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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-K





ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT
OF 1934

Year ended December 31, 2008





LOGO





8540 Gander Creek Drive

Miamisburg,
Ohio 45342

877.855.7243



|                       |  |                             |  |                                    |  |                       
|---------------------- |  | --------------------------- |  | ---------------------------------- |  | ----------------------
|Commission File Number |  | Registrant                  |  | IRS Employer Identification Number |  | State of Incorporation
|001-32956              |  | NEWPAGE HOLDING CORPORATION |  | 05-0616158                         |  | Delaware              
|333-125952             |  | NEWPAGE CORPORATION         |  | 05-0616156                         |  | Delaware              





Securities Registered Pursuant to
Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act: None





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



|                            |  |     |   |  |    |  
|--------------------------- |  | --- | - |  | -- | -
|NewPage Holding Corporation |  | Yes |  ̈ |  | No | x
|NewPage Corporation         |  | Yes |  ̈ |  | No | x

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



|                            |  |     |   |  |    |  
|--------------------------- |  | --- | - |  | -- | -
|NewPage Holding Corporation |  | Yes |  ̈ |  | No | x
|NewPage Corporation         |  | Yes |  ̈ |  | No | x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.



|                            |  |     |   |  |    |  
|--------------------------- |  | --- | - |  | -- | -
|NewPage Holding Corporation |  | Yes | x |  | No |  ̈
|NewPage Corporation         |  | Yes | x |  | No |  ̈

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 the registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.



|                                                        
|--------------------------------------------------------
|NewPage Holding Corporation  x    NewPage Corporation  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act:



|                            |  |                            |  |                             
|--------------------------- |  | -------------------------- |  | ----------------------------
|NewPage Holding Corporation |  | Large accelerated filer   ̈ |  | Accelerated filer   ̈        
|                            |  | Non-accelerated filer  x   |  | Smaller reporting company   ̈



|                    |  |                            |  |                             
|------------------- |  | -------------------------- |  | ----------------------------
|NewPage Corporation |  | Large accelerated filer   ̈ |  | Accelerated filer   ̈        
|                    |  | Non-accelerated filer  x   |  | Smaller reporting company   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).



|                            |  |        |  |      
|--------------------------- |  | ------ |  | -----
|NewPage Holding Corporation |  | Yes   ̈ |  | No  x
|NewPage Corporation         |  | Yes   ̈ |  | No  x

The aggregate market value of NewPage Holding Corporation and NewPage Corporation common stock held by
non-affiliates were each $0 as of June 30, 2008.

The number of shares of each Registrants Common Stock, par value $0.01 per share, as of
February 20, 2009:



|                            |  |    
|--------------------------- |  | ---
|NewPage Holding Corporation |  | 10 
|NewPage Corporation         |  | 100

This Form 10-K is a combined annual report being filed separately by two registrants: NewPage Holding Corporation
and NewPage Corporation. NewPage Corporation meets the conditions set forth in general instruction I(1)(a) and (b) of Form 10-K and is therefore filing this form with the reduced disclosure format.

DOCUMENTS INCORPORATED BY REFERENCENone









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References to NewPage Holding refer to NewPage Holding Corporation, a Delaware corporation; references to
NewPage refer to NewPage Corporation, a Delaware corporation and a wholly-owned subsidiary of NewPage Holding. As applicable by the context used, references to we, us and our refer to NewPage Holding
and its subsidiaries. All assets, liabilities, income, expenses and cash flows presented for all periods represent those of NewPage Holdings wholly-owned subsidiary, NewPage, except for NewPage Holdings debt obligation and related
financing costs, interest expense, write-off of costs for a withdrawn 2006 initial public offering and income tax effects. Unless otherwise noted, the information provided pertains to both NewPage Holding and NewPage. References to SENA
are to Stora Enso North America Inc., which we acquired from Stora Enso Oyj (SEO) on December 21, 2007 (the Acquisition). Following the Acquisition, SENA changed its name to NewPage Consolidated Papers Inc., or NPCP.
References to both SENA and NPCP are to the acquired business.

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, the Private Securities Litigation Reform Act
of 1995 and other related laws. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws. Forward-looking statements may include the words may,
plans, estimates, anticipates, believes, expects, intends and similar expressions. Although we believe that these forward-looking statements are based on reasonable assumptions,
they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected or assumed in our forward-looking statements. These factors, risks and uncertainties include,
among others, the following:



| |  |  | our substantial level of indebtedness
| | - |  | -------------------------------------



| |  |  | changes in the supply of, demand for, or prices of our products
| | - |  | ---------------------------------------------------------------



| |  |  | general economic and business conditions in the United States and Canada and elsewhere
| | - |  | --------------------------------------------------------------------------------------



| |  |  | the ability of our customers to continue as a going concern, including our ability to collect accounts receivable according to customary business terms
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the activities of competitors, including those that may be engaged in unfair trade practices
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | changes in significant operating expenses, including raw material and energy costs
| | - |  | ----------------------------------------------------------------------------------



| |  |  | changes in currency exchange rates
| | - |  | ----------------------------------



| |  |  | changes in the availability of capital
| | - |  | --------------------------------------



| |  |  | changes in the regulatory environment, including requirements for enhanced environmental compliance
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | our ability to realize the anticipated benefits of the acquisition of SENA, including anticipated synergies
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | the other factors described under Risk Factors
| | - |  | ------------------------------------------------

Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, either to reflect new developments or for any
other reason, except as required by law.



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INDUSTRY DATA

Information in this annual report concerning the paper and forest products industry and our relative position in the industry is based on independent industry analyses, management estimates and competitor announcements.

PART I



|ITEM 1. | BUSINESS
|------- | --------

General

We believe that we are the largest coated paper manufacturer in North America based on production capacity. Coated paper is used primarily in media and marketing
applications, such as corporate annual reports, high-end advertising brochures, direct mail advertising, coated labels, magazines, magazine covers and inserts and catalogs. For the year ended December 31, 2008, we had net sales of $4.4 billion.

We operate 20 paper machines at ten paper mills located in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills
and our distribution centers are strategically located near major print markets, such as New York, Chicago, Minneapolis and Atlanta. As of December 31, 2008, our mills have total annual production capacity of approximately 4.4 million
short tons of paper, including approximately 3.2 million short tons of coated paper, approximately 1 million short tons of uncoated paper and approximately 200,000 short tons of specialty paper.

We have long-standing relationships with many leading publishers, commercial printers, retailers and paper merchants. Our key customers include Condé Nast
Publications, The McGraw-Hill Companies, Meredith Corporation, News America Group, Pearson Education, Rodale Inc. and Time Inc. in publishing; Quad/Graphics, Quebecor World Inc. and R.R. Donnelley & Sons Company in commercial printing;
Sears Holdings Corporation and Williams-Sonoma, Inc. in retailing; and paper merchants Lindenmeyr, a division of Central National-Gottesman Inc., Unisource Worldwide, Inc. and xpedx, a division of International Paper Company. Key customers for
specialty paper products include Avery Dennison Corporation and Vacumet Corp.

On December 21, 2007, NewPage acquired all of the issued and
outstanding common stock of SENA from SEO. We acquired SENA in order to create a single business platform and to enable us to remain competitive in the marketplace, serve our customers more efficiently and achieve synergies from the Acquisition. The
Acquisition more than doubled our production capacity and broadened our product line.



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Organization

The following chart shows our organizational structure and ownership as of February 20, 2009. Except as indicated below, each entity in the chart owns 100% of the equity interests of the entity appearing immediately below it.

LOGO



|(1) | Excludes NewPage Group common stock that may be issued upon exercise of options outstanding or that may be granted under the NewPage Group Equity Incentive Plan.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



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Industry Overview

The North American paper industry is cyclical and, like other cyclical industries, is largely affected by the interplay of demand and supply. Demand and supply factors affecting our principal paper products, as well as historical price
trends, are discussed below.

North American coated paper demand is primarily driven by advertising and print media usage. In particular, the demand for
certain grades of coated paper is affected by spending on catalog and promotional materials by retailers and spending on magazine advertising, which affects the number of printed pages in magazines. Advertising spending and magazine and catalog
circulation tend to rise when GDP in the United States is robust and typically decline in a sluggish economy. During 2008, North American coated paper demand declined significantly compared to 2007, as a result of decreased advertising spending and
magazine and catalog circulation resulting from macroeconomic factors. North American customers purchased approximately 12 million short tons of coated paper in 2008 and approximately 13 million short tons of coated paper in 2007.

In North America and the United States, coated paper supply is determined by both local coated paper production and imports from sources outside North America or the
United States, principally Europe and Asia. Imports have become a structural part of the North American coated paper marketplace. The volume of coated paper imports from Europe and Asia is a function of worldwide supply and demand for coated paper,
the exchange rate of the U.S. dollar relative to other currencies, especially the Euro, market prices in North America and other markets and the cost of ocean-going freight. North American producers, including us, have announced the scheduled
shutdown of an aggregate of approximately 2 million short tons of coated paper capacity over the last two years, primarily as a result of higher costs and, more recently, as a result of reduced demand.

Products

Our portfolio of paper products includes coated
freesheet, coated groundwood, supercalendered, newsprint and specialty papers. Specialty papers are primarily used in labels and packaging. We offer the broadest coated paper product selection of any North American paper manufacturer. We also sell
uncoated paper and market pulp. Our brands are some of the most recognized brands in the industry. Substantially all of our 2008 sales were within North America and approximately 93% were within the United States. Our principal product is coated
paper, which represented approximately 81%, 92% and 93% of our net sales for the years ended December 31, 2008, 2007 and 2006.

Coated Paper

We believe that we are the largest coated paper manufacturer in North America based on production capacity. As of December 31, 2008, our mills have
total annual production capacity of approximately 3.2 million short tons of coated paper. Coated paper is used primarily in media and marketing applications, including corporate annual reports, high-end advertising brochures, magazines,
catalogs and direct mail advertising. Coated paper has a higher level of smoothness than uncoated paper. Increased smoothness is typically achieved by applying a clay-based coating on the surface of the paper and processing that paper under heat and
pressure. As a result, coated paper achieves higher reprographic quality and printability.

