designs.

In 2014, the Compensation Committee, in accordance with SEC rules, considered the

independence factors having to do with consultant conflicts of interest and determined that the work of
the compensation consultants did not raise any conflicts of interest.

Role of Executive Officers

At the request of the Compensation Committee, our President and Chief Executive Officer, along

with our Vice President-Human Resources, make recommendations to our Compensation Committee
regarding base salary and target levels for our annual performance bonuses and long-term equity
compensation for our executive officers. Mr. O’Donnell is not involved in setting or approving his own
compensation levels. These recommendations are based on the philosophy and analysis described in
this Compensation Discussion and Analysis section of this Proxy Statement.

Peer Comparison

To assist in evaluating and determining levels of compensation in 2014 for each element of pay, the

Compensation Committee reviewed various sources of data prepared by management and reviewed by
Meridian including:

31OCT201109101132

(cid:127) Proxy data collected and analyzed from a peer group of 13 companies in the paper, packaging,

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and base materials and specialty chemical industries similar in size to Neenah (the ‘‘Peer
Group’’). In 2014 the Peer Group consisted of the following companies:

— AEP Industries Inc.

—Omnova Solutions, Inc

—Clearwater Paper Corporation

—Quaker Chemical Corp

—Headwaters, Inc.

—Innospec, Inc.

—RTI International Metals Inc.

—Schweitzer-Mauduit International, Inc.

—Kapstone Paper & Packaging Corp

—Wausau Paper Corporation

—Myers Industries Inc.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT
(cid:127) Data collected from Equilar’s database using a broad industry cut of manufacturing companies

—P.H. Glatfelter Company

—Zep, Inc.

with revenues between $500 million and $1.5 billion.

To develop market figures, compensation opportunities for the named executive officers were
compared to the compensation opportunities for similarly situated executives in comparable positions.
Hugessen reviewed the results of these analyses and provided feedback to the Compensation
Committee in connection with their review of competitive pay practices.

Neenah’s management and the Compensation Committee do not believe that it is appropriate to
establish compensation levels based solely on peer comparisons or benchmarking; however, marketplace
information is one of the many factors that we consider in assessing the reasonableness of
compensation. Management and the Compensation Committee believe that information regarding pay
practices at other companies is useful to confirm that our compensation practices are competitive in the
marketplace.

Targeted Compensation Levels

The Compensation Committee establishes targeted total compensation levels based upon

performance objectives for our executive officers eligible to receive an annual cash bonus opportunity
under the Management Incentive Plan (‘‘MIP’’) and the equity awards under the Long-Term
Compensation Plan (‘‘LTCP’’) as authorized by the Omnibus Plan. In making these determinations, our
Compensation Committee is guided by the compensation philosophy described below. Our
Compensation Committee also considers historical compensation levels, pay practices at companies in
the Peer Group and the relative compensation among Neenah’s senior executive officers. The
Compensation Committee also considers industry conditions, corporate performance versus peer
companies and the overall effectiveness of Neenah’s compensation program in achieving desired
performance levels.

As targeted total compensation levels are determined, our Compensation Committee also
determines the portion of total compensation that will be contingent, performance-based pay.
Performance-based pay includes cash awards under our MIP program and equity awards under our
LTCP, which may be earned based on the Company’s achievement of performance goals and whose
value depends upon long-term appreciation in stock price.

Neenah’s compensation philosophy is intended to provide competitive pay within the relevant
market by targeting the total compensation opportunities and to reward the executives for short term
and long term performance through an overall compensation mix that is targeted to include a minimum
of 50% performance based compensation for named executive officers. Our Chief Executive Officer’s
compensation in 2014 was approximately 70% performance based at target levels.

Compensation Components

Our executive compensation includes the base components described below, each of which is
designed to accomplish specific goals of our compensation philosophy described above. In connection
with our discussion of each of such base components, the following questions will be addressed:

(cid:127) Why Neenah chooses to pay each of the base components;

(cid:127) How Neenah determines the amount of the various base components;

(cid:127) How each component fits into Neenah’s overall compensation scheme and supports Neenah’s

compensation philosophy.

Base Salary

Base salary is a critical element of executive compensation because it provides our executives with
a base level of monthly income and also sets the base level for performance compensation. Individual
base salaries for our named executive officers are generally determined by comparing total
compensation opportunities within the Peer Group as discussed above. Salary increases, if any, are
reviewed and approved by the Compensation Committee on an annual basis. Factors considered in base
salary increases include the Company’s performance over the past year, changes in individual executive
responsibility and the position of base salary together with all other compensation as indicated by our
analysis of the Peer Group.

This approach to base salary supports our compensation philosophy. The Compensation

Committee has determined that setting NEO base salaries at this level allows Neenah to be competitive
in attracting and retaining talent, while at the same time a substantial portion of the executive’s overall
compensation is performance based, thus aligning the executive’s and stockholders’ interests.

2014 and 2015 Base Salary Decisions

After discussing the individual performance, experience, scope of responsibilities, and

Mr. O’Donnell’s recommendations for the other NEOs, the Compensation Committee established the
base salaries for each NEO in January of 2014 and again in January of 2015. In general, any increases
in base pay are intended to be competitive with the market and take into consideration the individual
performance and scope of responsibilities of each NEO.

The following table provides the base salary received by each named executive officer for 2014 and

2015.

2013 Base Salary

2014 Base Salary % Increase

2015 Base Salary % Increase

O’Donnell . . . . . . . . . . . . . . . .
Lind . . . . . . . . . . . . . . . . . . .
Heinrichs . . . . . . . . . . . . . . . .
Schertell . . . . . . . . . . . . . . . . .
Schwinn . . . . . . . . . . . . . . . . .

$600,000
$330,000
$290,000
$300,000
A235,000

$625,000
$346,000
$310,000
$336,000
A235,000

4%
5%
7%
12%
0%

$625,000
$346,000
$310,000
$336,000
A250,000

0%
0%
0%
0%
6%

Annual Performance Bonuses

Annual cash incentive bonus opportunities are awarded under the MIP, and are based on our
achievement of performance goals established in the beginning of each calendar year. MIP target
bonuses are established as a percentage of base salary with a target bonus ranging from 40% to 80%
for named executive officers. The Compensation Committee annually approves the target bonus range
based on data provided from the market surveys as previously described and based on the experience
and knowledge of the executive and the quality and effectiveness of their leadership within Neenah as
determined by the Compensation Committee. The amount of the actual MIP bonus may be adjusted up
or down from the target bonus based on Neenah’s year-end results (as measured by the objective and
subjective criteria set forth in the MIP plan for the applicable year, as previously approved by the
Compensation Committee). Actual MIP payments can range from 0-200% of the target bonus for our
chief executive, legal, and financial officers, and 0-250% for the business unit leaders, depending on
whether the results fall short of, achieve or exceed the identified performance goals.

31OCT201109101132

Under the MIP, the Compensation Committee generally sets a range of possible payments from

zero to a maximum percentage of the target award based on its belief that no bonus should be earned
if performance is below established thresholds and its determination that the top end of the range
should provide an appropriate incentive for management to achieve exceptional performance. Under
the MIP, specific performance measures and thresholds are determined by the Compensation
Committee in consultation with Mr. O’Donnell, based on key metrics that support the achievement of
Neenah’s short-term and long-term strategic objectives.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

Annual performance bonuses support our compensation philosophy in that they: (i) reward
Neenah’s executives for meeting and exceeding goals that contribute to Neenah’s short-term and
long-term strategic plan and growth; (ii) promote a performance-based work environment; and
(iii) serve as a material financial incentive to attract and retain executive talent.

2014 Annual Performance Bonus Awards

For 2014, the Compensation Committee approved target bonuses for our named executive officers

as a percentage of base salary with a target bonus ranging from 40% to 80% as follows:

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2014 TARGET MIP
(% of Base Salary)

O’Donnell . . . . . . . . . . . . . . .
Lind . . . . . . . . . . . . . . . . . . .
Heinrichs . . . . . . . . . . . . . . .
Schertell . . . . . . . . . . . . . . . .
Schwinn . . . . . . . . . . . . . . . .

80%
55%
50%
50%
40%

The performance goals for the 2014 MIP program were set based on the following performance

criteria and the relative weighting set forth below: (i) adjusted corporate earnings before interest,
income taxes, depreciation and amortization (‘‘Corporate EBITDA’’), which is calculated as net income
plus income tax expenses, plus depreciation expense and amortization expense for intangibles, plus
amortization expense for stock options and restricted stock units adjusted for any one time events
outside of the ordinary course of business and (ii) business unit earnings before interest and taxes

(‘‘EBIT’’) for our Fine Paper and Technical Products business units, and (iii) Progress achieved in
implementing the Company’s strategic plan:

Corporate
EBITDA

Business Unit
EBIT

Strategic
Initiatives

O’Donnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Heinrichs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schertell
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schwinn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75%
75%
75%
25%
25%

—
—
—
50%
50%

25%
25%
25%
25%
25%

Each goal was set at levels that both the Compensation Committee and management believed to

be challenging but attainable, and achievements would reflect significant performance by the Company.
On a stand-alone basis, MIP EBITDA could have yielded a payout from 0% at threshold, 100% at
target and 200% at outstanding, and business unit EBIT could have yielded a payout from 0% at
threshold, 100% at target and 300% at maximum, based on year-end results. This increase is consistent
with our desire to incentivize and reward significant growth in profits. The strategic plan objective was
paid out at 200% of target reflecting performance in achieving a set of strategic objectives considered
critical for long-term growth. The results included organic growth of strategic categories, the successful
acquisition and integration of Crane Technical Materials, Inc. in July of 2014, the development of a
targeted asset repurpose strategy, and other strategic corporate initiatives.

The performance goals and results for each of the financial metrics in 2014 were as follows:

Metric ($MM)

Threshold

Target Outstanding Maximum 2014 Results

Payout %

MIP EBITDA . . . . . . . . . . . . . . . . . .
Fine Paper & Packaging EBIT . . . . . .
Tech Products EBIT . . . . . . . . . . . . .

100.3
49.0
29.0

123.7
62.0
36.2

134.6
66.0
41.5

N/A
69.0
46.8

129.6
61.2
37.9

154%
93%
133%

Based on the process described above, MIP payments were awarded as follows:

2014 MIP
at Target

2014 MIP
at Actual

% of Target
Earned

O’Donnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Heinrichs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schertell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schwinn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$500,000
$189,750
$155,000
$168,000
A 94,000

$827,500
$314,036
$256,525
$233,251
A149,460

166%
166%
166%
139%
159%

Long-Term Equity Compensation

Long-term equity incentives under the LTCP consist of performance share units, stock options and

stock appreciation rights granted on an annual basis, with stock option awards and/or stock
appreciation rights representing approximately 30% of the total value of the equity incentive awards
and performance shares representing approximately 70% of the total value of the equity award granted
to an executive officer for that year. This reflects the Company’s desire to emphasize the performance
based incentives in the LTCP. The total target LTCP grants are set at the beginning of the year for
each named executive officer at a minimum of 40% of the executive’s base salary. The Company
typically grants 100% of the option and/or stock appreciation rights in conjunction with the first Board
meeting of each fiscal year. Each year the Compensation Committee reviews and approves a target
number of performance share units for each of our named executive officers and each other participant
in the LTCP plan. The number of units actually earned by each participant is determined by the
Company’s corporate performance. The range of possible awards is set by the Compensation

Committee based on its: (i) belief that a minimal award shall be granted if the performance measures
are significantly below target levels; and (ii) determination that the top end of the range provided an
appropriate incentive for management to achieve exceptional performance.

The combination of stock options and performance share units focuses our executives on Neenah’s

financial performance and increasing shareholder value. It is aligned with and supports our stock
ownership policy. Long-term incentives also help retain employees during the performance periods.

31OCT201109101132

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2014 LTCP Awards

For 2014, the Compensation Committee approved equity grants under the LTCP for our named

executive officers with target values ranging from 40% to 150% of base salary pay as follows:

2014 LTCP
(% of base Salary)

O’Donnell . . . . . . . . . . . . . . . .
Lind . . . . . . . . . . . . . . . . . . . .
Heinrichs . . . . . . . . . . . . . . . .
NOTICE OF 2013 ANNUAL MEETING
Schertell . . . . . . . . . . . . . . . . .
Schwinn . . . . . . . . . . . . . . . . .
AND
For each of our named executive officers, the value was divided into awards of non-qualified stock
PROXY STATEMENT

150%
75%
65%
65%
40%

options and a target number of performance share units, with 70% of the value in performance share
units and 30% of the value in options. The range of possible awards under the LTCP was selected to
tie a substantial percentage of their compensation to Neenah’s performance.

The number of stock options to be awarded to each named executive officer in 2014 was
determined by dividing the value of the portion of the LTCP award to be awarded as stock options
(determined by the Compensation Committee as described above) by the fair value of one stock option
(determined using a modified Black- Scholes formulas as modeled by Meridian), and then rounded to
the nearest tens to produce the number of shares subject to the applicable option award. Each grant of
options made in 2014 vests in increments of 33.34%, 33.33% and 33.33% over a three year period, with
vesting occurring on each anniversary of the applicable grant and a ten year term to exercise. The
process described above resulted in grants of options in 2014 to purchase the following options:

2014 Options(*)

O’Donnell . . . . . . . . . . . . . . . . .
Lind . . . . . . . . . . . . . . . . . . . . .
Heinrichs . . . . . . . . . . . . . . . . .
Schertell . . . . . . . . . . . . . . . . . .
Schwinn . . . . . . . . . . . . . . . . . .

18,770
5,180
4,030
4,370
2,570

The Company converted all outstanding stock options to stock
appreciation rights on July 1, 2014. Beginning with the 2015 LTCP
award the Company intends to issue stock appreciation rights instead of
stock options as part of the award described in this section.

The target number of performance share units to be awarded to each named executive officer in

2014 was determined by dividing the value of the portion of the LTCP award to be awarded as
performance share units (determined by the Compensation Committee as described above) using fair
market value of the stock price as of the date of grant, and then rounded to the nearest ten shares.
The target number of 2014 performance share units are increased or decreased (to an amount equal to
between 40% to 200% of the target number) prior to being converted to actual shares after a two year
holding period. After the end of the performance period, the adjustment of the target number of
shares will be calculated based on the Company’s achievement of performance goals relative to the
following equally weighted criteria: year over year growth in sales (constant currency), year over year
growth in return on invested capital, free cash flow as a percentage of Net Sales and relative total
shareholder return (‘‘Relative TSR’’). The Relative TSR (including dividend yield), is compared against
the Russell 2000 Value Index. The payout levels for the performance share unit metrics include a
0% payout below threshold, 100% payout at target, and 200% payout at outstanding. The specific
targets and results in 2014 were as follows:

Metric

Threshold

Payout (as a % of Target) . . . . . . . . . . .

Return on Capital . . . . . . . . . . . . . . . . No increase

Target

100%

Increase of
40 basis points

Growth in Sales

. . . . . . . . . . . . . . . . .

0% growth

3% growth

Outstanding

2014 Results

Payout %

200%

Increase of
greater than
80 basis points

More than
6% growth

Increase of
54 basis points

135%

6.9%

200%

Free Cash Flow as % of Sales . . . . . . . .

6.9%

Relative Total Shareholder Return . . . . . 3rd Quartile

Median

Top Quartile

Aggregate Payout Percentage . . . . . . . . .

200%

184%

Based on the process described above and our performance against the targets noted, performance

share unit (‘‘PSU’’) grants were awarded as follows:

2014 PSUs
at Target

2014 PSUs % of Target

Granted

Earned

15,330
4,230
3,290
4,370
2,100

28,207
7,783
6,053
8,040
3,864

184%
184%
184%
184%
184%

The earned shares are now in a two year hold period and are still subject to forfeiture based on

continued employment. All shares are scheduled to be released to active participants on December 31,
2016.

Retirement Benefits

We maintain the Neenah Paper Retirement Contribution Plan (the ‘‘Retirement Contribution
Plan’’), which is a tax-qualified defined contribution plan for employees, including Mr. O’Donnell,
Mr. Heinrichs, and Ms. Schertell, who are ineligible to participate in the Pension Plan, the
Supplemental Pension Plan and the German Pension Plans. Further, we maintain a supplemental
retirement contribution plan (the ‘‘Supplemental RCP’’) which is a non-qualified defined contribution
plan which is intended to provide a tax-deferred retirement savings alternative for amounts exceeding
Internal Revenue Code limitations on qualified plans. Additional information regarding the
Supplemental RCP can be found in the 2014 Nonqualified Deferred Compensation table later in this

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Proxy Statement. We also maintain the Neenah Paper 401(k) Plan (the ‘‘401(k) Plan’’), which is a
tax-qualified defined contribution plan available to all of Neenah’s U.S. employees, and the Neenah
Paper Deferred Compensation Plan (the ‘‘Deferred Compensation Plan’’), which is a non-qualified
deferred compensation plan for our executive officers. The Deferred Compensation Plan enables our
executive officers to defer a portion of annual cash compensation (base salary and non-equity awards
under our MIP). This plan is intended to assist our executive officers in maximizing the value of the
compensation they receive from the Company and assist in their retention. Additional information
regarding the Deferred Compensation Plan can be found in the 2014 Nonqualified Deferred
Compensation table later in this Proxy Statement.

31OCT201109101132

We also maintain the Neenah Paper Pension Plan, a tax-qualified defined benefit plan (the
‘‘Pension Plan’’) and the Neenah Paper Supplemental Pension Plan, a non-qualified defined benefit
plan (the ‘‘Supplemental Pension Plan’’) which provide tax-deferred retirement benefits for certain of
our employees, including Ms. Lind, who was employed by Kimberly-Clark (our predecessor company
prior to being spun-off) prior to December 31, 1996. Mr. O’Donnell, Mr. Heinrichs, Ms. Schertell, and
Mr. Schwinn do not participate in these plans. Mr. Schwinn participates in an individual pension
agreement with the Company which provides pension benefits based on earnings and service, an
additional pension plan which provides benefits based on the Company’s and the employee’s
contribution, and a supplemental executive retirement pension agreement, which provides benefits in
addition to the two base plans if certain amounts are exceeded (collectively, the ‘‘German Pension
Plans’’). Additional information regarding the Pension Plan, the Supplemental Pension Plan and the
German Pension Plans can be found in the 2014 Pension Benefits table later in this Proxy Statement.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

Neenah and the Compensation Committee believe that the Pension Plan, Supplemental Pension

Plan, German Pension Plans, Retirement Contribution Plan, Supplemental RCP, Deferred
Compensation Plan and 401(k) Plan are core components of our compensation program. The plans are
competitive with plans maintained by our peer companies and are necessary to attract and retain top
level executive talent. Additionally, the plans support the long-term retention of key executives by
providing a strong incentive for the executive to remain with Neenah over an extended number of
years.

Severance Payments

The Neenah Paper Executive Severance Plan (the ‘‘Executive Severance Plan’’) covers designated

officers, including all of our named executive officers (except for Mr. Schwinn who is covered by an
individual employment agreement, the terms of which are described in detail below), and provides
certain severance benefits upon termination of employment following a change in control of Neenah.
Upon termination of the officer’s employment by Neenah without ‘‘cause’’ or by the officer for ‘‘good
reason’’ (as defined in the Executive Severance Plan) within the two-year period following a change in
control or a termination by us without ‘‘cause’’ during the one-year period preceding such a change in
control, the officer will be entitled to a lump-sum cash payment equal to the sum of: (i) two times the
sum of his annual base salary and targeted annual bonus; (ii) any qualified retirement plan benefits
forfeited as a result of such termination; (iii) the amount of retirement benefits such officer would have
received under the qualified and supplemental retirement plans but for his or her termination for the
two-year period following his or her termination; (iv) the cost of medical and dental COBRA premiums
for a period of two years; and (v) a cash settlement of any accrued retiree welfare benefits. In addition,
the officer will be eligible to receive outplacement services for a period of two years (up to a maximum
cost to us of $50,000).

Payment of the benefits under the Executive Severance Plan is subject to the applicable executive

executing an agreement that includes restrictive covenants and a general release of claims against us.
These benefits are intended to recruit and retain key executives and provide continuity in Neenah’s
management in the event of a change in control. We believe the Executive Severance Plan is consistent

with similar plans maintained by our peer companies and therefore is a core component of our
compensation program necessary to attract and retain key executives. In 2011 the Compensation
Committee closed the excise gross up provision of the Executive Severance Plan to new participants
and determined that it would phase out the excise tax gross up provision in the Executive Severance
Plan over time for the current named executive officers.

Mr. Schwinn does not participate in the Executive Severance Plan. He is covered by a separate
employment agreement which provides a twelve month notice period from the end of the calendar
year. Mr. Schwinn’s equity grants contain change in control provisions that provide for vesting and
payments for his 2013 and 2014 LTCP performance shares. The value at the end of 2014 was $442,338.
The equity awards contain provisions that are similar to the U.S. provisions in the case of illness,
accident or death. In addition, Mr. Schwinn’s employment contract provides for salary continuation to
him or his surviving family members for a period of three months in the case of illness, accident or
death.

Timing of Compensation

Base salary adjustments, if any, are made by our Compensation Committee at the first meeting of
each fiscal year (with the adjustments effective as of January 1 of that same year). Stock option grants
and performance share unit target levels and awards are made in the manner described above. We do
not coordinate the timing of equity awards with the release of non-public information. The exercise
price of the stock options is established at the fair market value of the closing price of our stock on the
date of the grant.

Tax and Accounting Consideration

In general, the tax and accounting treatment of compensation for our named executive officers has
not been a core component used in setting compensation. In limited circumstances we do consider such
treatment and attempt to balance the cost to Neenah against the overall goals we intend to achieve
through our compensation philosophy. In particular, our intent is to maximize deductibility of our
named executive officers’ compensation under Code Section 162(m) while maintaining the flexibility
necessary to appropriately compensate our executives based on performance and the existing
competitive environment. The MIP and LTCP programs are performance based and are designed to be
fully deductible under Code Section 162(m).

Stock Ownership Guidelines

The Compensation Committee has adopted stock ownership guidelines to foster long-term stock

holdings by company leadership. These guidelines create a strong link between stockholders’ and
management’s interests. Named executive officers are required to own a designated multiple of their
respective annual salaries. The multiple was increased in 2014 to four times base salary for all NEOs
except for Mr. O’Donnell, whose multiple remained at six times base salary.

Stock Ownership
Multiple of Salary

O’Donnell . . . . . . . . . . . . . . . .
Lind . . . . . . . . . . . . . . . . . . . .
Heinrichs . . . . . . . . . . . . . . . .
Schertell . . . . . . . . . . . . . . . . .
Schwinn . . . . . . . . . . . . . . . . .

6x
4x
4x
4x
4x

Each of the named executive officers is required to hold at least 50% of their annual performance

share grants until they reach the ownership guidelines. The following holdings are counted toward
fulfilling guidelines, with each being valued using our stock price as of December 31 of each year;

(i) stock held in the 401(k) plan, other deferral plans, outright or in brokerage accounts;
(ii) performance share units or restricted stock units earned but not vested or not paid out; and (iii) ‘in
the money’ value of vested or unvested stock options. Penalties for continued failure to meet the
guidelines include payment of MIP compensation in Neenah stock and reduction of LTCP
compensation. All of our named executive officers met or exceeded the guidelines as of December 31,
31OCT201109101132
2014, except for Mr. Schwinn. As a result, Mr. Schwinn will be subject to the restrictions set forth
above until the requirement is met.

Clawback Policy

The Compensation Committee adopted a ‘‘clawback policy’’ for all executives and other employees

participating in our MIP program concerning the future payment of MIP payments and long term
equity grants under the LTCP program. This new policy gives the Board the authority to reclaim
certain overstated payments made to Neenah employees due to materially inaccurate results presented
in the Company’s audited financial statements.

Hedging Policy

Our insider trading policy provides that directors, officers and employees are prohibited from
engaging in short sales and buying or selling puts or calls or other derivative securities of Neenah.
Directors and officers are also prohibited from holding Neenah securities in a margin account or
pledging Neenah securities as collateral for a loan.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

COMPENSATION COMMITTEE REPORT

The Compensation Committee oversees Neenah’s compensation policies and programs on behalf
of the Board. In fulfilling this responsibility, the Compensation Committee has reviewed and discussed
with Neenah’s management the Compensation Discussion and Analysis included in this Proxy
Statement. In reliance on such review and discussions, the Compensation Committee recommended to
Neenah’s Board of Directors that the Compensation Discussion and Analysis be included in this Proxy
Statement and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

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Compensation Committee:

Philip C. Moore, Chairman
John F. McGovern
Stephen M. Wood

ADVISORY VOTE ON EXECUTIVE COMPENSATION (ITEM 2)

Section 14A of the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’) requires

that we include in this proxy statement a non-binding stockholder vote on our executive compensation
as described in this proxy statement (commonly referred to as ‘‘Say-on-Pay’’).

We encourage stockholders to review the Compensation Discussion and Analysis (‘‘CD&A’’)

section of this proxy statement. Our executive compensation program has been designed to pay for
performance and align our compensation programs with business strategies focused on long-term
growth and creating value for stockholders while also paying competitively and focusing on total
compensation. The Company’s executive compensation programs are designed to attract, motivate and
retain highly qualified executive officers who are able to achieve corporate objectives and create
stockholder value. The Compensation Committee believes the Company’s executive compensation
programs reflect a strong pay-for-performance philosophy and are well aligned with the stockholders’
long-term interests without promoting excessive risk. We feel this design is evidenced by the following:

(cid:127) A majority of our executives’ compensation is directly linked to our performance and the

creation of stockholder value. The overall compensation mix is targeted to include at least 50%
performance based compensation for the named executive officers with a higher percentage of
our CEO’s compensation being performance based. In 2014 70% of our CEO’s compensation
was performance based at target levels.

(cid:127) Our long-term incentive awards are exclusively in the form of performance share units, stock
options and stock appreciation rights and all of our incentive plans have capped payouts.

(cid:127) LTCP grants are split with 70% of the total value of the awards granted as performance share

units with a three-year vesting period, and 30% as stock options or stock appreciation rights with
annual vesting over a three-year period. This reflects the Company’s desire to emphasize
performance based incentives. For our performance share units, we use objective performance
metrics closely tied to financial performance and shareholder value, such as increasing return on
invested capital, revenue growth, cash flow generation and relative total shareholder return. In
2014 LTCP grants were awarded at 184% of target based on achieved growth in corporate sales,
free cash flow as a percent of sales, improvement in return on invested capital, and total
shareholder return.

(cid:127) Our short-term incentive plan (MIP) also is based on a pay-for-performance philosophy, with

target bonus opportunities ranging from 40% to 80% of base salary based on improvements in
corporate and business unit profits and successful execution of strategic objectives. In 2014,
executives received a payment of 139% to 166% of target as a result of significant increases in
corporate EBITDA, business unit EBIT and the successful execution of strategic objectives.

(cid:127) We have meaningful stock ownership requirements for our named executive officers.

(cid:127) Except for Mr. Schwinn, our foreign-based named executive officer, we do not have employment
agreements or other individual arrangements with our named executive officers that provide for
a specified term of employment, compensation terms or specific benefits upon a termination of
employment.

(cid:127) Benefits are payable under our Executive Severance Plan only on a double trigger basis
(i.e., following both a change in control and a qualifying termination of employment).

(cid:127) The Compensation Committee is advised by an independent compensation consultant who keeps

the Compensation Committee apprised of developments and best practices.

(cid:127) The Company has a clawback policy which allows the Company to recoup awards if payment or

vesting was based on financial criteria that are later deemed to be materially inaccurate.

The Board strongly endorses the Company’s executive compensation program and recommends
that stockholders vote in favor of the following resolution:

RESOLVED, that the stockholders approve the compensation of the Company’s named
executive officers as described in this proxy statement under ‘‘Executive Compensation’’,
including the Compensation Discussion and Analysis and the tabular and narrative
disclosure contained in this proxy statement.

31OCT201109101132

Because the vote is advisory, it will not be binding upon the Board of Directors or the

Compensation Committee and neither the Board of Directors nor the Compensation Committee will be
required to take any action as a result of the outcome of the vote on this proposal. The Compensation
Committee will consider the outcome of the vote when considering future executive compensation
arrangements.

The Board of Directors unanimously recommends that the stockholders vote ‘‘FOR’’ the approval

of the Company’s executive compensation.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

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ADDITIONAL EXECUTIVE COMPENSATION INFORMATION

Summary Compensation Table

The following table reflects compensation paid to or earned by our named executive officers for

services rendered during 2014, 2013 and 2012 and:

Change in
Pension
Value and
Non-Qualified
Deferred

Non-Equity

Name and Principal Position

Year

Salary
($)

Stock
Awards
($)(1)

Option
Awards Compensation
($)(2)

($)(3)

Incentive Plan Compensation

236,502
John P. O’Donnell . . . . . . . . . . . 2014 625,000 1,144,078
724,170
237,367
551,650 1,306,618

President and
Chief Executive Officer

2013 600,000
2012 525,000

Bonnie C. Lind . . . . . . . . . . . . 2014 346,000
2013 330,000
2012 330,000

Senior Vice President, Chief
Financial Officer and Treasurer

Steven S. Heinrichs . . . . . . . . . . 2014 310,000
2013 290,000
2012 290,000

Senior Vice President, General
Counsel and Secretary

Julie A. Schertell

Senior Vice President
Fine Paper & Packaging and
Technical Products U.S.

. . . . . . . . . . . 2014 336,000
2013 300,000
2012 280,000

Armin S. Schwinn(6) . . . . . . . . . 2014 285,643
2013 323,501
2012 297,343

Senior Vice President, and
Managing Director—Neenah
Germany

315,685
197,175
259,600

245,533
150,570
197,945

266,430
143,400
175,230

156,723
100,380
120,065

65,268
65,348
53,592

50,778
49,972
40,600

55,062
47,089
36,540

32,382
32,674
30,229

827,500
501,600
653,231

314,036
189,668
322,616

256,525
151,527
257,741

233,251
189,000
327,950

181,669
112,578
113,226

Earnings
($)(4)

—
—
—

695,665
77,002
595,585

—
—
—

561,476
219,584
314,378

All Other
Compensation
($)(5)

101,590
111,986
88,503

13,079
8,883
9,263

41,951
49,598
38,761

46,385
51,685
37,582

7,968
9,024
8,662

Total
($)

2,934,670
2,175,123
3,125,002

1,749,733
868,076
1,570,656

904,787
691,666
825,047

937,128
731,174
857,302

1,225,861
797,741
878,847

(1) Amounts shown reflect the aggregate grant date fair value with respect to performance share units, restricted stock units

and restricted stock granted pursuant to our Omnibus Plan, all disregarding any estimates of forfeitures related to service-
based vesting conditions. The amounts for represent the grant date fair value of the awards on the date of the grant in
accordance with ASC 718. The grant date fair value of the stock awards is equal to the fair market value of the underlying
common stock on the date of grant. See Note 8 to the audited Financial Statement included in our 2014 Annual Report on
Form 10-K for the assumptions used in valuing the performance share units.

(2) Amounts shown reflect the aggregate grant date fair value with respect to stock options granted pursuant to our Omnibus

Plan, disregarding any estimates of forfeitures related to service-based vesting conditions. The amounts represent grant date
fair value of the options on the date of the grant in accordance with ASC 718. The grant date fair value of the option
awards is determined using the Black-Scholes option valuation model. See Note 8 to the audited Financial Statement
included in our 2014 Annual Report on Form 10-K for the assumptions used in valuing the stock options. For
Mr. O’Donnell in 2012 this amount includes $1,193,750 for the value of the special option grant of 125,000 options
discussed in the Company’s 2013 Proxy Statement in section titled ‘‘2012 CEO Special Option Grant’’, The exercise price of
the options is $24.09, which is the closing price of the company stock on the date of grant, January 25, 2012. 100% of the
options will be earned, vest and be exercisable on December 31, 2016 if, during the 5-year period from the Grant Date to
the Vesting Date, Neenah Stock achieves annualized total shareholder return (‘‘TSR’’) of 11% or above, but if 100% of the
options have not been earned as set out above, (i) 25% of the options will nonetheless have been earned and will vest and
be exercisable on December 31, 2016 if, during the time period from the Grant Date to a measurement date occurring at
the end of the last 90 trading days of 2014, Neenah Stock achieves annualized TSR of 11% or above, and (ii) 25% of the
options will nonetheless have been earned and will vest and be exercisable on December 31, 2016 if, during the time period
from the Grant Date to a measurement date occurring at the end of the last 90 trading days of 2015, Neenah Stock
achieves annualized TSR of 11% or above. All options that are earned as set out above will fully vest and become
exercisable on December 31, 2016, and have a 10-year term ending December 31, 2021. All options which have not been
earned as set out above by December 31, 2016 shall expire and terminate. The material conditions to vesting and exercise
are set forth in greater detail in the Form 8-K filed by the company dated January 31, 2012.

(3) Amounts shown reflect annual performance bonuses earned in the fiscal year and paid in the following year, and are

described in detail in the portion of our Compensation Discussion and Analysis, captioned ‘‘2014 Annual Performance
Bonus Awards.’’

(4) Amounts shown reflect the aggregate change during the year in the actuarial present value of accumulated benefit under

our Pension Plan and Supplemental Pension Plan. The large variability in value year-to-year is caused, for the most part, by
changes in the discount rates used to calculate the value from year to year, and not any increase or change in the pension
plan for any individual named executive officer. Messrs. Heinrichs, O’Donnell and Ms. Schertell do not participate in any of
the defined pension plans.

(5)

‘‘All Other Compensation’’ includes Neenah’s contribution to the 401(k) account of each of our named executive officers
except Mr. Schwinn. The amounts shown for Messrs. Heinrichs, O’Donnell and Ms. Schertell also include Neenah’s
contribution to their accounts in the Retirement Contribution Plan and Supplemental Retirement Contribution Plan. The
amounts shown for Ms. Lind and Mr. Heinrichs include expenses for an annual physical. The totals shown for
Messrs. O’Donnell, Heinrichs, and Ms. Schertell in 2014, 2013, and 2012 include expenses for tax preparation and financial
planning. All amounts shown for Mr. Schwinn are for an annual car allowance.

31OCT201109101132

(6) Mr. Schwinn’s compensation has been converted from Euros to US Dollars as follows; December 31, 2012 conversion of
Euros to US Dollars at 1 to 1.3215, and December 31, 2013 conversion of Euro to US Dollars at 1 to 1.3766, and
December 31, 2014 conversion of Euros to US Dollars at 1 to 1.2155.

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

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2014 Grants of Plan Based Awards

The following table contains information relating to the plan based awards grants made in 2014 to

our named executive officers under the Omnibus Plan and is intended to supplement the 2014
Summary Compensation Table listed above.

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)

Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)

All Other
Option
Awards
(3)

Grant Date
Fair
Exercise
Number of or Base
Value of
Securities Price of Stock and
Underlying Option
Award
($/SH)

Option
Awards
($)

(#)

Name and
Principal Position

Plan

Grant
Date

John P. O’Donnell .

.
President and Chief
Executive Officer

MIP 01/28/2014
Performance Units 01/28/2014
Stock Options 01/28/2014

Bonnie C. Lind .

.
Senior Vice President,
Chief Financial Officer
and Treasurer

MIP 01/28/2014
Performance Units 01/28/2014
Stock Options 01/28/2014

Steven S. Heinrichs .

.
Senior Vice President,
General Counsel and
Secretary

MIP 01/28/2014
Performance Units 01/28/2014
Stock Options 01/28/2014

Julie A. Schertell

.
Senior Vice President,
and President—Fine
Paper & Packaging and
Technical Products U.S.

MIP 01/28/2014
Performance Units 01/28/2014
Stock Options 01/28/2014

Threshold Target Maximum Threshold Target Maximum Options
(#)

(#)

($)

500,000 1,000,000

6,132

15,330

30,660

195,250

390,500

1,692

4,230

8,460

155,000

310,000

1,316

3,290

6,580

168,000

336,000

1,428

3,570

7,140

18,770

42.82

5,180

42.82

4,030

42.82

4,370

42.82

1,144,078
236,502

315,365
65,268

245,533
50,778

266,430
55,062

Armin S. Schwinn .

.
Senior Vice President,
Managing Director—
Neenah Germany

MIP 01/28/2014
Performance Units 01/28/2014
Stock Options 01/28/2014

118,935

297,338

840

2,100

4,200

2,570

42.82

156,723
32,382

(1)

(2)

Reflects the range of potential annual incentive bonus payments that could have been earned by each named executive officer under
Neenah’s MIP in 2014. The actual bonuses earned in 2014 are reflected in the Summary Compensation Table above under the caption
‘‘Non-Equity Incentive Plan Compensation.’’ For more information regarding annual incentive bonus opportunities, see the discussion in the
Compensation Discussion and Analysis. The value of Mr. Schwinn’s incentive bonus payment has been converted from Euros to US Dollars
using a December 31, 2014 conversion of Euro to US Dollars at 1 to 1.2155.

Reflects the range of potential performance share units that may be earned by each named executive officer, based on the Company’s level
of achievement of performance goals in 2014 and total shareholder return relative to a peer group for the performance period ending
December 31, 2014. For more information regarding the performance share units, including how the number of performance share units
awarded was determined and the vesting terms applicable to such units, see the discussion in the Compensation Discussion and Analysis.
Outstanding restricted share units receive dividends at the same rate as other stockholders.

(3)

The stock options vest as to one-third of the shares on each of the first three anniversaries of the grant date.

