modeFinance Credit Report: NewPage Corporation

Thursday, 08 September 2011

NEWPAGE CORPORATION

MORE Credit Rating

C

D

CC CCC

B

BB BBB

A

AA AAA

key

If you want to know more, ASKMORE modeFinance’s credit report.

TM

Almost every day millions of people around the world are wondering the real creditworthiness of the companies with which they are in business. Every day these questions remain unanswered. modeFinance now aims to answer these questions in a simple, complete and immediate way.

TM

TM

TM

NEWPAGE CORPORATION

Identification number

US19-753-3446

Country

United States of America

ZIP code and city

45342 - MIAMISBURG

Address

8540 GANDER CREEK DR +1 877 855 7243 www.newpagecorp.com

Legal form Account

Consolidated

Incorporation date

2005

NACE 2 Sector

1712 - Manufacture of paper and paperboard

TM

ASKMORE is the modeFinance product which gives the chance to evaluate the credit risk for every company from all around the world.

ASKMORE

Company name

Listed Status

Active

MORE Credit limit

Not eligible for credit on the base of the available informations

plans 2 types of reports:

Turnover (th e) Rating Basic

TM

ASKMORE Basic: This report includes modeFinance ’ s MORE Credit Ratings and MORE Credit Limit to help you in the decision making.

It covers all essential information including financial statements of the last three years and descriptive information including trade description and sector analysis.

This report type is ideally suited for decisions on transactions with each level of credit risk.

31/12/2009

31/12/2008

2,691,214

2,156,045

3,129,986

CC

CC

CC

42.00%

42.00%

42.00%

78%

78%

78%

-6.34

285.08

26.04

0.84

1.00

1.04

Current Ratio

2.08

1.98

1.72

Quick Ratio

0.79

0.69

0.56

Probability of default

Plus

31/12/2010

Confidence Level

TM

Solvency ratios Leverage ratio Total asset/Total liabilties Liquidity ratios

Profitability and economic equilibrium ratios Return on investement ROI (%) Return on equity ROE (%)

-

-

-

-99,785.37

-2,164.32

-74.52

1E03

0.78

1.03

Asset turnover Interest paid weight Gross Profit/Operating revenue

-

-

-

0.02

-0.02

0.09

-

-

-

Interest Coverage ratios EBIT interest coverage ratio

Analysis and trend of financial strength

modeFinance Headquarter Building A - AREA Science Park Padriciano 99 - 34149 Trieste - Italy Ph.: +39 040 375 5337 Fax: +39 040 375 6741 info@modefinance.com TM

key askMORETM is a registered mark of modeFinanceTM

MORE Credit Rating

D not available

non return

C

CC

extremly pathological pathological

CCC

B

BB

BBB

A

AA

AAA

high danger

weak

sufficient

adequate

good

very strong

extremely strong

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Sector Analysis Company

Healthy

Balanced

Vulnerable

Risky

Leverage ratio

-6.34

Total asset/Total liabilties

0.84

0.43

1.54

2.82

-1.36

3.36

1.65

1.31

0.96

Current Ratio Quick Ratio

2.08

2.84

1.46

1.08

0.66

0.79

2.19

1.00

0.71

0.38

-

15.03

5.81

-0.10

-7.19

-99,785.37

14.69

7.35

-6.73

-106.40

1E03

1.23

1.13

1.06

1.13

-

0.02

0.21

0.00

-0.20

0.02

0.24

0.21

0.16

0.03

-

53.00

3.50

-0.36

-2.88

Solvency ratios

Liquidity ratios

Profitability and economic equilibrium ratios Return on investement ROI (%) Return on equity ROE (%) Asset turnover Interest paid weight Gross Profit/Operating revenue Interest Coverage ratios EBIT interest coverage ratio Cash Conversion Cycle (days) Days Sales Of Inventory (DIO)

0

35

43

45

48

Days Sales Outstanding (DSO)

0

59

62

60

47

Days Payable Outstanding (DPO)

0

24

38

52

66

Cash Conversion Cycle (DIO + DSO - DPO)

0

66

66

64

29

Numer of analyzed companies

-

150

538

260

74

CC

A

BBB

B

C

(Average) Rating

The sector has been chosen according to: international companies in the sector NACE 2 1712 with financial data of year 2009.