Coated paper consists of both coated freesheet and coated
groundwood, which generally differ in price and quality. The chemically-treated pulp used in freesheet applications produces brighter and smoother paper than the mechanical pulp used in groundwood papers. Coated freesheet papers comprised 56% of the
coated paper we produced in 2008. We produce coated freesheet papers in No. 1, No. 2 and No. 3 grades for higher-end uses such as corporate annual reports and high-end advertising, as well as coated one-side paper (C1S), which is used
primarily for label and specialty applications.



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Coated groundwood papers, which represented 44% of the coated paper we produced in 2008, are typically lighter and less
expensive than our coated freesheet products. We produce coated groundwood papers in No. 3, No. 4 and No. 5 grades for use in applications requiring lighter paper stock such as magazines, catalogs and inserts.

Each of the paper grades that we manufacture are produced in a variety of weights, sizes and finishes. The coating process changes the gloss, ink absorption qualities,
texture and opacity of the paper to meet each customers performance requirements. Most of the coated paper that we manufacture is shipped in rolls, with the rest cut into sheets.

Supercalendered Paper

Supercalendered paper is uncoated paper with pigment filler passed through a supercalendering
process in which alternating steel and cotton-covered rolls iron the paper, giving it a gloss and smoothness similar to coated paper. Our supercalendered paper is primarily used for magazines, catalogs, advertisements, inserts and
flyers. We produce supercalendered paper primarily in SC-A and SC-A+ grades.

Newsprint Paper

Newsprint paper is uncoated groundwood paper used primarily for printing daily newspapers and other publications. We are a niche supplier of newsprint paper serving the
North American and select international markets in the publishing and printing industry for major end-uses such as inserts/fliers for retail customers.

Specialty Paper

Specialty paper consists of both coated and uncoated paper designed and produced to meet the specific packaging, printing
and labeling needs of customers with diverse and specialized paper needs. Specialty papers consist of two primary product lines: technical papers and packaging papers.

Technical papers consist of face papers, thermal transfer, direct thermal base papers and release liners for use in self-adhesive labels. Packaging papers are designed to protect, transport and identify a wide range
of products. Flexible packaging papers are often used as part of a multilayer package construction, in combination with film, foil, extruded coatings, board and other materials. For example, flexible packaging papers are used in pouch, lidding, bag,
tobacco packaging and spiral can applications.

Other Products

We also produce uncoated paper to enhance our manufacturing efficiency by filling unused capacity, such as when we have excess capacity on a paper machine but not on a coater. Uncoated paper typically is used for business forms and
stationery, general printing paper and photocopy paper. We primarily sell uncoated paper to paper merchants, business forms manufacturers and converters.

Manufacturing

We operate 20 paper machines at ten paper mills located in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin
and Nova Scotia, Canada. All of these paper mills are at least partially-integrated mills, meaning that they produce paper, pulp and energy. Most of the energy produced at these mills is for internal use. As of December 31, 2008, our mills have
total annual production capacity of



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approximately 4.4 million short tons of paper, including approximately 3.2 million short tons of coated paper, approximately 1 million short
tons of uncoated paper and approximately 200,000 short tons of specialty paper. With the exception of our Port Hawkesbury, Nova Scotia, mill, substantially all of our long-lived assets are located within the United States. The following table lists
the paper products produced at each of our mills, as well as each mills approximate annual paper capacity, as of December 31, 2008:



|                             |  |                                      |  |                                
|---------------------------- |  | ------------------------------------ |  | -------------------------------
|Mill Location                |  | Products                             |  | Paper Capacity(short tons/year)
|Biron, Wisconsin             |  | Coated paper                         |  | 400,000                        
|Duluth, Minnesota            |  | Supercalendered paper                |  | 260,000                        
|Escanaba, Michigan           |  | Coated and uncoated paper            |  | 790,000                        
|Luke, Maryland               |  | Coated and specialty paper           |  | 530,000                        
|Port Hawkesbury, Nova Scotia |  | Supercalendered paper and newsprint  |  | 590,000                        
|Rumford, Maine               |  | Coated and specialty paper           |  | 570,000                        
|Stevens Point, Wisconsin     |  | Specialty paper                      |  | 170,000                        
|Whiting, Wisconsin           |  | Coated paper                         |  | 260,000                        
|Wickliffe, Kentucky          |  | Coated, specialty and uncoated paper |  | 310,000                        
|Wisconsin Rapids, Wisconsin  |  | Coated paper                         |  | 520,000                        

During 2008, we announced restructuring plans which included the shutdown of six of our less efficient, higher
cash cost paper machines. We closed the No. 11 paper machine in Rumford, Maine in February 2008, the No. 95 paper machine in Kimberly, Wisconsin in May 2008, the Niagara, Wisconsin paper mill, which included two paper machines, in June
2008 and the Kimberly, Wisconsin mill, which included the two remaining paper machines, in September 2008. We have reallocated production of paper grades across our remaining combined machine base, resulting in the operation of machines in narrower
ranges of paper grades around their peak production. In addition, as of December 31, 2008 we ceased substantially all production at our Chillicothe, Ohio converting facility and have transferred production to our remaining two converting
facilities in Luke, Maryland and Wisconsin Rapids, Wisconsin. We completed the shutdown of this facility in February 2009. As a result of the restructuring activities undertaken, we have reduced our overall workforce by approximately 8% as of
December 31, 2008 as compared to December 31, 2007. For a further discussion of these actions, see Managements Discussion and Analysis of Financial Condition and Results of OperationsOverviewAnticipated Synergies of the
Acquisition and Integration of the Business.

Through reallocation of production among our combined mills, we are producing products in closer
proximity to our customers to reduce lowering freight costs. In addition, we continue to implement best practices across our combined mill system and focus on increasing our overall profitability, rather than independently at each individual mill.

Since 2000, over $1.4 billion of capital expenditures have been invested in our paper mills currently in operation, to build, maintain and update
facilities and equipment, enhance product mix, lower costs and meet environmental requirements. These upgrades also included an upgrade of our papermaking technology to support our high-end coated grade lines.

In addition to the restructuring actions described above, over the last several years, we have significantly reduced our costs by consolidating operations and focusing
on operational efficiency. We reduced our salaried headcount by approximately 28% and our hourly headcount by approximately 20% from 2002 to the time of the Acquisition in December 2007. From January 2002 to the time of the Acquisition, we shut down
six paper machines, closed one paper mill and reduced maintenance costs by improving our annual maintenance shutdown procedures. From August 2000 to the time of the Acquisition, SENA reduced salaried headcount by approximately 38% and hourly
headcount by approximately 40%. See Managements Discussion and Analysis of Financial Condition and Results of OperationsOverviewAnticipated Synergies of the Acquisition and Integration of the Business.



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The first step in the production of paper is to produce pulp from wood. Pulp for groundwood and supercalendered paper is
produced using a mechanical or thermo-mechanical process. Pulp for freesheet paper is produced by placing wood chips that are mixed with various chemicals into digester cooking vessels. The pulp is then washed and bleached. To turn the
pulp into paper, it is processed through a paper machine. Hardwood and softwood pulp is blended based on the desired paper characteristics.

To produce
coated paper, uncoated paper is put through a coating process. Our mills have both on-machine coaters, which are integrated with the paper machines, and separate off-machine coaters. On-machine coaters generally are considered to be more efficient,
while off-machine coaters generally are considered to have more flexibility. After the coating process is complete, the coated paper is slit and wound into rolls to be sold to customers. We also have converting facilities at which we convert some of
these rolls into sheets.

Paper machines are large, complex systems that operate more efficiently when operated continuously. Paper machine production and
yield decline when a machine is stopped for any reason. Therefore, we organize our manufacturing processes so that our paper machines and most of our paper coaters run almost continuously throughout the year. Some of our paper machines also offer
the flexibility to change the type of paper produced on the machine, which allows easier matching of production schedules and seasonal and geographic demand swings.

Paper production is energy intensive. During 2008, we produced approximately 45% of our energy requirements by means of our mill-generated fuels, which included black liquor, wood waste and bark. The energy we
purchased from outside suppliers consisted of a portion of our electricity, natural gas, fuel oil, steam, petroleum coke, tire-derived fuel, wood waste and coal. The majority of our coal needs are purchased under long-term supply contracts, while
the other purchased fuels are priced based on current market rates.

Our wholly-owned subsidiary, Consolidated Water Power Company, or CWPCo, provides
energy to our mills in central Wisconsin. CWPCo has 33.3 megawatts of generating capacity on 39 generators located in five hydroelectric plants on the Wisconsin River. CWPCo is a regulated public utility and also provides electricity to a small
number of other residential, light commercial and light industrial customers.

We also are the general partner and have a 30% investment in Rumford
Cogeneration Company L.P., a joint venture created to generate power for us at our Rumford mill and for public sale. We have an option through 2014 to purchase all of our co-investors interests in the partnership.

Raw Materials and Suppliers

Pulp and wood fiber are the
primary raw materials used in making paper. Pulp is the generic term that describes the cellulose fiber derived from wood. These fibers may be separated by mechanical, thermo-mechanical or chemical processes. The processes we use at our mills to
produce pulp for freesheet paper involve removing the glues, which bind the wood fibers, to leave cellulose fibers. We use most of our pulp production internally to reduce the amount of pulp purchased from third parties. We sell our excess hardwood
pulp, which we refer to as market pulp, to third parties in the United States and internationally.