Outstanding Equity Awards at 2014 Fiscal Year-End

The following table sets forth information concerning outstanding equity awards for our named executive

officers as of December 31, 2014.

or Other
Rights That
Have Not
Vested ($)

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Option Awards

Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised Option

31OCT201109101132

Stock Awards

Equity
Incentive

Equity
Incentive
Plan Awards:

Plan Awards: Market or

Number of
Unearned

Payout Value
of Unearned
Shares, Units Shares, Units

Number of
Number of
Securities
Securities
Underlying
Underlying
Unexercised Unexercised
Options (#) Options (#)
Exercisable Unexercisable Options (#) Price ($)

Number of
Shares or Market
Value of
Units or
shares or Rights That
Stock That
Option
Units of
Exercise Expiration Have Not
Stock
Date

Have Not
Vested

Unearned

or Other

Vested

Name and Principal Position

John P. O’Donnell

. . . . . . . . . . .

President and Chief
Executive Officer

700
700
0
0
0
0

0
0
4,634
125,000
16,467
18,770

0
0
0
0
0
0

7.41(1) 01/28/2019
8.99(2) 07/28/2019
24.09(4) 01/24/2022
24.09(5) 01/24/2022
31.23(6) 01/28/2023
42.82(7) 01/27/2024

Bonnie C. Lind . . . . . . . . . . . . .

Senior Vice President,
Chief Financial Officer
and Treasurer

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

19.25(3) 01/27/2021
24.09(4) 01/24/2022
31.23(6) 01/29/2023
42.82(7) 01/27/2024

0
2,201
4,534
5,180

2,563
0
0
0

0
0
0
0

20,200(8)
15,330(9)

863,954
1,144,078

Steven S. Heinrichs . . . . . . . . . . .

Senior Vice President,
General Counsel and
Secretary

1,901
3,332
1,733
0

Julie A. Schertell

. . . . . . . . . . . .

Senior Vice President,
—Fine Paper & Packaging and
Technical Products U.S.

Armin S. Schwinn,

. . . . . . . . . . .

Senior Vice President,
Managing Director
—Neenah Germany

0
0

0
0
0

0
1,668
3,467
4,030

1,601
3,000
4,900
4,370

1,034
2,267
2,570

0
0
0
0

0
0

0
0
0

19.25(3) 01/27/2021
24.09(4) 01/24/2022
31.23(6) 01/28/2023
42.82(7) 01/27/2024

24.09(4) 01/24,2022
31.23(6) 01/28/2023
42.82(7) 01/27/2024

5,500(8)
4,230(9)

235,235
315,685

4,200(8)
3,290(9)

179,634
245,533

4,000(8)
3,570(9)

171,080
266,429

2,800(8)
2,100(9)

235,791
119,756

(1)

(2)

(3)

(4)

(5)

(6)

These options were granted on January 29, 2009, and vested as follows: 33.34% on January 29, 2010 and 33.33% on both January 29, 2011 and
January 29, 2012. These options were converted to stock appreciation rights on July 1, 2014.

These options were granted on July 28, 2009, and vested as follows: 33.34% on July 28, 2010 and 33.33% on both July 28, 2011 and July 28, 2012.
These options were converted to stock appreciation rights on July 1, 2014.

These options were granted on January 28, 2011 and vested as follows: 33.34% on January 28, 2012 and 33.33% on both January 28, 2013 and
January 28, 2014. These options were converted to stock appreciation rights on July 1, 2014.

These options were granted on January 25, 2012 and vest as follows: 33.34% on January 25, 2013 and 33.33% on both January 25, 2014 and
January 25, 2015. These options were converted to stock appreciation rights on July 1, 2014.

These options were granted to Mr. O’Donnell on January 25, 2013 and vest as further described in the CD&A section of the Company’s 2012
Proxy Statement under the title ‘‘2012 CEO Special Option Grant’’ and footnote 2 to the Summary Compensation Table in this Proxy Statement.
These options were converted to stock appreciation rights on July 1, 2014.

These options were granted on January 29, 2013, and vest as follows: 33.34% on January 29, 2014 and 33.33% on both January 29, 2015 and
January 29, 2016. These options were converted to stock appreciation rights on July 1, 2014.

(7)

(8)

(9)

These options were granted on January 28, 2014, and vest as follows: 33.34% on January 28, 2015 and 33.33% on both January 28, 2016 and
January 28, 2017. These options were converted to stock appreciation rights on July 1, 2014.

These performance share units target levels were set on January 29, 2013 and were earned and vested on December 31, 2013, based on the
Company’s achievement of performance goals relating to return on invested capital and total shareholder return during the performance period
ending December 31, 2013. The awards were granted at 123% of target as disclosed in the CD&A Section of the Company’s 2014 Proxy Statement
and the market value disclosed in this table reflects the sizing of these awards. These performance share units are subject to a two year hold
requirement after vesting.

These performance share units target levels were set on January 28, 2014 and were earned and vested on December 31, 2014, based on the
Company’s achievement of performance goals relating to return on invested capital and total shareholder return during the performance period
ending December 31, 2014. The awards were granted at 184% of target as disclosed in the CD&A Section of this Proxy Statement and the market
value disclosed in this table reflects the sizing of these awards. These performance share units are subject to a two year hold requirement after
vesting.

Option Exercises and Stock Vested in 2014

The following table sets forth information regarding options exercised and stock awards vested for our named

executive officers in 2014.

Option Awards

31OCT201109101132

Stock Awards(2)

Name

Number of
Shares
Acquired on
Exercise (#)

John P. O’Donnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonnie C. Lind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Steven S. Heinrichs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Julie A. Schertell
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Armin S. Schwinn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106,699
32,265
8,850
—
6,050

(1) Reflects the market value of the shares on the vesting date.

Value Realized
on Exercise ($)

3,963,690
1,061,421
135,334
—
109,905

Number of
Shares
Acquired on
Vesting (#)

25,330
11,920
9,089
8,046
5,735

Value Realized
on Vesting ($)(1)

1,526,639
718,418
547,794
484,932
345,648

(2) These shares represent the vesting of the Performance Share Units granted to each of our named executive officer

Pension Plans

in January of 2012, which vested on December 31, 2014, after a one year performance and two year holding period.
NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT
The Neenah Paper Pension Plan is a broad-based, tax-qualified defined benefit pension plan, which provides a
benefit upon retirement to eligible employees of the Company. The Neenah Paper Supplemental Pension Plan is a
non-qualified defined benefit pension plan which covers pay and benefits above the qualified limits in the Pension
Plan. The compensation covered by these defined benefit plans includes the salary and non-equity incentive
payments set forth above in the Summary Compensation Table. Under our Pension Plan an employee is entitled to
receive an annual standard benefit based on years of service and integrated with social security benefits. The Code
generally places limits on the amount of pension benefits that may be paid from the tax qualified Pension Plan.
However, we will pay any participant in our Supplemental Pension Plan the amount of the benefit payable under
the Pension Plan that is limited by the Code.

Retirement benefits for participants in the Pension Plan who have at least five years of service may begin on
a reduced basis at age 55 or on an unreduced basis at the normal retirement age of 65. Unreduced benefits also
are available (i) for participants with ten years of service at age 62 or as early as age 60 with thirty years of service
and (ii) as described below, for certain involuntary terminations. Ms. Lind, our Chief Financial Officer, is eligible
for early retirement on a reduced basis. None of our other named executive officers currently is eligible for
retirement under our Pension Plan or Supplemental Pension Plan.

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The normal form of benefit is a single-life annuity payable monthly and other optional forms of
benefit are available including a joint and survivor benefit. Accrued benefits under our Supplemental
Pension Plan will, at the participant’s option, either be paid as monthly payments in the same form as
the retirement payments from the Pension Plan or as an actuarially determined lump sum payment
upon retirement after age 55.

Mr. Schwinn participates in an individual pension agreement with the Company which provides

pension benefits based on earnings and service, an additional pension plan which provides benefits
based on the Company’s and the employee’s contribution, and a supplemental executive retirement
pension agreement, which provides benefits in addition to the two base plans if certain amounts are
exceeded (collectively, the ‘‘German Pension Plans’’).

For a discussion of how we value these obligations and the assumption we use in that valuation,

see Note 7 to our financial statements included in our 2014 Annual Report on Form 10-K. For
purposes of determining the present value of accumulated benefits, we have used the normal
retirement age under the plans, which is 65.

2014 Pension Benefits

The following table sets forth information as of December 31, 2014 regarding accumulated benefits

to our named executive officers under our Pension Plan, Supplemental Pension Plan and German
Pension Plans.

Name

Plan Name

Number of Years
Credited Service(1)

Present Value of
Accumulated Benefit ($)(2)

Bonnie C. Lind . . . . . . . . . . . Neenah Paper Pension Plan

33.0

1,477,164

Armin S. Schwinn(3) . . . . . . .

Neenah Paper
Supplemental
Pension Plan

German Pension Plan
German Additional
Pension Plan
Gessner Pension Plan

33.0

19.0

19.0
19.0

1,936,473

1,335,764

112,142
292,160

(1) Includes years of service credited for employment with Kimberly-Clark prior to Neenah’s spin-off

for Ms. Lind and years of service for Mr. Schwinn related to employment with companies acquired
by Neenah as part of its acquisition of Neenah Germany.

(2) For a description of the assumptions applied in determining the present value of accumulated
benefits reported above, see Note 7 to the audited Financial Statements included in our 2014
Annual Report on Form 10-K.

(3) Mr. Schwinn participates exclusively in German Pension Plans. The value of these plans has been

converted from Euros to US Dollars using a December 31, 2014 conversion of Euro to US Dollars
at 1 to 1.2155.

2013 Nonqualified Deferred Compensation

The Supplemental RCP is a nonqualified excess benefit and supplemental retirement plan pursuant

to which the Company provides additional retirement benefits to certain highly compensated
employees. These Company contributions are intended to provide contributions to those individuals
whose benefits under tax-qualified programs are restricted by the limitations permitted by the Internal
Revenue Code. Contributions are held for each participant in either an excess benefit or supplemental
benefit unfunded separate account. Participant accounts are credited with earnings, gains and losses

based on the rate of return of investment funds selected by the participant, which the participant may
elect to change in accordance with the participant’s elections under the Supplemental RCP. Payments
can be tied to termination of employment, including retirement, and would be paid in lump sum. If a
participant dies before receiving the full value of their account balance, the participant’s beneficiary
would receive the remainder of the benefit in one lump sum payment. All accounts would be
immediately distributed upon a change in control, subject to a 10% reduction in a current participant’s
account and a 5% reduction in an account for a retired participant. The Deferred Compensation Plan
enables our executive officers to defer a portion of annual cash compensation (base salary and
non-equity awards under our MIP). This plan is intended to assist our executive officers in maximizing
the value of the compensation they receive from the Company and assist in their retention. Named
executive officer participation in the Supplemental RCP and the Deferred Compensation Plan in 2014
is as follows:

31OCT201109101132

Name

Executive
Contributions
in last
Fiscal Year(1)

Company
Contributions
in last
Fiscal Year(1)

Aggregate
Earnings
in last
Fiscal Year

Aggregate
Withdrawal/
Distributions

John P. O’Donnell . . . . . . . . . . . . . . . .

$71,494

$(15,980)

President and Chief
Executive Officer

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

$ 8,588

$15,114

Steven S. Heinrichs . . . . . . . . . . . . . . .

Senior Vice President,
General Counsel and Secretary

Julie A. Schertell . . . . . . . . . . . . . . . . .

$19,875

$ 5,365

Senior Vice President,
—Fine Paper & Packaging and

Technical Products U.S.

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Aggregate
Balance
at Last
Fiscal Year

$342,355

$139,993

$ 95,111

(1) None of our named executive officers elected to defer compensation in 2014 under the Deferred

Compensation Plan

(2) Amounts are reported as 2014 compensation in the ‘‘All Other Compensation’’ column of the

Summary Compensation Table.

Potential Payments Upon Termination

Except for Mr. Schwinn as noted in footnote 8 below, we do not have employment agreements or
other individual arrangements with our named executive officers that provide for specific benefits upon
a termination of employment. In general, upon termination of employment, an executive officer will
receive compensation and benefits for which he or she has already vested. This includes accrued but
unpaid salary, accrued and unused vacation pay, and payments and benefits accrued under our broad-
based benefit programs. The following section describes certain payments and benefits that would be
payable to our named executive officers in the event of their involuntary termination in connection with
a change-in-control of Neenah, or other involuntary termination.

Involuntary Termination in Connection with a Change in Control

The Executive Severance Plan covers designated officers, including all of our named executive
officers except Mr. Schwinn, and provides certain severance benefits upon termination of employment
following a change in control of Neenah. Upon termination of the officer’s employment by Neenah
without ‘‘cause’’ or by the officer for ‘‘good reason’’ (as defined in the Executive Severance Plan)
within the two-year period following a change in control or a termination by us without ‘‘cause’’ during

the one-year period preceding such a change in control, the officer will be entitled to a lump-sum cash
payment equal to the sum of: (i) two times the sum of his annual base salary and targeted annual
bonus; (ii) any qualified retirement plan benefits forfeited as a result of such termination; (iii) the
amount of retirement benefits such officer would have received under the qualified and supplemental
retirement plans but for his or her termination for the two-year period following his or her termination;
(iv) the cost of medical and dental COBRA premiums for a period of two years; and (v) a cash
settlement of any accrued retiree medical credits. In addition, the officer will be eligible to receive
outplacement services for a period of two years (up to a maximum cost to us of $50,000). Payment of
the benefits under the Executive Severance Plan is subject to the applicable executive executing an
agreement that includes restrictive covenants and a general release of claims against us. The Executive
Severance Plan has been designed to limit exposure for any ‘‘parachute’’ excise taxes; but if such excise
taxes apply, we will reimburse the officer on an after-tax basis for any excise taxes incurred by that
executive due to payments received under the Executive Severance Plan.

The following table shows the payments that would be made to each of our named executive

officers under the Executive Severance Plan in connection with a change-in-control termination.

Payments(8)

John P.
O’Donnell

Bonnie C.
Lind

Steven S.
Heinrichs

Julie A.
Schertell

Severance(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prorated Non-Equity Incentive Payment(2) . . . . . . . . .
Unvested Stock Option Spread(3) . . . . . . . . . . . . . . . .
Unvested Restricted Stock(4) . . . . . . . . . . . . . . . . . . .
LTCP Payment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement Benefit Payment(5) . . . . . . . . . . . . . . . . .
Welfare Benefit Values(6) . . . . . . . . . . . . . . . . . . . . .
Outplacement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excise Tax & Gross-Up(7) . . . . . . . . . . . . . . . . . . . . .
Aggregate Payments . . . . . . . . . . . . . . . . . . . . . . . . . .

2,250,000
500,000
5,495,863
3,197,504
0
193,320
39,204
50,000
3,839,715
15,565,606

1,069,000
189,750
301,634
876,808
0
730,333
39,204
50,000
0
3,257,229

930,000
155,000
231,295
676,230
0
66,195
39,204
50,000
0
2,147,924

1,008,000
168,000
225,391
692,442
0
74,565
39,204
50,000
0
2,257,602

(1) Severance payment equal to two times the sum of the executive’s annual base salary at the time of

the termination plus the target bonus.

(2) The Target Non-Equity Incentive Payment is prorated for the number of days in the calendar year

prior to termination due to assumed termination on December 31, 2014.

(3) Total value of unvested stock option spread and unvested restricted stock that would become

vested upon a change in control assuming a share price of $60.27 and a change-in-control date of
December 31, 2014.

(4) All unearned target performance share units vest upon a change-in-control event. Amounts are

based on target 2013 and 2014 performance share unit grants.

(5) Actuarial value attributable to retirement benefits.

(6) Estimated value associated with the continuation of life insurance, medical, dental, and disability

benefits for two years post-termination.

(7) Gross-up payments covering the full cost of applicable excise taxes under Code sections 280G and

4999. In 2011 the Compensation Committee closed the plan to new participants and determined
that it would phase out the excise tax gross up provision in the Executive Severance Plan for the
current named executive officers.

(8) Mr. Schwinn does not participate in the Neenah Paper Executive Severance Plan. He is covered by
a separate employment agreement which provides a twelve month notice period from the end of

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the calendar year. Mr. Schwinn’s equity grants contain change in control provisions that provide
for vesting and payments for his 2013 and 2014 LTCP performance shares. The value at the end of
2014 was $442,338. The equity awards contain provisions that are similar to the U.S. provisions in
the case of illness, accident or death. In addition, Mr. Schwinn’s employment contract provides for
salary continuation to him or his surviving family members for a period of three months in the
case of illness, accident or death.

31OCT201109101132

Other Involuntary Termination

The Neenah Paper Severance Pay Plan (the ‘‘Severance Pay Plan’’) provides regular severance to
our executive officers. Participation in the Severance Pay Plan is conditioned upon each participant’s
execution of a noncompete agreement. In the event of a qualifying termination, the Severance Pay Plan
generally provides officers (including named executive officers) severance equal to one year of base
salary.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION

The following directors served on the Compensation Committee during 2014: Messrs. Moore,

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

McGovern and Dr. Wood. None of the members of the Compensation Committee was an officer or
employee of Neenah during 2014 or any time prior thereto, and none of the members had any
relationship with Neenah during 2014 that required disclosure under Item 404 of Regulation S-K. None
of our executive officers serves as a member of the board of directors or compensation committee of
any entity that has one or more of its executive officers serving as a member of our Board of Directors
or Compensation Committee.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act and rules and regulations of the SEC thereunder require our
directors, officers and persons who beneficially own more than 10% of our common stock, as well as
certain affiliates of such persons, to file initial reports of their ownership of our common stock and
subsequent reports of changes in such ownership with the SEC. Directors, officers and persons owning
more than 10% of our common stock are required by SEC rules and regulations to furnish us with
copies of all Section 16(a) reports they file. Based solely on our review of the copies of such reports
received by us and on information provided by the reporting persons, we believe that during 2014, our
directors, officers and owners of more than 10% of our common stock complied with all applicable
filing requirements, except that Mr. Moore filed a Form 4 late on March 31, 2015 representing
restricted stock units granted in lieu of a quarterly cash dividend granted in 2014 and 2015.

AUDIT COMMITTEE REPORT

The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities
relating to the accuracy and integrity of Neenah’s financial reporting, including the performance and
the independence of Neenah’s independent registered public accounting firm, Deloitte & Touche LLP
(‘‘Deloitte’’). On November 30, 2004, our Board of Directors adopted an Audit Committee Charter,
which sets forth the responsibilities of the Audit Committee. The Audit Committee reviewed and
discussed with management and Deloitte our audited financial statements for the fiscal year ended
December 31, 2014. The Audit Committee also discussed with Deloitte the matters required to be
discussed under Statement on Auditing Standards No. 61, as amended (Codification of Statements on
Auditing Standards, AU § 380).

The Audit Committee received the written disclosures and other communications from Deloitte
that are required by the applicable requirements of the Public Company Accounting Oversight Board
regarding Deloitte’s communications with the Audit Committee, which included independence
considerations. The Audit Committee reviewed the audit and non-audit services provided by Deloitte
for the fiscal year ended December 31, 2014 and determined to engage Deloitte as the independent
registered public accounting firm of Neenah for the fiscal year ending December 31, 2015. The Audit
Committee also received and reviewed a report by Deloitte outlining communications required by
NYSE listing standards describing: (1) the firm’s internal quality control procedures; (2) any material
issue raised by a) the most recent internal quality control review of the firm, b) peer review of the firm,
or c) any inquiry or investigation by governmental or professional authorities, within the preceding five
years, respecting one or more independent audits carried out by the firm, and any steps taken to deal
with issues; and (3) (to assess Deloitte’s independence) all relationships between Deloitte and us.

Based upon the Audit Committee’s review of the audited financial statements and the discussions

noted above, the Audit Committee recommended that the Board of Directors include the audited
financial statements for the year ended December 31, 2014 in our Annual Report on Form 10-K for
the year ended December 31, 2014 for filing with the SEC.

Audit Committee:

Timothy S. Lucas, Chairman
Philip C. Moore
Stephen M. Wood

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RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM (ITEM 3)

The Audit Committee of our Board of Directors, in accordance with its charter and authority

delegated to it by the Board, has appointed the firm of Deloitte & Touche LLP to serve as our
independent registered public accounting firm for the fiscal year ending December 31, 2015. As a
matter of good corporate practice, the Board has directed that such appointment be submitted to our
stockholders for ratification at the Annual Meeting. Deloitte & Touche LLP has served as our
independent registered public accounting firm since our spin-off from Kimberly-Clark Corporation in
November 2004 and is considered by our Audit Committee to be well qualified. If the stockholders do
not ratify the appointment of Deloitte & Touche LLP, the Audit Committee will reconsider the
appointment. Even if the stockholders ratify the appointment, the Audit Committee, in its discretion,
may appoint a different independent auditor at any time during the year if the Audit Committee
determines that such a change would be in the best interests of Neenah and its stockholders.

31OCT201109101132

Representatives of Deloitte & Touche LLP will be present at the Annual Meeting and will have an

opportunity to make a statement if they desire to do so. They also will be available to respond to
appropriate questions from stockholders.

NOTICE OF 2013 ANNUAL MEETING
AND
The Audit Committee and the Board unanimously recommend that the stockholders vote ‘‘FOR’’
PROXY STATEMENT

the proposal to ratify the appointment of Deloitte & Touche, LLP as our independent registered public
accounting firm.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FEES AND SERVICES

Audit Fees

Aggregate fees for professional services rendered for us by Deloitte & Touche LLP, the member
firms of Deloitte Touche and Tohmatsu and their respective affiliates (‘‘Deloitte & Touche’’) as of or
for the fiscal years ended December 31, 2014 and December 31, 2013 are set forth below. The
aggregate fees included in the Audit category are fees billed for the fiscal year for the integrated audit
of our annual financial statements and review of statutory and regulatory filings. The aggregate fees
included in each of the other categories are fees billed in the fiscal years.

Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-Related Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,711,455
0
66,355
0

$1,664,982
0
0
0

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,777,810

$1,664,982

2014

2013

Audit Fees were for professional services rendered for the audit of our annual consolidated
financial statements including the audit of our internal control over financial reporting and review of
quarterly reports on Form 10-Q filed by us with the SEC.

Tax Fees were for professional services rendered to assist us with compliance with the revised

Tangible Property Regulations of the Internal Revenue Service.

Policy on Audit Committee Pre-Approval

To avoid potential conflicts of interest in maintaining auditor independence, the law prohibits a

publicly-traded company from obtaining certain non-audit services from its independent registered
public accounting firm. The law also requires the audit committee of a publicly traded company to
pre-approve other services provided by the independent registered public accounting firm. Pursuant to
its charter, the Audit Committee’s policy is to pre-approve all audit and permissible non-audit services
provided by the independent registered public accounting firm. These services may include audit
services, audit-related services, tax services and other services. In its pre-approval of non-audit services,
the Audit Committee considers, among other factors, the possible effect of the performance of such
services on the auditor’s independence. The Audit Committee may delegate pre-approval authority to a
member of the Audit Committee. The decisions of any Audit Committee member to whom
pre-approval authority is delegated shall be presented to the full Audit Committee at its next scheduled
meeting. The Audit Committee pre-approved all services performed by the independent registered
public accounting firm in fiscal 2014 and fiscal 2013, including those services described in the table
above under the captions ‘‘Audit Fees’’.

STOCKHOLDERS’ PROPOSALS FOR 2016 ANNUAL MEETING

Proposals of stockholders, excluding nominations for the Board, intended to be presented at the

2016 Annual Meeting should be submitted by certified mail, return receipt requested, and must
be received by us at our executive offices in Alpharetta, Georgia, on or before the date that is
120 calendar days prior to the first anniversary of the date that this Proxy Statement is released to
stockholders, to be eligible for inclusion in our Proxy Statement and form of proxy relating to that
meeting and to be introduced for action at the 2016 Annual Meeting. In the event that the date of the
2016 Annual Meeting is changed more than thirty days from the date of this year’s meeting, notice by
stockholders should be received no later than the close of business on the later of the 150th calendar
day prior to the 2016 meeting or the 10th calendar day on which public announcement of the date of
such meeting is first made.

Any stockholder proposal must be in writing and must comply with Rule 14a-8 under the Exchange

Act and must set forth (i) a description of the business desired to be brought before the meeting and
the reasons for conducting the business at the meeting; (ii) the name and address, as they appear on
our books, of the stockholder submitting the proposal; (iii) the class and number of shares that are
beneficially owned by such stockholder; (iv) the dates on which the stockholder acquired the shares;
(v) documentary support for any claim of beneficial ownership as required by Rule 14a-8; (vi) any
material interest of the stockholder in the proposal; (vii) a statement in support of the proposal; and
(viii) any other information required by the rules and regulations of the SEC. Stockholder nominations
for the Board must comply with the procedures set forth above under ‘‘Corporate Governance—
Nomination of Directors.’’

The failure of a stockholder to deliver a proposal in accordance with the requirements of the

preceding paragraph may result in it being excluded from our Proxy Statement and ineligible for
consideration at the 2016 Annual Meeting. Further, the submission of a proposal in accordance with
the requirements of the preceding paragraph does not guarantee that we will include it in our Proxy
Statement or that it will be eligible for consideration at the 2016 Annual Meeting. We strongly
encourage any stockholder interested in submitting a proposal to contact our Corporate Secretary in
advance of the submission deadline to discuss the proposal.

OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL
MEETING

Our Board knows of no matters other than those referred to in the accompanying Notice of

Annual Meeting of Stockholders which may properly come before the Annual Meeting. However, if any
other matter should be properly presented for consideration and vote at the Annual Meeting or any
adjournment(s) thereof, it is the intention of the persons named as proxies on the enclosed form of
proxy card to vote the shares represented by all valid proxy cards in accordance with their judgment of
what is in the best interest of Neenah and its stockholders.

31OCT201109101132

HOUSEHOLDING OF NOTICE OF INTERNET AVAILABILITY OF
PROXY MATERIALS

The SEC’s proxy rules permit companies and intermediaries, such as brokers and banks, to satisfy

delivery requirements for Notices, and if applicable, the proxy statements and annual reports, with
respect to two or more stockholders sharing the same address by delivering a single Notice to those
stockholders. This method of delivery, often referred to as householding, should reduce the amount of
duplicate information that stockholders receive and lower printing and mailing costs for companies.
Neenah and certain intermediaries are householding Notices, and if applicable, proxy statements and
annual reports, for shareholders of record in connection with its 2015 Annual Meeting. This means
that:

NOTICE OF 2013 ANNUAL MEETING
AND
PROXY STATEMENT

(cid:127) Only one Notice, and if applicable, proxy statement and annual report, will be delivered to

multiple stockholders sharing an address unless you notify your broker or bank to the contrary;

(cid:127) You can contact Neenah by calling 678-566-6500 or by writing to INVESTOR RELATIONS,
Neenah Paper, Inc., at 3460 Preston Ridge Road, Preston Ridge III, Suite 600, Alpharetta,
Georgia 30005 to request a separate copy of the Notice, and if applicable, proxy statement and
annual report, for the 2015 Annual Meeting and for future meetings or, if you are currently
receiving multiple copies, to receive only a single copy in the future or you can contact your
bank or broker to make a similar request; and

(cid:127) You can request delivery of a single copy of the Notice, and if applicable, proxy statement and
annual report, from your bank or broker if you share the same address as another Neenah
shareholder and your bank or broker has determined to household proxy materials.

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Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.
UNITED STATES
The following tables present further information about our businesses by geographic area (dollars in millions):
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

Year Ended December 31,

2012

2011

2010

(Mark One)

Net sales
United States
Europe

(cid:31) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

Consolidated

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014
OR
(cid:30) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

December 31,

2012

2011

2010

$543.4
265.4

$416.2
279.8

$413.6
244.1

$808.8

$696.0

$657.7

Total Assets
EXCHANGE ACT OF 1934
United States
Canada
Europe

For the transition period from

Consolidated

Commission file number 001-32240
NEENAH PAPER, INC.
(Exact name of registrant as specified in its charter)
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.

20-1308307
(I.R.S. Employer
Identification No.)

$610.7

$565.1

$606.7

Delaware
(State or other jurisdiction of
incorporation or organization)
3460 Preston Ridge Road
Alpharetta, Georgia
(Address of principal executive offices)

Raw Materials

30005
(Zip Code)

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

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0
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K

Registrant’s telephone number, including area code: (678) 566-6500

Securities registered pursuant to Section 12(b) of the Act:

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

Common Stock — $0.01 Par Value
Preferred Stock Purchase Rights

Securities registered pursuant to Section 12(g) of the Act: None

Name of Each Exchange on Which Registered

New York Stock Exchange

Title of Each Class

Indicate by check mark if the registrant is a well-seasoned issuer, as defined in Rule 405 of the Securities

Act. Yes (cid:31) No (cid:30)

Act. Yes (cid:30) No (cid:31)

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such
files). Yes (cid:31) No (cid:30)

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:30)
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
smaller reporting company. See definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer,’’ and ‘‘smaller reporting company’’ in
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
Rule 12b-2 of the Exchange Act. (Check one):
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
Large accelerated filer (cid:31)
Smaller reporting company (cid:30)
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

Accelerated filer (cid:30)

Non-accelerated filer (cid:30)
(Do not check if a smaller
reporting company)

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:30) No (cid:31)
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
The aggregate market value of the registrant’s common stock held by non-affiliates on June 30, 2014 (based on the closing
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

stock price on the New York Stock Exchange) on such date was approximately $880,000,000.

As of February 13, 2015, there were 16,700,000 shares of the Company’s common stock outstanding.

Certain information contained in the definitive proxy statement for the Company’s Annual Meeting of Stockholders to be

held on May 21, 2015 is incorporated by reference into Part III hereof.

DOCUMENTS INCORPORATED BY REFERENCE

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TABLE OF CONTENTS
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

Page

The following tables present further information about our businesses by geographic area (dollars in millions):

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2012

2011

Year Ended December 31,

2010

$543.4
265.4

$416.2
279.8

$413.6
244.1

Net sales
United States
Europe

Consolidated

$808.8

$696.0

$657.7

Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . .
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . .
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$322.5
0.2
288.0

$286.4
0.3
278.4

December 31,

$610.7

$565.1

2012

2011

$308.9
0.1
297.7

$606.7

2010

Total Assets
United States
Canada
Europe

Consolidated

Part 1
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Part II
Item 5.

Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.

1
10
17
17
18
18

19
21
23
37
38
39
39
39

Part III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
40
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
41
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
41
Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . . .
business segment.
41
Certain Relationships and Related Transactions and Director Independence . . . . . . . . . . . . . .
41
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Raw Materials

Part IV
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
Exhibits and Financial Statement Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 15.
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

42
46

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Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

(This page has been left blank intentionally.)

PART I
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
In this report, unless the context requires otherwise, references to ‘‘we,’’ ‘‘us,’’ ‘‘our,’’ ‘‘Neenah’’ or the ‘‘Company’’
10 percent of our consolidated net sales.
are intended to mean Neenah Paper, Inc., its consolidated subsidiaries and predecessor companies.

The following tables present further information about our businesses by geographic area (dollars in millions):

Item 1. Business

Overview

Year Ended December 31,

2012

2011

2010

Consolidated

Net sales
United States
Europe

We are organized into two primary businesses: a performance-based technical products business and a premium
fine paper and packaging business (formerly known as the fine paper business). On January 1, 2015, we changed
$413.6
the name of our fine paper business to fine paper and packaging. The name change better reflects the increasing
244.1
importance, and plans for continued growth, of our premium packaging products.

$657.7
Our technical products business is a leading international producer of filter media for transportation, water and
other markets and saturated and coated substrates for industrial products backings and a variety of other end
markets. The business is focused on categories where we believe we are a market leader or have a competitive
2010
advantage, including, among others, transportation, water and other filter media, specialty tape, label, abrasive,
medical packaging and image transfer and customer-specific applications in furniture veneer backing and durable
$308.9
print and cover applications. Our customers are located in more than 70 countries. In July 2014, we purchased all
0.1
of the outstanding equity of Crane Technical Materials, Inc. from Crane & Co., Inc. The acquired Crane Technical
297.7
Materials business provides performance-oriented wet laid nonwovens media for filtration end markets as well as
$606.7
environmental, energy and industrial uses. Our technical products manufacturing facilities are located in Munising,
Michigan, Pittsfield, Massachusetts and near Munich and Frankfurt, Germany.

Total Assets
United States
Canada
Europe

$322.5
0.2
288.0

$286.4
0.3
278.4

$543.4
265.4

$416.2
279.8

Consolidated

December 31,

$610.7

$808.8

$696.0

$565.1

2012

2011

Raw Materials

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
We believe our fine paper and packaging business is the leading supplier of premium printing, packaging and
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
other high end specialty papers in North America. We are also focused on increasing our presence in international
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
markets. Our premium writing, text, cover and specialty papers are used in commercial offset and digital printing
business segment.
and imaging applications for corporate identity packages, invitations, personal stationery, premium labels and
luxury packaging. Our bright papers are used in applications such as direct mail, advertising inserts, scrapbooks
and marketing collateral. Our products include some of the most recognized and preferred fine paper brands and
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
we enjoy leading market positions in many of our product categories. We sell our products primarily to authorized
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
paper distributors, as well as through converters, specialty businesses and major retail customers. Our fine paper
from various suppliers. The technical products business purchases substantially all of its raw material requirements
and packaging manufacturing facilities are located in Appleton, Neenah and Whiting, Wisconsin.
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

Our corporate structure consists of Neenah Paper, Inc., and six direct wholly owned subsidiaries.

Company Structure

Neenah Paper, Inc. is a Delaware corporation that holds our trademarks and patents related to all of our U.S.
businesses (except Neenah Paper FVC, Inc), all of our U.S. inventory, the real estate, mills and manufacturing
assets associated with our fine paper and packaging operations in Neenah and Whiting, Wisconsin, and all of the
equity in our subsidiaries listed below. The common stock of Neenah is publicly traded on the New York Stock
Exchange under the symbol ‘‘NP.’’

Neenah Paper FVC, LLC is a Delaware limited liability company and wholly owned subsidiary of Neenah that
owns all of the equity of Neenah Paper FR, LLC. Neenah Paper FR, LLC is a Delaware limited liability company
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
that owns the real estate, mills and manufacturing assets associated with our fine paper and packaging operation
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
in Appleton, Wisconsin.
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
Neenah Paper International Holding Company, LLC is a Delaware limited liability company and wholly owned
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
subsidiary of Neenah that owns all of the equity of Neenah Paper International, LLC. Neenah Paper
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
International, LLC is a Delaware limited liability company that owns all of the equity of Neenah Germany GmbH
and in conjunction with Neenah Germany GmbH all of the equity of Neenah Services GmbH & Co. KG.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

F
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NPCC Holding Company LLC is a Delaware limited liability company and wholly owned subsidiary of Neenah
that owns all of the equity of Neenah Paper Company of Canada (‘‘Neenah Canada’’). Neenah Canada is a Nova
Scotia unlimited liability corporation that holds certain post-employment liabilities of our former Canadian
operations.

Neenah Paper International Finance Company BV is a private company with limited liability organized under the
laws of the Netherlands and a wholly owned subsidiary of Neenah that facilitates the financing of our international
operations.

Neenah Filtration, LLC is a Delaware limited liability company and wholly owned subsidiary of Neenah that owns
all of the equity of Neenah Technical Materials, Inc. (‘‘NTM’’). NTM is a Massachusetts corporation that owns all
of the real estate, mills and manufacturing assets associated with our technical materials business in Pittsfield.
Massachusetts.

History of the Businesses

Neenah was incorporated in April 2004 in contemplation of the spin-off by Kimberly-Clark Corporation
(‘‘Kimberly-Clark’’) of its technical products and fine paper businesses in the United States and its Canadian pulp
business (collectively, the ‘‘Pulp and Paper Business’’). We had no material assets or activities until Kimberly-
Clark’s transfer to us of the Pulp and Paper business on November 30, 2004. On that date, Kimberly-Clark
completed the distribution of all of the shares of our common stock to the stockholders of Kimberly-Clark (the
‘‘Spin-Off’’). Following the Spin-Off, we are an independent public company and Kimberly-Clark has no
ownership interest in us.

Technical Products. In 1952, we purchased what is now our Munising, Michigan mill. Subsequent to the purchase,
we converted the mill to produce durable, saturated and coated papers for sale and use in a variety of industrial
applications for our technical products business. In October 2006, we purchased the outstanding interests of
FiberMark Services GmbH & Co. KG and the outstanding interests of FiberMark Beteiligungs GmbH (collectively
‘‘Neenah Germany’’). The Neenah Germany assets consist of two mills located near Munich, Germany and a third
mill near Frankfurt, Germany, that produce a wide range of products, including transportation, beverage and other
filter media, nonwoven wall coverings, masking and other tapes, abrasive backings, and specialized printing and
coating substrates.

In July 2014, we purchased all of the outstanding equity of Crane Technical Materials, Inc. from Crane & Co., Inc.
for approximately $72 million. The acquired technical materials business provides performance-oriented wet laid
nonwovens media for water filtration end markets as well as environmental, energy and industrial uses. The
technical materials business has two manufacturing facilities in Pittsfield, Massachusetts.

Fine Paper and Packaging. The fine paper and packaging business was incorporated in 1885 as Neenah Paper
Company, which initially operated a single paper mill in Neenah, Wisconsin. We acquired the mill in 1956. In
1981, we purchased an additional mill located in Whiting, Wisconsin to increase the production capacity of the
fine paper and packaging business. In the late 1980s and early 1990s, we expanded the capacity of the fine paper
and packaging business by building two new paper machines at the Whiting mill, rebuilding two existing paper
machines at the Whiting mill and completing a major expansion of the Neenah facility with the installation of a
new paper machine, a new finishing center, a new customer service center and a distribution center expansion.

In March 2007, we acquired Fox Valley Corporation (now named Neenah Paper FVC, Inc.), which owned Fox
River Paper Company, LLC (‘‘Fox River,’’ now named Neenah Paper FR, LLC). The Fox River assets consisted of
four U.S. paper mills and various related assets, producing premium fine papers with well-known brands including
STARWHITE�, SUNDANCE�, ESSE� and OXFORD�. In integrating the operations of Fox River with those of
our existing fine paper and packaging mills, we closed three of the Fox River paper mills. We closed the
Housatonic mill, located near Great Barrington, Massachusetts in May 2007, the fine paper mill located in
Urbana, Ohio during the second quarter of 2008 and the fine paper mill located in Ripon, California in May 2009.