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

key

Sector Analysis - Graphs

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

AA AAA

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Balance Sheet BALANCE SHEET (th e)

31/12/2010

31/12/2009

31/12/2008

Accounting practice

Local GAAP

Local GAAP

Local GAAP

0.74839

0.69416

0.71855

Exchange rate USD - EUR Total assets

2,628

2,780,091

3,050,228

Fixed assets

1,997

2,137,303

2,381,261

Intangible fixed assets

0

0

0

Tangible fixed assets

0

0

0

1,997

2,137,303

2,381,261

Other fixed assets Current assets

631

642,788

668,966

Stocks

391

417,881

451,247

Debtors

219

205,470

199,756

21

19,436

17,964

6

3,471

2,156

-492

9,718

112,812

608

549,077

551,125

-1,100

-539,358

-438,313

Total liabilities

3,119

2,770,373

2,937,416

Non current liabilities

2,816

2,445,508

2,549,401

Long term debt

2,756

2,445,508

2,549,401

60

0

0

303

324,865

388,015

Other current assets Cash & cash equivalent Shareholders funds Capital Other shareholders funds

Other non-current liabilities Current liabilities Loans Creditors Other current liabilities Total shareh. funds & liab.

NET DEBT (th e)

0

0

11,497

146

159,656

182,511

157

165,209

194,007

2,628

2,780,091

3,050,228

31/12/2009

31/12/2008

31/12/2010

Short term debts Long term debt Cash & cash equivalent Net debt

0

0

11,497

2,756

2,445,508

2,549,401

6

3,471

2,156

2,750

2,442,037

2,558,742

31/12/2009

31/12/2008

31/12/2010 Working capital

464

463,696

468,492

Net Current Assets

328

317,923

280,951

31/12/2010

31/12/2009

31/12/2008

Days Sales Of Inventory (DIO)

0

71

53

Days Sales Outstanding (DSO)

0

35

23

Days Payable Outstanding (DPO)

0

27

21

Cash Conversion Cycle (DIO + DSO - DPO)

0

79

55

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Income Statement INCOME STATEMENT (th e)

31/12/2010

31/12/2009

31/12/2008

Accounting practice

Local GAAP

Local GAAP

Local GAAP

0.74839

0.69416

0.71855

Exchange rate USD - EUR Sales

-

-

-

Revenues growth (%)

-

-

-

-

-

-

Operating revenue / turnover

2,691,214

2,156,045

3,129,986

Total operating costs

2,764,556

2,326,113

3,214,056

Costs growth (%)

19

-28

-

Service costs

-

-

-

Material costs

-

-

-

Costs of employees

-

-

-

EBITDA

-

-

-

Depreciation

-

-

-

Other revenues +/- variation in inventories and contract in progress + Fixed assets own construction capitalized

EBIT Financial P/L Financial revenue Financial expenses Interest paid P/L before tax Extr. and other P/L

-73,342

-170,068

-84,070

-416,854

-77,745

0

-

212,411

-

416,854

290,157

-

-

-

-

-490,196

-247,813

-84,070

-

-

-

Extr. and other revenue

-

-

-

Extr. and other expenses

-

-

-

-

-

-

748

-37,484

-

-490,944

-210,329

-84,070

31/12/2010

31/12/2009

31/12/2008

2,627,601

2,201,166

2,859,095

63,613

-45,120

270,892

136,956

124,948

354,962

P/L before tax + Extr. and other P/L Taxation P/L for period

Costs of Good Sold Gross Profit Other Operating Expenses

31/12/2010

31/12/2009

31/12/2008

Cash flow

-

-

-

Added value

-

-

-

31/12/2010 Number of employees

380

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

31/12/2009

31/12/2008

380

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

350

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

key

Evolutions and trends

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

AA AAA

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Qualitative information Full overview

NewPage Corporation, founded in 2005, is a leading U. S. producer of coated papers in North America. The company is headquartered in Dayton, Ohio, United States. NewPage produces several types of paper including coated free sheet, a high end paper used in annual reports, magazines, promotional brochures, coffee table books, and other types of publications. It also manufactures and distributes coated printing papers for catalogs, textbooks and advertising materials. The company’s brands include Signature Truer , Sterlingr Ultra, Focusr Plus, Anthemr , Visionr Plus, Escanabar Plus and Dependowebr Plus. Further, the company primarily serves media and entertainment and publishing industries. NewPage operates integrated pulp and paper manufacturing mills located in Escanaba, Michigan; Luke, Maryland; Rumford, Maine; and Wickliffe, Kentucky. These mills have a combined annual capacity of approximately 2.2 million tons of coated paper. The company also has a converting and distribution facility in Chillicothe, Ohio. NewPage has strategic partnerships with Motorsports, Print Council, Create Magazine, and Heidelberg.