The primary sources of wood fiber are timber and its
byproducts, such as wood chips. We are a party to various fiber supply agreements to supply our mills with hardwood, softwood, aspen pulpwood and wood chips. These agreements require the counterparty to sell to the mills, and require the mills to
purchase, a designated minimum number of tons of pulpwood and wood



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chips during the specified terms of the arrangement, which have various expiration dates from December 31, 2009 to December 31, 2053. The annual
purchase requirement under these agreements is approximately 3 million tons in 2009, approximately 2 million tons per year from 2010 to 2015, approximately 1 million tons per year from 2016 to 2020 and approximately 250,000 tons per
year from 2021 to 2026. In 2020, all of the agreements terminate with the exception of the agreement with respect to the Rumford mill, which terminates in 2053. For all of the pulpwood agreements, we may purchase a substantial portion of any
additional pulpwood harvested by the counterparty during each year. The prices to be paid under these agreements are determined by formulas based upon market prices in the relevant regions and are subject to periodic adjustments based on procedures
stipulated in each agreement. The amount of timber we receive under these agreements has varied, and is expected to continue to vary, according to the price and supply of wood fiber for sale on the open market and the harvest levels the timberland
owners deem appropriate in the management of the timberlands.

Our Port Hawkesbury, Nova Scotia mill operates a woodlands unit which manages approximately
1,500,000 acres of land licensed from the Province of Nova Scotia and 59,000 acres of land we own in Nova Scotia. All wood harvested from the licensed lands must be used in our Port Hawkesbury mill unless otherwise agreed to by the Province of Nova
Scotia. The license is for a 50 year period, renewable every 10 years, and currently expires in July 2051. The license may be terminated by the Province of Nova Scotia if the Port Hawkesbury mill is not operational for a continuous period of two
years.

We seek to fulfill substantially all of our wood needs with timber that is harvested by professional loggers trained in certification programs that
are designed to promote sustainable forestry. We do not accept wood from old growth forests, forests of exceptional conservation value or rainforests. We do not accept illegally harvested or stolen wood. We have formally notified our outside wood
chip suppliers that we expect their wood supply will be produced by trained loggers in compliance with sustainable forestry principles. Our goal is to ensure that sustainable forestry-trained loggers are used to supply essentially all of the wood to
our mills. We oppose and, through our participation in the American Forest and Paper Association, World Resources Institute and other organizations, are working to stop illegal logging in the United States and worldwide.

Chemicals used in the production of paper include latex and starch, which are used to affix coatings to paper; calcium carbonate, which brightens paper; titanium, which
makes paper opaque; and other chemicals used to bleach or color paper. We purchase these chemicals from various suppliers and are not dependent on a single supplier for any of these chemicals, although some specialty chemicals are available only
from a small number of suppliers.

Customers

We
have long-standing relationships with many leading publishers, commercial printers, retailers and paper merchants. Our ten largest customers accounted for approximately half of our net sales for 2008. Our key customers include Condé Nast
Publications, The McGraw-Hill Companies, Meredith Corporation, News America Group, Pearson Education, Rodale Inc. and Time Inc. in publishing; Quad/Graphics, Quebecor World Inc. and R.R. Donnelley & Sons Company in commercial printing;
Sears Holdings Corporation and Williams-Sonoma, Inc. in retailing; and paper merchants Lindenmeyr, a division of Central National-Gottesman Inc., Unisource Worldwide, Inc. and xpedx, a division of International Paper Company. Key customers for
specialty paper products include Avery Dennison Corporation and Vacumet Corp.

During 2008, xpedx accounted for 21% of net sales. No other customer
accounted for more than 10% of our 2008 net sales.



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Sales, Marketing and Distribution

We sell our paper products primarily in the United States and Canada, using three sales channels:



| |  |  | direct sales, which consist of sales made directly to end-use customers, primarily large companies such as publishers, printers and retailers
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | merchant sales, which consist of sales made to paper merchants, who in turn sell to end-use customers
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | specialty sales, which consist of sales made to packaging and label manufacturers
| | - |  | ---------------------------------------------------------------------------------

Across the three channels of our sales network, sales professionals are compensated with a salary and bonus plan based on account profitability and individual assignments. As part of our customer service, we seek to
provide value-added services to customers. For example, within the merchant channel, we work closely with customers to meet specifications and to utilize joint marketing efforts when appropriate.

We also emphasize technical support as part of our commitment to customers. We seek to enhance efficiency for customers by enabling them to interact with us online,
including through order access, planning, customer data exchange and consumption estimation tools.

The locations of our paper mills and distribution
centers also provide certain logistical advantages as a result of their close proximity to several major print markets, including New York, Chicago, Minneapolis and Atlanta, which affords us the ability to more quickly and cost-effectively deliver
our products to those markets. We have two major distribution facilities located in Bedford, Pennsylvania and Sauk Village, Illinois. In total, we own two warehouses and lease space in approximately 50 warehouses owned by third parties. Paper
merchants also provide warehouse and distribution systems to service the needs of commercial print customers. We use third parties to ship our products by truck and rail. In addition, we utilize integrated tracking systems that track all of our
products through the distribution process. Customers can access order tracking information over the internet. Most of our products are delivered directly to printers or converters, regardless of sales channel.

Competition

The North American paper industry is highly
competitive. We compete based on a number of factors, including price, product availability, quality, breadth of product offerings, customer service and distribution capabilities. When a coated paper manufacturer announces a price increase, it
generally takes effect over time. Whether a price increase is successful depends on supply, demand and other competitive factors in the marketplace.

Our
primary competitors for coated paper are AbitibiBowater Inc., Sappi Limited, UPM-Kymmene Corporation and Verso Paper, Inc. Our primary competitors for supercalendered paper are AbitibiBowater Inc., Catalyst Paper Corporation and Irving Paper Ltd.
Our primary competitors for newsprint are AbitibiBowater Inc. and Catalyst Paper Corporation.

The competition in the specialty paper category is diverse
and highly fragmented, varying by product end use. Our primary competitors for specialty paper products are Appleton Coated LLC, Boise Cascade LLC, Dunn Paper Inc., Fraser Papers Inc., International Paper Company, UPM-Kymmene Corporation and Wausau
Paper Corp.

Some of our competitors have greater financial and other resources than we do or may be better positioned than we are to compete for certain
opportunities. We also believe that our competitors in China, Indonesia and South Korea have been selling their products in our markets at less than fair value and have been subsidized by their governments.



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Information Technology Systems

We use integrated information technology systems that help us manage our product pricing, customer order processing, customer billing, raw material purchasing, inventory management, production controls and shipping
management, as well as our human resources management and financial management. Our information technology systems utilize principally third-party software. As part of the reorganization plan associated with the Acquisition, we are migrating the
acquired mills to our existing ERP system and integrating NPCPs order management, purchasing, inventory and finance information systems with our existing systems and expect to complete this action during the third quarter of 2009.

Intellectual Property

In general, paper production does
not rely on proprietary processes or formulas, except in highly specialized or custom grades. We hold foreign and domestic patents as a result of our research and product development efforts and also have the right to use certain other patents and
inventions in connection with our business. We also own registered trademarks for some of our products. Although, in the aggregate, our patents and trademarks are important to our business, financial condition and results of operations, we believe
that the loss of any one or any related group of intellectual property rights would not have a material adverse effect on our business, financial condition or results of operations.

Employees

As of December 31, 2008, we had approximately 7,800 employees. Approximately 70% of our
employees were represented by labor unions, principally by the United Steelworkers, the International Brotherhood of Electrical Workers, the Communications, Energy and Paperworkers Union of Canada (CEP), the International Association of Machinists
and Aerospace Workers and the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada.

We have 16 collective bargaining agreements expiring at various times through November 30, 2010. Approximately 925 employees at the Escanaba, Michigan mill are covered under three contracts that expired in June and July of 2008 and are
currently under renegotiation. In addition, two contracts covering an aggregate of approximately 750 employees at the Luke, Maryland mill expired December 1, 2008 and January 15, 2009 and are currently under renegotiation. During 2009, one
contract for the office workers in central Wisconsin covering approximately 50 employees will expire on April 30, 2009 and three contracts covering an aggregate of approximately 550 employees at our Port Hawkesbury, Nova Scotia, mill will
expire on May 31, 2009.

We have not experienced any significant work stoppages or employee-related problems that had a material effect on our
operations over the last five years. We consider our employee relations to be good. Our Port Hawkesbury, Nova Scotia, mill was closed from December 2005 until October 2006, before our ownership of the mill, due to a labor dispute.

Environmental and Other Governmental Regulations

Our
operations are subject to federal, state, provincial and local environmental laws and regulations in the United States and Canada, such as the Federal Water Pollution Control Act of 1972, the Federal Clean Air Act, the Federal Resource Conservation
and Recovery Act, and the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or CERCLA. Among the activities subject to environmental regulation are the emissions of air pollutants; discharges of wastewater and
stormwater;



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generation, use, storage, treatment and disposal of, or exposure to, materials and waste; remediation of soil, surface water and ground water contamination;
and liability for damages to natural resources. In addition, we are required to obtain and maintain environmental permits and approvals in connection with our operations. Many environmental laws and regulations provide for substantial fines or
penalties and criminal sanctions for failure to comply with orders and directives requiring that certain measures or actions be taken to address environmental issues.

Certain of these environmental laws, such as CERCLA and analogous state and foreign laws, provide for strict liability, and under certain circumstances joint and several liability, for investigation and remediation of
releases of hazardous substances into the environment, including soil and groundwater. These laws may apply to properties presently or formerly owned or operated by or presently or formerly under the charge, management or control of an entity or its
predecessors, as well as to conditions at properties at which wastes attributable to an entity or its predecessors were disposed. Under these environmental laws, a current or previous owner or operator of real property or a party formerly or
previously in charge, management or control of real property, and parties that generate or transport hazardous substances that are disposed of at real property, may be held liable for the cost to investigate or clean up that real property and for
related damages to natural resources.