In January 2012, we purchased certain premium fine paper brands and other assets from Wausau Paper
Mills, LLC, a subsidiary of Wausau Paper Corp. (‘‘Wausau’’). In January 2013, we purchased certain premium
business paper brands from the Southworth Company (‘‘Southworth’’).

Former Pulp Operations. At the Spin-Off, our pulp operations consisted of mills located in Terrace Bay, Ontario
and Pictou, Nova Scotia and approximately 975,000 acres of related woodlands. We disposed of these mills and
woodlands in a series of transactions from 2006 to 2010. In March 2010, we sold approximately 475,000 acres of
woodland assets in Nova Scotia, substantially completing our exit from pulp operations.

Business Strategy

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

Our mission is to create value by improving the image and performance of everything we touch. We expect to
create value by growing in specialized niche markets that value performance or image and where we have
The following tables present further information about our businesses by geographic area (dollars in millions):
competitive advantages. In managing our businesses, we believe that achieving and maintaining a leadership
position in our markets, responding effectively to customer needs and competitive challenges, employing capital
Year Ended December 31,
optimally, controlling costs and managing risks are important to our long-term success. Strategies to deliver value
include:

2012

2011

2010

Net sales
United States
Europe

Leading in profitable, specialty niche markets — We will increase our participation in niche markets that can
provide us with leading positions and value our core competencies in performance-based fiber and non-wovens
media production, coating and saturating. Key markets include filtration, specialty backings and technical products,
and premium fine paper and packaging.

$416.2
279.8

$413.6
244.1

$543.4
265.4

Consolidated

$808.8

$696.0

$657.7

Increasing our size, growth rate and portfolio diversification — We will invest and focus resources in higher growth
specialty markets to grow with customers in new geographies and to enter into adjacent markets that are growing
and profitable. We will do this both through organic initiatives that build on our technologies and capabilities, and
through acquisitions that fit with our competencies and provide attractive financial returns.

December 31,

2012

2011

2010

Delivering consistent, attractive returns to our shareholders with disciplined financial management — We will continue
to use Return on Invested Capital (‘‘ROIC’’) as a key metric to evaluate investment decisions, measure our
performance, maintain a prudent capital structure and deploy cash flows in ways that can provide value, including
direct cash returns to shareholders through a meaningful dividend.

Consolidated

$610.7

$565.1

$606.7

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

Total Assets
United States
Canada
Europe

F
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Products

Raw Materials

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Technical Products. The technical products business is a leading producer of filtration media and durable, saturated
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
and coated substrates for a variety of end uses. In general, our technical products are sold to other manufacturers
business segment.
as key components for their finished products. Several of our key market segments served, including filtration,
specialty tape and abrasives, are global in scope. JET-PRO�SofStretch�, KIMDURA�, MUNISING LP�,
PREVAIL�, NEENAH�, GESSNER� and varitess� are brands of our technical products business. Our technical
products business had net sales of $467 million, $416 million and $407 million in 2014, 2013 and 2012,
respectively.

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

Filtration media for induction air, fuel, oil, and cabin air applications in automotive transportation. Transportation
filtration media are sold to suppliers of automotive companies as original equipment on new cars and trucks as
well as to the automotive aftermarket, which represents the majority of sales.

The following is a description of certain key products and markets:

Filtration media for water and other industrial end markets. Primary applications include reverse osmosis,
nanofiltration, ultrafiltration, pervaporation and vapor permeation, as well as other applications for specialty
markets.

Specialty tape including both saturated and unsaturated crepe and flat paper tapes sold to manufacturers to
produce finished pressure sensitive products for sale in automotive, transportation, manufacturing, building
construction, and industrial general purpose applications, including sales in the consumer-do-it-yourself retail
channel.

Label and tag products made from both saturated base label stock and purchased synthetic base label stock, with
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
coatings applied to allow for high quality variable and digital printing. The synthetic label stock is recognized as a
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
high quality, UV (ultra-violet) stable product used for outdoor applications. Label and tag stock is sold to pressure
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
sensitive coaters, who in turn sell the coated label and tag stock to the label printing community.
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

Other latex saturated and coated papers for use by a wide variety of manufacturers. Premask paper is used as a
protective over wrap for products during the manufacturing process and for applying signs, labeling and other
finished products. Medical packaging paper is a polymer impregnated base sheet that provides a breathable
sterilization barrier that provides unique properties.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
Image transfer papers used to transfer an image from paper to tee shirts, hats, coffee mugs, and other surfaces
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
using a proprietary imaging coating for use in digital printing applications. Decorative components papers used in
fiber supply issues to have a material effect on our operations.
book covers, stationery and fancy packaging. Other specialty products include clean room papers, durable printing
papers, release papers and furniture backers.

Wall covering substrates made from saturated and coated wet-laid nonwovens are marketed to converters serving
primarily European commercial and consumer-do-it-yourself markets.

Fine Paper and Packaging. The fine paper and packaging business manufactures and sells world-class branded
premium writing, text, cover and specialty papers and envelopes used in corporate identity packages, invitations,
personal stationery, premium labels, and luxury packaging. Often these papers are characterized by distinctive
colors and textures. Our fine paper and packaging business had net sales of $409 million, $402 million and
$373 million in 2014, 2013 and 2012, respectively.

Premium writing papers are used for business and personal stationery, corporate identity packages and similar
end-use applications. Market leading writing papers are sold by the fine paper and packaging business under the
CLASSIC�, ENVIRONMENT�, CAPITOL BOND�, ROYAL SUNDANCE� and SOUTHWORTH� trademarks,
which are denoted by a brand watermark in each sheet of writing paper. Our fine paper and packaging business
has an exclusive agreement to manufacture, market and distribute Crane & Co.’s CRANE’S CREST�, CRANE’S
BOND�, and CRANE’S LETTRA�, branded fine papers. Our fine paper and packaging business has an exclusive
agreement to market and distribute Gruppo Cordenons SpA’s SO...SILK�, PLIKE� and STARDREAM� branded
fine papers. The fine paper and packaging business also sells private watermarked paper and other specialty
writing papers.

Text and cover papers and envelopes are used in applications such as corporate brochures, pocket folders,
corporate annual reports, advertising inserts, direct mail, business cards, hang tags, scrapbooks, and a variety of
other uses where colors, textured finishes or heavier weight papers are desired. Our brands in this category
include CLASSIC�, CLASSIC CREST�, ESSE�, ENVIRONMENT� and ROYAL SUNDANCE�. We also sell a
variety of custom colors, paper finishes, and duplex/laminated papers.

Premium packaging and label papers are used for wine, spirits and beer labels, folding cartons, box wrap, bags,
hang tags, and stored value cards servicing high-end retail, cosmetics, spirits, and electronics end-use markets.

Bright papers are used in applications such as direct mail, advertising inserts, scrapbooks and marketing collateral.
Our brands in this category include ASTROBRIGHTS� and EXACT BRIGHTS�.

The fine paper and packaging business also produces and sells other specialty papers that address a consumer’s
need for enhanced image such as translucent papers, art papers, papers for optical scanning and other specialized
applications.

Markets and Customers

Technical Products. The technical products business sells its products globally into product categories generally
used as base materials in the following applications: filtration, component backing materials for manufactured
products such as tape and abrasives, and other specialized product uses such as graphics and identification.

Several products (filtration media, wall coverings, abrasives, specialty tapes, labels) are used in markets that are
directly affected by economic business cycles. Other market segments such as image transfer papers used in small/
home office and consumer applications are relatively stable. Most products are performance-based and require
qualification at customers; however, certain categories may also be subject to price competition and the
substitution of lower cost substrates in some less demanding applications.

The technical products business relies on a team of direct sales representatives and customer service
representatives to market and sell approximately 95 percent of its sales volume directly to customers and
converters.

The technical products business has over 500 customers worldwide. The distribution of sales in 2014 was
approximately 55 percent in Europe, 30 percent in North America and 15 percent in Latin America and Asia.
Customers typically convert and transform base papers and film into finished rolls and sheets by adding adhesives,
coatings, and finishes. These transformed products are then sold to end-users.

Sales to the technical products business’s three largest customers represented approximately 20 percent of total
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
sales for the segment in 2014. Although a complete loss of any of these customers would cause a temporary
10 percent of our consolidated net sales.
decline in the business’s sales volume, the decline could be partially offset by expanding sales to existing
customers, and further offset over a several month period with the addition of new customers.

The following tables present further information about our businesses by geographic area (dollars in millions):
Fine Paper and Packaging. We believe our fine paper and packaging business is the leading supplier of premium
Year Ended December 31,
writing, text and cover papers, premium packaging papers, bright papers and specialty papers in North America.
2010
The text and cover paper segment of the market, used in corporate identification applications, is split between
smooth papers and textured papers. Text papers have traditionally been utilized for special, high end collateral
$413.6
material such as corporate brochures, marketing materials and special edition books. Cover papers are primarily
244.1
used for business cards, pocket folders, brochures and report covers. Our premium packaging business includes
other products such as food and beverage labels and high-end packaging materials such as specialty boxes used for
luxury retail goods. The stationery segment of the premium fine papers market is divided into cotton and sulphate
grades and includes writing papers and envelopes. Bright papers are generally used by consumers for flyers, direct
mail and packaging.

Net sales
United States
Europe

$416.2
279.8

$543.4
265.4

Consolidated

December 31,

$808.8

$696.0

$657.7

2012

2011

2012

2011

2010

Consolidated

Total Assets
United States
Canada
Europe

The fine paper and packaging business has historically sold its products through our sales and marketing
organizations primarily in three channels: authorized paper distributors, as well as through converters and direct
$308.9
$286.4
sales. With the purchase of the Wausau and Southworth brands, products are also sold into the retail channel
0.3
0.1
through major national retailers. Sales to distributors, including distributor owned paper stores, account for
297.7
278.4
approximately 60 to 65 percent of revenue in the fine paper and packaging business. During 2014, approximately
$606.7
eight percent of the sales of our fine paper and packaging business were exported to markets outside the United
States.

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Sales to the largest customer of the fine paper and packaging business represented approximately 20 percent of its
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
total sales in 2014. We practice selective sales distribution to improve our ability to control the marketing of our
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
products. Although a complete loss of any of these customers would cause a temporary decline in the business’s
business segment.
sales volume, the decline could be partially offset by expanding sales to existing customers, and further offset over
a several month period with the addition of new customers.

$322.5
0.2
288.0

Raw Materials

$610.7

$565.1

Concentration. In July 2014, Unisource Worldwide, Inc (‘‘Unisource’’) and xpedx, formerly owned by International
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
Paper (‘‘xpedx’’) merged to form Veritiv Corporation. For the years ended December 31, 2014, 2013 and 2012
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
sales to Unisource and xpedx represented approximately 10 percent of our consolidated net sales and
from various suppliers. The technical products business purchases substantially all of its raw material requirements
approximately 20 percent of net sales of the fine paper business.
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

The following tables present further information about our businesses by geographic area (dollars in millions):

F
o
r
m
1
0
-
K

2013

2014

$612.0
290.7

$564.4
280.1

Net sales
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
2012
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
$543.4
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
265.4
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
2012
pulp or latex grades would have a material effect on our operations.

Total Assets
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$322.5
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
0.2
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
288.0
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$610.7
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

December 31,
2013

$456.1
0.4
274.1

$365.1
1.0
309.8

$902.7

$844.5

$808.8

$730.6

$675.9

2014

Raw Materials

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

Fine Paper and Packaging. Hardwood pulp is the primary fiber used to produce products of the fine paper and
packaging business. Other significant raw material inputs in the production of fine paper and packaging products
include softwood pulp, recycled fiber, cotton fiber, dyes and fillers. The fine paper and packaging business
purchases all of its raw materials externally. We believe that all of the raw materials for our fine paper and
packaging operations, except for certain cotton fiber which represent less than five percent of the total fiber
requirements of our fine paper and packaging business, are readily available from several sources and that the loss
of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

Energy and Water

The equipment used to manufacture the products of our technical products and fine paper and packaging
businesses use significant amounts of energy, primarily electricity, natural gas, oil and coal. We generate
substantially all of our electrical energy at the Munising mill and approximately 25 of the electrical energy at our
mills in Appleton, Wisconsin and Bruckm¨uhl, Germany. We also purchase electrical energy from external sources,
including electricity generated from renewable sources.

Availability of energy is not expected to be a problem in the foreseeable future, but the purchase price of such
energy can and likely will fluctuate significantly based on changes in demand and other factors.

An adequate supply of water is needed to manufacture our products. We believe that there is an adequate supply
of water for this purpose at each of our manufacturing locations.

Working Capital

Technical Products. The technical products business maintains approximately 25 to 30 days of raw materials and
supplies inventories to support its manufacturing operations and approximately 25 to 35 days of finished goods
and semi-finished goods inventory to support customer orders for its products. Sales terms in the technical
products business vary depending on the type of product sold and customer category. Extended credit terms of up
to 120 days are offered to customers located in certain international markets. In general, sales are collected in
approximately 45 to 55 days and supplier invoices are paid within 20 to 30 days.

Fine Paper and Packaging. The fine paper and packaging business maintains approximately 10 days of raw material
inventories to support its paper making operations and about 55 days of finished goods inventory to fill customer
orders. Fine paper and packaging sales terms range between 20 and 30 days with discounts of zero to two percent
for customer payments, with discounts of one percent and 20-day terms used most often. Extended credit terms
are offered to customers located in certain international markets. Supplier invoices are typically paid within
30 days.

Competition

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

Technical Products. Our technical products business competes in global markets with a number of large
multinational competitors, including Ahlstrom Corporation, Munksj¨o, ArjoWiggins SAS and Hollingsworth & Vose
The following tables present further information about our businesses by geographic area (dollars in millions):
Company. It also competes in some, but not all, of these segments with smaller regional manufacturers, such as
Monadnock Paper Mills, Inc., Expera Specialty Solutions LLC., Potsdam Specialty Paper, Inc. and Paper
Line S.p.A. We believe the bases of competition in most of these segments are the ability to design and develop
2010
customized product features to meet customer specifications while maintaining quality, customer service and price.
Net sales
We believe our research and development program gives us an advantage in customizing base papers to meet
United States
customer needs.
Europe

$413.6
244.1
Fine Paper and Packaging. We believe our fine paper and packaging business is the leading supplier of premium
$657.7
printing, packaging and other high end specialty papers in North America. Our fine paper and packaging business
also competes globally in the premium segment of the uncoated free sheet market. The fine paper and packaging
business competes directly in North America with Mohawk Fine Paper Inc. and other smaller companies. We
believe the primary bases of competition for premium fine papers are brand recognition, product quality, customer
service, product availability, promotional support and variety of colors and textures. Price also can be a factor
particularly for lower quality printing needs that may compete with opaque and offset papers. We have and will
$308.9
continue to invest in advertising and other programs aimed at graphic designers, printers and corporate end-users
0.1
in order to maintain a high level of brand awareness as well as communicate the advantages of using our products.
297.7

Total Assets
United States
Canada
Europe

$322.5
0.2
288.0

$286.4
0.3
278.4

Year Ended December 31,

$543.4
265.4

$416.2
279.8

Consolidated

December 31,

$808.8

$696.0

2012

2011

2012

2011

2010

F
o
r
m
1
0
-
K

Research and Development

Consolidated

$610.7

$565.1

$606.7

Raw Materials

Our technical products business maintains research and development laboratories in Feldkirchen-Westerham,
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Germany, Munising, Michigan and Pittsfield, Massachusetts to support its strategy of developing new products and
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
technologies, and to support growth in its existing product lines and other strategically important markets. In 2014,
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
we consolidated our Roswell, Georgia and Munising, Michigan research and development laboratories at our
business segment.
manufacturing facility in Munising, Michigan to bring our research and development laboratories in closer
proximity to our manufacturing operation. We have continually invested in product research and development with
spending of $6.4 million in 2014, $6.1 million in 2013 and $5.6 million in 2012.

Intellectual Property

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
The KIMDURA� and MUNISING LP� trademarks have made a significant contribution to the marketing of
externally. We believe that all of the raw materials for our technical products operations, except for certain
synthetic film and clean room papers of the technical products business. The GESSNER� and varitess�
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
trademarks have played an important role in the marketing of Neenah Germany product lines.
single supplier would not cause a shutdown of our manufacturing operations.

We own more than 40 patents and have multiple pending patent applications in the United States, Canada,
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
Western Europe and certain other countries covering image transfer paper, abrasives and medical packaging. We
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
believe our image transfer patents have contributed to establishing the technical products business as a leading
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
supplier of image transfer papers.
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
We own more than 50 trademarks with registrations in approximately 50 countries. Our fine paper and packaging
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
business has built its market leading reputation on trademarked brands that date back as far as 1908. The
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
CLASSIC� family of brands is one of the most well-known and respected trademarks in the printing and writing
grades or other latex grades that would allow us to meet required product performance characteristics and incur
industry. The CLASSIC� family includes CLASSIC CREST�, CLASSIC� Laid, CLASSIC� Linen, CLASSIC
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
COLUMNS� and CLASSIC COTTON� papers. Our branded products, which also include the
pulp or latex grades would have a material effect on our operations.
ENVIRONMENT� brand and brands such as STARWHITE�, SUNDANCE� and ESSE�, have played an
important role in the marketing of the product lines of the fine paper and packaging business, which are
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
recognized as an industry leader for quality, consistency and printing applications. Our fine paper and packaging
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
business has an exclusive licensing agreements to market and distribute Crane’s CRANE’S CREST�, CRANE’S
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
BOND�, CRANE’S LETTRA�, CRANE’S PALETTE� and CRANE’S� Choice Papers branded fine papers and
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
Gruppo Cordenons SpA’s SO...SILK�, PLIKE� and STARDREAM� branded fine papers. In conjunction with the
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
acquisition of the Wausau fine paper business in January 2012, we acquired the ASTROBRIGHTS�,
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
ASTROPARCHE� and ROYAL premium writing, text and cover brands. In conjunction with the acquisition of
the Southworth premium business paper business in January 2013, we acquired the SOUTHWORTH� premium
business paper brand.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

Backlog and Seasonality

Technical Products. In general, sales and profits for the technical products business have been relatively stronger in
the first half of the year with reductions in the third quarter due to reduced customer converting schedules and in
the fourth quarter due to a reduction in year-end inventory levels by our customers. The order flow for the
technical products business is subject to seasonal peaks for several of its products, such as the larger volume
grades of specialty tape, abrasives, premask, and label stock used primarily in the downstream finished goods
manufacturing process. To assure timely shipments during these seasonal peaks, the technical products business
provides certain customers with finished goods inventory on consignment. Historically, consignment sales have
represented approximately 15 percent of the technical products business’s annual sales. Orders are typically
shipped within six to eight weeks of receipt of the order. However, the technical products business periodically
experiences periods where order entry levels surge, and order backlogs can increase substantially. Raw materials
are purchased and manufacturing schedules are planned based on customer forecasts, current market conditions
and individual orders for custom products. The order backlog in the technical products business on December 31,
2014 was approximately $110 million and represented approximately 25 percent of prior year sales. The order
backlog in the technical products business on December 31, 2013 was approximately $100 million and represented
approximately 25 percent of prior year sales. We have previously filled the order backlog from December 31, 2013
and expect to fill the order backlog from December 31, 2014 within the current fiscal year.

Fine Paper and Packaging. The fine paper and packaging business has historically experienced a steady flow of
orders. Orders for stock products are typically shipped within two days, while custom orders are shipped within
two to three weeks of receipt. Raw material purchases and manufacturing schedules are planned based on a
combination of historical trends, customer forecasts and current market conditions. The order backlogs in the fine
paper and packaging business on December 31, 2014 and 2013 were $17.0 million and $22.9 million, respectively,
which represent approximately 15 days of sales and 21 days of sales, respectively. The order backlogs from
December 31, 2014 and 2013 were filled in the respective following years.

The operating results at each of our businesses are influenced by the timing of our annual maintenance downs,
which are generally scheduled in the third quarter.

Employee and Labor Relations

As of December 31, 2014, we had 2,000 regular full-time employees of whom 830 hourly and 395 salaried
employees were located in the United States and 490 hourly and 285 salaried employees were located in Germany.

Except for our Pittsfield, Massachusetts mills which are non-union, hourly employees at our U.S. paper mills are
represented by the United Steelworkers Union (the ‘‘USW’’). The collective bargaining agreement between the
Whiting, Neenah, Munising and Appleton paper mills and the USW expire on January 31, 2018, June 30, 2018,
July 14, 2018 and May 31, 2019, respectively. On pension matters our U.S. paper mills have bargained jointly with
the union. The current agreement on pension matters will remain in effect until September 2019.

We believe we have satisfactory relations with our employees covered by collective bargaining agreements and do
not expect the negotiation of new collective bargaining agreements to have a material effect on our results of
operations or cash flows.

Environmental, Health and Safety Matters

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

Our operations are subject to federal, state and local laws, regulations and ordinances relating to various
environmental, health and safety matters. Our operations are in compliance with, or we are taking actions
The following tables present further information about our businesses by geographic area (dollars in millions):
designed to ensure compliance with, these laws, regulations and ordinances. However, the nature of our
operations exposes us to the risk of claims concerning non-compliance with environmental, health and safety laws
Year Ended December 31,
or standards, and there can be no assurance that material costs or liabilities will not be incurred in connection
2010
with those claims. Except for certain orders issued by environmental, health and safety regulatory agencies with
which we believe we are in compliance and which we believe are immaterial to our financial condition, results of
$413.6
operations and liquidity, we are not currently named as a party in any judicial or administrative proceeding
244.1
relating to environmental, health and safety matters.

Net sales
United States
Europe

$543.4
265.4

$416.2
279.8

2012

2011

Consolidated

Greenhouse gas (‘‘GHG’’) emissions have increasingly become the subject of political and regulatory focus.
Concern over potential climate change, including global warming, has led to legislative and regulatory initiatives
directed at limiting GHG emissions. In addition to certain federal proposals in the United States to regulate GHG
2010
emissions, Germany and all the states in which we operate are currently considering GHG legislation or
regulations, either individually and/or as part of regional initiatives. While not all are likely to become law it is
reasonably possible that additional climate change related mandates will be forthcoming, and it is expected that
$308.9
they may adversely impact our costs by increasing energy costs and raw material prices, requiring operational or
0.1
equipment modifications to reduce emissions and creating costs to comply with regulations or to mitigate the
297.7
financial consequences of such compliance.

Total Assets
United States
Canada
Europe

$322.5
0.2
288.0

$286.4
0.3
278.4

December 31,

2012

2011

$808.8

$696.0

$657.7

$610.7

$565.1

$606.7

Consolidated

Raw Materials

While we have incurred in the past several years, and will continue to incur, capital and operating expenditures in
order to comply with environmental, health and safety laws, regulations and ordinances, we believe that our future
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
cost of compliance with environmental, health and safety laws, regulations and ordinances, and our exposure to
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
liability for environmental, health and safety claims will not have a material effect on our financial condition,
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
results of operations or liquidity. However, future events, such as changes in existing laws and regulations, new
business segment.
legislation to limit GHG emissions or contamination of sites owned, operated or used for waste disposal by us
(including currently unknown contamination and contamination caused by prior owners and operators of such sites
or other waste generators) may give rise to additional costs which could have a material effect on our financial
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
condition, results of operations or liquidity.
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
We have planned capital expenditures to comply with environmental, health and safety laws, regulations and
from various suppliers. The technical products business purchases substantially all of its raw material requirements
ordinances during the period 2015 through 2017 of approximately $1 million to $2 million annually. Our
externally. We believe that all of the raw materials for our technical products operations, except for certain
anticipated capital expenditures for environmental projects are not expected to have a material effect on our
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
financial condition, results of operations or liquidity.
single supplier would not cause a shutdown of our manufacturing operations.

F
o
r
m
1
0
-
K

AVAILABLE INFORMATION

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
We are subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. As
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
such, we file annual, quarterly and current reports, proxy statements and other information with the Securities and
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
Exchange Commission (‘‘SEC’’). Our SEC filings are available to the public on the SEC’s web site at www.sec.gov.
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
You may also read and copy any document we file at the SEC’s Public Reference Room located at 100 F Street,
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
Reference Room. Our common stock is traded on the New York Stock Exchange under the symbol NP. You may
grades or other latex grades that would allow us to meet required product performance characteristics and incur
inspect the reports, proxy statements and other information concerning us at the offices of the New York Stock
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
Exchange, 20 Broad Street, New York, New York 10005.
pulp or latex grades would have a material effect on our operations.

Our web site is www.neenah.com. Information on our web site is not incorporated by reference in this document.
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
Our reports on Form 10-K, Form 10-Q and Form 8-K, as well as amendments to those reports, are and will be
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
available free of charge on our web site as soon as reasonably practicable after we file or furnish such reports with
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
the SEC. In addition, you may request a copy of any of these reports (excluding exhibits) at no cost upon written
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
request to us at: Investor Relations, Neenah Paper, Inc., 3460 Preston Ridge Road, Suite 600, Alpharetta,
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
Georgia 30005.
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

Item 1A. Risk Factors

You should carefully consider each of the following risks and all of the other information contained in this Annual
Report on Form 10-K. Some of the risks described below relate principally to our business and the industry in which we
operate, while others relate principally to our indebtedness. The remaining risks relate principally to the securities
markets generally and ownership of our common stock.

Our business, financial condition, results of operations or liquidity could be materially affected by any of these risks,
and, as a result, the trading price of our common stock could decline. The risks described below are not the only ones
we face. Additional risks not presently known to us or that we currently deem immaterial may also impair our business
operations.

Risks Related to Our Business and Industry

Our business will suffer if we are unable to effectively respond to decreased demand for some of our products due to
conditions in the global economy or secular pressures in some markets.

We have experienced and may experience in the future decreased demand for some of our products due to
slowing or negative global economic growth, uncertainty in credit markets, declining consumer and business
confidence, fluctuating commodity prices, increased unemployment and other challenges affecting the global
economy. Parts of our fine paper and packaging business are subject to electronic substitution. In addition, our
customers may experience deterioration of their businesses, cash flow shortages, and difficulty obtaining financing.
If we are unable to implement business strategies to effectively respond to decreased demand for our products,
our financial position, cash flows and results of operations would be adversely affected.

Changes in international conditions generally, and particularly in Germany, could adversely affect our business and
results of operations.

Our operating results and business prospects could be adversely affected by risks related to the countries outside
the United States in which we have manufacturing facilities or sell our products, including Germany, the Eurozone
and elsewhere. Downturns in economic activity, adverse tax consequences, fluctuations in the value of local
currency versus the U.S. dollar, or any change in social, political or labor conditions in any of these countries or
regions could negatively affect our financial results.

For example, the European sovereign debt crisis has negatively affected economic conditions in Europe and
globally. We have significant operations and financial relationships based in Europe and in Germany in particular.
Historically more than 40 percent of our sales have been to customers in Europe. If the European sovereign debt
crisis continues or deepens, economic conditions in Europe may further deteriorate. In that case, our business in
Europe and elsewhere, as well as the businesses of our customers and suppliers, may be adversely affected.

Our businesses are significantly dependent on sales to their largest customers.

Sales to the largest customer of the fine paper and packaging business represented approximately 20 percent the
segment’s total sales for 2014. Sales to the three largest customers of the technical products business represented
approximately 20 percent of total sales for the segment in 2014. A significant loss of business from any of our
major fine paper and packaging or technical products customers may have a material adverse effect on our
financial condition, results of operations and liquidity. We are also subject to credit risk associated with our
customer concentration. If one or more of our largest fine paper and packaging or technical products customers
were to become bankrupt, insolvent or otherwise were unable to pay for services provided, we may incur
significant write-offs of accounts receivable.

The availability of and prices for raw materials and energy will significantly impact our business.

We purchase a substantial portion of the raw materials and energy necessary to produce our products on the open
market, and, as a result, the price and other terms of those purchases are subject to change based on factors such
as worldwide supply and demand and government regulation. We do not have significant influence over our raw
material or energy prices and our ability to pass increases in those prices along to purchasers of our products may
be challenged, unless those increases coincide with increased demand for the product. Therefore, raw material or
energy prices could increase at the same time that prices for our products are steady or decreasing. In addition,
we may not be able to recoup other cost increases we may experience, such as those resulting from inflation or
from increases in wages or salaries or increases in health care, pension or other employee benefits costs, insurance
costs or other costs.

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
10 percent of our consolidated net sales.
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
The following tables present further information about our businesses by geographic area (dollars in millions):
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
Year Ended December 31,
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production.
$413.6
244.1
Our fine paper and packaging business acquires a substantial majority of the cotton fiber used in the production
of certain branded bond paper products pursuant to annual agreements with two North American producers. The
$657.7
balance of our cotton fiber requirements are acquired through ‘‘spot market’’ purchases from a variety of other
producers. We believe that a partial or total disruption in the production of cotton fibers at our two primary
suppliers would increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost.

Net sales
United States
Europe

$543.4
265.4

$416.2
279.8

Consolidated

December 31,

$696.0

$808.8

2011

2012

2010

2012

2011

2010

Total Assets
United States
Canada
Europe

Our operating results are likely to fluctuate.

Consolidated

Our operating results are subject to substantial quarterly and annual fluctuations due to a number of factors, many
of which are beyond our control. Operating results could be adversely affected by general economic conditions
causing a downturn in the market for paper products. Additional factors that could affect our results include,
among others, changes in the market price of pulp, the effects of competitive pricing pressures, production
capacity levels and manufacturing yields, availability and cost of products from our suppliers, the gain or loss of
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
significant customers, our ability to develop, introduce and market new products and technologies on a timely
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
basis, changes in the mix of products produced and sold, seasonal customer demand, the relative strength of the
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
Euro versus the U.S. dollar, increasing interest rates and environmental costs. The timing and effect of the
business segment.
foregoing factors are difficult to predict, and these or other factors could materially adversely affect our quarterly
or annual operating results.

$610.7

$565.1

$606.7

Raw Materials

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

F
o
r
m
1
0
-
K

We face many competitors, several of which have greater financial and other resources.

We cannot be certain that our tax planning strategies will be effective and that our net operating losses (‘‘NOLs’’) and
research and development tax credits will continue to be available to offset our tax liability.

As of December 31, 2014, we had $5.2 million of U.S. Federal and $64.4 million of U.S. State tax NOLs which
may be used to offset taxable income in the future. In order to utilize the NOLs, we must generate consolidated
taxable income. If not used, substantially all of the NOLs will expire in various amounts between 2020 and 2030.
In addition, we had $31.4 million of U.S. federal and state research and development credits (‘‘R&D Credits’’)
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
which, if not used, will expire between 2025 and 2034 for the U.S. federal R&D Credits and between 2017 and
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
2029 for the state R&D Credits.
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
In accordance with Accounting Standards Codification (‘‘ASC’’) Topic 740, Income Taxes (‘‘ASC Topic 740’’), as of
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
December 31, 2014, we have recorded a liability of $7.0 million for uncertain tax positions where we believe it is
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
‘‘more likely than not’’ that the benefit reported on our income tax return will not be realized. There can be no
assurance, however, that the actual amount of unrealized deductions will not exceed the amounts we have
recognized for uncertain tax positions.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

We have significant obligations for pension and other postretirement benefits.

We have significant obligations for pension and other postretirement benefits which could require future funding
beyond that which we have funded in the past or which we currently anticipate. At December 31, 2014, our
projected pension benefit obligations were $353.3 million and exceeded the fair value of pension plan assets by
$65.0 million. In 2014, we made total contributions to qualified pension trusts of $24.5 million. In addition, during
2014 we paid pension benefits for unfunded qualified and supplemental retirement plans of $2.3 million. At
December 31, 2014, our projected other postretirement benefit obligations were $40.8 million. No assets have
been set aside to satisfy our other postretirement benefit obligations. In 2014, we made payments for
postretirement benefits other than pensions of $3.8 million. A material increase in funding requirements or benefit
payments could have a material effect on our cash flows.

The outcome of legal actions and claims may adversely affect us.

We are involved in legal actions and claims arising in the ordinary course of our business. The outcome of such
legal actions and claims against us cannot be predicted with certainty. Legal actions and claims against us could
have a material effect on our financial condition, results of operations and liquidity.

Labor interruptions would adversely affect our business.

Except for our Pittsfield, Massachusetts mills which are non-union, substantially all of our hourly employees are
unionized. In addition, some key customers and suppliers are also unionized. Strikes, lockouts or other work
stoppages or slowdowns involving our unionized employees could have a material effect on us.

Future dividends on our common stock may be restricted or eliminated.

Dividends are declared at the discretion of our Board of Directors, and future dividends will depend on our future
earnings, cash flow, financial requirements and other factors. Our ability to pay cash dividends on our common
stock is limited under the terms of both our bank credit agreement and the indenture for our $175 million of
eight-year senior notes due November 2021 (the ‘‘2021 Senior Notes’’). As of December 31, 2014, under the most
restrictive terms of the indenture for the 2021 Senior Notes, our ability to pay cash dividends on our common
stock is limited to a total of $25 million in a 12-month period. There can be no assurance that we will continue to
pay dividends in the future.

If we have a catastrophic loss or unforeseen or recurring operational problems at any of our facilities, we could suffer
significant lost production and/or cost increases.

Our technical products and fine paper and packaging businesses may suffer catastrophic loss due to fire, flood,
terrorism, mechanical failure, or other natural or man-made events. If any of our facilities were to experience a
catastrophic loss, it could disrupt our operations, delay production, delay or reduce shipments, reduce revenue,
and result in significant expenses to repair or replace the facility. These expenses and losses may not be
adequately covered by property or business interruption insurance. Even if covered by insurance, our inability to
deliver our products to customers, even on a short-term basis, may cause us to lose market share on a more
permanent basis.

Fluctuations in currency exchange rates could adversely affect our results.

Exchange rate fluctuations for the Euro do not have a material effect on the operations or cash flows of our
German technical products business. Our German technical products business incurs most of its costs and sells
most of its production in Europe and, therefore, its operations and cash flows are not materially affected by
changes in the exchange rate of the Euro relative to the U.S. dollar. Changes in the Euro exchange rate relative
to the U.S. dollar will, however, have an effect on our balance sheet and reported results of operations. See
‘‘Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Risk.’’

In addition, because we transact business in other foreign countries, some of our revenues and expenses are
denominated in a currency other than the local currency of our operations. As a result, changes in exchange rates
between the currency in which the transaction is denominated and the local currency of our operations into which
the transaction is being recorded can impact the amount of local currency recorded for such transaction. This can
result in more or less local currency revenues or costs related to such transaction, and thus have an effect on our
reported sales and income before income taxes.

Our activities are subject to extensive government regulation, which could increase our costs, cause us to incur liabilities
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
and adversely affect the manufacturing and marketing of our products.
10 percent of our consolidated net sales.

Our operations are subject to federal, state and local laws, regulations and ordinances in the United States and
The following tables present further information about our businesses by geographic area (dollars in millions):
Germany relating to various environmental, health and safety matters. The nature of our operations requires that
we invest capital and incur operating costs to comply with those laws, regulations and ordinances and exposes us
to the risk of claims concerning non-compliance with environmental, health and safety laws or standards. We
cannot assure that significant additional expenditures will not be required to maintain compliance with, or satisfy
potential claims arising from, such laws, regulations and ordinances. Future events, such as changes in existing laws
and regulations or contamination of sites owned, operated or used for waste disposal by us (including currently
unknown contamination and contamination caused by prior owners and operators of such sites or other waste
generators) may give rise to additional costs that could require significantly higher capital expenditures and
operating costs, which would reduce the funds otherwise available for operations, capital expenditures, future
business opportunities or other purposes.

Net sales
United States
Europe

Year Ended December 31,

$416.2
279.8

$413.6
244.1

$543.4
265.4

Consolidated

$808.8

$696.0

$657.7

2012

2011

2010

December 31,

2012

2011

2010

We are subject to risks associated with possible climate change legislation and various cost and manufacturing issues
associated with such legislation.

Consolidated

GHG emissions have increasingly become the subject of political and regulatory focus. Concern over potential
climate change, including global warming, has led to legislative and regulatory initiatives directed at limiting GHG
emissions. In addition to certain federal proposals in the United States to regulate GHG emissions, Germany and
all the states in which we operate are currently considering GHG legislation or regulations, either individually
and/or as part of regional initiatives. While not all are likely to become law it is reasonably possible that additional
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
climate change related mandates will be forthcoming, and it is expected that they may adversely impact our costs
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
by increasing energy costs and raw material prices, requiring operational or equipment modifications to reduce
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
emissions and creating costs to comply with regulations or to mitigate the financial consequences of compliance.
business segment.

$610.7

$565.1

$606.7

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

Total Assets
United States
Canada
Europe

Raw Materials

Risks Relating to Our Indebtedness

We may not be able to fund our future capital requirements internally or obtain third-party financing.

F
o
r
m
1
0
-
K

We may not be able to generate sufficient cash flow to meet our debt obligations, including the 2021 Senior Notes.

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
Our ability to make scheduled payments or to refinance our obligations with respect to the 2021 Senior Notes, our
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
other debt and our other liabilities will depend on our financial and operating performance, which, in turn, is
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
subject to prevailing economic conditions and to certain financial, business and other factors beyond our control.
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
If our cash flow and capital resources are insufficient to fund our debt obligations and other liabilities, we could
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
face substantial liquidity problems and may be forced to reduce or delay scheduled expansions and capital
grades or other latex grades that would allow us to meet required product performance characteristics and incur
expenditures, sell material assets or operations, obtain additional capital or restructure our debt. We cannot assure
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
that our operating performance, cash flow and capital resources will be sufficient to repay our debt in the future.
pulp or latex grades would have a material effect on our operations.
In the event that we are required to dispose of material assets or operations or restructure our debt to meet our
debt and other obligations, we can make no assurances as to the terms of any such transaction or how quickly any
such transaction could be completed.