History

Not available.

Primary business line

Producer of coated papers.

Secondary business line

Not available.

Main activity

Manufacturing.

Secondary activity

Not available.

Main products and services

Not available.

Size estimate

A leading U. S. producer of coated papers in North America.

Strategy, organization and policy

Not available.

Strategic alliances

Motorsports; Print Council; Create Magazine; Heidelberg.

Membership of a network

Not available.

Main brand names

Signature Truer ; Focusr Plus; Anthemr ; Visionr Plus; Escanabar Plus; Dependowebr Plus; Sterlingr Ultra.

Main domestic country

United States of America.

Main foreign countries or regions

Not available.

Main production sites

Escanaba; Luke; Rumford; Wickliffe.

Main distribution sites

Chillicothe.

Main sales representation sites

Not available.

Main customers

Media and entertainment industry; Publishing industry.

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Auditor/Advisor/Bank name

type

address

PricewaterhouseCoopers, LLP, Cincinnati,

Auditor

-

Ohio

Board name

date of birth

nationality

function

Mr Chan W Galbato Mr Robert L Nardelli Mr. Mark A. Suwyn Mr Julian Markby

1942 01/11/1952

United States United States United States

Chairman of the Board (Executives) Chairman (Finance & Administration) Chairman and Chief Executive Officer (Finance & Administration) Board of Directors (Finance & Administration)

Mr Lenard B Tessler Mr Raymond Wechsler

1952 -

United States United States

Board of Directors (Finance & Administration) Board of Directors (Finance & Administration)

Sharehoders (the first twenty shareholders ordered by Direct %)) Rating:

NEWPAGE HOLDING CORPORATION Country ISO code NACE Rev. 2, Core code Direct % Total % Address: Not available

US MO -

Information date

-

Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

3,596 4 2011/02

Rating:

ALEXANDAR WOLF Country ISO code NACE Rev. 2, Core code Direct % Total % Address: Not available

CC

Operating revenue (MIL $) Total Assets (MIL $) Number of Employees

-

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

2011/02

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Subsidiaries (the first twenty subsidiaries ordered by Direct %) Rating:

-

Country ISO code

US

Operating revenue (MIL $)

210

NACE Rev. 2, Core code Direct % Total %

MO -

Total Assets (MIL $) Number of Employees Information date Rating:

-

Country ISO code

US

Operating revenue (MIL $)

104

NACE Rev. 2, Core code Direct % Total %

MO -

Total Assets (MIL $) Number of Employees Information date Rating:

-

Country ISO code

US

Operating revenue (MIL $)

78

NACE Rev. 2, Core code Direct % Total %

MO -

Total Assets (MIL $) Number of Employees Information date Rating:

-

Country ISO code

CA

Operating revenue (MIL $)

148

NACE Rev. 2, Core code Direct % Total %

MO -

Total Assets (MIL $) Number of Employees Information date

Country ISO code

US

Operating revenue (MIL $)

NACE Rev. 2, Core code Direct % Total %

MO -

Total Assets (MIL $) Number of Employees Information date

CHILLICOTHE PAPER INC

ESCANABA PAPER COMPANY

LUKE PAPER COMPANY

NEWPAGE PORT HAWKESBURY LIMITED

2,200 2010/04

1,200 2011/03

1,000 2011/04

553 2010/10

Rating:

NEWPAGE WISCONSIN SYSTEM INC.

3,521 4,100 2010/08

Rating:

RUMFORD PAPER COMPANY

-

Country ISO code NACE Rev. 2, Core code

US -

Operating revenue (MIL $) Total Assets (MIL $)

Direct % Total %

MO -

Number of Employees Information date

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

2,176

1,200 2010/11

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

ASKMORE rating guide General vision

A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk factors.