We handle and dispose of wastes arising from our mill operations, including by the operation of a number of
landfills. We may be subject to liability, including liability for investigation and cleanup costs, if contamination is discovered at one of these mills, landfills, or at another location where we have disposed of, or arranged for the disposal of,
waste. While we believe, based upon current information, that we are in substantial compliance with applicable environmental laws and regulations, we could be subject to potentially significant fines or penalties for failing to comply with
environmental laws and regulations. MeadWestvaco and SEO have separately agreed to indemnify us for certain environmental liabilities related to the properties acquired from them, subject to certain limitations. We agreed to indemnify the purchaser
of our carbonless paper business for certain environmental liabilities, subject to certain limitations.

Compliance with environmental laws and regulations
is a significant factor in our business. We incurred capital expenditures of $1 million in 2008 in order to maintain compliance with applicable environmental laws and regulations and to meet new regulatory requirements. We do not expect to incur any
environmental capital expenditures in 2009. Environmental compliance may require significant capital or operating expenditures over time as environmental laws or regulations, or interpretation thereof, change or the nature of our operations require
us to make significant additional expenditures.

Our operations also are subject to a variety of worker safety laws in the United States and Canada. The
Occupational Safety and Health Act, U.S. Department of Labor Occupational Safety and Health Administration regulations and analogous state and provincial laws and regulations mandate general requirements for safe workplaces for all employees. We
believe that we are operating in material compliance with applicable employee health and safety laws.

Available Information

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are available without charge on our website,
www.newpagecorp.com, as soon as is reasonably practicable after they are filed electronically with the SEC. We will also provide a free copy of any of our filed documents upon written request to: General Counsel, NewPage Corporation, 8540 Gander
Creek Drive, Miamisburg, Ohio 45342.



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The public may read and copy any materials we file with the SEC at the SECs Public Reference Room at 100 F Street
NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC (http://www.sec.gov).



|ITEM 1A. | RISK FACTORS
|-------- | ------------

The risks discussed below, any of which could
materially affect our business, financial condition or results of operations, are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely
affect our business, financial condition or results of operations.

Our substantial level of indebtedness could adversely affect our business,
financial condition or results of operations.

We have substantial indebtedness. As of December 31, 2008, we had $3,152 million of total
indebtedness (excluding $87 million in outstanding letters of credit). Total indebtedness for NewPage was $2,962 million at December 31, 2008. As of December 31, 2008, our revolving senior secured credit facility also permitted additional
borrowings of up to a maximum of $500 million. In addition, subject to restrictions in our debt instruments, we may incur additional indebtedness. If new debt is added to our and our subsidiaries current debt levels, the related risks
that we now face could intensify.

Our substantial indebtedness could have important consequences, including the following:



| |  |  | it may be difficult for us to satisfy our obligations with respect to our outstanding indebtedness
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | our ability to obtain additional financing for working capital, debt service requirements, general corporate or other purposes may be impaired
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we must use a substantial portion of our cash flow to pay interest and principal on our indebtedness, which reduces the funds available to us for other purposes
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we are more vulnerable to economic downturns and adverse industry conditions
| | - |  | ----------------------------------------------------------------------------



| |  |  | our ability to capitalize on business opportunities and to react to competitive pressures and changes in our industry as compared to our competitors may be
compromised due to our high level of indebtedness
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to refinance our indebtedness may be limited
| | - |  | --------------------------------------------------------

In addition, we cannot assure you that we will be able to refinance any of our debt or that we will be able to refinance on commercially reasonable terms. If we were unable to make payments or refinance our debt or obtain new financing
under these circumstances, we would have to consider other options, such as:



| |  |  | sales of assets
| | - |  | ---------------



| |  |  | sales of equity
| | - |  | ---------------



| |  |  | negotiations with our lenders to restructure the applicable debt
| | - |  | ----------------------------------------------------------------



| |  |  | cash equity contributions from our controlling equity owner or others
| | - |  | ---------------------------------------------------------------------

Our debt instruments may restrict, or market or business conditions may limit, our ability to use some of our options.



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A substantial portion of our debt bears interest at variable rates. If market interest rates increase, it could
materially increase our cash interest payments.

As of December 31, 2008, $1,999 million of our debt consisted of borrowings that bear
interest at variable rates, representing 63% of our total indebtedness. Variable-rate indebtedness at NewPage was $1,809 million at December 31, 2008, representing 61% of its total indebtedness. If market interest rates increase, variable-rate
debt will create higher debt service requirements, which could adversely affect our cash flow and compliance with our debt covenants. As of December 31, 2008, weighted average interest rates were 5.3% on borrowings under the NewPage senior
secured term loan due 2014, 9.4% on the NewPage floating rate senior secured notes due 2012 and 10.3% on the NewPage Holding floating rate senior unsecured PIK Notes due 2013 (the NewPage Holding PIK Notes). Each one-eighth
percentage-point change in LIBOR would result in a $2.0 million change in annual interest expense on the NewPage senior secured term loan, a $0.3 million change in annual interest expense on the NewPage floating rate notes, a $0.2 million change in
annual interest expense on the NewPage Holding PIK Notes, and, assuming the entire revolving credit facility were drawn, a $0.6 million change in interest expense on the revolving credit facility, in each case, without taking into account any
interest rate derivative agreements. While we may enter into agreements limiting our exposure to higher market interest rates, these agreements may not offer complete protection from this risk.

Servicing our indebtedness will require a significant amount of cash. Our ability to generate sufficient cash depends on numerous factors beyond our control, and
we may be unable to generate sufficient cash flow to service our debt obligations.

Our ability to make payments on and to refinance our
indebtedness will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, political, financial, competitive, legislative, regulatory and other factors that are beyond our control.

During 2008, we expended approximately $267 million to service our indebtedness as compared to approximately $202 million during 2007 (without giving effect to the
repayment of $450 million under our pre-Acquisition credit facility at the closing of the Acquisition). We cannot assure you that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us
under our senior secured credit facilities, in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. If our cash flows and capital resources are insufficient to allow us to make scheduled payments on our
indebtedness, we may need to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will be able to refinance
any of our indebtedness, or that we will be able to refinance on commercially reasonable terms. If we are unable to generate sufficient cash flow or refinance our debt on favorable terms it could have a material adverse effect on our financial
condition, the value of the outstanding debt and our ability to make any required cash payments under our indebtedness.

Our senior secured credit
facilities are secured by substantially all of our assets and our notes rank junior in right of payment to indebtedness under our senior secured credit facilities to the extent of the collateral securing the senior secured credit facilities.

NewPage Holding and most of the subsidiaries of NewPage are guarantors of NewPages senior secured credit facilities. The guarantees are
secured by collateral comprising substantially all of our assets. Holders of secured debt have claims that are prior to those of other debt holders up to the value of the assets. On December 31, 2008, there was $1,584 million of senior secured
indebtedness outstanding under the senior secured credit facilities (excluding $87 million in outstanding letters of credit). The senior secured credit facilities permit additional borrowings of up to a maximum of $500 million under the revolving
portion of the facility. If our secured creditors, including lenders under our senior secured credit facilities, exercise their rights with respect to their collateral, the secured creditors would be entitled to be repaid in full from the proceeds
of those assets before those proceeds would



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be available for distribution to other creditors. If our assets are distributed or paid in a foreclosure, dissolution, winding-up, liquidation,
reorganization or other bankruptcy proceeding, holders of secured debt will have prior claim to our assets that constitute their collateral. If any of the foregoing events occur, we cannot assure you that there will be sufficient assets to pay
amounts due on more junior borrowings.

All operations are conducted through NewPage and its subsidiaries, none of which have guaranteed the NewPage
Holding PIK Notes.

All of our operations are conducted through NewPage and its subsidiaries. The NewPage Holding PIK Notes are not guaranteed by
NewPage or any of its subsidiaries, and are effectively subordinated to all of our subsidiaries current and future indebtedness, including our borrowings under NewPages senior secured credit facilities and its other indebtedness. As a
result, in the event of the bankruptcy, liquidation or dissolution of NewPage or any subsidiary, the assets of the applicable subsidiary would be available to pay obligations under the NewPage Holding PIK Notes only after all payments had been made
on the indebtedness of the applicable subsidiary. Sufficient assets may not remain after all of these payments have been made to make any payments on the NewPage Holding PIK Notes and our other obligations. On December 31, 2008, the $190
million of NewPage Holding PIK Notes were effectively subordinated to $2,962 million of indebtedness of NewPage and its subsidiaries (excluding $87 million in outstanding letters of credit), and up to a maximum of $500 million of additional
availability under NewPages revolving senior secured credit facility. NewPage and its subsidiaries are permitted to incur substantial additional indebtedness in the future under the terms of the indentures governing our existing indebtedness.

Our debt instruments impose significant operating and financial restrictions on us.

The indentures and other agreements governing our notes and our debt instruments impose significant operating and financial restrictions on us. These restrictions limit
our ability to, among other things:



| |  |  | incur additional indebtedness or guarantee obligations
| | - |  | ------------------------------------------------------



| |  |  | repay indebtedness prior to stated maturities
| | - |  | ---------------------------------------------



| |  |  | pay dividends or make certain other restricted payments
| | - |  | -------------------------------------------------------



| |  |  | make investments or acquisitions
| | - |  | --------------------------------



| |  |  | create liens or other encumbrances
| | - |  | ----------------------------------



| |  |  | transfer or sell certain assets or merge or consolidate with another entity
| | - |  | ---------------------------------------------------------------------------



| |  |  | engage in transactions with affiliates
| | - |  | --------------------------------------



| |  |  | engage in certain business activities
| | - |  | -------------------------------------

In addition
to the covenants listed above, our senior secured credit facilities require us to meet specified financial ratios and tests and restrict our ability to make capital expenditures. The required financial covenant levels become more restrictive over
the term of the senior secured credit facilities. By December 31, 2009, the leverage ratio declines to 5.00 with further decreases over the following three years to 3.75, the senior leverage ratio declines to 2.50 with further decreases over the
following three years to 1.25, the interest coverage ratio increases to 2.00 with a further increase to 2.50 the following year and the fixed charge coverage ratio increases to 1.10. Certain items included in results of operations are excluded under
the definition of consolidated adjusted EBITDA used to calculate compliance with the financial covenants in our senior secured credit facilities. These include items such as equity award expense, the effect of LIFO inventory accounting,
non-cash pension expense, cost of restructuring activities and costs related to the integration of the two businesses, among other items. Any of these restrictions could limit our ability to plan for or react to market conditions or meet
extraordinary capital needs and could otherwise restrict corporate activities.