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

our debt holders could declare all outstanding principal and interest to be due and payable;

If we cannot make scheduled payments on our debt, we will be in default and, as a result:

our senior secured lenders could terminate their commitments and commence foreclosure proceedings
against our assets; and

we could be forced into bankruptcy or liquidation.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
If our operating performance declines in the future or we breach our covenants under our revolving credit facility,
fiber supply issues to have a material effect on our operations.
we may need to obtain waivers from the lenders under our revolving credit facility to avoid being in default. We
may not be able to obtain these waivers. If this occurs, we would be in default under our revolving credit facility.

(cid:127)

We have significant indebtedness which subjects us to restrictive covenants relating to the operation of our business.

As of December 31, 2014, we had $175 million of 2021 Senior Notes, $48.7 million in revolving credit borrowings
at Neenah Germany and $10.6 million of project financing outstanding. In addition, availability under our bank
credit agreement was approximately $146 million. Our leverage could have important consequences. For example,
it could:

(cid:127) make it difficult for us to satisfy our financial obligations, including making scheduled principal and

interest payments on the 2021 Senior Notes and our other indebtedness;

(cid:127)

place us at a disadvantage to our competitors;

require us to dedicate a substantial portion of our cash flow from operations to service payments on our
indebtedness, thereby reducing funds available for other purposes;

increase our vulnerability to a downturn in general economic conditions or the industry in which we
operate;

limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and
general corporate and other purposes; and

limit our ability to plan for and react to changes in our business and the industry in which we operate.

The terms of our indebtedness, including our bank credit agreement and the indenture governing the 2021 Senior
Notes, contain covenants restricting our ability to, among other things, incur certain additional debt, make
specified restricted payments, pay dividends, authorize or issue capital stock, enter into transactions with our
affiliates, consolidate or merge with or acquire another business, sell certain of our assets or liquidate, dissolve or
wind-up our company. As of December 31, 2014, under the most restrictive terms of our debt agreements, our
ability to pay cash dividends on our common stock is limited to a total of $25 million in a 12-month period.

In addition, our bank credit agreement contains covenants with which we must comply during the term of the
agreement. Among other things, such covenants restrict the our ability to incur certain debt, incur or create
certain liens, make specified restricted payments, authorize or issue capital stock, enter into transactions with our
affiliates, consolidate, merge with or acquire another business, sell certain of their assets, or dissolve or wind up.
In addition, if the aggregate availability under our revolving credit facilities is less than the greater of
(i) $25 million and (ii) 12.5% of the maximum aggregate commitments under our revolving credit facilities as then
in effect, we will be subject to increased reporting obligations and controls until such time as availability is more
than the greater of (a) $35 million and (b) 17.5% of the maximum aggregate commitments under our revolving
credit facilities as then in effect.

If aggregate availability under our revolving credit facilities is less than the greater of (i) $20 million and (ii) 10%
of the maximum aggregate commitments under our revolving credit facilities as then in effect, we are required to
comply with a fixed charge coverage ratio (as defined in our bank credit agreement) of not less than 1.1 to 1.0 for
the preceding four-quarter period, tested as of the end of each quarter. Such compliance, once required, would no
longer be necessary once (x) aggregate availability under our revolving credit facilities exceeds the greater of
(i) 17.5% of the aggregate commitment for our revolving credit facilities and (ii) $35 million for 60 consecutive
days and (y) no default or event of default has occurred and is continuing during such 60-day period. As of
December 31, 2014, aggregate availability under our revolving credit facilities exceeded the minimum required
amount, and we are not required to comply with such fixed charge coverage ratio.

Our revolving credit facilities accrue interest at variable rates. As of December 31, 2014, we had $48.7 million of
revolving credit borrowings outstanding. We may reduce our exposure to rising interest rates by entering into
interest rate hedging arrangements, although those arrangements may result in us incurring higher interest
expenses than we would incur without the arrangements. If interest rates increase in the absence of such
arrangements, we will need to dedicate more of our cash flow from operations to make payments on our debt. For
more information on our liquidity, see ‘‘Management’s Discussion and Analysis of Financial Condition and Results
of Operations — Liquidity and Capital Resources.’’

Our failure to comply with the covenants contained in our revolving credit facility or the indenture governing the 2021
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
Senior Notes could result in an event of default that could cause acceleration of our indebtedness.
10 percent of our consolidated net sales.

Our failure to comply with the covenants and other requirements contained in the indenture governing the 2021
The following tables present further information about our businesses by geographic area (dollars in millions):
Senior Notes, our revolving credit facility or our other debt instruments could cause an event of default under the
relevant debt instrument. The occurrence of an event of default could trigger a default under our other debt
Year Ended December 31,
instruments, prohibit us from accessing additional borrowings and permit the holders of the defaulted debt to
declare amounts outstanding with respect to that debt to be immediately due and payable. Our assets or cash
flows may not be sufficient to fully repay borrowings under our outstanding debt instruments, and we may be
$543.4
unable to refinance or restructure the payments on indebtedness on favorable terms, or at all.
265.4

Net sales
United States
Europe

$416.2
279.8

$413.6
244.1

2011

2012

2010

Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more indebtedness, which may
increase the risks created by our substantial indebtedness.

Consolidated

$808.8

$696.0

$657.7

Because the terms of our bank credit agreement and the indenture governing the 2021 Senior Notes do not fully
prohibit us or our subsidiaries from incurring additional indebtedness, we and our subsidiaries may be able to
incur substantial additional indebtedness in the future, some of which may be secured. If we or any of our
subsidiaries incur additional indebtedness, the related risks that we and they face may intensify.
$322.5
0.2
288.0

Total Assets
United States
Canada
Europe

Our bank credit agreement is secured by a majority of our assets.

$286.4
0.3
278.4

$308.9
0.1
297.7

2012

2011

2010

December 31,

Consolidated

Our bank credit agreement is secured by a majority of our assets. Availability under our bank credit agreement
will fluctuate over time depending on the value of our inventory, receivables and various capital assets. An
extended work stoppage or decline in sales volumes would result in a decrease in the value of the assets securing
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
the bank credit agreement. A reduction in availability under the bank credit agreement could have a material
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
effect on our liquidity.
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.

$610.7

$565.1

$606.7

Changes in credit ratings issued by nationally recognized statistical rating organizations could adversely affect our cost of
financing and have an adverse effect on the market price of our securities.

Raw Materials

Our debt currently has a non-investment grade rating, and there can be no assurance that any rating assigned by
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
the rating agencies will remain for any given period of time or that a rating will not be lowered or withdrawn
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the
from various suppliers. The technical products business purchases substantially all of its raw material requirements
rating, such as adverse changes, so warrant. A lowering or withdrawal of the ratings assigned to our debt securities
externally. We believe that all of the raw materials for our technical products operations, except for certain
by rating agencies may increase our future borrowing costs and reduce our access to capital, which could have a
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
material adverse impact on our financial condition and results of operations.
single supplier would not cause a shutdown of our manufacturing operations.

F
o
r
m
1
0
-
K

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
We depend on our subsidiaries to generate cash flow to meet our debt service obligations, including payments on the 2021
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
Senior Notes.
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
We conduct a substantial portion of our business through our subsidiaries. Consequently, our cash flow and ability
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
to service our debt obligations, including the 2021 Senior Notes, depend upon the earnings of our subsidiaries and
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
the distribution of those earnings to us, or upon loans, advances or other payments made by these entities to us.
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
The ability of these entities to pay dividends or make other payments or advances to us will be subject to
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
applicable laws and contractual restrictions contained in the instruments governing their debt, including our
grades or other latex grades that would allow us to meet required product performance characteristics and incur
revolving credit facility and the indenture governing the 2021 Senior Notes. These limitations are also subject to
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
important exceptions and qualifications.
pulp or latex grades would have a material effect on our operations.

The ability of our subsidiaries to generate sufficient cash flow from operations to allow us to make scheduled
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
payments on our debt, including the 2021 Senior Notes, will depend upon their future financial performance,
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
which will be affected by a range of economic, competitive and business factors, many of which are outside of our
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
control as well as their ability to repatriate cash to us. If our subsidiaries do not generate sufficient cash flow from
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
operations to help us satisfy our debt obligations, including payments on the 2021 Senior Notes, or if they are
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
unable to distribute sufficient cash flow to us, we may have to undertake alternative financing plans, such as
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
refinancing or restructuring our debt, selling assets, reducing or delaying capital expenditures or seeking to raise
additional capital. Refinancing may not be possible, and any assets may not be saleable, or, if sold, we may not
realize sufficient amounts from those sales. Additional financing may not be available on acceptable terms, if at
all, or we may be prohibited from incurring it, if available, under the terms of our various debt instruments then
in effect. Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our
obligations on commercially reasonable terms would have an adverse effect on our business, financial condition
and results of operations, as well as on our ability to satisfy our obligations on the 2021 Senior Notes.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report on Form 10-K may constitute ‘‘forward-looking’’ statements as defined
in Section 27A of the Securities Act of 1933 (the ‘‘Securities Act’’), Section 21E of the Securities Exchange Act of
1934 (the ‘‘Exchange Act’’), the Private Securities Litigation Reform Act of 1995 (the ‘‘PSLRA’’), or in releases
made by the SEC, all as may be amended from time to time. Statements contained in this Annual Report on
Form 10-K that are not historical facts may be forward-looking statements within the meaning of the PSLRA. Any
such forward-looking statements reflect our beliefs and assumptions and are based on information currently
available to us. Forward-looking statements are only predictions and involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance or achievements, or industry results,
to be materially different from any future results, performance or achievements expressed or implied by such
forward-looking statements. These cautionary statements are being made pursuant to the Securities Act, the
Exchange Act and the PSLRA with the intention of obtaining the benefits of the ‘‘safe harbor’’ provisions of such
laws. The Company cautions investors that any forward-looking statements we make are not guarantees or
indicative of future performance. For additional information regarding factors that may cause our results of
operations to differ materially from those presented herein, please see ‘‘Risk Factors’’ contained in this Annual
Report on Form 10-K and as are detailed from time to time in other reports we file with the SEC.

You can identify forward-looking statements as those that are not historical in nature, particularly those that use
terminology such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘expect,’’ ‘‘anticipate,’’ ‘‘contemplate,’’ ‘‘estimate,’’ ‘‘believe,’’ ‘‘plan,’’
‘‘project,’’ ‘‘predict,’’ ‘‘potential’’ or ‘‘continue,’’ or the negative of these, or similar terms. In evaluating these
forward-looking statements, you should consider the following factors, as well as others contained in our public
filings from time to time, which may cause our actual results to differ materially from any forward-looking
statement:

(cid:127)

changes in market demand for our products due to global economic conditions;

fluctuations in (i) exchange rates (in particular changes in the U.S. dollar/Euro currency exchange rates)
and (ii) interest rates;

increases in commodity prices, (particularly for pulp, energy and latex) due to constrained global supplies
or unexpected supply disruptions;

the availability of raw materials and energy;

the competitive environment;

capital and credit market volatility and fluctuations in global equity and fixed-income markets;

unanticipated expenditures related to the cost of compliance with environmental and other governmental
regulations;

our ability to control costs and implement measures designed to enhance operating efficiencies;

the loss of current customers or the inability to obtain new customers;

increases in the funding requirements for our pension and postretirement liabilities;

changes in asset valuations including write-downs of assets including property, plant and equipment;
inventory, accounts receivable, deferred tax assets or other assets for impairment or other reasons;

our existing and future indebtedness;

our net operating losses may not be available to offset our tax liability and other tax planning strategies
may not be effective;

strikes, labor stoppages and changes in our collective bargaining agreements and relations with our
employees and unions;

other risks that are detailed from time to time in reports we file with the SEC; and

other factors described under ‘‘Risk Factors’’.

You are cautioned not to unduly rely on such forward-looking statements, which speak only as of the date made,
when evaluating the information presented in this information statement.

Item 1B. Unresolved Staff Comments

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

None.

The following tables present further information about our businesses by geographic area (dollars in millions):

Item 2. Properties

Our principal executive offices are located in Alpharetta, Georgia, a suburb of Atlanta, Georgia, and we operate
2010
research and development laboratories in Munising, Michigan and Pittsfield, Massachusetts. We own and operate
six paper mills in the United States that produce printing and writing, text, cover, durable saturated and coated
substrates and other specialty papers for a variety of end uses. We own and operate three paper mills in Germany
$416.2
that produce transportation and other filter media, wall coverings and durable and saturated substrates.
279.8

Net sales
United States
Europe

Year Ended December 31,

$413.6
244.1

$543.4
265.4

2012

2011

Consolidated

We believe that each of these facilities is adequately maintained and is suitable for conducting our operations and
$657.7
business. We manage machine operating schedules at our manufacturing locations to fulfill customer orders in a
timely manner and control inventory levels.

$808.8

$696.0

December 31,

As of December 31, 2014, following are the locations of our principal facilities and operating equipment and the
products produced at each location. All the facilities are owned by us, except as otherwise noted:

2012

2011

2010

Location

Total Assets
United States
Canada
Europe

Fine Paper and Packaging Segment

Equipment/Resources

$322.5
0.2
288.0

Products

$286.4
0.3
278.4

$308.9
0.1
297.7

$565.1

$606.7

Paper finishing equipment

Two paper machines; paper
finishing equipment

$610.7
Printing and writing, text, cover
and other specialty papers

Consolidated
Appleton Mill
Appleton, Wisconsin
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Converting Center
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Neenah, Wisconsin
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.
Neenah Mill
Neenah, Wisconsin
Raw Materials
Whiting Mill
Printing and writing, text, cover
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
Whiting, Wisconsin
and other specialty papers
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
Munising Mill
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
Munising, Michigan
single supplier would not cause a shutdown of our manufacturing operations.

Printing and writing, text, cover
and other specialty papers

Four paper machines; paper
finishing equipment

Two paper machines; paper
finishing equipment

Technical Products Segment

Tapes, abrasives, premask,
medical packaging and other
durable, saturated and coated
substrates

Two paper machines; two off
line saturators; two off line
coaters; specialty finishing
equipment

Three paper machines; eight
calenders; two rewinders

One paper machine; two
saturator/coaters; finishing
equipment

Reverse osmosis filtration and
glass applications

Nonwoven wall coverings,
printing media and durable
substrates

Masking tape backings and
abrasive backings

One paper machine; three
impregnating and coating
machines; two calendars;
finishing equipment

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
Weidach Mill
Two paper machines; three
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
Feldkirchen-Westerham, Germany
saturators; one laminator; three
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
meltblown machines; specialty
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
finishing equipment
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

Transportation filtration and
other industrial filter media

See Note 6 of Notes to Consolidated Financial Statements, ‘‘Debt’’ for a description of the material encumbrances
We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
attached to the properties described in the table above.
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

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Capacity Utilization

Paper machines in our manufacturing facilities generally operate on a combination of five or seven-day schedules
to meet demand. We are not constrained by input factors and the maximum operating capacity of our
manufacturing facilities is calculated based on operating days to account for variations in mix and different units
of measure between assets. Due to required maintenance downtime and contract holidays, the maximum number
of operating days is defined as 350 days per year. We generally expect to utilize approximately 85 to 95 percent of
our maximum operating capacity. The following table presents our percentage utilization of maximum operating
capacity by segment:

Year Ended
December 31,

2014

2013

2012

Technical Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fine Paper and Packaging (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88% 88% 88%
86% 86% 85%

(1) The Index, Tag and Vellum Bristol product lines acquired from Wausau in January 2012 are manufactured in

our Fine Paper and Packaging mills and the percentage of maximum capacity utilization for the Fine Paper
and Packaging segment includes such production.

As of December 31, 2014, following are the locations of our owned and leased office and laboratory space and the
functions performed at each location.

Administrative Location

Alpharetta, Georgia

Office/Other Space

Leased Office Space

Function

Corporate Headquarters and
Administration

Munising, Michigan

Owned Laboratory Space Research and Development for our paper

businesses

Pittsfield, Massachusetts

Owned Laboratory Space Research and Development for the

acquired technical materials business

Feldkirchen-Westerham, Germany

Owned Laboratory Space Research and Development for our

technical product businesses

Neenah and Appleton, Wisconsin

Owned Office Space

Administration

Pittsfield, Massachusetts

Owned Office Space

Administration

Item 3. Legal Proceedings

Litigation

We are involved in certain legal actions and claims arising in the ordinary course of business. While the outcome
of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the
outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not
have a material effect on our consolidated financial condition, results of operations or liquidity.

Income Taxes

We are continuously undergoing examination by the IRS as well as various state and foreign jurisdictions. The IRS
and other taxing authorities routinely challenge certain deductions and credits we report on our income tax
returns.

Item 4. Mine Safety Disclosures

Not applicable.

Securities

Net sales
United States
Europe

PART II
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
10 percent of our consolidated net sales.

The following tables present further information about our businesses by geographic area (dollars in millions):

Neenah common stock is listed on the New York Stock Exchange and is traded under the ticker symbol NP.
Trading, as reported on the New York Stock Exchange, Inc. Composite Transactions Tape, and dividend
information follows:

Year Ended December 31,

2012

2011

2010

Common Stock
$416.2
Market Price
279.8
Low

$543.4
265.4
High

$413.6
Dividends
244.1
Declared

$808.8
$61.79
$57.31
$53.87
2012
$51.72

$696.0
$51.33
$49.62
December 31,
$47.82
2011
$40.64

$657.7
$0.27
$0.27
$0.24
2010
$0.24

Consolidated

2014
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Assets
United States
Canada
Europe

Consolidated

$286.4
0.3
$37.50
278.4
$31.80
$27.44
$565.1
$27.70

$322.5
0.2
$44.31
288.0
$40.38
$32.35
$610.7
$32.57

2013
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$308.9
0.1
$0.20
297.7
$0.20
$0.15
$606.7
$0.15
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Dividends are declared at the discretion of the Board of Directors, and future dividends will depend on our future
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
earnings, cash flow, financial requirements and other factors. Our ability to pay cash dividends on our common
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
stock is limited under the terms of both our bank credit agreement and our 2021 Senior Notes. As of
business segment.
December 31, 2014, under the most restrictive terms of our debt agreements, our ability to pay cash dividends on
our common stock is limited to a total of $25 million in a 12-month period. For the year ended December 31,
2014 we paid cash dividends of $1.02 per common share or $17.1 million. For the year ended December 31, 2013
we paid cash dividends of $0.70 per common share or $11.5 million. In November 2014, our Board of Directors
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
approved an 11 percent increase in the annual dividend rate on our common stock to $1.20 per share. The
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
dividend is scheduled to be paid in four equal quarterly installments beginning in March 2015.
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
As of February 13, 2015, Neenah had approximately 1,600 holders of record of its common stock. The closing
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
price of Neenah’s common stock on February 13, 2015 was $62.15.
single supplier would not cause a shutdown of our manufacturing operations.

Raw Materials

Purchases of Equity Securities:

The following table sets forth certain information regarding purchases of our common stock during the fourth
quarter of 2013.

Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs (b)

Total Number
of Shares
Purchased

Average Price
Paid Per
Share

Period

October 2014 . . . . . . . . . . . . . . . . . . . . .
November 2014 . . . . . . . . . . . . . . . . . . .
December 2014(a) . . . . . . . . . . . . . . . . .

$23,841,000
$23,841,000
$23,841,000

(a) Transactions represent the purchase of vested restricted shares from employees to satisfy minimum tax

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
withholding requirements upon vesting of stock-based awards. None of these transactions were made in the
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
open market. The average price paid is based upon the closing sales price on the New York Stock Exchange
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
on the date of the transaction. Such purchases are held as treasury shares. See Note 8 of Notes to
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
Consolidated Financial Statements, ‘‘Stock Compensation Plans.’’

15,000
—
53,200

14,800
—
—

$52.17
—
$60.27

(b) On May 22, 2014, our Board of Directors authorized a program that would allow for the purchase of up to

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

$25 million of outstanding common stock through May 21, 2015.

F
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Equity Compensation Plan Information

The following table summarizes information about outstanding options, share appreciation rights and restricted
stock units and shares reserved for future issuance under our existing equity compensation plans as of
December 31, 2014.

Plan Category

(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants, and rights

(b)
Weighted-average
exercise price of
outstanding
options,
warrants, and
rights(1)

(c)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in
column (a))

Equity compensation plans approved by security holders . .
Equity compensation plans not approved by security

holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

587,000(2)(3)

$26.49

1,675,000

—

587,000

—

$26.49

—

1,675,000

(1) The weighted-average exercise price of outstanding options, warrants and rights does not take into account

restricted stock units since they do not have an exercise price.

(2) Includes (i) 374,500 shares issuable upon the exercise of outstanding options and stock appreciation rights

(‘‘SARs’’), (ii) 107,200 shares issuable following the vesting and conversion of outstanding performance share
unit awards, and (iii) 105,300 shares issuable upon the vesting and conversion of outstanding restricted stock
units, all as of December 31, 2014.

As of December 31, 2014, we had an aggregate of 604,000 stock options and SARs outstanding. The weighted
average exercise price of the stock options and SARs was $26.49 per share and the remaining contractual life
of such awards was 6.3 years.

(3) Includes 282,200 shares that would be issued upon the assumed exercise of 511,700 SARs at the $60.27 per

share closing price of our common stock on December 31, 2015.

Item 6. Selected Financial Data

The following tables present further information about our businesses by geographic area (dollars in millions):

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
The following table sets forth our selected historical financial and other data. You should read the information set
10 percent of our consolidated net sales.
forth below in conjunction with ‘‘Management’s Discussion and Analysis of Financial Condition and Results of
Operations’’ and our historical consolidated financial statements and the notes to those consolidated financial
statements included elsewhere in this Annual Report. The statement of operations data for the years ended
December 31, 2014, 2013 and 2012 and the balance sheet data as of December 31, 2014 and 2013 set forth below
are derived from our audited historical consolidated financial statements included elsewhere in this Annual Report
on Form 10-K. The balance sheet data as of December 31, 2012, 2011 and 2010 and the statement of operations
$413.6
data for the years ended December 31, 2011 and 2010 set forth below are derived from our historical consolidated
244.1
financial statements not included in this Annual Report on Form 10-K.

Net sales
United States
Europe

Year Ended December 31,

$416.2
279.8

$543.4
265.4

2012

2011

2010

Consolidated

$696.0
Year Ended December 31,

$808.8

$657.7

2014

2013

2012

2011

2010

(Dollars in millions, except per share data)
2010

2012

2011

December 31,

$902.7
725.5

$844.5
678.9

$808.8
649.7

$696.0
570.6

$657.7
537.7

Total Assets
United States
Canada
Europe

Consolidated Statement of Operations Data
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . .
Integration/restructuring costs (a) . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension plan settlement charge (b) . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt (c) . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on closure and sale of the Ripon Mill (d) . . . . . . . . . . ..
Other (income) expense — net . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$308.9
120.0
0.1
69.3
297.7
—
—
—
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
(3.4)
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
(1.0)
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense — net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$286.4
125.4
0.3
68.2
278.4
—
—
2.4
—
(1.8)

$322.5
159.1
0.2
77.4
288.0
5.8
3.5
0.6
—
1.4

177.2
83.2
2.9
3.5
0.2
—
(0.1)

165.6
79.4
0.6
0.2
0.5
—
1.1

83.8
11.0

87.5
11.1

70.4
13.4

56.6
15.3

55.1
20.3

$610.7

$565.1

$606.7

Income from continuing operations before income taxes . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Raw Materials

76.4
7.7

72.8
23.4

57.0
17.1

41.3
12.0

34.8
9.8

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from discontinued operations, net of taxes (f) . . . . . . .

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
$ 1.69
$ 4.09
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.
$ 1.61
$ 4.03

Earnings from continuing operations per diluted share . . . . . . . . . . .

Earnings from continuing operations per basic share . . . . . . . . . . . . .

25.0
134.1

29.3
(0.2)

68.7
—

49.4
2.6

39.9
4.4

$ 68.7

$ 2.41

$ 1.82

$ 52.0

$ 44.3

$ 29.1

$159.1

$ 2.96

$ 3.02

$ 2.46

$ 1.91

F
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K

$ 1.02

Cash dividends per common share . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Financial Data
Net cash flow provided by (used for):

$ 57.2
(23.1)
(5.8)
(63.8)
3.5x

$ 40.1
(25.1)
(7.2)
(13.0)
4.8x

$ 83.5
(28.7)
(4.6)
15.0
6.7x

$ 94.5
(27.9)
(77.0)
10.2
6.9x

December 31,

$ 0.70

$ 0.48

$ 0.44

$ 0.40

2014

2013

2012

2011

2010

Consolidated Balance Sheet Data
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Working capital, less cash and cash equivalents . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
$ 48.3
7.8
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
81.6
138.9
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
606.7
610.7
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
231.3
177.6
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
447.5
412.9
159.2
197.8
We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

$ 73.4
128.4
675.9
190.5
408.4
267.5

$ 19.8
70.2
565.1
164.5
398.4
166.7

$ 72.6
135.8
730.6
232.9
441.9
288.7

(Dollars in millions)

(a) For the year ended December 31, 2014, we incurred $1.0 million of integration costs related to the acquisition
of the technical materials business and $1.9 million of restructuring costs. For the year ended December 31,
2013, we incurred $0.4 million of integration costs related to the acquisition of the Southworth brands and
$0.2 million of restructuring costs. For the year ended December 31, 2012, we incurred $5.8 million
integration costs related to the acquisition of the Wausau brands.

(b) For the years ended December 31, 2014, 2013 and 2012, benefit payments under certain pension plans

exceeded the sum of expected service cost and interest costs for the plan for the respective calendar years. In
accordance with ASC Topic 715, Compensation — Retirement Benefits (‘‘ASC Topic 715’’), we measured the
liabilities of the post-retirement benefit plans and recognized settlement losses of $3.5 million, $0.2 million
and $3.5 million, respectively.

recognized a pre-tax loss of $0.2 million for the write-off of unamortized debt issuance costs. For the year
ended December 31, 2013, we redeemed $90 million of 2014 Senior Notes and repaid all outstanding term
loan borrowings ($29.3 million). In connection with the early extinguishment of debt we recognized a pre-tax
loss of $0.5 million for the write-off of unamortized debt issuance costs. For the year ended December 31,
2012, we completed an early redemption of $68 million in aggregate principal amount of the 2014 Senior
Notes. In connection with the early redemption we recognized a pre-tax loss of $0.6 million, including a call
premium and the write-off of unamortized debt issuance costs. For the year ended December 31, 2011, we
completed an early redemption of $65 million in aggregate principal amount of the 2014 Senior Notes. In
connection with the early redemption we recognized a pre-tax loss of $2.4 million, including a call premium
and the write-off of unamortized debt issuance costs.

(d) In May 2009, we permanently closed the Ripon Mill. In October 2011, we sold the remaining assets of the

Ripon Mill to Diamond Pet Food Processors of Ripon, LLC for gross proceeds of $9 million. We recognized
a pre-tax gain on the sale of $3.4 million in the fourth quarter of 2011.

(e) For purposes of determining the ratio of earnings to fixed charges, earnings consist of income before income
taxes (less interest) plus fixed charges. Fixed charges consist of interest expense, including amortization of
debt issuance costs, and the estimated interest portion of rental expense.

(f) The following table presents the results of discontinued operations:

Year Ended December 31,

2014

2013(1)

2012(2)

2011(3)

2010

(Dollars in millions)

Discontinued operations: (4)

Income (loss) from operations . . . . . . . . . . . . . . . . . . . . . . . . . .

$ — $4.2

$(0.1)

$(0.3)

1.0

Gain on disposal of the Woodlands . . . . . . . . . . . . . . . . . . . . . .
Reclassification of cumulative translation adjustments related to

investments in Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gain (loss) on disposal

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . .
Provision (benefit) for income taxes . . . . . . . . . . . . . . . . . . . . . .

—

—
—

—

4.2
1.6

—

(0.1)
(4.5)

—

74.1

87.9

— 162.0

(0.3)
(0.1)

163.0
28.9

Income (loss) from discontinued operations, net of taxes . . . . . . .

$ — $2.6

$ 4.4

$(0.2)

$134.1

(1) During the first quarter of 2013, we received a refund of excess pension contributions from the

terminated Terrace Bay pension plan. As a result, we recorded income before income taxes from
discontinued operations of $4.2 million and a related provision for income taxes of $1.6 million.

(2) In November 2012, audits of the 2007 and 2008 tax years were finalized with a finding of no additional
taxes due. As a result, we recognized a non-cash tax benefit of $4.5 million related to the reversal of
certain liabilities for uncertain income tax positions.

(3) In March 2010, Neenah Canada sold approximately 475,000 acres of woodland assets in Nova Scotia (the

‘‘Woodlands’’) to Northern Timber Nova Scotia Corporation, an affiliate of Northern Pulp (collectively,
‘‘Northern Pulp’’), for C$82.5 million ($78.6 million) resulting in a pre-tax gain of $74.1 million. The sale
of the Woodlands resulted in the substantially complete liquidation of the Company’s investment in
Neenah Canada. In accordance with Accounting Standards Codification (‘‘ASC’’) Topic 830, Foreign
Currency Matters (‘‘ASC Topic 830’’), $87.9 million of cumulative currency translation adjustments
attributable to the Company’s Canadian subsidiaries was reclassified into earnings and recognized as part
of the gain on sale of the Woodlands. See Note 4 of Notes to Consolidated Financial Statements,
‘‘Discontinued Operations.’’

(4) For the years ended December 31, 2014, 2013, 2012, 2011 and 2010, the results of operations of the
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
Pictou Mill and the Woodlands and the loss on disposal of the Pictou Mill are reported as discontinued
10 percent of our consolidated net sales.
operations in the Consolidated Statement of Operations Data.

(g) In July 2014, we purchased all of the outstanding equity of Crane for approximately $72 million.

The following tables present further information about our businesses by geographic area (dollars in millions):

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Year Ended December 31,

Net sales
United States
Europe

The following discussion and analysis presents the factors that had a material effect on our results of operations during
the years ended December 31, 2014, 2013 and 2012. Also discussed is our financial position as of the end of those
years. You should read this discussion in conjunction with our consolidated financial statements and the notes to those
consolidated financial statements included elsewhere in this Annual Report on Form 10-K. This Management’s
Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See
‘‘Forward-Looking Statements’’ for a discussion of the uncertainties, risks and assumptions associated with these
statements.

$416.2
279.8

$413.6
244.1

$543.4
265.4

Consolidated

$808.8

$696.0

$657.7

2012

2011

2010

December 31,

Introduction

2012

2011

2010

This Management’s Discussion and Analysis of Financial Condition is intended to provide investors with an
understanding of the historical performance of our business, its financial condition and its prospects. We will
discuss and provide our analysis of the following:

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

Total Assets
United States
Canada
Europe

$610.7

$565.1

$606.7

(cid:127) Overview of Business;

Consolidated
Business Segments;

(cid:127)

(cid:127) Results of Operations and Related Information;

(cid:127) Adoption of New Accounting Pronouncements; and

Liquidity and Capital Resources;

(cid:127)

(cid:127) Critical Accounting Policies and Use of Estimates.

Raw Materials

Overview of Business

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
We are a leading producer of technical products and premium fine papers and packaging. We have two primary
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
operations: our technical products business and our fine paper and packaging business (formerly known as the fine
from various suppliers. The technical products business purchases substantially all of its raw material requirements
paper business). On January 1, 2015, we changed the name of our fine paper business to fine paper and
externally. We believe that all of the raw materials for our technical products operations, except for certain
packaging. The name change better reflects the increasing importance, and plans for continued growth, of our
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
premium packaging products.
single supplier would not cause a shutdown of our manufacturing operations.

F
o
r
m
1
0
-
K

(cid:127)

Our mission is to create value by improving the image and performance of everything we touch. We expect to
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
create value by growing in specialized niche markets that value performance or image and where we have
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
competitive advantages. In managing our businesses, we believe that achieving and maintaining a leadership
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
position in our markets, responding effectively to customer needs and competitive challenges, employing capital
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
optimally, controlling costs and managing risks are important to long-term success. Changes in input costs and
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
general economic conditions also impact our results. In this discussion and analysis, we will refer to these factors.
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
Competitive Environment — Our past results have been and our future prospects will be significantly
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
affected by the competitive environment in which we operate. In most of our markets, our businesses
grades or other latex grades that would allow us to meet required product performance characteristics and incur
compete directly with well-known competitors, some of which are larger and more diversified. While our
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
businesses are oriented to premium performance and quality they may also face competitive pressures
pulp or latex grades would have a material effect on our operations.
from lower value products.

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
Economic Conditions and Input Costs — The markets for all of our products are affected to a significant
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
degree by economic conditions, including rapid changes in input costs, particularly for pulp, latex and
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
natural gas that may not be recovered immediately through pricing or other actions. Our results are also
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
affected by fluctuations in exchange rates, particularly for the Euro.
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

(cid:127)

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

Business Segments

Our technical products business is a leading international producer of transportation, water and other filter media
and durable, saturated and coated substrates for a variety of end markets. We focus on categories where we
believe we are, or can be, a market leader, which include, among others, the transportation, water and other
filtration media, specialty tape, abrasive, label and other technical products markets. Our technical products
manufacturing facilities are located near Munich and Frankfurt, Germany, in Munising, Michigan and Pittsfield,
Massachusetts.

We believe our fine paper and packaging business is the leading supplier of premium printing, packaging and
other high end specialty papers in North America. Our products include some of the most recognized and
preferred papers in North America, where we enjoy leading market positions in many of our product categories.
We sell our products primarily to authorized paper distributors, as well as through converters, major national
retailers and specialty businesses. We believe that our fine paper and packaging manufacturing facilities located in
Appleton, Neenah and Whiting, Wisconsin are among the most efficient for their markets and make us one of the
lowest cost producers in the product categories in which we compete.

The other segment includes the Index, Tag and Vellum Bristol product lines acquired from Wausau.

Results of Operations and Related Information

In this section, we discuss and analyze our net sales, income before interest and income taxes (which we refer to
as ‘‘operating income’’ in this Management’s Discussion and Analysis of Financial Condition and Results of
Operations) and other information relevant to an understanding of our results of operations.

Executive Summary

During 2014, global economic conditions generally showed improvement from the prior year. The improvement
was more pronounced in the U.S., while demand remained subdued in regions such as Western Europe and
slowed in certain emerging markets.

In our Technical Products businesses, sales volumes for many product categories are sensitive to changes in gross
domestic product in the countries in which we compete. Approximately half of the sales for our Technical
Products business are in Europe. In our Fine Paper and Packaging business, which is mostly in North America,
demand for these premium products is also sensitive to economic conditions, as well as pressures in some parts of
the business from the use of electronic media for communication. In both of our segments, our objective is to
outperform the markets through expansion into adjacent products and new geographies, through share gains and
through acquisitions. In 2014, results in our Technical Products business benefitted from the purchase of the
technical materials business from Crane in July, 2014.

Additional external factors impacting results in 2014 were higher input costs for fiber and energy, and especially
natural gas prices in North America during the first quarter due to an unusually severe winter. Over time, we
target changes in selling prices and operation efficiencies to offset impacts from higher input costs.

In July 2014, we purchased all of the outstanding equity of the Crane Technical Materials business from
Crane & Co., Inc. for $72.4 million. The acquisition purchase price was paid from cash on hand. The acquired
technical materials business provides performance-oriented wet laid nonwovens media for fast growing filtration
end markets as well as environmental, energy and industrial uses. This technical materials business has two
manufacturing facilities in Pittsfield, Massachusetts.

For the year ended December 31, 2014, consolidated net sales increased $58.2 million from the prior year to
$902.7 million primarily due to incremental technical products volume related to the acquisition of the technical
materials business, higher average net prices for our heritage businesses and growth in technical products volume.
Excluding incremental sales from the acquired technical materials business, consolidated net sales increased
$34.1 million or four percent from the prior year.

Consolidated operating income of $87.5 million for the year ended December 31, 2014 increased $3.7 million from
the prior year. The favorable comparison to the prior year was primarily due to higher net price for both
businesses, increased sales volumes for our technical products business and fine paper manufacturing efficiencies.
These favorable variances were partially offset by $4.7 million of higher manufacturing input costs for our fine
paper business which included more than $3 million for natural gas in the first quarter of 2014 due to the
unusually cold winter in the United States. Excluding aggregate charges of $6.6 million in 2014 for integration and
restructuring costs, costs related to the early extinguishment of debt and a pension plan settlement charge and
aggregate charges of $1.3 million in 2013 for acquisition-related integration costs, costs related to the early
extinguishment of debt and a pension plan settlement charge, operating income for the year ended December 31,
2014 increased $9.0 million from the prior year.

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

Cash provided by operating activities of $94.5 million for year ended December 31, 2014 was $11.0 million
favorable to cash provided by operating activities of $83.5 million in the prior year primarily due to higher
operating income and an $8.8 million decrease in our investment in working capital for the current year compared
to an increase in our investment in working capital of $6.6 million in the prior year. These favorable variances
The following tables present further information about our businesses by geographic area (dollars in millions):
were partially offset by increased contributions and benefit payments for post-retirement benefit obligations.