The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial companies by using data included in financial statements.

The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the model are obtained by applying newly developed numerical methodologies, drawing together financial theory, data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective algorithm that produces a classification of each company, by taking into account any attributes (such as sector and country) characterizing a firm.

The model gives the opportunity to assign a rating to a company even without considering a complete data analysis and allows to process quality information. It induces a better understanding of a company’s strength and weakness thanks to sophisticated data mining tools and taking into account the analyst knowledge.

The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium between the different aspects, better will be the final rating.

This is done studying, evaluating and aggregating the most important sections of the financial and economic behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Rating scale Rating class

Rating macro class

The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent

AAA

AA

Assessment

economic and financial flow and fund equilibrium.

Healthy

The company has very strong creditworthiness. It also has a good capital structure and economic and financial equilibrium. Difference from AAA is slight.

The company has a high solvency. The company is however more susceptible to the adverse effects of changes in

A

circumstances and economic conditions than companies in higher rated categories.

Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial commitments could be affected by serious unfavourable events.

BBB Balanced

A company rated BB is more vulnerable than companies rated BBB. Furthermore the company faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions.

BB

The company presents vulnerable signals with regards to its fundamentals. Adverse business, financial, or economic

B

conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments.

Vulnerable

CCC

A company rated CCC has a dangerous disequilibrium on the capital structure and on its economic and financial fundamentals. Adverse market events and an inadequate management could affect with high probability the company’s solvency.

CC

The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the company’s strong disequilibrium could increase.

Risky

C

The company shows considerable pathological situations. commitments is very low.

D

The company has not any longer the capacity to meet its financial commitments.

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

The company’s capacity to meet its financial

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Fundamental Credit Rating Ratios Analysis area

Ratio

Assessment This measures the level of total liabilities of the company in comparison

Leverage ratio

with equity.

Solvency ratios

Financial ratios

Assets to debt

This indicates company’s solvency. The company shows a level of deficit when the value of this ratio is under one unit.

Fixed Assets coverage ratio

This is calculated only for holdings. It measures the capital structure i.e. whether a company covers the fixed assets with long term capital.

Current ratio

This measures whether a company has sufficient short-term assets to cover its short-term liabilities.

Liquidity ratios This compares current liabilities only to those assets that can be readily

Quick ratio

turned into cash.

Return on Investement(ROI)

This measures the profitability of company investments without regard to the way the investment is financed.

Return on Equity(ROE)

This measures the profitability of the equity.

Asset turnover

This indicates the investments turnover with regards to sales. The level assumed from the ratio depends on the sector in which the company operates.

Profit margin

This indicates the profitability of sales.

Interest Paid coverage

This indicate the ability of the company to cover interest expenses through the economic margins (Gross profit and EBIT) and through the cash flow from operating activities.

Profitability and economic ratios

Interest coverage ratio

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

MORE Credit Limit, Probability of default and Confidence Level MORE Credit Limit

MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial relationship with the analyzed company with an outlook of one year. modeFinance used the following values associated with the company analyzed while computing the credit limit:

• Size; • Years in Business; • Average number of suppliers; • Liquidity of the company and the comparison with its sector; • The funds dedicated to be paid to suppliers; • The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).

The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual public data. This value should be reviewed by paying attention to the Confidence Level value and by using other information such as other business information, news... etc; and private information such as the relationship with client, history of payments, guarantees and the knowledge of the sector.

Probability of default e Confidence Level

In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go into default.

As the probability of default is strongly affected by the economic climate that the company is operating in, companies in the same MORE class will not necessarily have the same probability of default.

The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:

Confidence =

P Available Information P Total Information

The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the MORE rating is able to take into account for each company.

For companies with fully populated records a confidence level of 100% would be applied: companies where no financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

NEWPAGE CORPORATION

Thursday, 08 September 2011 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Notes and disclaimer NOTES

The present analysis was based on the company available financial statements as provided by Bureau Van Dijk Electronic Publishing - ORBIS database (lack of both Notes to financial statements and Report on operations).

DISCLAIMER

All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Contacts Company

modeFinance

Products Where

MORE rating AREA Science Park 34149 Trieste, via Padriciano 99 - ITALY info@modefinance.com www.modefinance.com +39 040 3755337

Info web Phone

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741