Our ability to comply with these covenants may be affected by events beyond
our control, and an adverse development affecting our business could require us to seek waivers or amendments of covenants, alternative or additional sources of financing or reductions in expenditures. We cannot assure you that these waivers,
amendments or alternative or additional financings could be obtained, or if obtained, would be on terms acceptable to us.



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A breach of any of the covenants or restrictions contained in any of our existing or future financing agreements,
including our inability to comply with the required financial covenants in our senior secured credit facilities, could result in an event of default under those agreements. Our default could allow the lenders under our financing agreements, if the
agreements so provide, to discontinue lending, to accelerate the related debt as well as any other debt to which a cross acceleration or cross default provision applies, and to declare all borrowings outstanding under our financing arrangements to
be due and payable. In addition, the lenders could terminate any commitments they had made to supply us with further funds. If the lenders require immediate repayments, we will not be able to repay them, or the other holders of our debt, in full.

We may not have the ability to raise the funds necessary to finance the change of control offers required by the indentures governing our
indebtedness.

Upon the occurrence of a change of control, we must offer to buy back certain indebtedness at a price greater than par, together
with any accrued and unpaid interest to the date of the repurchase. Our failure to purchase, or give notice of purchase of, this indebtedness would be a default under the indentures governing the applicable indebtedness, which would also be a
default under our senior secured credit facilities.

If a change of control occurs, it is possible that we may not have sufficient assets at the time of
the change of control to make the required repurchase of indebtedness or to satisfy all obligations under our senior secured credit facilities and the indentures governing our indebtedness. In order to satisfy our obligations, we could seek to
refinance the indebtedness under our senior secured credit facilities and the indentures governing the indebtedness or obtain a waiver from the lenders or holders of the indebtedness. We cannot assure you that we would be able to obtain a waiver or
refinance our indebtedness on terms acceptable to us, if at all.

Our controlling equity holder may take actions that conflict with interests of the
debtholders.

A substantial portion of the voting power of our equity is held indirectly by affiliates of Cerberus. Accordingly, Cerberus
indirectly controls the power to elect our directors and officers, to appoint new management and to approve all actions requiring the approval of the holders of our equity (subject to certain specified consent rights of SEO under the security
holders agreement between NewPage Group and SEO), including adopting amendments to our constituent documents and approving mergers, acquisitions or sales of all or substantially all of our assets. The directors have the authority, subject to the
terms of our debt, to issue additional indebtedness or equity, implement equity repurchase programs, declare dividends and make other such decisions about our equity.

In addition, the interests of our controlling equity holder could conflict with those of our debtholders if, for example, we encounter financial difficulties or are unable to pay our debts as they mature. Our
controlling equity holder also may have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in its judgment, could enhance its equity investment, even though these transactions might involve risks to our
debtholders.

Demand for coated paper has declined due to recent macroeconomic events. Further declines in demand could have a material
adverse effect on our business, financial condition and results of operations.

Deteriorating general economic conditions have had an adverse
effect on the demand for our products since the second half of 2008. North American coated paper demand is primarily driven by advertising and print media usage. In particular, the demand for certain grades of coated paper is affected by spending on
catalog and promotional materials by retailers and spending on magazine advertising, which affects the number of printed pages in magazines. Since the second half of 2008, advertising and print media usage has declined. Coated paper prices increased
during the first three quarters of 2008. However, sales prices began to decline during the fourth quarter of 2008 as a result of lower demand in the current economic environment. Given the slowdown in the global economic outlook and the decline in
demand for coated paper exceeding the decline in supply, we expect this trend could continue through 2009. Further declines in the general economic environment could have a material adverse effect on our business, financial condition and results of
operations.

We have limited ability to pass through increases in our costs. Increases in our costs or decreases in our paper prices could adversely
affect our business, financial condition and results of operations.

Our earnings are sensitive to changes in the prices of our paper products.
Fluctuations in paper prices, and coated paper prices in particular, historically have had a direct effect on our net income (loss) and EBITDA for several reasons:



| |  |  | Market prices for paper products are a function of supply and demand, factors over which we have limited influence. We therefore have limited ability to control the
pricing of our products. Market prices of grade No. 3 coated paper, 60 lb. weight, which is an industry benchmark for coated freesheet paper pricing, have fluctuated since 2000 from a high of $1,100 per ton to a low of $705 per ton. Market
prices of grade No. 4 coated paper, 50 lb. weight, which is an industry benchmark for coated groundwood paper pricing, and grade SC-A, 35 lb. weight, which is an industry benchmark for supercalendered paper pricing, have generally followed
similar trends. Because market conditions determine the price for our paper products, the price for our products could fall below our production costs.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Market prices for paper products typically are not directly affected by raw material costs or other costs of sales, and consequently we have limited ability to pass
through increases in our costs to our customers absent increases in the market price. Thus, even though our costs may increase, our customers may not accept price increases for our products, or the prices for our products may decline.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Paper manufacturing is highly capital-intensive and a large portion of our and our competitors operating costs are fixed. Additionally, paper machines are
large, complex systems that operate more efficiently when operated continuously. Consequently, both we and our competitors typically continue to run our machines whenever marginal sales exceed the marginal costs.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our ability to achieve acceptable margins is, therefore, principally dependent on managing our cost structure and managing changes in raw materials prices, which
represent a large component of our operating costs and fluctuate based upon factors beyond our control. If the prices of our products decline, or if our raw material costs increase, or both, it could have a material adverse effect on our business,
financial condition and results of operations. For a further discussion of the variability of our paper prices and our costs and expenses, see Managements Discussion and Analysis of Financial Condition and Results of
OperationsSelected Factors That Affect Our Operating Results.

Most of the raw material, labor and other cost of sales at our Port Hawkesbury,
Nova Scotia, mill are denominated in Canadian dollars. North American sales prices for the products produced at Port Hawkesbury are determined primarily by the U.S. dollar price per ton charged by U.S. producers. In 2008, a stronger U.S. dollar
helped profitability at our Port Hawkesbury mill compared to 2007. If the U.S. dollar were to weaken significantly against the Canadian dollar, it would impair the ability of the Port Hawkesbury mill to profitably compete.

The markets in which we operate are highly competitive and imports could materially adversely affect our business, financial condition and results of operations.

Our business is highly competitive. Competition is based largely on price. We compete with numerous North American paper manufacturers. We also
face competition from foreign producers, some of which we believe are lower cost producers than we are. Foreign overcapacity could result in an increase in the supply of paper products available in the North American market. Asian producers, in
particular, have significantly increased imports to the U.S. in recent years, and we believe that producers in China, Indonesia and South Korea have been selling in our markets at less than fair value and have been subsidized by their governments.

Our non-U.S. competitors may develop a competitive advantage over us and other U.S. producers if the U.S. dollar strengthens in comparison to the home
currency of those competitors, if the home currency of those competitors (particularly in China) is maintained by their governments at a low value compared to the U.S. dollar, if those competitors receive governmental subsidies or incentives or if
ocean shipping rates decrease. If the U.S. dollar strengthens, if foreign currencies are maintained at low values, if



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shipping rates decrease, if foreign producers receive governmental subsidies or incentives or if overseas supply exceeds demand, imports may increase, which,
in turn, would cause the supply of paper products available in the North American market to increase. An increased supply of paper could cause us to lower our prices or lose sales to competitors, either of which could have a material adverse effect
on our business, financial condition and results of operations.

In addition, the following factors will affect our ability to compete:



| |  |  | product availability
| | - |  | --------------------



| |  |  | the quality of our products
| | - |  | ---------------------------



| |  |  | our breadth of product offerings
| | - |  | --------------------------------



| |  |  | our ability to maintain plant efficiencies and high operating rates and thus lower our average manufacturing costs per ton
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to provide customer service that meets customer requirements and our ability to distribute our products on time
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | costs to comply with environmental laws and regulations
| | - |  | -------------------------------------------------------



| |  |  | our ability to produce products that meet customer requirements for the use of sustainable forestry principles, recycled content and environmentally friendly energy
sources
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the availability or cost of chemicals, wood, energy and other raw materials and labor
| | - |  | -------------------------------------------------------------------------------------

Furthermore, some of our competitors have greater financial and other resources than we do or may be better positioned than we are to compete for certain opportunities.

If we are unable to obtain raw materials, including petroleum-based chemicals, at favorable prices, or at all, it could adversely affect our
business, financial condition and results of operations.

We have no significant timber holdings and purchase wood, chemicals and other raw
materials from third parties. We may experience shortages of raw materials or be forced to seek alternative sources of supply. If we are forced to seek alternative sources of supply, we may not be able to do so on terms as favorable as our current
terms or at all. The prices for many chemicals, especially petroleum-based chemicals, have increased over the last few years, including substantial increases during 2008. Chemical prices have historically been and are expected to continue to be
volatile. In addition, chemical suppliers that use petroleum-based products in the manufacture of their chemicals may, due to a supply shortage, ration the amount of chemicals available to us or we may not be able to obtain the chemicals we need at
favorable prices, if at all. Chemical suppliers also may be adversely affected by, among other things, hurricanes and other natural disasters. Certain specialty chemicals that we purchase are available only from a small number of suppliers. We may
experience additional cost pressures if merger and acquisition activity occurs among our major chemical suppliers. If any of our major chemical suppliers were to cease operations or cease doing business with us, we may be unable to obtain these
chemicals at favorable prices, if at all.