Net sales
United States
Europe

Year Ended December 31,
In December 2014, we amended and restated our existing credit facility by entering into a Third Amended and
2010
Restated Credit Agreement (the ‘‘Third Amended Credit Agreement’’). The Third Amended Credit Agreement,
among other things: (1) increases the maximum principal amount of our existing U.S. credit facility to
$125 million (the ‘‘U.S. Revolving Credit Facility’’); (2) establishes a secured, multicurrency, revolving credit
facility for Neenah Germany in the maximum principal amount of $75 million (the ‘‘German Revolving Credit
Facility,’’ and together with the U.S. Revolving Credit Facility, the ‘‘Global Revolving Credit Facilities’’); (3) causes
$657.7
Neenah and the other domestic borrowers to guarantee, among other things, the obligations under the German
Revolving Credit Facility; (4) provides for the Global Revolving Credit Facilities to mature on December 18, 2019;
and (5) provides for an accordion feature permitting one or more increases in the Global Revolving Credit
Facilities in an aggregate principal amount not exceeding $50 million, such that the aggregate commitments under
the Global Revolving Credit Facilities do not exceed $250 million.

$413.6
244.1

$416.2
279.8

$543.4
265.4

Consolidated

December 31,

$808.8

$696.0

2011

2012

2011

2010

2012

Analysis of Net Sales — Years Ended December 31, 2014, 2013 and 2012

The following table presents net sales by segment and net sales expressed as a percentage of total net sales:

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

$610.7

$565.1

$606.7

Total Assets
United States
Canada
Europe

Consolidated

Net sales

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
2012
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.

Technical Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fine Paper and Packaging . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49% $406.6
48% 372.7
29.5
3%

52% $416.1
45% 401.8
26.6
3%

$466.6
409.0
27.1

50%
46%
—

2014

2013

2012

Year Ended December 31,

F
o
r
m
1
0
-
K

Raw Materials
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$902.7

100% $844.5

100% $808.8

100%

Commentary:

Year 2014 versus 2013

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.
Total
Change

Technical Products . . . . . . . . . . . . . . . . . . . . . . . . .
Fine Paper and Packaging . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
2014
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
$466.6
$ 1.4
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
409.0
—
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
27.1
—
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
$ 1.4
$902.7
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
Consolidated net sales for the year ended December 31, 2014 were $58.2 million or seven percent higher than the
grades or other latex grades that would allow us to meet required product performance characteristics and incur
prior year due to incremental technical products volume related to the acquired technical materials business,
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
increased volume for both businesses and higher average selling prices.
pulp or latex grades would have a material effect on our operations.

Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in Net Sales Compared to the Prior Year

For the Year
Ended
December 31,

$416.1
401.8
26.6

$43.0
2.8
(0.2)

$ 6.1
4.4
0.7

$50.5
7.2
0.5

Average Net Price

Change Due To

$844.5

Currency

$58.2

$45.6

$11.2

Volume

2013

(cid:127) Net sales in our technical products business increased $50.5 million, or 12 percent, due to increased volume
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
and higher average selling prices. Excluding incremental sales from the acquisition, technical product sales
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
increased $26.4 million or six percent due to a five percent increase in shipments as volume increased for all
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
product categories led by backings, transportation filtration and specialty products. Average selling prices
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
increased approximately 1.5 percent from the prior year due to a more favorable product mix and higher
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
selling prices.
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

(cid:127) Net sales in our fine paper and packaging business increased $7.2 million or two percent from the prior year
We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
due to higher average net prices and increased volume. Average net price improved from the prior year due
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
to a more favorable product mix and a one percent increase in average selling prices. Sales volumes increased
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
approximately one percent from the prior year period primarily due to growth in shipments of core premium
fiber supply issues to have a material effect on our operations.
products, luxury packaging and labels, and incremental sales of approximately $1.5 million in the first quarter
of 2014 from the acquisition of the Southworth brands (acquired on January 31, 2013).

Year 2013 versus 2012

For the Year
Ended
December 31,

2013

2012

$416.1
401.8
26.6

$406.6
372.7
29.5

Change in Net Sales Compared to the Prior Year

Change Due To

Volume

Average Net Price

Currency

Total
Change

$ 9.5
29.1
(2.9)

$ 5.1
16.7
(2.9)

$ (4.2)
12.4
—

$ 8.2

$ 8.6
—
—

$ 8.6

Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$844.5

$808.8

$35.7

$18.9

Consolidated net sales for the year ended December 31, 2013 were $35.7 million higher than the prior year
primarily due to incremental volume growth in both segments, a more favorable product mix for our fine paper
and packaging business and favorable currency exchange rate effects.

(cid:127) Net sales in our technical products business increased $9.5 million, or two percent, as favorable currency
effects and increased volume more than offset lower average selling prices. Sales volumes increased
approximately one percent from the prior year due to growth in transportation filtration and specialty tape
shipments that more than offset a decline in wall covering volume. Favorable currency exchange effects
reflected a three percent strengthening of the Euro relative to the U.S. dollar during 2013. Average selling
prices decreased less than one percent from the prior year and included the effect of contractual price
adjustments for certain grades due to the pass-through of lower input costs.

(cid:127) Net sales in our fine paper and packaging business increased $29.1 million or eight percent from the prior

year due to increased volume and a more favorable product mix. Sales volumes increased approximately four
percent due to incremental volume from the acquisitions of the Southworth and Wausau brands and double-
digit growth in luxury packaging shipments, partially offset by lower shipments of both lower priced
non-branded products and certain branded products. Average net price improved from the prior year due to a
more favorable product mix that included a greater proportion of higher priced products and modestly higher
average selling prices.

Analysis of Operating Income — Years Ended December 31, 2014, 2013 and 2012

The following table sets forth line items from our consolidated statements of operations as a percentage of net
sales for the periods indicated and is intended to provide a perspective of trends in our historical results:

Year Ended December 31,

2014

2013

2012

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.0% 100.0% 100.0%
80.4
80.4

80.3

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
One-time adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense — net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.6
9.2
0.7
—

9.7
1.2

8.5
1.2

19.6
9.4
0.2
0.1

9.9
1.3

8.6
2.8

19.7
9.6
1.2
0.2

8.7
1.7

7.0
2.1

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.3% 5.8% 4.9%

The following table sets forth our operating income by segment for the periods indicated:

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

Year Ended December 31,

The following tables present further information about our businesses by geographic area (dollars in millions):

2014

2013

2012

Operating income
Technical Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fine Paper and Packaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating Income as Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net sales
United States
Europe

2012

Year Ended December 31,

$ 46.9
61.2
(0.4)
(20.2)

2011

$ 38.6
59.8
1.2
(15.8)

2010

$ 37.6
50.0
2.4
(19.6)

$416.2
279.8

83.8

$413.6
244.1

70.4

87.5

$543.4
265.4

Consolidated
Adjustments for One-time Items
Fine Paper and Packaging

$808.8

$696.0

$657.7

Acquisition integration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
0.4
December 31,

Technical Products
Total Assets
United States
Unallocated corporate costs
Canada
Europe

Integration/Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Post-retirement benefit plan settlement charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated

2012

2011

2010

2.2

0.2

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

$610.7

$565.1

$606.7

0.2
—
0.5

3.5
0.7
0.2

5.8

—

3.5
—
0.6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total
4.1
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Total One-time Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.9
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
Operating Income as Adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
business segment.

$ 85.1

$ 94.1

$ 80.3

6.6

4.4

0.7

1.3

Raw Materials

In accordance with generally accepted accounting principles in the United States (‘‘GAAP’’), consolidated
operating income includes the pre-tax effects of unusual items. We believe that by adjusting reported operating
income to exclude the effects of these items, the resulting adjusted operating income is on a basis that reflects the
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
results of our ongoing operations. We believe that providing adjusted operating results will help investors gain an
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
additional perspective of underlying business trends and results. Adjusted operating income is not a recognized
from various suppliers. The technical products business purchases substantially all of its raw material requirements
term under GAAP and should not be considered in isolation or as a substitute for operating income derived in
externally. We believe that all of the raw materials for our technical products operations, except for certain
accordance with GAAP. Other companies may use different methodologies for calculating their non-GAAP
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
financial measures and, accordingly, our non-GAAP financial measures may not be comparable to their measures.
single supplier would not cause a shutdown of our manufacturing operations.

F
o
r
m
1
0
-
K

Commentary:

Year 2014 versus 2013

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
$(9.0)
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 87.5 $ 83.8 $ 3.7

(a) Includes price changes, net of changes in product mix.

59.8
1.2
(20.2) (15.8)

$ 0.3
(7.0)
—
—

$ 5.8
4.7
0.7
—

61.2
(0.4)

Change Due To

$(6.7)

Material

$11.2

$ 7.7

$0.5

Total

2014

2013

Net

(b) Includes price changes for raw materials and energy.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
related to the acquired technical materials business and $1.2 million of restructuring costs. For the year ended
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
December 31, 2013, Technical Products results include $0.2 million of restructuring costs.
fiber supply issues to have a material effect on our operations.

(d) For the year ended December 31, 2013, Fine Paper and Packaging results include $0.4 million of integration

costs related to the Southworth acquisition.

(e) For the year ended December 31, 2014 unallocated corporate costs include a pension plan settlement charge
of $3.5 million, $0.2 million of costs related to the amendment and restatement of our bank credit agreement
and $0.7 million of restructuring costs. For the year ended December 31, 2013 unallocated corporate costs
include $0.5 million of costs related to the early redemption of 2014 Senior Notes and a $0.2 million pension
plan settlement charge.

Consolidated operating income of $87.5 million for the year ended December 31, 2014 increased $3.7 million from
the prior year. Excluding aggregate charges of $6.6 million in 2014 for integration and restructuring costs, costs
related to the early extinguishment of debt and a pension plan settlement charge and aggregate charges of
$1.3 million in 2013 for acquisition-related integration costs, costs related to the early extinguishment of debt and
a pension plan settlement charge, operating income for the year ended December 31, 2014 increased $9.0 million
from the prior year. The improvement in operating income was primarily due to higher net price for both
businesses and incremental technical products volume, including volume related to the acquired technical materials
business, partially offset by higher manufacturing input costs in our fine paper and packaging business.

(cid:127) Operating income for our technical products business increased $8.3 million or 22 percent from the prior

year. The improvement in operating income was primarily due to a more favorable product mix, growth in
shipments for all product categories and incremental volume related to the acquired technical materials
business. The more favorable product mix was primarily due to growth in higher value filtration and specialty
shipments. In 2014, other manufacturing costs increased versus the prior year due to additional costs related
to annual maintenance downs at our German facilities, including an extended down at our filtration plant to
increase the capabilities and capacity of one of the machines. Results for the years ended December 31, 2014
and 2013 include $2.2 million and $0.2 million for integration/restructuring costs, respectively.

(cid:127) Operating income for our fine paper and packaging business increased $1.4 million or two percent from the
prior year primarily due to higher average net selling prices, manufacturing operating efficiencies and
increased shipment volume. These favorable variances were partially offset by $7.0 million in higher
manufacturing input costs, including more than $3.0 million for natural gas in the first quarter of 2014.
Results for the ended December 31, 2013 include $0.4 million for acquisition related integration costs.

(cid:127) Unallocated corporate costs for the year ended December 31, 2014 were $20.0 million, or $4.4 million

unfavorable to the prior year. Excluding aggregate charges of $4.4 million in 2014 for a pension plan
settlement charge, restructuring costs and costs related to the early extinguishment of debt and aggregate
charges of $0.7 million in 2013 for costs related to the early extinguishment of debt and a pension plan
settlement charge, unallocated corporate expenses were $0.7 million unfavorable to the prior year.

Year 2013 versus 2012

For the Year
Ended
December 31,

Change in Operating Income (Loss) Compared to the
Prior Year

Total

Net

Material

Change Due To

2013

2012

Change Volume Price(a) Costs(b) Currency Other(c)

$(1.8)
Technical Products . . . . . . . . . . . . . . . . . . . . . . . . $ 38.6 $ 37.6 $ 1.0 $ 2.4
9.2
Fine Paper and Packaging(d) . . . . . . . . . . . . . . . .
7.0
(1.5) —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Unallocated corporate costs(d) . . . . . . . . . . . . . . .

50.0
2.4
(15.8) (19.6)

9.8
(1.2)
3.8

59.8
1.2

—

Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83.8 $ 70.4 $13.4 $10.1

$ 5.2

$ 0.4
(3.6)
—
—

$(3.2)

$ 0.6
(0.1)
—
—

$(0.6)
(2.7)
0.3
3.8

$ 0.5

$ 0.8

(a) Includes price changes, net of changes in product mix.

(b) Includes price changes for raw materials and energy.

costs related to the Southworth acquisition. For the year ended December 31, 2012, Fine Paper and
Packaging results include $5.8 million of integration costs related to the Wausau acquisition and non-cash
charges for the revaluation of inventory and profit in inventory.

(d) For the year ended December 31, 2013 unallocated corporate costs include $0.5 million of costs related to the
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
early redemption of 2014 Senior Notes and a $0.2 million pension plan settlement charge. For the year ended
10 percent of our consolidated net sales.
December 31, 2012 unallocated corporate costs include a $3.5 million pension plan settlement charge and
$0.6 million of costs related to the early redemption of our 2014 Senior Notes.
The following tables present further information about our businesses by geographic area (dollars in millions):

Consolidated operating income of $83.8 million for the year ended December 31, 2013 increased $13.4 million
Year Ended December 31,
from the prior year. Excluding aggregate charges of $1.3 million in 2013 for integration and restructuring costs,
2010
costs related to the early extinguishment of debt and a pension plan settlement charge and aggregate charges of
$9.9 million in 2012 for acquisition-related integration costs, costs related to the early extinguishment of debt and
$413.6
a pension plan settlement charge, operating income for the year ended December 31, 2013 increased $4.8 million
244.1
from the prior year. The improvement in operating income was primarily due to incremental volume related to
the Southworth and Wausau acquisitions and a more favorable product mix for both businesses partially offset by
$657.7
higher operating costs in our fine paper and packaging business to support the acquired brands and lower average
selling prices for our technical products business.

Net sales
United States
Europe

$543.4
265.4

$416.2
279.8

Consolidated

$808.8

$696.0

2011

2012

December 31,

2012

2011

2010

(cid:127) Operating income for our technical products business increased $1.0 million or three percent from the prior
year. The improvement in operating income resulted from a more favorable product mix and increased
$308.9
volume, partially offset by lower average selling prices. The more favorable product mix was primarily due to
0.1
growth in higher value filtration and specialty tape shipments.
297.7

Total Assets
United States
Canada
Europe

(cid:127) Operating income for our fine paper and packaging business increased $9.8 million or 20 percent from the
$606.7
prior year. Excluding acquisition related integration costs of $0.4 million in 2013 and $5.8 million in 2012,
operating income increased $4.4 million or eight percent primarily due to incremental volume related to the
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Southworth and Wausau acquisitions and a more favorable product mix, partially offset by higher
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
manufacturing inputs costs and increased distribution costs, and selling and administrative spending in support
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
of the acquired brands.
business segment.

$322.5
0.2
288.0

$286.4
0.3
278.4

Consolidated

$610.7

$565.1

(cid:127)

Raw Materials

Additional Statement of Operations Commentary:

(cid:127) Unallocated corporate costs for the year ended December 31, 2013 were $15.8 million, or $3.8 million
favorable to the prior year. Excluding a pension plan settlement charge and costs related to the early
redemption of 2014 Senior Notes in 2013 and 2012, unallocated corporate expenses were $0.4 million
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
favorable to the prior year.
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
SG&A expense of $83.2 million for the year ended December 31, 2014 was $3.8 million higher than the prior
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
year primarily due to incremental selling and administrative costs related to the acquired technical materials
single supplier would not cause a shutdown of our manufacturing operations.
business and increased employee compensation costs. SG&A expense as a percentage of net sales for the year
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
ended December 31, 2014, was approximately 9.2 percent and was 0.2 percentage points lower than the prior
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
year as the increase in net sales in the current year more than offset higher SG&A expenses.
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
SG&A expense of $79.4 million for the year ended December 31, 2013 was $2.0 million higher than the prior
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
year primarily due to higher selling and administrative costs related to the brands acquired from Southworth
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
and Wausau. SG&A expense as a percentage of net sales for the year ended December 31, 2013, was
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
approximately 9.4 percent and was 0.2 percentage points lower than the prior year as the increase in net sales
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
in the current year more than offset higher SG&A expenses.
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
For the years ended December 31, 2014, 2013 and 2012, we incurred $11.4 million, $11.2 million and
pulp or latex grades would have a material effect on our operations.
$13.5 million of interest expense, respectively. For the year ended December 31, 2013, the decrease in interest
expense from the prior year was primarily due to lower weighted average interest rates due to the early
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
redemption of our 2014 Senior Notes.
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
In general, our effective tax rate differs from the U.S. statutory tax rate of 35 percent primarily due to the
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
benefits of our foreign financing structure and the proportion of pre-tax income in jurisdictions with marginal
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
tax rates that differ from the U.S. statutory tax rate. For the years ended December 31, 2014 and 2013, our
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
effective income tax rate related to continuing operations was 10 percent and 32 percent, respectively. The
decrease in our effective tax rate for the year ended December 31, 2014 from the prior year was primarily
We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
due to the recognition of R&D Credits related to activities for the years 2005 through 2014 and a change in
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
methodology. Excluding the benefit of R&D Credits related to prior year activities, our effective income tax
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
rate would be approximately 33 percent. For the year ended December 31, 2012, our effective income tax rate
fiber supply issues to have a material effect on our operations.
related to continuing operations was approximately 30 percent. For a reconciliation of effective tax rate to the
U.S. federal statutory tax rate, see Note 5 of Notes to Consolidated Financial Statements, ‘‘Income Taxes.’’

(cid:127)

F
o
r
m
1
0
-
K

Liquidity and Capital Resources

Net cash flow provided by (used in):
Operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities:

Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of Crane Technical Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of equity investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2014

2013

2012

$ 94.5

$ 83.5

$ 40.1

$ (27.9) $(28.7) $(25.1)
—
(14.1)
—
6.9

(72.4)
—
(2.9)
(1.7)

—
(5.2)
—
0.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(104.9) $(33.3) $(32.3)

Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in cash and cash equivalents (a) . . . . . . . . . . . . . . . . . . . . . . .

$ 10.2
$

$ 15.0
(0.8) $ 65.6

$(13.0)
$ (5.0)

(a) Includes the effect of exchange rate changes on cash and cash equivalents.

Operating Cash Flow Commentary

(cid:127) Cash provided by operating activities of $94.5 million for the year ended December 31, 2014 was $11.0 million
favorable to cash provided by operating activities of $83.5 million in the prior year. The favorable comparison
was primarily due to higher operating income and an $9.0 million decrease in our investment in working
capital for the year ended December 31, 2014 compared to an increase in our investment in working capital
of $6.6 million in the prior year. These favorable variances were partially offset by increased contributions and
benefit payments for post-retirement benefit obligations.

(cid:127) Cash provided by operating activities of $83.5 million for the year ended December 31, 2013 was $43.4 million
favorable to cash provided by operating activities of $40.1 million in the prior year. The favorable comparison
was primarily due to a $14.3 million year-over-year reduction in our working capital requirements, a
$13.4 million improvement in income from operations and lower spending for acquisitions in 2013
($4.8 million).

Investing Commentary:

(cid:127)

For the years ended December 31, 2014 and 2013, cash used by investing activities was $104.9 million and
$33.3 million, respectively. For the year ended December 31, 2014, cash used by investing activities includes
$72.4 million for the purchase of the Crane Technical Materials business and $2.9 million for the acquisition
of a non-controlling equity investment in a joint venture in India. Cash used by investing activities for the
year ended December 31, 2013 includes a payment of $5.2 million to acquire the Southworth brands. Cash
used by investing activities for the year ended December 31, 2012 includes a payment of $14.1 million to
acquire the Wausau brands offset by a $7.0 million reduction in restricted cash used to pay post-retirement
benefits.

(cid:127) Capital expenditures for the year ended December 31, 2014 were $27.9 million compared to spending of

$28.7 million in the prior year. In general, we expect aggregate annual capital expenditures of approximately 3
to 5 percent of net sales. For 2015, we expect annual capital expenditures at the higher end of that range or
approximately $45 million due to incremental investment in filtration assets in the U.S. We believe that the
level of our capital spending can be more than adequately funded from cash provided from operating
activities and allows us to maintain the efficiency and cost effectiveness of our assets and also invest in
expanded manufacturing capabilities to successfully pursue strategic initiatives and deliver attractive returns.

(cid:127)

For the years ended December 31, 2013 and 2012, cash used by investing activities was $33.3 million and
$32.3 million, respectively. Cash used by investing activities for the year ended December 31, 2013 includes a
payment of $5.2 million to acquire the Southworth brands. Cash used by investing activities for the year
ended December 31, 2012 includes a payment of $14.1 million to acquire the Wausau brands offset by a
$7.0 million reduction in restricted cash used to pay SERP benefits.

(cid:127) Capital expenditures for the year ended December 31, 2013 were $28.7 million compared to spending of

$25.1 million in the prior year.

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

Financing Commentary:

The following tables present further information about our businesses by geographic area (dollars in millions):

Our liquidity requirements are provided by cash generated from operations and short and long-term borrowings.

Year Ended December 31,

(cid:127)

Net sales
United States
Europe

2010
For the year ended December 31, 2014, cash provided by financing activities was $10.2 million compared to
cash provided by financing activities of $15.0 million for the year ended December 31, 2013. For the year
ended December 31, 2014, cash provided by financing activities was $15.0 million compared to cash used in
$413.6
financing activities of $13.0 million for the year ended December 31, 2013. Cash flows from financing
244.1
activities for the year ended December 31, 2013, included proceeds of $175 million from the issuance of the
$657.7
2021 Senior Notes. For the years ended December 31, 2013 and 2012, cash flows from financing activities
included outflows of $90 million and $68 million, respectively for the early redemption of the 2014 Senior
Notes.

$543.4
265.4

$416.2
279.8

Consolidated

December 31,

$808.8

$696.0

2012

2011

2012

2011

2010

F
o
r
m
1
0
-
K

Total Assets
Secured Bank Credit Facility
United States
Canada
Europe

Consolidated

$308.9
0.1
297.7

$322.5
0.2
288.0

$286.4
In December 2014, we entered into the Third Amended Credit Agreement. The Third Amended Credit
0.3
Agreement, among other things: (1) increases the maximum principal amount of our existing credit facility for the
278.4
U.S. Revolving Credit Facility to $125 million; (2) establishes the German Revolving Credit Facility in the
maximum principal amount of $75 million; (3) causes Neenah and the other domestic borrowers to guarantee,
among other things, the obligations arising under the German Revolving Credit Facility; (4) provides for the
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Global Revolving Credit Facilities to mature on December 18, 2019; and (5) provides for an accordion feature
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
permitting one or more increases in the Global Revolving Credit Facilities in an aggregate principal amount not
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
exceeding $50 million, such that the aggregate commitments under the Global Revolving Credit Facilities do not
business segment.
exceed $250 million. In addition, domestic borrowers may request letters of credit under the U.S. Revolving Credit
Facility in an aggregate face amount not to exceed $20 million outstanding at any time, and German borrowers
may request letters of credit under the German Revolving Credit Facility in an aggregate face amount not to
exceed $2 million outstanding at any time. See Note 6 of Notes to Consolidated Financial Statements, ‘‘Debt.’’
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
In May 2013, we issued $175 million of 2021 Senior Notes. Proceeds from this offering were used to retire the
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
remaining principal amount of 2014 Senior Notes, to repay approximately $56 million in outstanding revolver
single supplier would not cause a shutdown of our manufacturing operations.
borrowings under our bank credit agreement and for general corporate purposes.

Unsecured Senior Notes

Raw Materials

$610.7

$565.1

$606.7

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
In May 2013, we completed an early redemption of $20 million of our 2014 Senior Notes. The 2014 Senior Notes
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
were redeemed at par value plus accrued interest. The early redemption was financed with revolver borrowings
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
under our bank credit agreement and resulted in a pre-tax loss of $0.1 million due to the write-off of related
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
unamortized debt issuance costs.
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
In June 2013, we used a portion of the proceeds from the issuance of the 2021 Senior Notes to retire the
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
remaining $70 million in outstanding 2014 Senior Notes. The 2014 Senior Notes were redeemed at par value plus
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
accrued interest. The retirement of the 2014 Senior Notes resulted in a pre-tax loss of $0.3 million due to the
grades or other latex grades that would allow us to meet required product performance characteristics and incur
write-off of related unamortized debt issuance costs. As of December 31, 2014 there were no 2014 Senior Notes
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
outstanding. See Note 6 of Notes to Consolidated Financial Statements, ‘‘Debt.’’
pulp or latex grades would have a material effect on our operations.

Other Debt

In June 2014, we repaid the remaining A3.7 million ($5.2 million) in outstanding project financing borrowings
under the German Loan Agreement.

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
In January 2013, Neenah Germany entered into the Second German Loan Agreement to finance the construction
of a melt blown machine. The agreement provides for A9.0 million of construction financing which is secured by
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
the melt blown machine. The loan matures in September 2022 and principal is repaid in equal quarterly
installments beginning in December 2014. At December 31, 2014, A8.7 million ($10.6 million, based on exchange
rates at December 31, 2014) was outstanding under the Second German Loan Agreement.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

(cid:127) Availability under our revolving credit facility varies over time depending on the value of our inventory,

receivables and various capital assets. As of December 31, 2014, we had $48.7 million outstanding under our
Revolver and $145.8 million of available credit (based on exchange rates at December 31, 2014). During the
fourth quarter, the proceeds from Revolver borrowings in Germany were used to fund the repatriation of
cash to the U.S.

(cid:127) We have required debt payments through December 31, 2015 of $1.4 million on the Second German Loan

Agreement.

(cid:127)

For the year ended December 31, 2014, cash and cash equivalents decreased $0.8 million to $72.6 million at
December 31, 2014 from $73.4 million at December 31, 2013. Total debt increased $22.4 million to
$234.3 million at December 31, 2014 from $211.9 million at December 31, 2013. Net debt (total debt minus
cash and cash equivalents) increased by $23.2 million primarily due to the acquisition of the Crane Technical
Materials business for $72.4 million partially offset by cash flow from operations.

(cid:127) As of December 31, 2014, our cash balance consists of $66.0 million in the U.S. and $6.6 million held at

entities outside of the U.S. We are not aware of any restrictions regarding the repatriation of our non-U.S.
cash. Although we plan to use this cash at our non-U.S. entities, if we repatriated these cash balances to the
U.S., we could incur significant tax expense.

Transactions with shareholders

(cid:127)

For the years ended December 31, 2014 and 2013, we paid cash dividends of $1.02 per common share or
$17.1 million and $0.70 per common share or $11.4 million, respectively.

In November 2014, our Board of Directors approved an eleven percent increase in the annual dividend rate
on our common stock to $1.20 per share. The dividend is scheduled to be paid in four equal quarterly
installments beginning in March 2015. As of December 31, 2014, under the most restrictive terms of our debt
agreements, our ability to pay cash dividends on our common stock is limited to a total of $25 million in a
12-month period.

(cid:127)

In May 2014, our Board of Directors authorized the 2014 Stock Purchase Plan. The 2014 Stock Purchase Plan
allows us to repurchase up to $25 million of our outstanding Common Stock through May 2015. Purchases
under the 2014 Stock Purchase Program will be made from time to time in the open market or in privately
negotiated transactions in accordance with the requirements of applicable law. The timing and amount of any
purchases will depend on share price, market conditions and other factors. The 2014 Stock Purchase Program
does not require us to purchase any specific number of shares and may be suspended or discontinued at any
time. For the year ended December 31, 2014, we acquired approximately 22,500 shares of common stock at a
cost of $1.1 million pursuant to the 2014 Stock Purchase Program.

For the years ended December 31, 2014 and 2013, we acquired approximately 56,400 and 111,000 shares of
Common Stock, respectively, at a cost of $3.4 million and $4.6 million, respectively, for shares surrendered by
employees to pay taxes due on vested restricted stock awards and stock appreciation rights exercised. In
addition, we received $3.6 million and $3.7 million in proceeds from the exercise of employee stock options
for the years ended December 31, 2014 and 2013, respectively. For the years ended December 31, 2014 and
2013, we recognized excess tax benefits of $5.6 million and $2.6 million, respectively, related to the vesting or
exercise of stock-based awards.

Other Items:

(cid:127) As of December 31, 2014, we had $5.2 million and $64.4 million of U.S. federal and state NOLs, respectively.
If not used, substantially all of the NOLs will expire in various amounts between 2020 and 2030. In addition,
we had $31.4 million of U.S. federal and state R&D Credits which, if not used, will expire between 2025 and
2034 for the U.S. federal R&D Credits and between 2017 and 2029 for the state R&D Credits. We expect
that we will fully utilize our U.S. federal NOLs and be required to pay U.S. federal income taxes in 2015.

(cid:127)

For the year ended December 31, 2014, we recognized net actuarial losses of approximately $23 million
related to our post-retirement benefit plans. The losses were primarily due to the use of a lower discount rate
and a decrease in the mortality assumption used to value our post-retirement benefit plan liabilities. These
losses were partially offset by an actuarial gain as a result of better than expected asset returns.

Management believes that our ability to generate cash from operations and our borrowing capacity are adequate
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
to fund working capital, capital spending and other cash needs for the next 12 months. Our ability to generate
10 percent of our consolidated net sales.
adequate cash from operations beyond 2013 will depend on, among other things, our ability to successfully
implement our business strategies, control costs in line with market conditions and manage the impact of changes
The following tables present further information about our businesses by geographic area (dollars in millions):
in input prices and currencies. We can give no assurance we will be able to successfully implement these items.
Year Ended December 31,

Contractual Obligations
Net sales
The following table presents the total contractual obligations for which cash flows are fixed or determinable as of
$413.6
United States
December 31, 2014:
244.1
Europe

$416.2
279.8

$543.4
265.4

2011

2012

2010

(In millions)

Consolidated

2015

2016

2017

$808.8
2018

$696.0

Beyond
2019

2019

$657.7

Total

Long-term debt payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest payments on long-term debt (a) . . . . . . . . . . . . . . . . . . .
Open purchase orders (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other post-employment benefit obligations (c) . . . . . . . . . . . . . .
Contributions to pension trusts . . . . . . . . . . . . . . . . . . . . . . . . .
Minimum purchase commitments (d) . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Assets
United States
Canada
Europe

10.3

10.2
2012

1.4 $ 1.4 $ 1.4 $ 1.4 $50.0 $178.7 $234.3
December 31,
10.1
69.6
10.3
10.2
2010
— 81.9
81.9 — — — —
3.9
4.1
37.6
3.6
3.6
$322.5
$308.9
$286.4
— 12.3
12.3 — — — —
0.3
0.1
0.2
— 10.8
1.2 —
1.1
7.4
297.7
278.4
288.0
3.6
—
0.2 —
0.7
1.5

1.1
1.2

19.2

18.5

2011

3.2

Total contractual obligations . . . . . . . . . . . . . . . . . . . . . . . . . . $118.4 $17.2 $17.0 $16.9 $64.2 $216.4 $450.1

$610.7

$565.1

$606.7

Consolidated

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
(a) Interest payments on long-term debt includes interest on variable rate debt at December 31, 2014 weighted
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.

(b) The open purchase orders displayed in the table represent amounts we anticipate will become payable within

average interest rates.

the next 12 months for goods and services that we have negotiated for delivery.

Raw Materials

(c) The above table includes future payments that we will make for postretirement benefits other than pensions.
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
Those amounts are estimated using actuarial assumptions, including expected future service, to project the
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
future obligations.
from various suppliers. The technical products business purchases substantially all of its raw material requirements
(d) The minimum purchase commitments in 2015 are primarily for coal contracts. Although we are primarily
externally. We believe that all of the raw materials for our technical products operations, except for certain
liable for payments on the above operating leases and minimum purchase commitments, based on historic
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
operating performance and forecasted future cash flows, we believe our exposure to losses, if any, under these
single supplier would not cause a shutdown of our manufacturing operations.
arrangements is not material.

None.

Adoption of New Accounting Pronouncements

Critical Accounting Policies and Use of Estimates

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (‘‘GAAP’’)
grades or other latex grades that would allow us to meet required product performance characteristics and incur
in the United States requires estimates and assumptions that affect the reported amounts and related disclosures
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
of assets and liabilities at the date of the financial statements and net sales and expenses during the reporting
pulp or latex grades would have a material effect on our operations.
period. Actual results could differ from these estimates, and changes in these estimates are recorded when known.
The critical accounting policies used in the preparation of the consolidated financial statements are those that are
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
important both to the presentation of financial condition and results of operations and require significant
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
judgments with regard to estimates used. These critical judgments relate to the reported amounts of assets and
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
liabilities, disclosure of contingent assets and liabilities, and the reported amounts of expenses.
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
The following summary provides further information about the critical accounting policies and should be read in
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
conjunction with the notes to the Consolidated Financial Statements. We believe that the consistent application of
our policies provides readers of our financial statements with useful and reliable information about our operating
results and financial condition.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

We have discussed the application of these critical accounting policies with our Board of Directors and Audit
Committee.

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Inventories

We value U.S. inventories at the lower of cost, using the Last-In, First-Out (‘‘LIFO’’) method for financial
reporting purposes, or market. German inventories are valued at the lower of cost, using a weighted-average cost
method, or market. The First-In, First-Out value of U.S. inventories valued on the LIFO method was
$95.7 million and $86.6 million at December 31, 2014 and 2013, respectively and exceeded such LIFO value by
$14.0 million and $13.9 million, respectively. Cost includes labor, materials and production overhead.

Income Taxes

As of December 31, 2014, we have recorded aggregate deferred income tax assets of $45.7 million related to
temporary differences, net operating losses and research and development and other tax credits. As of
December 31, 2013, our aggregate deferred income tax assets were $36.1 million. No valuation allowance was
provided at either date. In determining the need for a valuation allowance, we consider many factors, including
specific taxing jurisdictions, sources of taxable income, income tax strategies and forecasted earnings for the
entities in each jurisdiction. A valuation allowance would be recognized if, based on the weight of available
evidence, we conclude that it is more likely than not that some portion or all of the deferred income tax assets
will not be realized.

As of December 31, 2014 and 2013, our liability for uncertain income taxes positions was $7.0 million and
$4.3 million, respectively. In evaluating and estimating tax positions and tax benefits, we consider many factors
which may result in periodic adjustments and which may not accurately anticipate actual outcomes.

Pension and Other Postretirement Benefits

Pension Plans

Substantially all active employees of our U.S. operations participate in defined benefit pension plans and/or
defined contribution retirement plans. Neenah Germany has defined benefit plans designed to provide a monthly
pension benefit upon retirement to substantially all of its employees in Germany. In addition, we maintain a
supplemental retirement contribution plan (the ‘‘SERP’’) which is a non-qualified defined benefit plan. We
provide benefits under the SERP to the extent necessary to fulfill the intent of our defined benefit retirement
plans without regard to the limitations set by the IRS on qualified defined benefit plans.

Our funding policy for qualified defined benefit plans is to contribute assets to fully fund the accumulated benefit
obligation, as required by the Pension Protection Act of 2006. Subject to regulatory and tax deductibility limits,
any funding shortfall is to be eliminated over a reasonable number of years. Nonqualified plans providing pension
benefits in excess of limitations imposed by the taxing authorities are not funded. There is no legal or
governmental obligation to fund Neenah Germany’s benefit plans and as such the plans are currently unfunded.

Consolidated pension expense for defined benefit pension plans was $11.8 million, $7.9 million and $11.3 million
for the years ended December 31, 2014, 2013 and 2012, respectively. The weighted-average expected long-term
rate of return on pension fund assets used to calculate pension expense was 6.50 percent, 7.00 percent and
7.25 percent for the years ended December 31, 2014, 2013 and 2012, respectively. The expected long-term rate of
return on pension fund assets held by our pension trusts was determined based on several factors, including input
from pension investment consultants and projected long-term returns of broad equity and bond indices. We also
considered the plans’ historical 10-year and 15-year compounded annual returns. We anticipate that, on average,
actively managed U.S. pension plan assets will generate annual long-term rates of return of approximately
6.50 percent. Our expected long-term rate of return on the assets in the plans is based on an asset allocation
assumption of about 35 percent with equity managers, with expected long-term rates of return of approximately 8
to10 percent, and 65 percent with fixed income managers, with an expected long-term rate of return of
approximately 4 to 6 percent. The actual asset allocation is regularly reviewed and periodically rebalanced to the
targeted allocation when considered appropriate. We evaluate our investment strategy and long-term rate of return
on pension asset assumptions at least annually.

Pension expense is estimated based on the fair value of assets rather than a market-related value that averages
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
gains and losses over a period of years. Investment gains or losses represent the difference between the expected
10 percent of our consolidated net sales.
return calculated using the fair value of the assets and the actual return based on the fair value of assets. The
variance between the actual and the expected gains and losses on pension assets is recognized in pension expense
The following tables present further information about our businesses by geographic area (dollars in millions):
more rapidly than it would be if a market-related value for plan assets was used. As of December 31, 2014, our
Year Ended December 31,
pension plans had cumulative unrecognized investment losses and other actuarial losses of $91.2 million. These
2010
unrecognized net losses may increase our future pension expense if not offset by (i) actual investment returns that
exceed the assumed investment returns, (ii) other factors, including reduced pension liabilities arising from higher
discount rates used to calculate our pension obligations or (iii) other actuarial gains, including whether such
$413.6
accumulated actuarial losses at each measurement date exceed the ‘‘corridor’’ determined under ASC Topic 715.
244.1

Net sales
United States
Europe

$543.4
265.4

$416.2
279.8

2011

2012

2010

2011

2012

$657.7

$696.0

$808.8

December 31,

Consolidated

The discount (or settlement) rate that is utilized for determining the present value of future pension obligations in
the U.S. is generally based on the yield for a theoretical basket of AA-rated corporate bonds currently available in
the market place, whose duration matches the timing of expected pension benefit payments. The discount (or
settlement) rate that is utilized for determining the present value of future pension obligations in Germany is
generally based on the IBOXX index of AA-rated corporate bonds adjusted to match the timing of expected
pension benefit payments. The weighted average discount rate utilized to determine the present value of future
pension obligations at December 31, 2014 and 2013 was 3.91 percent and 4.88 percent, respectively.