In addition, wood prices are dictated largely by demand. The primary source for wood fiber is timber.
Environmental litigation and regulatory developments have caused, and may cause in the future, significant reductions in the amount of timber available for commercial harvest in Canada and the United States. In addition, future domestic or foreign
legislation, litigation advanced by aboriginal groups, litigation concerning the use of timberlands, the protection of threatened or endangered species, the promotion of forest biodiversity and the response to and prevention of catastrophic
wildfires and campaigns or other measures by environmental activists could also affect timber supplies. Availability of harvested timber may further be limited by factors such as fire and fire



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prevention, insect infestation, disease, ice and wind storms, drought, floods and other natural and man-made causes, thereby reducing supply and increasing
prices. We buy wood chips from lumber producers as a by product of their lumber production. Declines in their business conditions could affect the availability and price of wood chips.

Any disruption in the supply of chemicals, wood or other inputs could affect our ability to meet customer demand in a timely manner and could harm our reputation. As we have limited ability to pass through increases
in our costs to our customers absent increases in market prices for our products, material increases in the cost of our raw materials could have a material adverse effect on our business, financial condition and results of operations.

We are involved in continuous manufacturing processes with a high degree of fixed costs. Any interruption in the operations of our manufacturing facilities may
affect our operating performance.

We seek to run our paper machines and pulp mills on a nearly continuous basis for maximum efficiency. Any
unplanned plant downtime at any of our paper mills results in unabsorbed fixed costs that negatively affect our results of operations. Due to the extreme operating conditions inherent in some of our manufacturing processes, we may incur unplanned
business interruptions from time to time and, as a result, we may not generate sufficient cash flow to satisfy our operational needs. In addition, many of the geographic areas where our production is located and where we conduct our business may be
affected by natural disasters, including snow storms, tornadoes, forest fires and flooding. These natural disasters could disrupt the operation of our mills, which could have a material adverse effect on our business, financial condition and results
of operations. Furthermore, during periods of weak demand for paper products or periods of rising costs, we may need to schedule market-related downtime, which could have a material adverse effect on our financial condition and results of
operations. We took 91,000 tons of market-related downtime of coated paper during 2008 and have announced that we intend to take an additional 150,000 tons of market-related downtime of coated paper in the first quarter of 2009.

Our operations require substantial ongoing capital expenditures, and we may not have adequate capital resources to fund all of our required capital expenditures.

Our business is capital intensive, and we incur capital expenditures on an ongoing basis to maintain our equipment and comply with environmental
laws and regulations, as well as to enhance the efficiency of our operations. We expect to spend approximately $75 million in 2009 on capital expenditures, including approximately $13 million for maintenance capital expenditures, approximately
$55 million for improvements in machinery and equipment efficiency or cost-effectiveness and approximately $7 million primarily for costs of integrating the two businesses, including investments in information systems. We anticipate that cash
generated from operations will be sufficient to fund our operating needs and capital expenditures for the foreseeable future. However, if we require additional funds to fund our capital expenditures, we may not be able to obtain them on favorable
terms, or at all. If we cannot maintain or upgrade our facilities and equipment as we require or to ensure environmental compliance, it could have a material adverse effect on our business, financial condition and results of operations.

Rising energy or chemical prices or supply shortages could adversely affect our business, financial condition and results of operations.

Although a significant portion of our energy requirements is satisfied by steam produced as a byproduct of our manufacturing process, we purchase natural gas, coal and
electricity to run our mills. Energy costs continued to increase during much of 2008 and are expected to remain volatile for the foreseeable future. In addition, energy suppliers and chemical suppliers that use petroleum-based products in the
manufacture of their chemicals may, due to supply shortages, ration the amount of energy or chemicals



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available to us and we may not be able to obtain the energy or chemicals we need to operate our business at acceptable prices or at all. Any significant
energy or chemical shortage or significant increase in our energy or chemical costs in circumstances where we cannot raise the price of our products due to market conditions could have a material adverse effect on our business, financial condition
and results of operations. We estimate that for each $1 increase in the cost of a barrel of crude oil, our direct energy costs, other than electricity, and indirect costs, such as costs for transportation and petroleum-derived chemicals, increase
approximately $6 million annually. See Managements Discussion and Analysis of Financial Condition and Results of OperationsSelected Factors That Affect Our Operating ResultsCost of Sales. Furthermore, we are required to
post letters of credit or other financial assurance obligations with certain of our energy and other suppliers, which could limit our financial flexibility. Additionally, we have experienced some fuel surcharges (primarily diesel fuel) by suppliers,
distributors and freight carriers. If fuel surcharges increase significantly, and we are not able to pass these costs through to our customers, they could have a material adverse effect on our business, financial condition and results of operations.

In addition, an outbreak or escalation of hostilities between the United States and any foreign power and, in particular, events in the Middle East, or
weather events such as hurricanes, could result in a real or perceived shortage of oil or natural gas, which could result in an increase in energy or chemical prices.

We depend on a small number of customers for a significant portion of our business.

Our largest customer,
xpedx, a division of International Paper Company, accounted for 21% of 2008 net sales. Our ten largest customers (including xpedx) accounted for approximately 50% of 2008 net sales. The loss of, or significant reduction in orders from, any of these
customers or other customers could have a material adverse effect on our business, financial condition and results of operations, as could significant customer disputes regarding shipments, price, quality or other matters.

Furthermore, we extend trade credit to certain of our customers to facilitate the purchase of our products and rely on their creditworthiness and ability to obtain
credit from lenders. Accordingly, a bankruptcy or a significant deterioration in the financial condition of any of our significant customers could have a material adverse effect on our business, financial condition and results of operations, due to
a reduction in purchases, a longer collection cycle or an inability to collect accounts receivable.



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We may not realize the anticipated benefits of the Acquisition.

We completed the Acquisition on December 21, 2007. Although we expect to realize strategic, operational and financial benefits as a result of the Acquisition, we
cannot predict whether and to what extent these benefits will be achieved. Successful integration of NewPage and NPCP will depend on managements ability to manage the combined operations effectively and to benefit from cost savings and
operating efficiencies. There are significant challenges to integrating the NPCP operations into our business, including:



| |  |  | potential disruptions of our business caused by the integration activities
| | - |  | --------------------------------------------------------------------------



| |  |  | the diversion of managements and others attention
| | - |  | ---------------------------------------------------



| |  |  | maintaining effective internal control procedures for the combined company
| | - |  | --------------------------------------------------------------------------



| |  |  | integrating management information, inventory, accounting and sales systems of NewPage and NPCP
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | sufficient customer demand necessary to support volume levels needed to achieve anticipated economies of scale
| | - |  | --------------------------------------------------------------------------------------------------------------

In addition, the Acquisition created a significantly larger combined company, which may increase the challenge of integrating the NPCP operations into our business.

We expect to generate annualized synergies as a result of the Acquisition of approximately $265 million. As of December 31, 2008, we remain on track to
meet our long-term target in annualized synergies from the Acquisition. However, full realization of the synergies from anticipated economies of scale may be delayed somewhat by the slowdown in demand and volume. We cannot assure you that these
synergies will be achieved on the timetable contemplated and in the amounts expected, or at all. Achieving the expected synergies, as well as the costs of achieving them, is subject to a number of uncertainties, including customer demand necessary
to support volume levels needed to achieve anticipated economies of scale and our ability to make necessary investments in information systems in a timely and cost efficient manner. If we encounter difficulties in achieving the expected synergies,
incur significantly greater costs related to these synergies than we anticipate or activities related to these synergies have unintended consequences, our business, financial condition and results of operations could be adversely affected.

Litigation could be costly and harmful to our business.

We are involved in various claims and lawsuits from time to time. For example, in 1998 and 1999, the Environmental Protection Agency, or EPA, issued Notices of Violation, or NOV, to eight paper industry facilities,
including our Luke, Maryland mill, alleging violation of certain Prevention of Significant Deterioration, or PSD, regulations under the Clean Air Act. In 2000, an enforcement action was brought in Federal District Court in Maryland against the
predecessor of MeadWestvaco, asserting that the predecessor did not obtain PSD permits or install required pollution controls in connection with capital projects carried out in the 1980s at the Luke mill. The complaint sought penalties of $27,500
per day for each claimed violation together with the installation of additional air pollution control equipment. MeadWestvaco has agreed to indemnify us for certain liability under these claims to the extent reserves were not previously established
or the liability exceeds amounts budgeted by MeadWestvaco in connection with these matters. However, if we incur liability for this lawsuit and we are unable to obtain indemnification from MeadWestvaco, we may incur substantial costs, which may
include costs in connection with the penalties and the installation of additional pollution control equipment.

In March 2000, the EPA issued a NOV and a
Finding of Violation, or FOV, to our Wisconsin Rapids pulp mill alleging violation of the PSD regulations and the New Source Performance Standard, or NSPS, requirements under the Clean Air Act arising from projects implemented at the mill between
1983 and 1991. The EPA is seeking the installation of additional air pollution control



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equipment and an $8 million penalty. The matter has been referred to the Department of Justice. In July 2002, the EPA issued a NOV and a FOV to our Niagara
mill alleging PSD and NSPS violations relating to projects implemented at the mill from 1995 to 1997. SEO has agreed to indemnify us for 75% of certain expenses relating to these matters, including losses arising from the design and installation of
air pollution control equipment and for 75% of air compliance penalties, provided the expenses and penalties are incurred within a five-year period following closing of the Acquisition and that SEOs obligations with respect to the boiler
Maximum Achievable Control Technology rule is limited to 50% of the initial $35 million of certain compliance costs. If we incur liability for these actions and we are unable to obtain indemnification from SEO, we may incur substantial costs in
connection with penalties and the installation of additional pollution control equipment.

In April 2008, NewPage Wisconsin System Inc. (formerly Stora
Enso North America Corp. and the successor by merger to Consolidated Papers, Inc.), along with several other defendants, was served with a summons and complaint seeking to allocate among the defendants the cleanup costs and natural resource damages
associated with the remediation of PCB contamination in the Lower Fox River and to require the defendants and the other responsible parties to pay for the upcoming remedial work and natural resource damages. The complaint does not specify our
alleged allocable share of these costs and damages. We do not believe that we are responsible for any PCB contamination in the Lower Fox River. We have submitted the claim to SEO, which is required to defend and indemnify us for 75% of any
environmental liability associated with the Lower Fox River, provided the liabilities are incurred within the five-year period following closing of the Acquisition. We cannot assure you that we will not be held responsible for PCB contamination in
the Lower Fox River or that SEO will satisfy any indemnification obligation to us.

In addition, we may be involved in various other claims and legal
actions that arise in the ordinary course of business, including claims and legal actions related to environmental laws and regulations. Any of these claims or legal actions could materially adversely affect our business, results of operations and
financial condition.

See Legal Proceedings for further information concerning pending legal proceedings.

Rising postal costs could weaken demand for our paper products.

A significant portion of paper is used in periodicals, catalogs, fliers and other promotional materials. Many of these materials are distributed through the mail. Future increases in the cost of postage could reduce the frequency of
mailings, reduce the number of pages in advertising materials or cause advertisers to use alternate methods to distribute their advertising materials. Any of the foregoing could decrease the demand for our products, which could materially adversely
affect our business, financial condition and results of operations.

Developments in alternative media could adversely affect the demand for our
products.

Trends in advertising, electronic data transmission and storage and the internet could have adverse effects on traditional print media,
including our products and those of our customers, but neither the timing nor the extent of those trends can be predicted with certainty. Our magazine and catalog publishing customers may increasingly use, and compete with businesses that use, other
forms of media and advertising and electronic data transmission and storage, particularly the internet, instead of paper made by us. As the use of these alternatives grows, demand for our paper products could decline. In addition, electronic formats
for textbooks could cause demand to decline for paper textbooks.



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The failure of our information technology and other business support systems could have a material adverse effect
on our business, financial condition and results of operations.

Our ability to effectively monitor and control our operations depends to a large
extent on the proper functioning of our information technology and other business support systems. We are a party to a service agreement that provides all of the information technology services through December 31, 2017 and human resources
services through January 31, 2013 necessary to support our operations. If the service agreement is terminated, we will need to either perform these functions internally or obtain these services from third parties. We may not be able to do so on
a cost-effective basis. If our information technology and other business support systems were to fail or the service provider were to fail to perform under the service agreement, it could have a material adverse effect on our business, financial
condition and results of operations.

Our business may suffer if we do not retain our senior management.

We depend on our senior management. The loss of services of members of our senior management team could adversely affect our business until suitable replacements can be
found. There may be a limited number of persons with the requisite skills to serve in these positions and we may be unable to locate or employ qualified personnel on acceptable terms. In addition, our future success requires us to continue to
attract and retain competent personnel. We may experience an increase in turnover among senior personnel as a result of the Acquisition.

A large
percentage of our employees are unionized. Wage increases or work stoppages by our unionized employees may have a material adverse effect on our business, financial condition and results of operations.

As of December 31, 2008, we had approximately 7,800 employees. Approximately 70% of our employees were represented by labor unions. We have 16 collective bargaining
agreements expiring at various times through November 30, 2010. Approximately 925 employees at the Escanaba, Michigan mill are covered under three contracts that expired in June and July of 2008 and are currently under renegotiation. In
addition, two contracts covering an aggregate of approximately 750 employees at the Luke, Maryland mill expired December 1, 2008 and January 15, 2009 and are currently under renegotiation. During 2009, one contract for the office workers
in central Wisconsin covering approximately 50 employees will expire on April 30, 2009 and three contracts covering an aggregate of approximately 550 employees at our Port Hawkesbury, Nova Scotia, mill will expire on May 31, 2009. Our Port
Hawkesbury, Nova Scotia mill was closed from December 2005 until October 2006, before our ownership of the mill, due to a labor dispute.

We may become
subject to material cost increases or additional work rules imposed by agreements with labor unions. This could increase expenses in absolute terms and as a percentage of net sales. In addition, work stoppages or other labor disturbances may occur
in the future. Any of these factors could negatively affect our business, financial condition and results of operations.

We depend on third parties
for certain transportation services.

We rely primarily on third parties for transportation of our products to our customers and transportation of
our raw materials to us, in particular, by truck and train. If any of our third-party transportation providers fail to deliver our products in a timely manner, we may be unable to sell them at full value. Similarly, if any of our transportation
providers fail to deliver raw materials to us in a timely manner, we may be unable to manufacture our products on a timely basis. Shipments of products and raw materials may be delayed due to weather conditions, strikes or other events. Any failure
of a third-party transportation provider to deliver raw materials or products in a timely manner could harm our reputation, negatively affect our customer relationships and have a material adverse



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effect on our business, financial condition and results of operations. In addition, our ability to deliver our products on a timely basis could be adversely
affected by the lack of adequate availability of transportation services, especially rail capacity, whether because of work stoppages or otherwise. Additionally, we have experienced some fuel surcharges (primarily diesel fuel) by suppliers,
distributors and freight carriers. If fuel surcharges increase significantly, and we are not able to pass these costs through to our customers, they could have a material adverse effect on our business, financial condition and results of operations.

We are subject to various regulations that could impose substantial costs upon us and may adversely affect our operating performance.

Our operations are subject to a wide range of federal, state, provincial and local general and industry-specific environmental, health and safety
laws and regulations, including those relating to air emissions, wastewater discharges, solid and hazardous waste management and disposal and site remediation. Compliance with these laws and regulations is a significant factor in our business and we
may be subject to increased scrutiny and enforcement actions by regulators as a result of changes in federal or state administrations. We have made, and will continue to make, significant expenditures to comply with these requirements. Significant
expenditures also could be required for compliance with any future laws or regulations relating to greenhouse gas or other emissions. In addition, we handle and dispose of wastes arising from our mill operations and operate a number of landfills to
handle that waste. While we believe, based upon current information, that we are currently in substantial compliance with all applicable environmental laws and regulations, we could be subject to potentially significant fines, penalties or criminal
sanctions for failure to comply, including with respect to the matters discussed in Litigation could be costly and harmful to our business. Moreover, under certain environmental laws, a current or previous owner or operator of real
property, and parties that generate or transport hazardous substances that are disposed of at real property, may be held liable for the cost to investigate or clean up that real property and for related damages to natural resources. We may be
subject to liability, including liability for investigation and cleanup costs, if contamination is discovered at one of our paper mills or other locations where we have disposed of, or arranged for the disposal of, wastes. MeadWestvaco and SEO have
separately agreed to indemnify us, subject to certain limitations, for certain environmental liabilities. There can be no assurance that MeadWestvaco or SEO will perform under any of their respective environmental indemnity obligations or that the
indemnity will adequately cover us in the event of any environmental liabilities, which could have a material adverse effect on our financial condition and results of operations. Furthermore, we agreed to indemnify the purchaser of our carbonless
paper business for certain environmental liabilities, subject to certain limitations. We also could be subject to claims brought pursuant to applicable laws, rules or regulations for property damage or personal injury resulting from the
environmental impact of our operations, including due to human exposure to hazardous substances. Increasingly stringent environmental requirements, more aggressive enforcement actions or policies, the discovery of unknown conditions or the bringing
of future claims may cause our expenditures for environmental matters to increase, and we may incur material costs associated with these matters.

Some of our operations are subject to Canadian government regulation and we are subject to foreign currency risk.

Our business
includes a mill in Port Hawkesbury, Nova Scotia and management of woodlands in Canada. Our operations in Canada are subject to Canadian laws and regulations, as well as foreign currency risk. The value of the Canadian dollar versus the U.S. dollar
has fluctuated dramatically over the last two years. A significantly weaker U.S. dollar makes imports to the United States of paper products made in our Port Hawkesbury, Nova Scotia mill unprofitable. We cannot assure you we will be able to manage
our Canadian operations profitably.



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We have a history of net losses and we may not generate net income in the future.

We incurred a net loss in each of the five years ended December 31, 2008. As of December 31, 2008, our accumulated deficit was $283 million and NewPages
accumulated deficit was $214 million. In addition, SENA incurred a net loss in each of the years ended December 31, 2004, 2005 and 2006 and the nine months ended September 30, 2007. Our ability to pay future dividends, if any, will be
limited by the amount of net income that we generate. Furthermore, if we are unable to generate net income in satisfactory amounts or at all, this may adversely affect our business.



|ITEM 1B. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

Not applicable.



|ITEM 2. | PROPERTIES
|------- | ----------

Our Corporate headquarters is located in Miamisburg,
Ohio. We own the mills where we produce our paper products and own the converting facilities where we convert rolls of paper to sheets. We believe that we have sufficient capacity at our manufacturing facilities to meet our production needs for the
foreseeable future. In addition, we lease space or have third-party arrangements to utilize space in approximately 50 distribution facilities. All of our owned facilities (except those owned by CWPCo) are pledged as collateral under our various debt
agreements. The following table lists the purpose of each of our significant facilities, as well as whether the facility is owned or leased:



|                             |  |                                    |  |                           
|---------------------------- |  | ---------------------------------- |  | --------------------------
|Location                     |  | Purpose                            |  | Owned or Leased/Expiration
|Miamisburg, Ohio             |  | Corporate Headquarters             |  | Leased/2017               
|Biron, Wisconsin             |  | Paper Mill                         |  | Owned                     
|Duluth, Minnesota            |  | Paper Mill                         |  | Owned                     
|Escanaba, Michigan           |  | Paper Mill                         |  | Owned                     
|Luke, Maryland               |  | Paper Mill                         |  | Owned                     
|Luke, Maryland               |  | Warehouse & Converting             |  | Owned                     
|Port Hawkesbury, Nova Scotia |  | Paper Mill                         |  | Owned                     
|Rumford, Maine               |  | Paper Mill                         |  | Owned                     
|Stevens Point, Wisconsin     |  | Paper Mill                         |  | Owned                     
|Whiting, Wisconsin           |  | Paper Mill                         |  | Owned                     
|Wickliffe, Kentucky          |  | Paper Mill                         |  | Owned                     
|Wisconsin Rapids, Wisconsin  |  | Paper Mill, Warehouse & Converting |  | Owned                     



|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

In 1998 and 1999, the EPA issued Notices of
Violation, or NOVs, to eight paper industry facilities, including our Luke, Maryland mill, alleging, among other things, violation of certain Prevention of Significant Deterioration, or PSD, regulations under the Clean Air Act. In 2000, an
enforcement action was brought in Federal District Court in Maryland against the predecessor of MeadWestvaco, asserting that the predecessor did not obtain PSD permits or install required pollution controls in connection with capital projects
carried out in the 1980s at the Luke mill. The complaint sought penalties of up to $27,500 per day for each claimed violation together with the installation of additional air pollution control equipment. During 2001, the court granted
MeadWestvacos motion for partial dismissal and dismissed the EPAs claims for civil penalties under the major counts of the complaint. In October 2005, the parties made their closing arguments on Phase I of this case, and each has filed
for summary judgment in its favor. The court has not ruled on these motions. MeadWestvaco has agreed to indemnify us for certain liabilities under these claims. MeadWestvaco will not indemnify