$308.9
0.1
297.7
Our consolidated pension expense in 2014 is based on the expected weighted-average long-term rate of return on
assets and the weighted-average discount rate described above and various other assumptions. Pension expense
beyond 2014 will depend on future investment performance, our contributions to the pension trusts, changes in
discount rates and various other factors related to the covered employees in the plans.

Total Assets
United States
Canada
Europe

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
The fair value of the assets in our defined benefit plans at December 31, 2014 of approximately $288 million
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
increased approximately $27 million from the fair value of about $261 million at December 31, 2013, as
business segment.
investment gains and employer contributions exceeded benefit and settlement payments. At December 31, 2014,
the projected benefit obligations of our defined benefit plans exceeded the fair value of plan assets by
approximately $65 million which was approximately $6 million larger than the $59 million deficit at December 31,
2013. The accumulated benefit obligation exceeded the fair value of plan assets by $48.0 million and $43.6 million
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
at December 31, 2014 and 2013, respectively. Contributions to pension trusts for the year ended December 31,
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
2014 were $24.5 million compared with $18.1 million for the year ended December 31, 2013. In addition, we made
from various suppliers. The technical products business purchases substantially all of its raw material requirements
direct benefit payments for unfunded qualified and supplemental retirement benefits of $2.3 million and
externally. We believe that all of the raw materials for our technical products operations, except for certain
$2.2 million for the years ended December 31, 2014 and 2013, respectively.
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

$322.5
0.2
288.0

$286.4
0.3
278.4

Raw Materials

$610.7

$565.1

$606.7

Other Postretirement Benefit Plans

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
We maintain postretirement health care and life insurance benefit plans for active employees and former
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
employees of our Canadian pulp operations. The plans are generally noncontributory for employees who were
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
eligible to retire on or before December 31, 1992 and contributory for most employees who became eligible to
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
retire on or after January 1, 1993. We do not provide a subsidized postretirement health care or life insurance
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
benefit to most employees hired after 2003. Our postretirement health care and life insurance benefit plans are
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
unfunded.
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
pulp or latex grades would have a material effect on our operations.

For the years ended December 31, 2014, 2013 and 2012, consolidated postretirement health care and life
insurance plan benefit expense was $3.8 million, $4.2 million and $4.9 million, respectively. The weighted-average
discount (or settlement) rate used to calculate postretirement health care and life insurance plan benefit expense
was 4.84 percent, 4.12 percent and 5.03 percent for the years ended December 31, 2014, 2013 and 2012,
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
respectively. The discount (or settlement) rate that is utilized for determining the present value of future
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
postretirement health care and life insurance plan benefit obligations in the U.S. is generally based on the yield
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
for a theoretical basket of AA-rated corporate bonds currently available in the market place, whose duration
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
matches the timing of expected postretirement health care and life insurance benefit payments. The discount (or
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
settlement) rate that is utilized for determining the present value of future postretirement health care and life
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
insurance obligations for our foreign benefit plans is generally based on an index of AA-rated corporate bonds
adjusted to match the timing of expected benefit payments.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
Our consolidated postretirement health care and life insurance plan benefit expense in 2014 is based on the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
weighted-average discount rate described above and various other assumptions. Postretirement health care and life
fiber supply issues to have a material effect on our operations.
insurance plan benefit expense beyond 2014 will depend on future health care cost trends, changes in discount
rates and various other factors related to the covered employees in the plans.

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Our obligations for postretirement health care and life insurance plan benefits are measured annually as of
December 31. The weighted average discount rate utilized to determine the present value of future postretirement
health care and life insurance obligations at December 31, 2014 and 2013 was 4.05 percent and 4.84 percent,
respectively. The assumed inflationary health care cost trend rates used to determine obligations at December 31,
2014 and costs for the year ended December 31, 2014 were 7.0 percent gradually decreasing to an ultimate rate of
4.5 percent in 2027. The assumed inflationary health care cost trend rates used to determine obligations at
December 31, 2013 and costs for the year ended December 31, 2014 were 7.3 percent gradually decreasing to an
ultimate rate of 4.5 percent in 2027. At December 31, 2014, the projected benefit obligations for our
postretirement health care and life insurance plans was approximately $41 million and was essentially unchanged
from the projected benefit obligation at December 31, 2013.

Impairment of Long-Lived Assets

Property, Plant and Equipment

Property, plant and equipment are tested for impairment in accordance with ASC Topic 360, Property, Plant, and
Equipment (‘‘ASC Topic 360’’), whenever events or changes in circumstances indicate that the carrying amounts of
such long-lived assets may not be recoverable from future net pre-tax cash flows. Impairment testing requires
significant management judgment including estimating the future success of product lines, future sales volumes,
growth rates for selling prices and costs, alternative uses for the assets and estimated proceeds from disposal of
the assets. Impairment testing is conducted at the lowest level where cash flows can be measured and are
independent of cash flows of other assets. An asset impairment would be indicated if the sum of the expected
future net pre-tax cash flows from the use of the asset (undiscounted and without interest charges) is less than the
carrying amount of the asset. An impairment loss would be measured based on the difference between the fair
value of the asset and its carrying amount. We determine fair value based on an expected present value technique
using multiple cash flow scenarios that reflect a range of possible outcomes and a risk free rate of interest are
used to estimate fair value.

The estimates and assumptions used in the impairment analysis are consistent with the business plans and
estimates we use to manage our business operations. The use of different assumptions would increase or decrease
the estimated fair value of the asset and would increase or decrease the impairment charge. Actual outcomes may
differ from the estimates.

Goodwill and Other Intangible Assets with Indefinite Lives

Goodwill arising from a business combination is recorded as the excess of purchase price and related costs over
the fair value of identifiable assets acquired and liabilities assumed in accordance with ASC Topic 805, Business
Combinations (‘‘ASC Topic 805’’). All of our goodwill was acquired in conjunction with the acquisition of Neenah
Germany in October 2006 and the technical materials business in July 2014.

Under ASC Topic 350, Intangibles — Goodwill and Other (‘‘ASC Topic 350’’), goodwill is subject to impairment
testing at least annually. ASC Topic 350 provides an entity with the option to first assess qualitative factors to
determine whether the existence of events or circumstances leads to a determination that it is more likely than not
that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or
circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than
its carrying amount, then performing the two-step impairment test is unnecessary. If the two-step impairment test
is necessary, a fair-value-based test is applied at the reporting unit level, which is generally one level below the
operating segment level. The test compares the fair value of an entity’s reporting units to the carrying value of
those reporting units. This test requires various judgments and estimates. We estimate the fair value of the
reporting unit using a market approach in combination with a discounted operating cash flow approach.
Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of
recognized and unrecognized assets and liabilities of the reporting unit. An adjustment to goodwill will be
recorded for any goodwill that is determined to be impaired. We test goodwill for impairment at least annually on
November 30 in conjunction with preparation of its annual business plan, or more frequently if events or
circumstances indicate it might be impaired.

At November 30, 2014, our assessment of qualitative facts and circumstances indicated no impairment of goodwill.
The qualitative factors considered included, but were not limited to, changes in the macroeconomic conditions;
changes in industry and market conditions such as an increase in the competitive environment; changes in
manufacturing input costs — particularly to the extent these cannot be recovered through higher selling prices;
changes in the financial performance of Neenah Germany and the acquired technical materials business including
earnings and cash flows; and changes in our market capitalization.

Certain trade names are estimated to have indefinite useful lives and as such are not amortized. Intangible assets
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
with indefinite lives are annually reviewed for impairment in accordance with ASC Topic 350.
10 percent of our consolidated net sales.

Other Intangible Assets with Finite Lives

The following tables present further information about our businesses by geographic area (dollars in millions):

Acquired intangible assets with finite useful lives are amortized on a straight-line basis over their respective
Year Ended December 31,
estimated useful lives and reviewed for impairment in accordance with ASC Topic 360. Intangible assets consist
2010
primarily of customer relationships, trade names and acquired intellectual property. Such intangible assets are
amortized using the straight-line method over estimated useful lives of between 10 and 15 years.

2011

2012

Our annual test of other intangible assets for impairment at November 30, 2014, 2013 and 2012 indicated that the
carrying amount of such assets was recoverable.

$543.4
265.4

$416.2
279.8

$413.6
244.1

$808.8

$696.0

$657.7

Stock-Based Compensation

December 31,

We account for stock-based compensation in accordance with the fair value recognition provisions of ASC Topic
2010
718, Compensation — Stock Compensation (‘‘ASC Topic 718’’). The amount of stock-based compensation cost
recognized is based on the fair value of grants that are ultimately expected to vest and is recognized pro-rata over
the requisite service period for the entire award.

2012

2011

Net sales
United States
Europe

Consolidated

Total Assets
United States
Canada
Europe

Consolidated

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

$610.7

$565.1

$606.7

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

As a multinational enterprise, we are exposed to risks such as changes in commodity prices, foreign currency
exchange rates, interest rates and environmental regulation. A variety of practices are employed to manage these
risks, including operating and financing activities and, where deemed appropriate, the use of derivative
instruments. Derivative instruments are used only for risk management purposes and not for speculation or
trading.

Presented below is a description of our most significant risks.

Raw Materials

Foreign Currency Risk

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Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
The translation of the balance sheets of our non-U.S. operations from their local currencies into U.S. dollars is
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
also sensitive to changes in the exchange rate of the U.S. dollar. Consequently, we performed a sensitivity test to
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
determine if changes in the exchange rate would have a significant effect on the translation of the balance sheets
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
of our non-U.S. operations into U.S. dollars. These translation gains or losses are recorded as unrealized
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
translation adjustments (‘‘UTA’’, a component of accumulated other comprehensive income) within stockholders’
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
equity. The hypothetical change in UTA is calculated by multiplying the net assets of our non-U.S. operations by a
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
10 percent change in the exchange rate of their local currencies versus the U.S. dollar. As of December 31, 2014,
grades or other latex grades that would allow us to meet required product performance characteristics and incur
the net assets of our non-U.S. operations exceeded their net liabilities by approximately $120 million. As of
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
December 31, 2014, a 10 percent decrease in the exchange rate of the U.S. dollar against the local currencies of
pulp or latex grades would have a material effect on our operations.
our non-U.S. operations would have decreased our stockholders’ equity by approximately $13 million.

Pulp

Commodity Risk

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
We purchase the wood pulp used to produce our products on the open market, and, as a result, the price and
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
other terms of those purchases are subject to change based on factors such as worldwide supply and demand and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
government regulation. We do not have significant influence over the price paid for our wood pulp purchases.
Therefore, an increase in wood pulp prices could occur at the same time that prices for our products are
decreasing and have an adverse effect on our results of operations, financial position and cash flows.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
Based on 2014 pulp purchases, a 10 percent increase in the average market price for pulp (approximately $85 per
fiber supply issues to have a material effect on our operations.
ton) would have increased our annual costs for pulp purchases by approximately $16 million.

Other Manufacturing Inputs

We purchase a substantial portion of the other manufacturing inputs necessary to produce our products on the
open market, and, as a result, the price and other terms of those purchases are subject to change based on factors
such as worldwide supply and demand and government regulation. We do not have significant influence over our
costs for such manufacturing inputs. Therefore, an increase in other manufacturing inputs could occur at the same
time that prices for our products are decreasing and have an adverse effect on our results of operations, financial
position and cash flows.

Our technical products business acquires certain of its specialized pulp requirements from two global suppliers and
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
pulp or latex grades would have a material effect on our operations.

Cotton fiber represents less than five percent of the total fiber requirements of our fine paper and packaging
business. Our fine paper and packaging business acquires a substantial majority of the cotton fiber used in the
production of certain branded bond paper products pursuant to annual agreements with two North American
producers. The balance of our cotton fiber requirements are acquired through ‘‘spot market’’ purchases from a
variety of other producers. We believe that a partial or total disruption in the production of cotton fibers at our
two primary suppliers would increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase
in cost. Since we have the ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we
would not expect cotton fiber supply issues to have a material effect on our operations.

We generate substantially all of the electrical energy used by our Munising mill and approximately 25 percent of
the electrical energy at our Appleton and Bruckm¨uhl mills. Availability of energy is not expected to be a problem
in the foreseeable future, but the purchase price of such energy can and likely will fluctuate significantly based on
fluctuations in demand and other factors. There is no assurance that that we will be able to obtain electricity or
natural gas purchases on favorable terms in the future.

Except for certain specialty latex grades and specialty softwood pulp used by our technical products business and
cotton fiber used by our fine paper and packaging business, we are not aware of any significant concentration of
business transacted with a particular supplier.

Interest Rate Risk

We are exposed to interest rate risk on our variable rate bank debt. At December 31, 2014, we had $48.7 million
of variable rate borrowings outstanding. A 100 basis point increase in interest rates would increase our annual
interest expense on outstanding variable rate borrowings by approximately $0.5 million.

Environmental Regulation/Climate Change Legislation

Our manufacturing operations are subject to extensive regulation primarily by U.S., German and other
international authorities. We have made significant capital expenditures to comply with environmental laws, rules
and regulations. Due to changes in environmental laws and regulations, including potential future legislation to
limit GHG emissions, the application of such regulations and changes in environmental control technology, we are
not able to predict with certainty the amount of future capital spending to be incurred for environmental
purposes. Taking these uncertainties into account, we have planned capital expenditures for environmental projects
during the period 2015 through 2017 of approximately $1 million to $2 million annually.

We believe these risks can be managed and will not have a material effect on our business or our consolidated
financial position, results of operations or cash flows.

Item 8. Financial Statements and Supplementary Data

The information required in Item 8 is contained in and incorporated herein by reference from pages F-1 through
F-48 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

None.

The following tables present further information about our businesses by geographic area (dollars in millions):

Item 9A. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Year Ended December 31,

2012

2011

2010

Consolidated

Net sales
United States
Europe

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has
evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in
$413.6
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of
244.1
the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer
and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls
$657.7
and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information
required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and are
effective in ensuring that information required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is accumulated and communicated to the Company’s management, including the
Total Assets
Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding
United States
required disclosure.
Canada
Europe

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

$543.4
265.4

$416.2
279.8

December 31,

$808.8

$696.0

Management’s Annual Report on Internal Control Over Financial Reporting

2012

2011

2010

Consolidated

$610.7

$565.1

$606.7

The Company’s management is responsible for establishing and maintaining effective internal control over
financial reporting as defined in Rules 13a-15(f) or 15a-15(f) under the Securities Exchange Act of 1934. The
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
management and board of directors regarding the preparation and fair presentation of published financial
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
statements.
business segment.

Raw Materials

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance
with respect to financial statement preparation and presentation.

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
Management assessed the effectiveness of the Company’s internal control over financial reporting as of
from various suppliers. The technical products business purchases substantially all of its raw material requirements
December 31, 2014. The scope of management’s assessment of the effectiveness of internal control over financial
externally. We believe that all of the raw materials for our technical products operations, except for certain
reporting includes all of the Company’s businesses except for the Crane Technical Materials business acquired in
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
July 2014. The acquired business constituted approximately 11 percent of total assets, five percent of revenues,
single supplier would not cause a shutdown of our manufacturing operations.
and one percent of net income of the consolidated financial statement amounts as of and for the year ended
December 31, 2014. Further discussion of this acquisition can be found in Note 3 ‘‘Acquisitions’’ to our
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
consolidated financial statements. In making this assessment, management used the criteria set forth by the
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
Framework (2013). Based upon its assessment, management believes that as of December 31, 2014, the Company’s
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
internal controls over financial reporting were effective.
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
pulp or latex grades would have a material effect on our operations.

The effectiveness of internal control over financial reporting as of December 31, 2014, has been audited by
Deloitte & Touche LLP, the independent registered public accounting firm who also audited the Company’s
consolidated financial statements. Deloitte & Touche’s attestation report on the Company’s internal control over
financial reporting is included herein. See ‘‘Item 15 — Exhibits and Financial Statement Schedules.’’

Neenah Paper, Inc
February 27, 2015

Changes in Internal Control Over Financial Reporting

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

There has been no significant change in the Company’s internal control over financial reporting during the three
months ended December 31, 2014 that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.

Item 9B. Other Information

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

None.

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Item 10. Directors and Executive Officers of the Registrant

PART III

The information required to be set forth herein, except for the information included under Executive Officers of
the Company, relating to nominees for director of Neenah and compliance with Section 16(a) of the Securities
Exchange Act of 1934 is set forth under the captions ‘‘Election of Directors,’’ ‘‘Meetings and Committees of the
Board of Directors,’’ ‘‘Corporate Governance’’ and ‘‘Section 16(a) Beneficial Ownership Reporting Compliance,’’
respectively, in the Proxy Statement for the Annual Meeting of Stockholders to be held on May 21, 2015. Such
information is incorporated herein by reference. The definitive Proxy Statement will be filed with the Securities
and Exchange Commission no later than 120 days after December 31, 2014.

Executive Officers of the Company

Set forth below is information concerning our executive officers.

Name

Position

John P. O’Donnell

President and Chief Executive Officer

Steven S. Heinrichs

Senior Vice President, General Counsel and Secretary

Bonnie C. Lind

Senior Vice President, Chief Financial Officer and Treasurer

James R. Piedmonte

Senior Vice President — Operations

Julie A. Schertell

Senior Vice President — Fine Paper and Packaging and Technical Products U.S.

Armin S. Schwinn

Senior Vice President — Managing Director of Neenah Germany

John P. O’Donnell, born in 1960, is our President and Chief Executive Officer and has been in that role since May
2011. Prior to becoming President and Chief Executive Office, Mr. O’Donnell served as our Senior Vice President,
Chief Operating Officer since June 2010. In November 2007, Mr. O’Donnell joined the Company as President,
Fine Paper. Mr. O’Donnell was employed by Georgia-Pacific Corporation from 1985 until 2007 and held
increasingly senior roles in the Consumer Products division. Mr. O’Donnell served as President of the North
America Retail Business from 2004 through 2007, and as President of the North American Commercial Tissue
business from 2002 through 2004.

Steven S. Heinrichs, born in 1968, is our Senior Vice President, General Counsel and Secretary and has been in
that role since June 2004 when he joined Kimberly-Clark as Chief Counsel, Pulp and Paper and General Counsel
for Neenah Paper, Inc. Prior to his employment with Kimberly-Clark, Mr. Heinrichs served as Associate General
Counsel and Assistant Secretary for Mariner Health Care, Inc., a nursing home and long-term acute care hospital
company. Before joining Mariner Health Care in 2003, Mr. Heinrichs served as Associate General Counsel and
Assistant Secretary for American Commercial Lines LLC, a leading inland barge and shipbuilding company from
1998 through 2003. Mr. Heinrichs engaged in the private practice of law with Skadden, Arps, Slate, Meagher and
Flom LLP and Shuttleworth, Smith, McNabb and Williams PLLC from 1994 through 1998. Mr. Heinrichs received
his MBA from the Kellogg School of Management at Northwestern University in 2008.

Bonnie C. Lind, born in 1958, is our Senior Vice President, Chief Financial Officer and Treasurer and has been in
that role since June 2004. Ms. Lind was an employee of Kimberly-Clark from 1982 until 2004, holding a variety of
increasingly senior financial and operations positions. From 1999 until June 2004, Ms. Lind served as the Assistant
Treasurer of Kimberly-Clark and was responsible for managing Kimberly-Clark’s global treasury operations. Prior
to that, she was Director of Kimfibers with overall responsibility for the sourcing and distribution of pulp to
Kimberly-Clark’s global operations.

James R. Piedmonte, born in 1956, is our Senior Vice President — Operations and has been in that role since June
2004. Mr. Piedmonte had been employed by Kimberly-Clark from 1978 until 2004, and held increasingly senior
positions within Kimberly-Clark’s operations function. Mr. Piedmonte was responsible for Kimberly-Clark’s pulp
mill and forestry operations in Pictou, Nova Scotia, from 2001 until 2004. Previously he was the Director of
Operations for the fine paper business operations, as well as mill manager at the Whiting, Wisconsin mill.

Julie A. Schertell, born in 1969, is our Senior Vice President — Fine Paper and Packaging and Technical Products
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
U.S., and has been in that role since January 2014. Ms. Schertell joined the Company in 2008 and served as Vice
10 percent of our consolidated net sales.
President of Sales and Marketing for the Fine Paper division through December 2010 and as a Senior Vice
President of the Company and President, Fine Paper through December 2013. Ms. Schertell was employed by
The following tables present further information about our businesses by geographic area (dollars in millions):
Georgia-Pacific Corporation in the Consumer Products Retail division, where she served as Vice President of Sales
Strategy from 2007-2008, and as Vice President of Customer Solutions from 2003 through 2007.

Year Ended December 31,

Net sales
United States
Europe

Armin S. Schwinn, born in 1959, is our Senior Vice President — Managing Director of Neenah Germany and has
been in that role since April 2010. In July 2014, Mr. Schwinn assumed responsibility for the sales and marketing
$413.6
activities of our acquired technical materials business. Mr. Schwinn had been Vice President, Finance of Neenah
244.1
Germany since our acquisition of FiberMark Germany in October 2006. Mr. Schwinn joined FiberMark Germany
in 1995 and held increasingly senior positions within FiberMark Germany’s financial, purchasing and
$657.7
administrative functions. Prior to this, Mr. Schwinn served in various leadership positions in other German
manufacturing and service companies.

$543.4
265.4

$416.2
279.8

Consolidated

$808.8

$696.0

December 31,

2012

2011

2010

There are no family relationships among our directors or executive officers.

2012

2011

2010

Total Assets
Code of Ethics
United States
Canada
Europe

$606.7

$610.7

Consolidated

Raw Materials

$286.4
0.3
278.4

$322.5
0.2
288.0

$308.9
0.1
The Neenah Paper, Inc. Code of Business Conduct and Ethics, applies to all directors, officers and employees of
297.7
Neenah. The Code of Business Conduct and Ethics meets the requirements of a ‘‘code of ethics’’ as defined by
$565.1
Item 406 of Regulation S-K, and applies to our Chief Executive Officer, Chief Financial Officer (our principal
financial officer) and Vice President — Controller (our principal accounting officer), as well as all other
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
employees, as indicated above. The Code of Business Conduct and Ethics also meets the requirements of a code
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
of conduct under New York Stock Exchange listing standards. The Code of Business Conduct and Ethics is posted
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
on our web site at www.neenah.com under the links ‘‘Investor Relations — Corporate Governance — Code of
business segment.
Ethics’’ and print copies are available upon request without charge. You can request print copies by contacting our
General Counsel in writing at Neenah Paper, Inc., 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005
or by telephone at 678-566-6500. The Company intends to disclose any amendments to the Code of Business
Conduct and Ethics, as well as any waivers for executive officers or directors, on our web site at www.neenah.com.
Information on our web site is not incorporated by reference in this document.

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
Information relating to executive compensation and other matters is set forth under the captions ‘‘Compensation,
single supplier would not cause a shutdown of our manufacturing operations.
Discussion and Analysis,’’ ‘‘Additional Executive Compensation,’’ ‘‘Director Compensation,’’ and ‘‘Compensation
Committee Report’’ in the Proxy Statement referred to in Item 10 above. Such information is incorporated herein
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
by reference.
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
Information relating to ownership of common stock of Neenah by certain persons is set forth under the caption
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
‘‘Security Ownership of Certain Beneficial Owners and Management’’ in the Proxy Statement referred to in
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
Item 10 above. Such information is incorporated herein by reference. Information regarding securities authorized
grades or other latex grades that would allow us to meet required product performance characteristics and incur
for issuance under equity compensation plans of Neenah is set forth under the caption ‘‘Equity Compensation
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
Plan Information’’ in the Proxy Statement referred to in Item 10 above. Such information is incorporated herein
pulp or latex grades would have a material effect on our operations.
by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Item 11. Executive Compensation

Item 13. Certain Relationships and Related Transactions and Director Independence

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

Information relating to existing or proposed relationships or transactions between Neenah and any affiliate of
Neenah is set forth under the caption ‘‘Certain Relationships and Related Transactions’’ in the Proxy Statement
referred to in Item 10 above. Such information is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

Information relating to Neenah’s principal accounting fees and services is set forth under the caption
‘‘Independent Registered Public Accounting Firm Fees and Services’’ in the Proxy Statement referred to in
Item 10 above. Such information is incorporated herein by reference.

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Item 15. Exhibits and Financial Statement Schedule

(a) Documents filed as part of this report:

1. Consolidated Financial Statements

PART IV

The following reports and financial statements are filed herewith on the pages indicated:

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Other Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Changes in Stockholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9

2. Financial Statement schedule

The following schedule is filed herewith:

Schedule II — Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-48

All other schedules for which provision is made in the applicable accounting regulations of the Securities and
Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have
been omitted.

3. Exhibits

See (b) below

(b) Exhibits

The following exhibits are filed with or incorporated by reference in this report. Where such filing is made by
incorporation by reference to a previously filed registration statement or report, such registration statement or
report is identified in parentheses. We will furnish any exhibit at no cost upon written request to us at: Investor
Relations, Neenah Paper, Inc., 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005.

Exhibit
Number

Exhibit

2.1

2.2

2.5

Distribution Agreement dated as of November 20, 2004 between Kimberly-Clark Corporation and
Neenah Paper, Inc. (filed as Exhibit 2.1 to the Neenah Paper, Inc. Current Report on Form 8-K
filed November 30, 2004 and incorporated herein by reference).

Sale and Purchase Agreement dated as of August 9, 2006 by and between FiberMark, Inc.,
FiberMark International Holdings LLC, and Neenah Paper, Inc. (filed as Exhibit 2.1 to the Neenah
Paper, Inc. Current Report on Form 8-K filed October 11, 2006 and incorporated herein by
reference).

Assignment of Sale and Purchase Agreement Rights dated October 11, 2006 by and between Neenah
Paper, Inc. and Neenah Paper International, LLC (filed as Exhibit 2.2 to the Neenah Paper, Inc.
Current Report on Form 8-K filed October 11, 2006 and incorporated herein by reference).

Agreement and Plan of Merger, among Neenah Paper, Inc., Fox Valley Corporation, Fox River
Paper Company, LLC and AF/CPS Holding Corporation, dated as of February 5, 2007 (filed as
Exhibit 2.1 to the Neenah Paper, Inc. Current Report on Form 8-K filed March 1, 2007 and
incorporated herein by reference).

2.7

2.8

2.9

2.10

2.11

3.1

3.2

4.1

4.2

4.3

4.4

2.6

Exhibit
Number
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

The following tables present further information about our businesses by geographic area (dollars in millions):

Amended and Restated Share Purchase Agreement dated as of June 24, 2008, by and among
Neenah Paper Company of Canada, NPCC Holding Company, LLC, Neenah Paper, Inc., Azure
Mountain Capital Holdings LP, Northern Pulp NS LP, and Azure Mountain Capital Financial LP
(filed as Exhibit 10.2 to the Neenah Paper, Inc. Quarterly Report on Form 10-Q for the three
Year Ended December 31,
months ended June 30, 2008, filed August 11, 2008 and incorporated herein by reference).

Exhibit

2011

2012

2010

Net sales
United States
Europe

Asset Purchase Agreement dated as of June 24, 2008, by and between Neenah Paper Company of
$413.6
Canada and Azure Mountain Financial Corporation (filed as Exhibit 10.3 to the Neenah Paper, Inc.
244.1
Quarterly Report on Form 10-Q for the three months ended June 30, 2008, filed August 11, 2008
and incorporated herein by reference).

$543.4
265.4

$416.2
279.8

$808.8

$696.0

$657.7

Consolidated

Asset Purchase Agreement dated as of June 24, 2008, by and between Neenah Paper Company of
Canada and Northern Pulp Nova Scotia Corporation (filed as Exhibit 10.4 to the Neenah Paper, Inc.
2010
Quarterly Report on Form 10-Q for the three months ended June 30, 2008, filed August 11, 2008
and incorporated herein by reference).

December 31,

2012

2011

$308.9
Timberland Purchase and Sale Agreement dated as of February 26, 2010 by and between Neenah
0.1
Paper Company of Canada and Northern Timber Nova Scotia Corporation (filed as Exhibit 10.1 to
297.7
the Neenah Paper, Inc. Quarterly Report on Form 10-Q for the three months ended March 31, 2010,
filed May 10, 2010 and incorporated herein by reference).

$322.5
0.2
288.0

$286.4
0.3
278.4

$610.7

$565.1

$606.7

Consolidated

Total Assets
United States
Canada
Europe

Raw Materials

Asset Purchase Agreement, by and among Neenah Paper, Inc., Wausau Paper Corp. and Wausau
Paper Mills, LLC, dated as of December 7, 2011 (filed as Exhibit 2.1 to the Neenah Paper, Inc.
Current Report on Form 8-K filed January 31, 2012 and incorporated herein by reference).

Securities Purchase Agreement by and among Crane Technical Materials, Inc., Crane & Co., Inc.,
Neenah Paper, Inc. and Neenah Filtration, LLC dated as of June 2, 2014 (filed as Exhibit 2.1 to the
Neenah Paper, Inc. Quarterly Report on Form 10-Q for the three months ended June 30, 2014, filed
August 7, 2014) (portions of this exhibit have been omitted pursuant to a confidential treatment
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
request that we have filed with the Securities Exchange Commission).
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
Amended and Restated Certificate of Incorporation of Neenah Paper, Inc. (filed as Exhibit 3.1 to
externally. We believe that all of the raw materials for our technical products operations, except for certain
the Neenah Paper, Inc. Current Report on Form 8-K filed November 30, 2004 and incorporated
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
herein by reference).
single supplier would not cause a shutdown of our manufacturing operations.

Amended and Restated Bylaws of Neenah Paper, Inc. (filed as Exhibit 3.2 to the Neenah Paper, Inc.
Current Report on Form 8-K filed November 30, 2004 and incorporated herein by reference).

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
Indenture dated as of November 30, 2004 between Neenah Paper, Inc., the Subsidiary Guarantors
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
named therein and The Bank of New York Trust Company, N.A., as Trustee, including Form of 73⁄8
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
Senior Note due 2014 (filed as Exhibit 10.8 to the Neenah Paper, Inc. Current Report on Form 8-K
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
filed November 30, 2004 and incorporated herein by reference).
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
pulp or latex grades would have a material effect on our operations.

Rights Agreement between Neenah Paper, Inc. and EquiServe Trust Company, N.A., as Rights
Agent, dated as of November 30, 2004 (filed as Exhibit 4.1 to the Neenah Paper, Inc. Current
Report on Form 8-K filed November 30, 2004 and incorporated herein by reference).

Form of Subsidiary Guarantee (included as Exhibit E to Exhibit 4.1).

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
Indenture dated as of May 23, 2013, by and among the Company, the Guarantors named therein,
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
and the 2021 Notes Trustee filed as Exhibit 4.1 to the Neenah Paper, Inc. Current Report on
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
Form 8-K, filed May 24, 2013 and incorporated herein by reference).
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
Tax Sharing Agreement dated as of November 30, 2004 by and between Kimberly-Clark Corporation
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
and Neenah Paper, Inc. (filed as Exhibit 10.2 to the Neenah Paper, Inc. Current Report on
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
Form 8-K filed November 30, 2004 and incorporated herein by reference).

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
Lease Agreement dated June 29, 2004 between Neenah Paper, Inc. and Germania Property Investors
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
XXXIV, L.P. (filed as Exhibit 10.3 to the Neenah Paper, Inc. Current Report on Form 8-K filed
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
November 30, 2004 and incorporated herein by reference).
fiber supply issues to have a material effect on our operations.

10.2

10.3

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Exhibit
Number

10.4

10.5*

10.6*

10.7*

10.8*

10.12

10.20*

10.21*

10.22*

10.23

10.24

10.25

10.26

Exhibit

Industrial Lease Agreement dated October 8, 2004 by and between Neenah Paper, Inc. and Duke
Realty Limited Partnership (filed as Exhibit 10.4 to the Neenah Paper, Inc. Current Report on
Form 8-K filed November 30, 2004 and incorporated herein by reference).

Neenah Paper Supplemental Pension Plan (filed as Exhibit 10.5 to the Neenah Paper, Inc. Annual
Report on Form 10-K for the year ended December 31, 2004, filed March 31, 2005 and incorporated
herein by reference).

Neenah Paper Supplemental Retirement Contribution Plan (filed as Exhibit 10.6 to the Neenah
Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2004, filed March 31,
2005 and incorporated herein by reference).

Neenah Paper Executive Severance Plan (filed as Exhibit 10.7 to the Neenah Paper, Inc. Annual
Report on Form 10-K for the year ended December 31, 2004, filed March 31, 2005 and incorporated
herein by reference).

Neenah Paper Severance Pay Plan (filed as Exhibit 10.8 to the Neenah Paper, Inc. Annual Report
on Form 10-K for the year ended December 31, 2006, filed March 16, 2007 and incorporated herein
by reference).

Form of Employee Matters Agreement by and between Kimberly-Clark Corporation and Neenah
Paper, Inc. (filed as Exhibit 10.2 to the Neenah Paper, Inc. Registration Statement on Form 10, as
amended, filed August 26, 2004 and incorporated herein by reference).

Neenah Paper, Inc. Amended and Restated 2004 Omnibus Stock and Incentive Compensation Plan
(filed as Annex A to the Neenah Paper, Inc. Definitive Proxy Statement on Schedule 14A for the
year ended December 31, 2013, filed April 12, 2013 and incorporated herein by reference).

Neenah Paper Deferred Compensation Plan approved on December 11, 2006 (filed as Exhibit 10.1
to the Neenah Paper, Inc. Current Report on Form 8-K filed December 15, 2006 and incorporated
herein by reference).

Neenah Paper Directors’ Deferred Compensation Plan approved on December 11, 2006. (filed as
Exhibit 99.1 to the Neenah Paper, Inc. Registration Statement on Form S-8 filed December 21, 2006
and incorporated herein by reference).

Subscription Agreement, dated as of June 24, 2008, by and between Neenah Paper Company of
Canada, and Azure Mountain Capital Financial Corporation (filed as Exhibit 10.6 to the Neenah
Paper, Inc. Quarterly Report on Form 10-Q for the three months ended June 30, 2008, filed
August 11, 2008 and incorporated herein by reference).

Amended and Restated Credit Agreement dated as of November 5, 2009 by and among Neenah
Paper, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as
agent for the Lenders (filed as Exhibit 10.34 to the Neenah Paper, Inc. Annual Report on
Form 10-K for the year ended December 31, 2009, filed March 10, 2010 and incorporated herein by
reference).+

First Amendment dated as of March 31, 2011 to the Amended and Restated Credit Agreement
dated as of November 5, 2009 by and among Neenah Paper, Inc., certain of its subsidiaries, the
lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed as
Exhibit 10.1 to the Neenah Paper, Inc. Quarterly Report on Form 10-Q for the three months ended
March 31, 2011, filed May 10, 2011 and incorporated herein by reference).+

Second Amendment dated as of November 16, 2011 to the Amended and Restated Credit
Agreement dated as of November 5, 2009 by and among Neenah Paper, Inc., certain of its
subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders
(filed as Exhibit 10.27 to the Neenah Paper, Inc. Annual Report on Form 10-K for the year ended
December 31, 2011, filed March 8, 2012 and incorporated herein by reference).

10.27

Exhibit
Number
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

Second Amended and Restated Credit Agreement dated as of October 11, 2012 by and among
Neenah Paper, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank,
The following tables present further information about our businesses by geographic area (dollars in millions):
N.A., as agent for the Lenders (filed as Exhibit 10.28 to the Neenah Paper, Inc. Annual Report on
Form 10-K for the year ended December 31, 2013, filed March 7, 2013 and incorporated herein by
reference).

Year Ended December 31,

Exhibit

2010

2011

2012

Net sales
United States
Europe

First Amendment dated as of June 7, 2013 to the Second Amended and Restated Credit Agreement,
$416.2
dated as of October 11, 2012 by and among Neenah Paper, Inc., certain of its subsidiaries, the
279.8
lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed as
Exhibit 99.1 to the Neenah Paper, Inc. Current Report on Form 8-K filed June 11, 2013 and
incorporated herein by reference).

$543.4
265.4

$413.6
244.1

$696.0

$657.7

$808.8

Consolidated

Second Amendment dated December 16, 2013 to the Second Amended and Restated Credit
December 31,
Agreement dated as of October 11, 2012 by and among Neenah Paper, Inc., certain of its
2010
2011
subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders
(filed as Exhibit 99.1 to the Neenah Paper, Inc. Current Report on Form 8-K filed December 18,
2013 and incorporated herein by reference).

2012

First Amendment to the Neenah Paper Executive Severance Plan (filed as Exhibit 10.28 to the
Neenah Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2013, (filed
March 7, 2013 and incorporated herein by reference).

$610.7

$565.1

Consolidated

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

$606.7

Total Assets
United States
Canada
Europe

10.28

10.29

10.30

10.31

Raw Materials

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Third Amended and Restated Credit Agreement dated December 18, 2014 by and among Neenah
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Paper, Inc., certain subsidiaries of Neenah Paper, Inc., as Domestic Borrowers, Neenah
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
Services GmbH & Co. KG and certain of its subsidiaries, as German Borrowers, certain other
business segment.
subsidiaries of Neenah Paper, Inc. as Guarantors, each of the financial institutions which is a
signatory hereto or which may from time to time become a party hereto, as Lenders,
JPMorgan Chase Bank, N.A., as Administrative Agent and Bank of America, N.A., as Syndication
Agent (filed herewith).+

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
Statement Regarding Computation of Ratio of Earnings to Fixed Charges (filed herewith)
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

List of Subsidiaries of Neenah Paper, Inc. (filed herewith).

Consent of Deloitte & Touche LLP (filed herewith)

Power of Attorney (filed herewith)

31.1

31.2

Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’) (filed herewith).
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
Exchange Act (filed herewith).
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
Code (filed herewith).
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
XBRL Instance Document (filed herewith).
pulp or latex grades would have a material effect on our operations.

101.INS

101.SCH

XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

101.LAB

101.PRE

Indicates management contract or compensatory plan or arrangement.

+ Pursuant to a confidential treatment request portions of this exhibit have been furnished separately to the

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

Securities and Exchange Commission.

See Item 15(a) (2) above.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

NEENAH PAPER, INC.

By:

/s/ JOHN P. O’DONNELL

Name:
Title:

Date:

John P. O’Donnell
President and Chief Executive Officer (in his
capacity as a duly authorized officer of the
Registrant and in his capacity as Chief
Executive Officer)
February 27, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ JOHN P. O’DONNELL

John P. O’Donnell

/s/ BONNIE C. LIND

Bonnie C. Lind

President and Chief Executive Officer
(Principal Executive Officer)

February 27, 2015

Senior Vice President, Chief Financial
Officer and Treasurer (Principal Financial
Officer)

February 27, 2015

/s/ LARRY N. BROWNLEE

Larry N. Brownlee

Vice President — Controller (Principal
Accounting Officer)

February 27, 2015

/s/ SEAN T. ERWIN*

Chairman of the Board and Director

February 27, 2015

Sean T. Erwin

/s/ EDWARD GRZEDZINSKI*

Director

February 27, 2015

Edward Grzedzinski

/s/ MARY ANN LEEPER*

Director

February 27, 2015

Mary Ann Leeper

/s/ TIMOTHY S. LUCAS*

Director

February 27, 2015

Timothy S. Lucas

/s/ JOHN F. MCGOVERN*

Director

February 27, 2015

John F. McGovern

/s/ PHILIP C. MOORE*

Director

February 27, 2015

Philip C. Moore

/s/ STEPHEN M. WOOD*

Director

February 27, 2015

Stephen M. Wood

*By:

/s/ STEVEN S. HEINRICHS

Steven S. Heinrichs
Senior Vice President, General
Counsel and Secretary
Attorney-in-fact

TABLE OF CONTENTS
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

Page

The following tables present further information about our businesses by geographic area (dollars in millions):

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting .
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Changes in Stockholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule II — Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net sales
United States
Europe

F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9
F-48

Year Ended December 31,

$543.4
265.4

$413.6
244.1

$416.2
279.8

Consolidated

$808.8

$696.0

$657.7

2010

2011

2012

Total Assets
United States
Canada
Europe

Consolidated

December 31,

2012

2011

2010

$322.5
0.2
288.0

$286.4
0.3
278.4

$308.9
0.1
297.7

$610.7

$565.1

$606.7

Raw Materials

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

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Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

F-1
5

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Neenah Paper, Inc. Alpharetta, Georgia

We have audited the internal control over financial reporting of Neenah Paper, Inc. and subsidiaries (the
‘‘Company’’) as of December 31, 2014, based on criteria established in Internal Control — Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in
Management’s Annual Report on Internal Control Over Financial Reporting, management excluded from its
assessment the internal control over financial reporting at Crane Technical Materials, which was acquired on
July 1, 2014 and whose financial statements constitute 11% of total assets, 5% of revenues and 1% of net income
of the consolidated financial statement amounts as of and for the year ended December 31, 2014. Accordingly, our
audit did not include the internal control over financial reporting at Crane Technical Materials. The Company’s
management is responsible for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the
company’s principal executive and principal financial officers, or persons performing similar functions, and effected
by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal
control over financial reporting to future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting
as of December 31, 2014, based on the criteria established in Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated financial statements and financial statement schedule as of and for the year
ended December 31, 2014 of the Company and our report dated February 27, 2015 expressed an unqualified
opinion on those financial statements and financial statement schedules.

/s/ Deloitte & Touche LLP

Atlanta, Georgia
February 27, 2015

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
10 percent of our consolidated net sales.

To the Board of Directors and Stockholders of Neenah Paper, Inc. Alpharetta, Georgia

The following tables present further information about our businesses by geographic area (dollars in millions):

We have audited the accompanying consolidated balance sheets of Neenah Paper, Inc. and subsidiaries (the
‘‘Company’’) as of December 31, 2014 and 2013, and the related consolidated statements of income,
comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period
2010
ended December 31, 2014. Our audits also included the financial statement schedule listed in the Index at
Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the financial statements and financial statement
schedule based on our audits.

Net sales
United States
Europe

Year Ended December 31,

$543.4
265.4

$416.2
279.8

$413.6
244.1

2012

2011

2012

2010

2011

$696.0

$657.7

$808.8

December 31,

Consolidated

Total Assets
United States
Canada
Europe

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
$286.4
0.3
278.4

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position
of Neenah Paper, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and
their cash flows for each of the three years in the period ended December 31, 2014, in conformity with accounting
principles generally accepted in the United States of America. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

Atlanta, Georgia
February 27, 2015

/s/ Deloitte & Touche LLP

$322.5
0.2
288.0

$308.9
0.1
297.7

Raw Materials

$606.7

$610.7

$565.1

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

F-3
5

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NEENAH PAPER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)

Year Ended December 31,

2014

2013

2012

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 902.7
725.5

$ 844.5
678.9

$ 808.8
649.7

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Integration/restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension plan settlement charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense — net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations, net of taxes (Note 12) . . . . . . . . . . . . . . .

177.2
83.2
2.9
3.5
0.2
(0.1)

87.5
11.4
(0.3)

76.4
7.7

68.7
—

165.6
79.4
0.6
0.2
0.5
1.1

83.8
11.2
(0.2)

72.8
23.4

49.4
2.6

159.1
77.4
5.8
3.5
0.6
1.4

70.4
13.5
(0.1)

57.0
17.1

39.9
4.4

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 68.7

52.0

44.3

Earnings Per Common Share
Basic

Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted

4.09
—

4.09

4.03
—

4.03

3.02
0.16

3.18

2.96
0.16

3.12

2.46
0.27

2.73

2.41
0.27

2.68

Weighted Average Common Shares Outstanding (in thousands)

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,584

16,072

15,752

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,872

16,403

16,072

See Notes to Consolidated Financial Statements

F-4

Net sales
United States
Europe

NEENAH PAPER, INC. AND SUBSIDIARIES
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
10 percent of our consolidated net sales.

(In millions)
The following tables present further information about our businesses by geographic area (dollars in millions):

Year Ended December 31,

2014

2011

2013

2010

2012

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 68.7

$52.0

$ 44.3

Reclassification of amounts recognized in the consolidated statement of operations:
Amortization of adjustments to pension and other postretirement benefit liabilities . . .
Pension plan settlement charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated

Amounts recognized in the consolidated statement of operations . . . . . . . . . . . . . . . . .
Unrealized foreign currency translation gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net gain (loss) from pension and other postretirement benefit liabilities . . . . . . . . . . .
Curtailment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain (loss) on ‘‘available-for-sale’’ securities . . . . . . . . . . . . . . . . . . . . . . .

Gain (loss) from other comprehensive income items before income taxes . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision (benefit) for income taxes

Total Assets
United States
Canada
Europe

Consolidated

$543.4
265.4

$416.2
279.8

$413.6
244.1

$808.8

$696.0

$657.7

4.7
3.5

6.5
0.2

5.1
3.5

2012

$322.5
0.2
288.0

2011

8.2
6.7
December 31,
8.7
(23.7)
15.8
(34.3)
—
—
$286.4
— (0.1)
0.3
278.4

(49.8)
(8.7)

31.1
8.6

2010

8.6
4.4
(31.2)
0.3
0.1

$308.9
0.1
(17.8)
297.7
(7.7)

$606.7

(10.1)

$610.7

$565.1

Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(41.1)

22.5

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
$ 34.2
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.

See Notes to Consolidated Financial Statements

$ 27.6

$74.5

Raw Materials

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

F
o
r
m
1
0
-
K

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

F-5
5

NEENAH PAPER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

ASSETS
Current Assets

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, Plant and Equipment — net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible Assets — net (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,

2014

2013

$ 72.6
87.1
111.3
—
15.8
15.7

302.5
270.0
29.9
51.5
58.9
17.8

$ 73.4
90.5
101.1
0.6
22.8
17.0

305.4
261.7
13.3
43.1
38.5
13.9

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$730.6

$675.9

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities

Debt payable within one year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.4
46.9
45.8

$ 21.4
36.4
45.8

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Noncurrent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94.1
232.9
10.6
103.1
1.2

441.9

103.6
190.5
15.6
97.7
1.0

408.4

Commitments and Contingencies (Notes 10 and 11)
Stockholders’ Equity

Common stock, par value $0.01 — authorized: 100,000,000 shares; issued and outstanding:

17,849,000 shares and 17,383,000 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost: 1,101,000 shares and 1,022,000 shares . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.2
(31.7)
300.4
88.2
(68.4)

0.2
(27.2)
285.2
36.6
(27.3)

Total Stockholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

288.7

267.5

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$730.6

$675.9

See Notes to Consolidated Financial Statements

F-6

NEENAH PAPER, INC. AND SUBSIDIARIES
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
10 percent of our consolidated net sales.

(In millions, shares in thousands)
The following tables present further information about our businesses by geographic area (dollars in millions):

Net sales
United States
Europe

Balance, December 31, 2011 . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . .
Other comprehensive loss, net of
Consolidated

income taxes . . . . . . . . . . . . . . . . . .
Dividends declared . . . . . . . . . . . . . . .
Excess tax benefits from stock-based

compensation . . . . . . . . . . . . . . . . .
Shares purchased (Note 9) . . . . . . . . .
Stock options exercised . . . . . . . . . . . .
Restricted stock vesting (Note 9) . . . . .
Stock-based compensation . . . . . . . . . .

Total Assets
United States
Canada
Europe

Consolidated

Balance, December 31, 2012 . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . .
Other comprehensive income, net of

Common Stock

Amount

15,594
—

$0.1
—

Treasury
Stock

$(10.9)
—

Additional
Paid-In
Capital

$257.6
—

—
—

—
—
371
861
—

16,826
—

—
—

—
—
—
0.1
—

0.2
—

—
—

—
(4.1)
—
(7.6)
—

—
—

6.1
—
5.3
—
4.9

(22.6)
—

273.9
—

Year Ended December 31,

Retained Earnings/
Accumulated
Deficit

2012

2011

Accumulated Other
Comprehensive
Income

2010

$(40.4)
$543.4
44.3
265.4

$416.2
279.8

$(39.7)
$413.6
—
244.1

$808.8
—
(7.8)

2012
—
—
$322.5
—
0.2
—
288.0
—

$610.7
(3.9)
52.0

$696.0

$657.7
(10.1)
—

December 31,

2011

$286.4
0.3
278.4

$565.1

2010
—
—
$308.9
—
0.1
—
297.7
—

$606.7
(49.8)
—

—
(11.5)
—

—
—
0.1

—
—
—

F
o
r
m
1
0
-
K

—
—
—
—

2.6
3.7
—
4.9

17,383
—

—
336
221
—

—
(0.6)
(4.0)
—

Balance, December 31, 2013 . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . .
Other comprehensive loss, net of

Raw Materials
compensation . . . . . . . . . . . . . . . . .
Stock options exercised . . . . . . . . . . . .
Restricted stock vesting (Note 9) . . . . .
Stock-based compensation . . . . . . . . . .

—
—
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
—
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
—
from various suppliers. The technical products business purchases substantially all of its raw material requirements
(27.3)
0.2
externally. We believe that all of the raw materials for our technical products operations, except for certain
—
—
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.
income taxes . . . . . . . . . . . . . . . . . .
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
Dividends declared . . . . . . . . . . . . . . .
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
Excess tax benefits from stock-based
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
compensation . . . . . . . . . . . . . . . . .
—
—
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
Shares purchased (Note 9) . . . . . . . . .
—
—
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
Stock options exercised . . . . . . . . . . . .
—
—
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
Restricted stock vesting (Note 9) . . . . .
—
—
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
Stock-based compensation . . . . . . . . . .
—
—
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
pulp or latex grades would have a material effect on our operations.

Balance, December 31, 2014 . . . . . . . .

—
(1.1)
—
(3.4)
—

—
—
316
150
—

5.6
—
3.6
—
6.0

—
—
—
—
—

(41.1)
—

(27.2)
—

—
(17.1)

285.2
—

36.6
68.7

$(68.4)

$(31.7)

17,849

$300.4

$ 88.2

—
—

$0.2

See Notes to Consolidated Financial Statements

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

F-7
5

NEENAH PAPER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from stock-based compensation (Note 8) . . . . . . . . . . . . . . . . . .
Deferred income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash effects of changes in liabilities for uncertain income tax positions . . . . . .
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory acquired in acquisitions (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement charge, net of plan payments . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on asset dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) changes in operating working capital, net of effect

of acquisitions (Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other post-employment benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . .
INVESTING ACTIVITIES
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of brands (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of Crane Technical Materials (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of equity investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINANCING ACTIVITIES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt
Debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from stock-based compensation (Note 8)
. . . . . . . . . . . . . . . . . . .
Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares purchased (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES . . . . . . . . . . . . .
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . .
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR . . . . . . . . . . . . . . . . . .
CASH AND CASH EQUIVALENTS, END OF YEAR . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2014

2013

2012

$ 68.7

$ 52.0

$ 44.3

30.0
6.0
(5.6)
3.7
(2.0)
0.2
—
3.5
0.2

9.0
(18.3)
(0.9)

94.5

(27.9)
—
(0.6)
—
—
(72.4)
(2.9)
(1.1)

(104.9)

49.5
(2.4)
(5.6)
6.5
(25.4)
3.6
5.6
(17.1)
(4.5)
—

10.2

(0.6)

(0.8)
73.4

29.4
4.9
(2.6)
19.3
(0.1)
0.5
(1.8)
(0.2)
0.5

(6.6)
(11.5)
(0.3)

83.5

(28.7)
—
(0.1)
(5.2)
0.6
—
—
0.1

(33.3)

218.8
(3.5)
(209.2)
19.3
(0.1)
3.7
2.6
(11.5)
(4.6)
(0.5)

15.0

0.4

65.6
7.8

28.8
4.9
(6.1)
10.7
(3.9)
0.6
(6.6)
(3.4)
0.1

(20.9)
(7.3)
(1.1)

40.1

(25.1)
7.0
(0.1)
(14.1)
—
—
—
—

(32.3)

111.9
—
(96.0)
1.2
(21.1)
5.3
6.1
(7.8)
(11.7)
(0.9)

(13.0)

0.2

(5.0)
12.8

$ 72.6

$ 73.4

7.8

See Notes to Consolidated Financial Statements

F-8

NEENAH PAPER INC. AND SUBSIDIARIES
Concentration. For the years ended December 31, 2012, 2011 and 2010, no customer accounted for more than
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10 percent of our consolidated net sales.

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 1. Background and Basis of Presentation

Year Ended December 31,

2012

2011

2010

Background

Net sales
United States
Europe

Neenah Paper, Inc. (‘‘Neenah’’ or the ‘‘Company’’), is a Delaware corporation incorporated in April 2004. The
Company has two primary operations: its technical products business and its fine paper and packaging business
$657.7
(formerly known as the fine paper business). On January 1, 2015, we changed the name of our fine paper business
to fine paper and packaging. The name change better reflects the increasing importance, and plans for continued
growth, of our premium packaging products.

Consolidated

December 31,

$808.8

$696.0

$543.4
265.4

$416.2
279.8

$413.6
244.1

2010
The technical products business is an international producer of transportation, water and other filter media and
durable, saturated and coated substrates for industrial products backings and a variety of other end markets. The
$322.5
$308.9
fine paper and packaging business is a leading supplier of premium printing, packaging and other high end
0.1
0.2
specialty papers primarily in North America. The Company’s premium writing, text and cover papers, and specialty
297.7
288.0
papers are used in commercial printing and imaging applications for corporate identity packages, invitations,
personal stationery and high-end advertising, as well as premium labels and luxury packaging.
$610.7

Total Assets
United States
Canada
Europe

$286.4
0.3
278.4

Consolidated

$565.1

$606.7

2012

2011

On July 1, 2014, the Company purchased all of the outstanding equity of Crane Technical Materials, Inc. from
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
Crane & Co., Inc. for approximately $72 million. The acquired technical materials business provides performance-
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
oriented wet laid nonwovens media for filtration end markets as well as environmental, energy and industrial uses.
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
The technical materials business has two manufacturing facilities in Pittsfield, Massachusetts. The results of this
business segment.
business are reported in the Technical Products segment from the date of acquisition. See Note 3, ‘‘Acquisitions.’’

Raw Materials

On January 31, 2013, the Company purchased certain premium business paper brands and other assets from the
Southworth Company (‘‘Southworth’’) for a payment of $7.0 million. See Note 3, ‘‘Acquisitions.’’

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
On January 31, 2012, the Company purchased certain premium paper brands and other assets from Wausau Paper
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
Mills, LLC, a subsidiary of Wausau Paper Corp. (‘‘Wausau’’) for approximately $21 million. See Note 3,
from various suppliers. The technical products business purchases substantially all of its raw material requirements
‘‘Acquisitions.’’
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

In June 2008, the Company’s wholly owned subsidiary, Neenah Paper Company of Canada (‘‘Neenah Canada’’)
sold its pulp mill in Pictou, Nova Scotia (the ‘‘Pictou Mill’’). In March 2010, Neenah Canada sold approximately
475,000 acres of woodland assets in Nova Scotia (the ‘‘Woodlands’’). The sale of the Woodlands resulted in the
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
substantially complete liquidation of the Company’s investment in Neenah Canada. For the years ended
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
December 31, 2014, 2013 and 2012, the results of operations of the Pictou Mill and the Woodlands are reported
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
as discontinued operations. See Note 12, ‘‘Discontinued Operations.’’
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
pulp or latex grades would have a material effect on our operations.

The consolidated financial statements include the financial statements of the Company and its wholly owned and
majority owned subsidiaries. All significant inter-company balances and transactions have been eliminated in
consolidation.

Basis of Presentation

F
o
r
m
1
0
-
K

Note 2. Summary of Significant Accounting Policies

Use of Estimates

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

The preparation of financial statements in conformity with accounting principles generally accepted in the United
States (‘‘GAAP’’) requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses
during the reporting periods. Actual results could differ from these estimates, and changes in these estimates are
We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
recorded when known. Significant management judgment is required in determining the accounting for, among
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
other things, pension and postretirement benefits, retained insurable risks, reserves for sales discounts and
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
allowances, purchase price allocations, useful lives for depreciation and amortization, future cash flows associated
fiber supply issues to have a material effect on our operations.
with impairment testing for tangible and intangible long-lived assets, income taxes, contingencies, inventory
obsolescence and market reserves and the valuation of stock-based compensation.

F-9
5

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 2. Summary of Significant Accounting Policies (Continued)

Revenue Recognition

The Company recognizes sales revenue when all of the following have occurred: (1) delivery has occurred,
(2) persuasive evidence of an agreement exists, (3) pricing is fixed or determinable, and (4) collection is
reasonably assured. Delivery is not considered to have occurred until the customer takes title and assumes the
risks and rewards of ownership. The timing of revenue recognition is largely dependent on shipping terms. Sales
are reported net of allowable discounts and estimated returns. Reserves for cash discounts, trade allowances and
sales returns are estimated using historical experience.

The Company’s businesses manage seasonal peaks in inventory demand by providing certain customers with
finished goods inventory on consignment. The Company accounts for such inventory as finished goods until title to
the inventory is transferred and the customer assumes the risks and rewards of ownership at which time the
Company recognizes sales revenue.

Earnings per Share (‘‘EPS’’)

The Company computes basic earnings per share (‘‘EPS’’) in accordance with Accounting Standards Codification
(‘‘ASC’’) Topic 260, Earnings Per Share (‘‘ASC Topic 260’’). In accordance with ASC Topic 260, share-based awards
with non-forfeitable dividends are classified as participating securities. In calculating basic earnings per share, this
method requires net income to be reduced by the amount of dividends declared in the current period for each
participating security and by the contractual amount of dividends or other participation payments that are paid or
accumulated for the current period. Undistributed earnings for the period are allocated to participating securities
based on the contractual participation rights of the security to share in those current earnings assuming all
earnings for the period are distributed. Holders of restricted stock and restricted stock units (‘‘RSUs’’) have
contractual participation rights that are equivalent to those of common stockholders. Therefore, the Company
allocates undistributed earnings to restricted stock, RSUs and common stockholders based on their respective
ownership percentage, as of the end of the period.

ASC Topic 260 also requires companies with participating securities to calculate diluted earnings per share using
the ‘‘Two Class’’ method. The ‘‘Two Class’’ method requires first calculating diluted earnings per share using a
denominator that includes the weighted average share equivalents from the assumed conversion of dilutive
securities. Diluted earnings per share is then calculated using net income reduced by the amount of distributed
and undistributed earnings allocated to participating securities calculated using the ‘‘Treasury Stock’’ method and a
denominator that includes the weighted average share equivalents from the assumed conversion of dilutive
securities excluding participating securities. Companies are required to report the lower of the diluted earnings per
share amounts under the two calculations subject to the anti-dilution provisions of ASC Topic 260.

Diluted EPS was calculated to give effect to all potentially dilutive non-participating common share equivalents
using the ‘‘Treasury Stock’’ method. Outstanding stock options, stock appreciation rights (‘‘SARs’’) and target
awards of RSUs with performance conditions (‘‘Performance Units’’) represent the only potentially dilutive
non-participating security effects on the Company’s weighted-average shares. For the years ended December 31,
2014, 2013 and 2012, approximately 15,000, 450,000 and 1,015,000 potentially dilutive options, respectively, were
excluded from the computation of dilutive common shares because the exercise price of such options exceeded the
average market price of the Company’s common stock for the respective 12-month periods during which the
options were outstanding.

F-10

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 2. Summary of Significant Accounting Policies (Continued)

Year Ended December 31,

2012

2011

2010

The following table presents the computation of basic and diluted shares of common stock used in the calculation
of EPS (amounts in millions, except share and per share amounts):

$543.4
265.4

$416.2
279.8

$413.6
244.1

Net sales
United States
Europe

Earnings per basic common share

Consolidated

$808.8

$696.0

$657.7

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributed and undistributed amounts allocated to participating securities . . . . . . .

Income from continuing operations available to common stockholders . . . . . . . . . . .
Income from discontinued operations, net of income taxes . . . . . . . . . . . . . . . . . . .
Distributed and undistributed amounts allocated to participating securities . . . . . . .

Total Assets
United States
Canada
Europe

Consolidated

Net income available to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,
December 31,
2013
2011
$

2010
$

2012

49.4
(0.8)

39.9
(1.2)

$286.4
48.6
0.3
2.6
278.4
—

$565.1
$

51.2

$308.9
0.1
297.7

38.7
4.4
(0.1)

$606.7

43.0

2014
2012
$ 68.7
(0.8)
$322.5
67.9
0.2
—
288.0
—
$610.7
$
67.9

F
o
r
m
1
0
-
K

Weighted-average basic shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
15,752
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
$
business segment.

Basic earnings per share
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4.09
—

2.46
0.27

3.02
0.16

16,072

16,584

Raw Materials

4.09

3.18

2.73

2014

2013

2012

Earnings per diluted common share

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
39.9
single supplier would not cause a shutdown of our manufacturing operations.
(1.1)

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributed and undistributed amounts allocated to participating securities . . . . . . .

$ 68.7
(0.8)

Year Ended December 31,

49.4
(0.8)

48.6
2.6
—

67.9
—
—

Net income available to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted average diluted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
38.8
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
4.4
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
(0.1)
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
43.1
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
15,752
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
320
grades or other latex grades that would allow us to meet required product performance characteristics and incur
16,072
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
pulp or latex grades would have a material effect on our operations.

Weighted-average basic shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add: Assumed incremental shares under stock-based compensation plans . . . . . . . .

Earnings Per Common Share
Diluted earnings per share
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
$
2.41
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
0.27
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
2.68
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

$ 4.03
—

16,072
331

16,584
288

2.96
0.16

16,403

16,872

67.9

4.03

3.12

51.2

Cash and Cash Equivalents

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
Cash and cash equivalents include all cash balances and highly liquid investments with an initial maturity of three
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
months or less. The Company places its temporary cash investments with high credit quality financial institutions.
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
As of December 31, 2014 and 2013, $0.4 million and $0.5 million, respectively, of the Company’s cash and cash
fiber supply issues to have a material effect on our operations.
equivalents is restricted to the payment of postretirement benefits for certain former Fox River executives.

F-11
5

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 2. Summary of Significant Accounting Policies (Continued)

Inventories

U.S. inventories are valued at the lower of cost, using the Last-In, First-Out (LIFO) method for financial
reporting purposes, or market. German inventories are valued at the lower of cost, using a weighted-average cost
method, or market. Cost includes labor, materials and production overhead.

Foreign Currency

Balance sheet accounts of Neenah Germany and Neenah Canada are translated from Euros and Canadian dollars,
respectively, into U.S. dollars at period-end exchange rates, and income and expense accounts are translated at
average exchange rates during the period. Translation gains or losses related to net assets located in Germany and
Canada are recorded as unrealized foreign currency translation adjustments within accumulated other
comprehensive income (loss) in stockholders’ equity. Gains and losses resulting from foreign currency transactions
(transactions denominated in a currency other than the entity’s functional currency) are included in other
(income) expense — net in the consolidated statements of operations.

Property and Depreciation

Property, plant and equipment are stated at cost, less accumulated depreciation. Certain costs of software
developed or obtained for internal use are capitalized. When property, plant and equipment is sold or retired, the
costs and the related accumulated depreciation are removed from the accounts, and the gains or losses are
recorded in other (income) expense — net. For financial reporting purposes, depreciation is principally computed
on the straight-line method over estimated useful asset lives. The weighted average remaining useful lives for
buildings, land improvements and machinery and equipment are approximately 18 years, 13 years and 10 years,
respectively. For income tax purposes, accelerated methods of depreciation are used.

Estimated useful lives are periodically reviewed and changed when warranted. Long-lived assets are reviewed for
impairment whenever events or changes in circumstances indicate that their cost may not be recoverable. An
impairment loss would be recognized when estimated undiscounted future pre-tax cash flows from the use of an
asset are less than its carrying amount. Measurement of an impairment loss is based on the excess of the carrying
amount of the asset over its fair value. Fair value is generally measured using discounted cash flows.

The costs of major rebuilds and replacements of plant and equipment are capitalized, and the cost of maintenance
performed on manufacturing facilities, composed of labor, materials and other incremental costs, is expensed as
incurred. Start-up costs for new or expanded facilities, including costs related to trial production, are expensed as
incurred.

The Company accounts for asset retirement obligations (‘‘AROs’’) in accordance with ASC Topic 410, Asset
Retirements and Environmental Obligations, which requires companies to make estimates regarding future events
in order to record a liability for AROs in the period in which a legal obligation is created. Such liabilities are
recorded at fair value, with an offsetting increase to the carrying value of the related long-lived asset. As of
December 31, 2014, the Company is unable to estimate its AROs for environmental liabilities at its manufacturing
facilities.

Goodwill and Other Intangible Assets

The Company follows the guidance of ASC Topic 805, Business Combinations (‘‘ASC Topic 805’’), in recording
goodwill arising from a business combination as the excess of purchase price over the fair value of identifiable
assets acquired and liabilities assumed.

F-12

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 2. Summary of Significant Accounting Policies (Continued)

Year Ended December 31,

2012

2011

2010

$696.0

$808.8

Consolidated

$543.4
265.4

$416.2
279.8

Net sales
United States
Europe

Under ASC Topic 350, Intangibles — Goodwill and Other (‘‘ASC Topic 350’’), goodwill is subject to impairment
testing at least annually. ASC Topic 350 provides an entity with the option to first assess qualitative factors to
$413.6
determine whether the existence of events or circumstances leads to a determination that it is more likely than not
244.1
that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or
$657.7
circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than
its carrying amount, then performing the two-step impairment test is unnecessary. If the two-step impairment test
is necessary, a fair-value-based test is applied at the reporting unit level, which is generally one level below the
2010
operating segment level. The test compares the fair value of an entity’s reporting units to the carrying value of
those reporting units. This test requires various judgments and estimates. The Company estimates the fair value of
the reporting unit using a market approach in combination with a discounted operating cash flow approach.
$308.9
Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of
0.1
recognized and unrecognized assets and liabilities of the reporting unit. An adjustment to goodwill will be
297.7
recorded for any goodwill that is determined to be impaired. The Company tests goodwill for impairment at least
$606.7
annually on November 30 in conjunction with preparation of its annual business plan, or more frequently if events
or circumstances indicate it might be impaired.

Total Assets
United States
Canada
Europe

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
At November 30, 2014, the Company’s assessment of qualitative facts and circumstances indicated no impairment
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
of goodwill. The qualitative factors considered included, but were not limited to, changes in the macroeconomic
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
conditions; changes in industry and market conditions such as an increase in the competitive environment; changes
business segment.
in manufacturing input costs — particularly to the extent these cannot be recovered through higher selling prices;
changes in the financial performance of Neenah Germany and the acquired technical materials business including
earnings and cash flows; and changes in the Company’s market capitalization.

$322.5
0.2
288.0

$286.4
0.3
278.4

Raw Materials

Consolidated

December 31,

$565.1

$610.7

2012

2011

F
o
r
m
1
0
-
K

Research and Development Expense

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
Intangible assets with finite useful lives are amortized on a straight-line basis over their respective estimated useful
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
lives and reviewed for impairment in accordance with ASC Topic 360, Property, Plant, and Equipment. Intangible
from various suppliers. The technical products business purchases substantially all of its raw material requirements
assets consist primarily of customer relationships, trade names and acquired intellectual property. Such intangible
externally. We believe that all of the raw materials for our technical products operations, except for certain
assets are amortized using the straight-line method over estimated useful lives of between 10 and 15 years. Certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
trade names are estimated to have indefinite useful lives and as such are not amortized. Intangible assets with
single supplier would not cause a shutdown of our manufacturing operations.
indefinite lives are reviewed for impairment at least annually. See Note 4, ‘‘Goodwill and Other Intangible
Assets.’’

Research and development costs are charged to expense as incurred and are recorded in ‘‘Selling, general and
administrative expenses’’ on the consolidated statement of operations. See Note 14, ‘‘Supplemental Data —
Supplemental Statement of Operations Data.’’

The Company measures the fair value of pension plan assets in accordance with ASC Topic 820, Fair Value
Measurements and Disclosures (‘‘ASC Topic 820’’) which establishes a framework for measuring fair value. ASC
Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
three levels of the fair value hierarchy under ASC Topic 820 are described below:
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

Level 1 — Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in
active markets that the plan has the ability to access.

Fair Value Measurements

Level 2 — Inputs to the valuation methodology include:

(cid:127) Quoted prices for similar assets or liabilities in active markets;

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

(cid:127) Quoted prices for identical or similar assets or liabilities in inactive markets;

Inputs other than quoted prices that are observable for the asset or liability;

(cid:127)

Inputs that are derived principally from or corroborated by observable market data by correlation or
other means.

F-13
5

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 2. Summary of Significant Accounting Policies (Continued)

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially
the full term of the asset or liability.

Level 3 — Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input
that is significant to the fair value measurement. Valuation techniques attempt to maximize the use of observable
inputs and minimize the use of unobservable inputs.

The following table sets forth by level, within the fair value hierarchy, the fair value of the Company’s pension
plan assets:

Assets at Fair Value at December 31,

Level 1

Level 2 (a)

Level 3

Total

2014

2013

2014

2013

2014

2013

2014

2013

Equity securities:

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International
Debt securities
Fixed income . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 188.1
—
Cash and cash equivalents . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . — —

$ — $ — $ 63.1
36.1

1.0

1.1

$ 49.4
42.4

$ — $ — $ 63.1
36.1
—

—

$ 49.4
42.4

168.4
—

—
—

— 188.1
1.0
—

168.4
1.1

Total assets at fair value . . . . . . . . . . . . . . . . . .

$1.0

$1.1

$287.3

$260.2

$ — $ — $288.3

$261.3

(a) Pension plan assets are invested in a common collective trust. The common collective trust is valued at

quoted net asset value.

Fair Value of Financial Instruments

The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts
receivable and accounts payable approximate fair value due to their short maturities. The fair value of short and
long-term debt is estimated using rates currently available to the Company for debt of the same remaining
maturities. The following table presents the carrying value and the fair value of the Company’s debt at
December 31, 2014 and 2013.

December 31, 2014

December 31, 2013

Carrying
Value

Fair
Value

Carrying
Value

Fair
Value (a)

2021 Senior Notes (5.25% fixed rate) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Revolving Credit Facilities (variable rates) . . . . . . . . . . . . . . . . . . .
Neenah Germany revolving line of credit (variable rates) . . . . . . . . . . . . . .
Second German Loan Agreement (2.5% fixed rate) . . . . . . . . . . . . . . . . . .
Neenah Germany project financing (3.8% fixed rate) . . . . . . . . . . . . . . . . .

$175.0
48.7
—
10.6
—

$169.6
48.7
—
9.0
—

$175.0
—
19.3
12.4
5.2

$163.7
—
19.3
10.9
5.1

Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$234.3

$227.3

$211.9

$199.0

(a) Fair value for all debt instruments was estimated from Level 2 measurements.

F-14

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 2. Summary of Significant Accounting Policies (Continued)

Year Ended December 31,

2012

2011

2010

Net sales
United States
Europe

The Company’s investments in marketable securities are accounted for as ‘‘available-for-sale securities’’ in
accordance with ASC Topic 320, Investments — Debt and Equity Securities (‘‘ASC Topic 320’’). Pursuant to ASC
Topic 320, marketable securities are reported at fair value on the consolidated balance sheet and temporary
unrealized holding gains and losses are reported in other comprehensive income until realized upon sale. At
December 31, 2014, the Company had $3.2 million in marketable securities classified as ‘‘Other Assets’’ on the
consolidated balance sheet. The cost of such marketable securities was $3.2 million. Fair value for the Company’s
marketable securities was estimated from Level 1 inputs. The Company’s marketable securities are restricted to
2010
the payment of benefits under its supplemental retirement contribution plan (the ‘‘SERP’’).

$416.2
279.8

$413.6
244.1

$543.4
265.4

Consolidated

December 31,

$808.8

$696.0

$657.7

2012

2011

Total Assets
United States
Canada
Europe

Consolidated

Other Comprehensive Income (Loss)

$286.4
0.3
Comprehensive income (loss) includes, in addition to net income (loss), gains and losses recorded directly into
278.4
stockholders’ equity on the consolidated balance sheet. These gains and losses are referred to as other
$565.1
comprehensive income items. Accumulated other comprehensive income (loss) consists of foreign currency
translation gains and (losses), deferred gains and (losses) on ‘‘available-for-sale’’ securities, and adjustments
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
related to pensions and other post-retirement benefits. The Company does not provide income taxes for foreign
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
currency translation adjustments related to indefinite investments in foreign subsidiaries.
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.

The components of accumulated other comprehensive income (loss), net of applicable income taxes are as follows:

$322.5
0.2
288.0

$308.9
0.1
297.7

$606.7

$610.7

Raw Materials

December 31,

2014

2013

Unrealized foreign currency translation gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss from pension and other postretirement benefit liabilities (net of income tax benefits of

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
$35.1 million and $26.3 million, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(45.2)
externally. We believe that all of the raw materials for our technical products operations, except for certain
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(68.4) $(27.3)
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

The following table presents changes in accumulated other comprehensive income (‘‘AOCI’’):

$ (5.8) $ 17.9

(62.6)

F
o
r
m
1
0
-
K

Adjustment to pension and other benefit liabilities
Unrealized gain (loss) on ‘‘available-for-sale’’

Unrealized foreign currency translation gains

— (0.1) — (0.1)

Year Ended December 31,

(8.6) 13.9

(22.3) 7.7

0.1 —

(17.4)

Other comprehensive income (loss) . . . . . . . . . . . $(49.8) $8.7 $(41.1) $31.1 $(8.6) $22.5 $(17.8) $7.7 $(10.1)

Pretax

22.5

2014

2013

2012

0.1

Net

Tax

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
For the years ended December 31, 2014, 2013 and 2012, the Company reclassified $4.7 million, $6.5 million and
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
$5.1 million, respectively, of costs from accumulated other comprehensive income to cost of products sold and
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
selling, general and administrative expenses on the Consolidated Statements of Operations. For the years ended
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
December 31, 2014, 2013 and 2012, the Company recognized an income tax benefit of $1.7 million, $2.5 million
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
and $1.9 million, respectively, related to such reclassifications classified as Provision for income taxes on the
Consolidated Statements of Operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

For the years ended December 31, 2014, 2013 and 2012, the Company reclassified $3.5 million, $0.2 million and
$3.5 million, respectively, of costs from accumulated other comprehensive income to pension plan settlement
charge on the Consolidated Statements of Operations. For the years ended December 31, 2014, 2013 and 2012,
the Company recognized an income tax benefit of $1.3 million, $0.1 million and $1.3 million, respectively, related
to such reclassifications classified as Provision for income taxes on the Consolidated Statements of Operations.

F-15
5

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 2. Summary of Significant Accounting Policies (Continued)

Accounting Standards Changes

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09
(‘‘ASU 2014-09’’), Revenue from Contracts with Customers (‘‘ASC Topic 606’’). ASU 2014-09 supersedes the
revenue recognition guidance in ASC Topic 605, Revenue Recognition. The core principle of the guidance in ASU
2014-09 is that an entity should recognize revenue to depict the transfer of promised goods and services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in the exchange
for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15,
2016. Therefore, the Company will adopt ASU 2014-09 on January 1, 2017. The Company is still evaluating the
impact of adopting ASU 2014-09 but the adoption of ASU 2014-09 is not expected to have a material impact on
the Company’s consolidated financial position, results of operations or cash flows.

As of December 31, 2014, no other amendments to the ASC had been issued that will have or are reasonably
likely to have a material effect on the Company’s financial position, results of operations or cash flows.

Note 3. Acquisitions

Acquisition of Crane Technical Materials

On July 1, 2014, the Company purchased all of the outstanding equity of the Crane Technical Materials business
for approximately $72 million. The acquired business provides performance-oriented wet laid nonwovens media for
filtration end markets as well as environmental, energy and industrial uses. The results of this business are
reported in the Technical Products segment from the date of acquisition.

The Company accounted for the transaction using the acquisition method in accordance with ASC Topic 805
‘‘Business Combinations.’’ The allocation of the purchase price is based on estimates of the fair value of assets
acquired and liabilities assumed as of July 1, 2014. The Company has not identified any material unrecorded
pre-acquisition contingencies. The Company did not acquire any in-process research and development assets as
part of the acquisition.

The following table summarizes the allocation of the purchase price to the estimated fair value of the assets
acquired and liabilities assumed as of December 31, 2014:

Assets Acquired

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-amortizable intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortizable intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquired goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5.8
8.2
0.7
23.5
11.1
13.3
0.2
13.5

Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

76.3

Liabilities Assumed

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.8
1.1

3.9

Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$72.4

F-16

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 3. Acquisitions (Continued)

Year Ended December 31,

2012

2011

2010

Net sales
United States
Europe

The Company estimated the fair value of the assets and liabilities acquired in accordance with ASC Topic 820.
The fair value of amortizable and non-amortizable intangible assets was estimated by applying a royalty rate to
projected revenue or the use of the excess earnings method, net of tax impacts and adjusted for present value
considerations. The Company estimated the fair value of acquired property, plant and equipment using a
$657.7
combination of cost and market approaches. In general, the fair value of other acquired assets and liabilities was
estimated using the cost basis of the acquired technical materials business.

$416.2
279.8

$413.6
244.1

$543.4
265.4

Consolidated

$808.8

$696.0

December 31,

2010

2011

2012

Consolidated

Total Assets
United States
Canada
Europe

The excess of the purchase price over the estimated fair value of the tangible net assets and identifiable intangible
assets acquired was recorded as acquired goodwill. The factors contributing to the amount of goodwill recognized
are based on several long-term strategic benefits that are expected to be realized from the acquisition of the
$308.9
technical materials business. These benefits include entry into growing and profitable global markets for water
0.1
filtration, environmental/emissions control, and energy management with defensible technologies and brands. In
297.7
addition, the acquisition of brands and complementary offerings facilitates the Company’s expansion into
$606.7
non-woven product lines containing fiberglass, polymer fibers and carbon fibers. Substantially all of the acquired
goodwill is expected to be deductible for income tax purposes and is entirely allocated to the Technical Products
segment.

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
For the year ended December 31, 2014, the Company incurred $1.0 million of acquisition-related integration costs.
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
In addition, the Company incurred approximately $1.1 million in capital costs for IT systems and infrastructure
business segment.
projects. For the year ended December 31, 2014, net sales and income from operations before income taxes for
the acquired technical materials business were $24.1 million and $2.1 million (including the acquisition related
integration costs described above), respectively.

$322.5
0.2
288.0

$286.4
0.3
278.4

Raw Materials

$610.7

$565.1

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
The following selected unaudited pro forma consolidated statements of operations data for the years ended
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
December 31, 2014 and 2013 was prepared as though the acquisition of the technical materials business had
from various suppliers. The technical products business purchases substantially all of its raw material requirements
occurred on January 1, 2013. The information does not reflect future events that may occur after December 31,
externally. We believe that all of the raw materials for our technical products operations, except for certain
2014 or any operating efficiencies or inefficiencies that may result from the acquisition of the technical materials
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
business. Therefore, the information is not necessarily indicative of results that would have been achieved had the
single supplier would not cause a shutdown of our manufacturing operations.
businesses been combined during the periods presented or the results that the Company will experience going
forward.

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings Per Common Share

$925.3
90.1
70.3
—
70.3

Year Ended
December 31,

Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
Basic
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
$ 3.04
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
0.16
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
$ 3.20
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
Diluted
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2.98
We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
0.16
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
$ 3.14
fiber supply issues to have a material effect on our operations.

$ 4.19
—

$ 4.12
—

$ 4.19

$ 4.12

2014

F
o
r
m
1
0
-
K

F-17
5

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 3. Acquisitions (Continued)

Acquisition of Southworth

On January 31, 2013, the Company purchased certain premium paper brands and other assets from Southworth.
The Company paid $7.0 million for (i) certain premium fine paper brands including Southworth, (ii) approximately
one month of finished goods inventory valued at $1.8 million and (iii) certain converting equipment used for retail
grades. The results of the Southworth brands are reported in the Fine Paper and Packaging segment from the date
of acquisition. For the year ended December 31, 2013, the Company incurred $0.4 million in acquisition-related
integration costs.

Acquisition of Wausau

On January 31, 2012, the Company purchased certain premium paper brands and other assets from Wausau. The
Company paid approximately $21 million for (i) the premium fine paper brands ASTROBRIGHTS�,
ASTROPARCHE� and ROYAL, (ii) exclusive, royalty free and perpetual license rights for a portion of the
EXACT� brand specialty business, including Index, Tag and Vellum Bristol, (iii) approximately one month of
finished goods inventory and (iv) certain converting equipment used for retail grades. The results of the Index, Tag
and Vellum Bristol product lines are reported in the Other segment from the date of acquisition. The results of all
other brands acquired from Wausau are reported in the Fine Paper and Packaging segment from the date of
acquisition. For the year ended December 31, 2012, the Company incurred $5.8 million in acquisition-related
integration costs.

Note 4. Goodwill and Other Intangible Assets

As of December 31, 2014, the Company had goodwill of $51.5 million which is not amortized. The following table
presents changes in goodwill (all of which relates to the Company’s Technical Products segment) for the years
ended December 31, 2014, 2013 and 2012:

Gross Amount

Accumulated
Impairment
Losses

Balance at December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 89.1
7.0

Balance at December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill acquired in acquisition of the technical materials business . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

96.1
4.0

100.1
13.5
(11.8)

$(48.6)
(6.1)

(54.7)
(2.3)

(57.0)
—
6.7

Net

$40.5
0.9

41.4
1.7

43.1
13.5
(5.1)

Balance at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$101.8

$(50.3)

$51.5

Impairment

As of December 31, 2014 and 2013, the carrying amount of goodwill was not impaired.

F-18

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 4. Goodwill and Other Intangible Assets (Continued)

Year Ended December 31,

2012

2011

2010

Other Intangible Assets
Net sales
United States
Europe

$413.6
As of December 31, 2014, the Company had net identifiable intangible assets of $58.9 million. All such intangible
244.1
assets were acquired in the acquisitions of Neenah Germany, Fox River, the Wausau and Southworth brands and
$657.7
the technical materials business. The following table details amounts related to those assets.

$543.4
265.4

$416.2
279.8

Consolidated

$808.8

$696.0

Amortizable intangible assets

Total Assets
United States
Canada
Europe

Consolidated

Customer based intangibles . . . . . . . . . . . . . . . . .
Trade names and trademarks . . . . . . . . . . . . . . . .
Acquired technology . . . . . . . . . . . . . . . . . . . . . .

Total amortizable intangible assets . . . . . . . . . . . . . .

Weighted
average
amortization
period (years)

December 31, 2014

Gross
Amount

2012
Accumulated
Amortization

December 31,

December 31, 2013
2011
Gross
Amount

2010
Accumulated
Amortization

15
10-15
10-15

$22.7
5.1
7.5

35.3
36.9

$322.5
0.2
288.0

$ (8.1)
(4.2)
(1.0)

$610.7

(13.3)

$286.4
$17.5
0.3
5.8
278.4
1.1
$565.1
24.4
26.7

$308.9
$ (7.6)
0.1
(4.2)
297.7
(0.8)

$606.7

(12.6)
—

Total

$72.2

$51.1

$(13.3)

Raw Materials

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not amortized
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
$(12.6)
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.
In conjunction with the acquisition of the technical materials business, the Company recorded $11.1 million in
non-amortizable intangible trade names and $6.9 million and $6.4 million in amortizable customer based intangible
assets and acquired technology, respectively. All other changes in the carrying value of the Company’s intangible
assets not specifically identified are due to foreign currency translation effects. The weighted average useful lives
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
assigned to amortizable intangible trade names, trademarks and customer based intangible assets was 15 years.
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
As of December 31, 2014, $37.6 million and $21.3 million of such intangible assets are reported within the
externally. We believe that all of the raw materials for our technical products operations, except for certain
Technical Products and Fine Paper and Packaging segments, respectively. See Note 13, ‘‘Business Segment and
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
Geographic Information.’’ Aggregate amortization expense of acquired intangible assets for the years ended
single supplier would not cause a shutdown of our manufacturing operations.
December 31, 2014, 2013 and 2012 was $2.3 million, $1.9 million and $1.9 million, respectively and was reported
in Cost of Products Sold on the Consolidated Statement of Operations. Estimated amortization expense for the
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
years ended December 31, 2015, 2016, 2017, 2018 and 2019 is $2.6 million, $2.4 million, $1.9 million, $1.9 million
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
and $1.9 million, respectively.
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
pulp or latex grades would have a material effect on our operations.

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

F-19
5

F
o
r
m
1
0
-
K

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 5. Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Income tax expense
represented 10.1 percent, 32.1 percent and 30.0 percent of income from continuing operations before income taxes
for the years ended December 31, 2014, 2013 and 2012, respectively. The following table presents the principal
reasons for the difference between the Company’s effective income tax rate and the U.S. federal statutory income
tax rate:

U.S. federal statutory income tax rate . . . . . . . . . . . . .
U.S. state income taxes, net of federal income tax

benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax on foreign dividends . . . . . . . . . . . . . . . . . . . . . .
Foreign tax rate differences (a) . . . . . . . . . . . . . . . . . .
Foreign financing structure (b) . . . . . . . . . . . . . . . . . .
Research and development and other tax

credits (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Uncertain income tax positions . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
Other differences — net

Year Ended December 31,

2014

2013

2012

35.0% $ 26.7

35.0% $25.5

35.0% $20.0

1.6
2.1%
3.0%
2.3
(2.8)% (2.1)
(2.5)% (1.9)

(31.5)% (24.1)
4.9
0.3

6.4%
0.4%

2.3% 1.7
2.8% 2.0
(2.4)% (1.7)
(3.3)% (2.4)

(3.0)% (2.2)
1.2% 0.9
(0.5)% (0.4)

1.9% 1.1
—
—
(2.7)% (1.6)
(4.3)% (2.4)

—
—
1.2% 0.6
(1.1)% (0.6)

Effective income tax rate . . . . . . . . . . . . . . . . . . . . . .

10.1% $ 7.7

32.1% $23.4

30.0% $17.1

(a) Represents the impact on the Company’s effective tax rate due to changes in the mix of earnings among

taxing jurisdictions with differing statutory rates.

(b) Represents the impact on the Company’s effective tax rate of the Company’s financing strategies.

development (‘‘R&D’’) activities for the years 2005 through 2014 and a change in methodology, the Company
recognized a $24.1 million net benefit related to R&D tax credits.

The Company’s effective income tax rate can be affected by many factors, including but not limited to, changes in
the mix of earnings in taxing jurisdictions with differing statutory rates, the availability of R&D and other tax
credits, changes in corporate structure as a result of business acquisitions and dispositions, changes in the
valuation of deferred tax assets and liabilities, the results of audit examinations of previously filed tax returns and
changes in tax laws.

The following table presents the U.S. and foreign components of income from continuing operations before
income taxes:

Income from continuing operations before income taxes:
U.S.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$46.5
29.9

$48.0
24.8

$35.8
21.2

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$76.4

$72.8

$57.0

Year Ended December 31,

2014

2013

2012

F-20

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 5. Income Taxes (Continued)

Year Ended December 31,

2012

2011

2010

The following table presents the components of the provision (benefit) for income taxes:

Net sales
United States
Europe

Consolidated

Provision (benefit) for income taxes:

Current:

$543.4
265.4

$416.2
279.8

$413.6
244.1

Year Ended December 31,

2014

2013

2012

$808.8

$696.0

$657.7

2011

December 31,
$ 0.5
—
3.5
$286.4
4.0
0.3
278.4

$ (0.5) $ (2.2)
2010
—
8.8

0.3
5.9

6.6

5.7

$308.9
0.1
297.7

6.9
$565.1
(5.9)
2.7

18.4
—
(0.7)

$606.7

12.0
0.4
(1.9)

$322.5
0.2
288.0

$610.7

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2012

Total current tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Assets
United States
Canada
Europe

Deferred:

Consolidated

Total deferred tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
10.5
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
business segment.

Total provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$23.4

$ 7.7

$17.1

17.7

3.7

Raw Materials

The Company has elected to treat its Canadian operations as a branch for U.S. income tax purposes. Therefore,
the amount of income (loss) before income taxes from Canadian operations are included in the Company’s
consolidated U.S. income tax returns and such amounts are subject to U.S. income taxes.

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
single supplier would not cause a shutdown of our manufacturing operations.

F
o
r
m
1
0
-
K

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

F-21
5

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 5. Income Taxes (Continued)

The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.
The components of deferred tax assets and liabilities are as follows:

December 31,

2014

2013

Net current deferred income tax assets

Research and development tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating losses and credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 7.6
2.9
2.5
1.5
0.9
0.4

$ 0.5
13.2
2.4
1.6
4.8
0.3

Net current deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.8

22.8

Net noncurrent deferred income tax assets

Research and development tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating losses and credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accelerated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.5
10.0
20.2
(18.6)
(0.2)

1.5
8.5
22.3
(18.4)
(0.6)

Net noncurrent deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.9

13.3

Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 45.7

$ 36.1

Net noncurrent deferred income tax liability

Accelerated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 16.7
3.5
(1.1)
(8.1)
(0.2)
(0.2)

$ 18.8
4.5
(1.9)
(5.2)
(0.2)
(0.4)

Net noncurrent deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 10.6

$ 15.6

As of December 31, 2014 and 2013, the Company had no valuation allowance against its income tax assets. In
determining the need for a valuation allowance, the Company considers many factors, including specific taxing
jurisdictions, sources of taxable income, income tax strategies and forecasted earnings for the entities in each
jurisdiction. A valuation allowance is recognized if, based on the weight of available evidence, the Company
concludes that it is more likely than not that some portion or all of the deferred income tax asset will not be
realized.

As of December 31, 2014, the Company had $5.2 million of U.S. Federal and $64.4 million of U.S. state net
operating losses (‘‘NOLs’’). If not used, substantially all of the NOLs will expire in various amounts between 2020
and 2030. As of December 31, 2014, the Company had $31.4 million of U.S. federal and state R&D credits which,
if not used, will expire between 2025 and 2034 for the U.S. federal R&D credits and between 2017 and 2029 for
the state R&D credits. The Company also has preacquisition and recognized built-in loss carryovers of
$11.8 million, net of expected limitations. In addition, the Company has $3.4 million of Alternative Minimum Tax
Credit carryovers, which can be carried forward indefinitely.

As of December 31, 2014 and 2013, the Company had no undistributed earnings of foreign subsidiaries.

F-22

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 5. Income Taxes (Continued)

Year Ended December 31,

2012

2011

2010

The following is a tabular reconciliation of the total amounts of uncertain tax positions as of and for the years
ended December 31, 2014, 2013 and 2012:

Net sales
United States
Europe

$543.4
265.4

$416.2
279.8

$413.6
244.1
For the Years Ended
$657.7
$696.0
December 31,

Consolidated

$808.8

Balance at January 1,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012
Increases in prior period tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decreases in prior period tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increases in current period tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decreases due to settlements with tax authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) from foreign exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . .

Total Assets
United States
Canada
Europe

$322.5
0.2
288.0

2014

2013

2012

2010

December 31,
$ 4.3
2011
—
(2.2)
5.3
$286.4
(0.2)
0.3
(0.2)
278.4

$ 4.8
0.2
(0.8)
1.3
(1.3)
0.1

$ 8.4
4.4
(7.5)
—
(0.5)
—

$308.9
0.1
297.7

Balance at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated

$610.7

$ 7.0

$565.1

$ 4.3

$606.7

$ 4.8

If recognized, $6.6 million of the benefit for uncertain tax positions at December 31, 2014 would favorably affect
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
the Company’s effective tax rate in future periods. The Company does not expect that the expiration of the statute
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
of limitations or the settlement of audits in the next 12 months will result in liabilities for uncertain income tax
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
positions that are materially different than the amounts that were accrued as of December 31, 2014.
business segment.

Raw Materials

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, various U.S. state
jurisdictions and foreign jurisdictions. The Company is no longer subject to U.S. federal examination for years
before 2008 and state and local examinations for years before 2007 and non-U.S. income tax examinations for
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
years before 2012.
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
from various suppliers. The technical products business purchases substantially all of its raw material requirements
The Company recognizes accrued interest and penalties related to uncertain income tax positions in the Provision
externally. We believe that all of the raw materials for our technical products operations, except for certain
for income taxes on the consolidated statements of operations. As of December 31, 2014 and 2013, the Company
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
had less than $0.1 million and $0.1 million, respectively, accrued for interest and penalties related to uncertain
single supplier would not cause a shutdown of our manufacturing operations.
income tax positions.

F
o
r
m
1
0
-
K

Note 6. Debt

Long-term debt consisted of the following:

2021 Senior Notes (5.25% fixed rate) due May 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Neenah Germany revolving lines of credit (variable rates) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Revolving Credit Facilities (variable rates) due December 2019 . . . . . . . . . . . . . . . . . . .
Neenah Germany project financing (3.8% fixed rate) due in 16 equal semi-annual installments

$175.0
—
48.7

2014

Second German Loan Agreement (2.45% fixed rate) due in 32 equal quarterly installments

ending December 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
ending September 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.4
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
211.9
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
21.4
Less: Debt payable within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$190.5
We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

234.3
1.4

$232.9

10.6

5.2

—

F-23
5

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 6. Debt (Continued)

Unsecured Senior Notes

2021 Senior Notes

In May 2013, the Company completed an underwritten offering of eight-year senior unsecured notes (the ‘‘2021
Senior Notes’’) at a face amount of $175 million. The 2021 Senior Notes bear interest at a rate of 5.25%, payable
in arrears on May 15 and November 15 of each year, commencing on November 15, 2013, and mature on May 15,
2021. Proceeds from this offering were used to redeem the remaining $70 million outstanding principal amount of
ten-year 7.375% senior unsecured notes, originally issued on November 30, 2004, to repay approximately
$56 million in outstanding revolving credit agreement borrowings and for general corporate purposes. The 2021
Senior Notes are fully and unconditionally guaranteed by substantially all of the Company’s domestic subsidiaries
(the ‘‘Guarantors’’). The 2021 Senior Notes were sold in a private placement transaction, have not been registered
under the Securities Act of 1933, as amended, and may not be offered or sold absent registration or an applicable
exemption from registration requirements.

The 2021 Senior Notes are senior unsecured obligations of the Company and rank equally in right of payment
with all its existing and future senior unsecured indebtedness. The guarantees of the 2021 Senior Notes are senior
unsecured obligations of the Guarantors and rank equally in right of payment with all existing and future senior
unsecured indebtedness of the Guarantors. The 2021 Senior Notes and the guarantees of the 2021 Senior Notes
are effectively subordinated to the Company’s and the Guarantors’ existing and future secured indebtedness (to
the extent of the value of the collateral) and are structurally subordinated to all indebtedness and other
obligations of the Company’s subsidiaries that do not guarantee the 2021 Senior Notes, including the trade
creditors of such non-guarantor subsidiaries.

The 2021 Senior Notes contain terms, covenants and events of default with which the Company must comply,
which the Company believes are ordinary and standard for notes of this nature. Among other things, the 2021
Senior Notes contain covenants restricting our ability to incur certain additional debt, make specified restricted
payments, pay dividends, authorize or issue capital stock, enter into transactions with our affiliates, consolidate or
merge with or acquire another business, sell certain of our assets or liquidate, dissolve or wind-up the Company.
As of December 31, 2014, the Company was in compliance with all terms of the indenture for the 2021 Senior
Notes.

Amended and Restated Secured Revolving Credit Facility

In December 2014, the Company amended and restated its existing credit facility by entering into the Third
Amended and Restated Credit Agreement (the ‘‘Third Amended Credit Agreement’’) by and among the Company
and certain of its domestic subsidiaries as the ‘‘Domestic Borrowers’’, Neenah Services GmbH & Co. KG
(‘‘Neenah Services’’) and certain of its German subsidiaries as the ‘‘German Borrowers’’, certain other subsidiaries
as the ‘‘German Guarantors’’, the financial institutions signatory to the Third Amended Credit Agreement as
lenders (the ‘‘Lenders’’), and JPMorgan Chase Bank, N.A., as agent for the Lenders (the ‘‘Administrative Agent’’).

F-24

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 6. Debt (Continued)

Year Ended December 31,

2012

2011

2010

Consolidated

Net sales
United States
Europe

The Third Amended Credit Agreement, among other things: (1) increases the maximum principal amount of the
existing credit facility for the Domestic Borrowers to $125 million (the ‘‘U.S. Revolving Credit Facility’’);
$413.6
$416.2
(2) establishes a secured, multicurrency, revolving credit facility for the German Borrowers in the maximum
244.1
279.8
principal amount of $75 million (the ‘‘German Revolving Credit Facility,’’ and together with the U.S. Revolving
$657.7
Credit Facility, the ‘‘Global Revolving Credit Facilities’’); (3) causes the Company and the other Domestic
Borrowers to guarantee, among other things, the obligations of the German Borrowers arising under the German
Revolving Credit Facility; (4) provides for the Global Revolving Credit Facilities to mature on December 18, 2019;
and (5) provides for an accordion feature permitting one or more increases in the Global Revolving Credit
Facilities in an aggregate principal amount not exceeding $50 million, such that the aggregate commitments under
$286.4
$308.9
the Global Revolving Credit Facilities do not exceed $250 million. In addition, the Domestic Borrowers may
0.1
0.3
request letters of credit under the U.S. Revolving Credit Facility in an aggregate face amount not to exceed
297.7
278.4
$20 million outstanding at any time, and the German Borrowers may request letters of credit under the German
Revolving Credit Facility in an aggregate face amount not to exceed $2 million outstanding at any time.
$606.7
$565.1

Total Assets
United States
Canada
Europe

$322.5
0.2
288.0

$543.4
265.4

Consolidated

December 31,

$808.8

$696.0

$610.7

2012

2011

2010

F
o
r
m
1
0
-
K

Raw Materials

Proceeds of borrowings under the Global Revolving Credit Facilities may be used to finance working capital
needs, permitted acquisitions, permitted investments (including certain intercompany loans), certain dividends,
distributions and other restricted payments, and for other general corporate purposes.

Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
The right of the Domestic Borrowers to borrow and obtain letters of credit under the U.S. Revolving Credit
business segment.
Facility is subject to, among other things, the borrowing base of the Domestic Borrowers on a consolidated basis
(the ‘‘Domestic Borrowing Base’’). The right of the German Borrowers to borrow and obtain letters of credit
under the German Revolving Credit Facility is similarly subject to a borrowing base requirement (the ‘‘German
Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
Borrowing Base’’). The German Borrowing Base is initially determined on a combined basis for all German
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
Borrowers. Under certain circumstances (including the occurrence of an event of default resulting from an act or
from various suppliers. The technical products business purchases substantially all of its raw material requirements
omission of any German Borrower or German Guarantor), the Administrative Agent may require the German
externally. We believe that all of the raw materials for our technical products operations, except for certain
Borrowing Base to be determined separately for each of the German Borrowers. At its option the Company may,
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
from time to time, allocate a portion of the Domestic Borrowing Base to the German Borrowing Base (resulting
single supplier would not cause a shutdown of our manufacturing operations.
in a corresponding reduction of the Domestic Borrowing Base); however, the principal amount of borrowings and
the outstanding letter of credit exposure under the German Revolving Credit Facility may not at any time exceed
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
the German Revolving Credit Facility commitment amount then in effect.
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
The guarantees of the German Guarantors are limited solely to the German Revolving Credit Facility obligations.
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
Under the terms of the Third Amended Credit Agreement and related loan documentation, neither the German
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
Borrowers nor the German Guarantors (collectively, the ‘‘German Loan Parties’’) will be liable for any obligations
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
relating to the U.S. Revolving Credit Facility. The Global Revolving Credit Facilities are secured by liens on all or
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
substantially all of the assets of the Domestic Borrowers. The German Revolving Credit Facility is secured by liens
grades or other latex grades that would allow us to meet required product performance characteristics and incur
on all or substantially all of the assets of the German Borrowers and certain assets of the German Guarantors.
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
Any liens granted by the German Loan Parties secure only the German Revolving Credit Facility obligations.
pulp or latex grades would have a material effect on our operations.

Under the terms of the Third Amended Credit Agreement, borrowing under the U.S. Revolving Credit Facility
Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
will bear interest at either (1) a prime rate-based index, (2) the federal funds rate, or (3) LIBOR (which cannot
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
be less than zero percent) plus 1.00% plus an applicable margin ranging from 0.00% to 3.00%, depending on the
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
amount of availability under the Third Amended Credit Agreement. Borrowing under the German Revolving
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
Credit Facility will bear interest at LIBOR (which cannot be less than zero percent) plus an applicable margin
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
ranging from 1.50% to 2.00%, depending on the amount of availability under the Third Amended Credit
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.
Agreement. Until the tenth business day after delivery of the Company’s borrowing base compliance certificate for
the month ending June 30, 2015, the applicable margin on borrowings will be 0.25% for prime rate-based
We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
borrowings, and 1.75% for LIBOR-based borrowings. The Company is also required to pay a monthly commitment
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
fee on the unused amounts available under the Global Revolving Credit Facilities at a per annum rate of 0.25%.
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
fiber supply issues to have a material effect on our operations.

F-25
5

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 6. Debt (Continued)

The Third Amended Credit Agreement contains covenants with which the Company and its subsidiaries must
comply during the term of the agreement, which the Company believes are ordinary and standard for agreements
of this nature. Among other things, such covenants restrict the ability of the Company and its subsidiaries to incur
certain debt, incur or create certain liens, make specified restricted payments, authorize or issue capital stock,
enter into transactions with their affiliates, consolidate, merge with or acquire another business, sell certain of
their assets, or dissolve or wind up. In addition, if the aggregate availability under the Global Revolving Credit
Facilities is less than the greater of (i) $25 million and (ii) 12.5% of the maximum aggregate commitments under
the Global Revolving Credit Facilities as then in effect, the Company will be subject to increased reporting
obligations and controls until such time as availability is more than the greater of (a) $35 million and (b) 17.5% of
the maximum aggregate commitments under the Global Revolving Credit Facilities as then in effect.

If aggregate availability under the Global Revolving Credit Facilities is less than the greater of (i) $20 million and
(ii) 10% of the maximum aggregate commitments under the Global Revolving Credit Facilities as then in effect,
the Company is required to comply with a fixed charge coverage ratio (as defined in the Third Amended Credit
Agreement) of not less than 1.1 to 1.0 for the preceding four-quarter period, tested as of the end of each quarter.
Such compliance, once required, would no longer be necessary once (x) aggregate availability under the Global
Revolving Credit Facilities exceeds the greater of (i) 17.5% of the aggregate commitment for the Global Revolving
Credit Facilities and (ii) $35 million for 60 consecutive days and (y) no default or event of default has occurred
and is continuing during such 60-day period. As of December 31, 2014, aggregate availability under the Global
Revolving Credit Facilities exceeded the minimum required amount, and the Company is not required to comply
with such fixed charge coverage ratio.

The Third Amended Credit Agreement also contains events of default customary for financings of this type,
including failure to pay principal or interest, materially false representations or warranties, failure to observe
covenants and certain other terms of the Third Amended Credit Agreement, cross-defaults to certain other
indebtedness, bankruptcy, insolvency, various ERISA and foreign pension violations, the incurrence of material
judgments and changes in control.

Subject to certain conditions (including the absence of a default or event of default under the Third Amended
Credit Agreement), the Third Amended Credit Agreement permits the Company the make up to $10 million in
cash repurchases of its outstanding common stock during each fiscal year, beginning in 2015, and to pay up to
$25 million in cash dividends to its stockholders during any period of 12 consecutive months; however, such stock
repurchases can be made, and such cash dividends can be paid, on an unlimited basis if pro forma aggregate
availability under the Global Revolving Credit Facilities is greater than or equal to the greater of (i) $25 million
and (ii) 12.5% of the aggregate commitment under the Global Revolving Credit Facilities, at all times during the
60-day period ending on the date of such repurchase or dividend payment.

Availability under the Global Revolving Credit Facilities varies over time depending on the value of the
Company’s inventory, receivables and various capital assets. As of December 31, 2014, the Company had
$48.7 million outstanding under the Global Revolving Credit Facilities and $145.8 million of available credit (based
on exchange rates at December 31, 2014). As of December 31, 2014, the weighted-average interest rate on
outstanding Revolver borrowings was 1.8 percent per annum.

In June 2013, the Company amended the Second Amended and Restated Credit Agreement (as amended, the
‘‘Bank Credit Agreement’’) to, among other things; (i) modify the Second Amended and Restated Credit
Agreement’s accordion feature to permit the Company, subject to certain conditions, to increase the aggregate
revolving credit facility commitments by up to $30 million, to a maximum amount of $180 million (ii) increase the
Company’s allowable dividends paid to shareholders in any period of 12 consecutive months to $25 million,
(iii) allow the Company to repurchase up to $30 million of its own common stock on or before December 31,
2014, with no more than $15 million of that amount to be repurchased on or before December 31, 2014, and
(iv) make certain definitional and administrative changes. As of December 31, 2013, the Company had a
$105 million Revolver pursuant to the Bank Credit Agreement of which no amounts were outstanding.

F-26

(Dollars in millions, except as noted)
The following tables present further information about our businesses by geographic area (dollars in millions):

Note 6. Debt (Continued)

Year Ended December 31,

2012

2011

2010

Net sales
United States
Europe

The Company’s ability to pay cash dividends on its common stock is also limited under the terms of the 2021
Senior Notes. As of December 31, 2014, under the most restrictive terms of the 2021 Senior Notes and the Third
$413.6
Amended Credit Agreement, the Company’s ability to pay cash dividends on its common stock was limited to a
244.1
total of $25 million in a 12-month period.

$543.4
265.4

$416.2
279.8

$808.8

$696.0

$657.7

Consolidated

Other Debt

Neenah Germany Project Financing

December 31,

2012

2011

2010

German Loan Agreement. In December 2006, Neenah Germany entered into a 10-year agreement with
HypoVereinsbank and IKB Deutsche Industriebank AG (‘‘IKB’’) to provide A10.0 million of project financing (the
$308.9
$286.4
$322.5
0.3
0.1
0.2
‘‘German Loan Agreement’’). In May 2014, the Company terminated the German Loan Agreement by repaying
the remaining A3.7 million ($5.2 million) in outstanding German Loan Agreement borrowings.
297.7
278.4
288.0

Total Assets
United States
Canada
Europe

Consolidated

$606.7
Second German Loan Agreement. In January 2013, Neenah Germany entered into a project financing agreement
for the construction of a melt blown machine (the ‘‘Second German Loan Agreement’’). The agreement provides
Net sales and total assets are attributed to geographic areas based on the physical location of the selling entities
for A9.0 million of construction financing which is secured by the melt blown machine. The loan matures in
and the physical location of the assets. See Note 13 of Notes to Consolidated Financial Statements ‘‘Business
September 2022 and principal is repaid in equal quarterly installments beginning in December 2014. The interest
Segment and Geographic Information’’ for information with respect to net sales, profits and total assets by
rate on amounts outstanding is 2.45% based on actual days elapsed in a 360-day year and is payable quarterly. At
business segment.
December 31, 2014, A8.7 million ($10.6 million, based on exchange rates at December 31, 2014) was outstanding
under the Second German Loan Agreement.

$565.1

$610.7

Raw Materials

Neenah Germany Revolving Lines of Credit

Technical Products. Softwood pulp, specialty pulp and latex are the primary raw materials consumed by our
technical products business. The technical products business purchases softwood pulp, specialty pulp and latex
HypoVereinsbank Line of Credit. Neenah Germany had a revolving line of credit with HypoVereinsbank (the
‘‘HypoVereinsbank Line of Credit’’) that provided for borrowings of up to A15 million for general corporate
from various suppliers. The technical products business purchases substantially all of its raw material requirements
externally. We believe that all of the raw materials for our technical products operations, except for certain
purposes. The Company cancelled the HypoVereinsbank Line of Credit upon entering into the Third Amended
Credit Agreement. As of December 31, 2013, the weighted-average interest rate on outstanding HypoVereinsbank
specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a
Line of Credit borrowings was 3.1 percent per annum.
single supplier would not cause a shutdown of our manufacturing operations.

F
o
r
m
1
0
-
K

Commerzbank Line of Credit. In January 2012, Neenah Germany entered into an agreement with Commerzbank
Our technical products business acquires all of its specialized pulp requirements from two global suppliers and
AG (‘‘Commerzbank’’) to provide up to A3.0 million of unsecured revolving credit borrowings for general
certain critical specialty latex grades from four suppliers. In general, these supply arrangements are not covered by
corporate purposes (the ‘‘Commerzbank Line of Credit’’). In February 2013, the Company and Commerzbank
formal contracts, but represent multi-year business relationships that have historically been sufficient to meet our
amended the Commerzbank Line of Credit to provide up to A5.0 million of unsecured revolving credit borrowings.
needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of
The Company cancelled the Commerzbank Line of Credit upon entering into the Third Amended Credit
an interruption of production at any one supplier, we believe that each of these suppliers individually would be
Agreement. As of December 31, 2013, the weighted average interest rate on Commerzbank Line of Credit
able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term
borrowings was 2.9 percent per annum.
disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp
grades or other latex grades that would allow us to meet required product performance characteristics and incur
only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative
pulp or latex grades would have a material effect on our operations.

The following table presents the Company’s required debt payments:

Principal Payments

Debt payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.4 $1.4 $1.4 $1.4 $50.0

Fine Paper. Hardwood pulp is the primary fiber used to produce products of the fine paper business. Other
significant raw material inputs in the production of fine paper products include softwood pulp, recycled fiber,
$234.3
cotton fiber, dyes and fillers. The fine paper business purchases all of its raw materials externally. We believe that
all of the raw materials for our fine paper operations, except for certain cotton fiber which represent less than five
percent of the total fiber requirements of our fine paper business, are readily available from several sources and
that the loss of a single supplier would not cause a shutdown of our manufacturing operations.

Note 7. Pension and Other Postretirement Benefits

2015 2016 2017 2018

2019 Thereafter

Pension Plans

$178.7

Total

We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would
Substantially all active employees of the Company’s U.S. operations participate in defined benefit pension plans
increase our reliance on ‘‘spot market’’ purchases with a likely corresponding increase in cost. Since we have the
and/or defined contribution retirement plans. Neenah Germany has defined benefit plans designed to provide a
monthly pension upon retirement for substantially all its employees in Germany. In addition, the Company
ability to source cotton fiber on the ‘‘spot market’’ if faced with a supply disruption, we would not expect cotton
maintains a SERP which is a non-qualified defined benefit plan. The Company provides benefits under the SERP
fiber supply issues to have a material effect on our operations.
to the extent necessary to fulfill the intent of its defined benefit retirement plans without regard to the limitations
set by the Internal Revenue Code on qualified defined benefit plans.

F-27
5

NEENAH PAPER INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in millions, except as noted)

Note 7. Pension and Other Postretirement Benefits (Continued)

During 2014, the Company offered a one-time lump sum payout option to all eligible U.S. participants with a
deferred vested pension benefit (the participant had a vested pension benefit but was no longer an employee of
the Company and was not in retirement status) in the Neenah Paper Pension Plan. For the year ended
December 31, 2014, approximately 425 individuals elected to receive their pension benefit as a lump-sum payment
and the Company paid a total of $14.0 million in such lump-sum payments. For the years ended December 31,
2014, 2013 and 2012, benefit payments under certain post-retirement benefit plans exceeded the sum of expected
service cost and interest costs for these plans for the respective calendar years. In accordance with ASC Topic 715,
Compensation — Retirement Benefits (‘‘ASC Topic 715’’), the Company measured the liabilities of the
post-retirement benefit plans and recognized settlement losses of $3.5 million, $0.2 million and $3.5 million,
respectively.

The Company’s funding policy for its U.S. qualified defined benefit plan is to contribute assets to fully fund the
projected benefit obligation. Subject to regulatory and tax deductibility limits, any funding shortfall is to be
eliminated over a reasonable number of years. Nonqualified plans providing pension benefits in excess of
limitations imposed by taxing authorities are not funded. There is no legal or governmental obligation to fund
Neenah Germany’s benefit plans and as such the Neenah Germany defined benefit plans are currently unfunded.
As of December 31, 2014, Neenah Germany had investments of $2.0 million that were restricted to the payment
of certain post-retirement employee benefits. As of December 31, 2014, $0.6 million and $1.4 million of such
investments are classified as prepaid and other current assets and other assets, respectively, on the consolidated
balance sheet.

The Company uses the fair value of pension plan assets to determine pension expense, rather than averaging gains
and losses over a period of years. Investment gains or losses represent the difference between the expected return
calculated using the fair value of the assets and the actual return based on the fair value of assets. The Company’s
pension obligations are measured annually as of December 31.

During 2014, the Society of Actuaries released a new mortality table, which is believed to better reflect mortality
improvements and is to be used in calculating defined benefit pension obligations. The Company adopted these
new tables for its U.S. pension plans for use in determining its projected benefit obligations. Adoption of the new
mortality tables increased the Company’s projected benefit obligation by approximately $5.5 million at
December 31, 2014.