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us for litigation losses arising from the design, installation or construction of a scrubber-compliant baghouse, to the extent these costs constitute capital
spending under the agreement pursuant to which we acquired the printing and papers business from MeadWestvaco. In addition, MeadWestvaco will not indemnify us for litigation losses resulting from any increased operation costs at our Luke mill unless
those costs exceed $2 million annually within five years after resolution of the claims. If we incur liability for this lawsuit and we are unable to obtain indemnification from MeadWestvaco, we may incur substantial costs, which may include costs in
connection with the penalties and the installation of additional pollution control equipment.

In March 2000, the EPA issued a NOV and a Finding of
Violation, or FOV, to our Wisconsin Rapids pulp mill alleging violation of the PSD regulations and the New Source Performance Standard, or NSPS, requirements under the Clean Air Act arising from projects implemented at the mill between 1983 and
1991. The EPA is seeking the installation of additional air pollution control equipment and an $8 million penalty. The matter has been referred to the Department of Justice. In July 2002, the EPA issued a NOV and a FOV to our Niagara mill alleging
PSD and NSPS violations relating to projects implemented at the mill from 1995 to 1997. SEO has agreed to indemnify us for 75% of certain expenses relating to these matters, including losses arising from the design and installation of air pollution
control equipment and for 75% of air compliance penalties, provided the expenses and penalties are incurred within a five-year period following closing of the Acquisition and that SEOs obligations with respect to the boiler Maximum Achievable
Control Technology rule is limited to 50% of the initial $35 million of certain compliance costs. If we incur liability for these actions and we are unable to obtain indemnification from SEO, we may incur substantial costs in connection with
penalties and the installation of additional pollution control equipment.

In April 2008, NewPage Wisconsin System Inc. (formerly Stora Enso North America
Corp. and the successor by merger to Consolidated Papers, Inc.), along with several other defendants, was named as a defendant in Appleton Papers, Inc., et al. v. George A. Whiting Paper Co., et al (08-CV-00016-WCG) in the United States
District Court for the Eastern District of Wisconsin, Green Bay Division. The plaintiffs are seeking to allocate among the defendants the cleanup costs and natural resource damages associated with the remediation of PCB contamination in the Lower
Fox River and to require the defendants and the other responsible parties to pay for the upcoming remedial work and natural resource damages. The complaint does not specify our alleged allocable share of these costs and damages. We do not believe
that we are responsible for any PCB contamination in the Lower Fox River. We have submitted the claim to SEO, which is required to defend and indemnify us for 75% of any environmental liability associated with the Lower Fox River, provided the
liabilities are incurred within the five-year period following the closing of the Acquisition.

A number of plaintiffs have filed purported class actions
on behalf of direct and indirect purchasers of publication paper in various U.S. federal and state courts. These class actions allege that certain manufacturers of publication paper, including SENA, participated in a price-fixing conspiracy from
1993 to the case filing date. The cases filed in federal court assert a violation of the federal antitrust laws, while the cases filed in the state court allege violations of state antitrust and consumer protection statutes. These lawsuits seek
treble damages, injunctive relief and other costs associated with the litigation but do not specify a dollar amount. The federal cases were consolidated for pre-trial purposes in December 2004 and all of the state court cases except one were removed
to federal court and consolidated as In Re Publication Paper Antitrust LitigationCase No. 3-04-MD-1631 (SRU) in the U.S. Federal Court for the District of Connecticut. Pre-trial proceedings have begun in the consolidated federal case.
The lone state court case, The Harman Press, et al. v. International Paper Co., et al., Case No. CGC-04-432167, filed in June 2004, which is pending in the Superior Court of California, County of San Francisco, has been stayed pending the
outcome of the consolidated federal cases, although discovery in the state case is being coordinated with discovery in the federal cases. The plaintiffs are seeking treble damages under the California antitrust statute, restitution, interest and
attorneys fees. The complaint does not specify a dollar amount of damages. SEO has agreed to defend and indemnify us for all liabilities under these claims.



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We are involved in various other litigation and administrative proceedings that arise in the ordinary course of business.
Although the ultimate outcome of these matters cannot be predicted with certainty, we do not believe that the currently expected outcome of any matter, lawsuit or claim that is pending or threatened, or all of them combined, will have a material
adverse effect on our financial condition, results of operations or liquidity.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

None.

PART II



|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------- | ------------------------------------------------------------------------------------------------------------

As of February 20, 2009, NewPage Group was the sole holder of record of the shares of NewPage Holdings common stock and NewPage Holding was the sole holder of
record of the shares of NewPages common stock. There is no established public trading market for the common stock of NewPage Holding or NewPage. We have never paid or declared a cash dividend on the common stock of NewPage Holding or NewPage.
Our debt agreements restrict our ability and the ability of our subsidiaries to pay dividends.



|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------

The following table sets forth summary
financial data of NewPage Holding and its predecessor for each of the five fiscal years in the period ended December 31, 2008.



|                                         |  |                       |       |   |                           |   |             |                       |  |   |                                  |   |  |   |       |                             |  |  |                       |   |     |   |  |   |       |  
|---------------------------------------- |  | --------------------- | ----- | - | ------------------------- | - | ----------- | --------------------- |  | - | -------------------------------- | - |  | - | ----- | --------------------------- |  |  | --------------------- | - | --- | - |  | - | ----- | -
|                                         |  | Successor             |       |   |                           |   | Predecessor |                      
|(in millions)                            |  | YearEndedDec. 31,2008 |       |   | YearEndedDec. 31,2007 (a) |   |             | YearEndedDec. 31,2006 |  |   | EightMonthsEndedDec. 31,2005 (b) |   |  |   |       | FourMonthsEndedApr. 30,2005 |  |  | YearEndedDec. 31,2004 |  
|Net sales                                |  | $                     | 4,356 |   |                           | $ | 2,168       |                       |  | $ | 2,038                            |   |  | $ | 1,281 |                             |  |  |                       | $ | 582 |   |  | $ | 1,779 |  
|Income (loss) from continuing operations |  |                       | (142  | ) |                           |   | (22         | )                     |  |   | (36                              | ) |  |   | (72   | )                           |  |  |                       |   | (3  | ) |  |   | (281  | )
|Net income (loss)                        |  |                       | (142  | ) |                           |   | (22         | )                     |  |   | (52                              | ) |  |   | (67   | )                           |  |  |                       |   | (8  | ) |  |   | (301  | )
|                                         |  |                       |       |   |                           |   |            
|Working capital                          |  | $                     | 391   |   |                           | $ | 477         |                       |  | $ | 276                              |   |  | $ | 369   |                             |  |  |                       |   |     |   |  | $ | 274   |  
|Total assets                             |  |                       | 4,246 |   |                           |   | 4,885       |                       |  |   | 1,985                            |   |  |   | 2,304 |                             |  |  |                       |   |     |   |  |   | 2,647 |  
|Long-term debt                           |  |                       | 3,082 |   |                           |   | 3,070       |                       |  |   | 1,429                            |   |  |   | 1,677 |                             |  |  |                       |   |     |   |  |   | 145   |  
|Other long-term obligations              |  |                       | 616   |   |                           |   | 351         |                       |  |   | 42                               |   |  |   | 46    |                             |  |  |                       |   |     |   |  |   | 9     |  



|(a) | NewPage acquired SENA as of December 21, 2007. The statement of operations data includes the results of this acquisition from the date of acquisition.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | NewPage acquired the printing and writing papers business of MeadWestvaco Corporation effective as of April 30, 2005. The statement of operations data includes the results of
this acquisition from the date of acquisition.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

You should read the following discussion together with our historical financial statements, including the related notes appearing elsewhere in this Form 10-K. Statements in the discussion and analysis regarding our
expectations regarding the performance of our business and any forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in Forward-Looking Statements
and Risk Factors. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Overview

Company Background

We
believe that we are the largest coated paper manufacturer in North America based on production capacity. Coated paper is used primarily in media and marketing applications such as corporate annual reports, high-end advertising brochures, direct mail
advertising, coated labels, magazines, magazine covers and inserts and catalogs. We operate 20 paper machines at ten mills located in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada.

Trends in our Business

North American coated paper demand is
primarily driven by advertising and print media usage. In particular, the demand for certain grades of coated paper is affected by spending on catalog and promotional materials by retailers and spending on magazine advertising, which affects the
number of printed pages in magazines. During 2008, North American coated paper demand declined significantly compared to 2007, as a result of decreased advertising spending and magazine and catalog circulation resulting from macroeconomic factors.
This trend is expected to continue through 2009. In response to this reduction in coated paper demand, we accelerated the closure of two paper machines in Niagara, Wisconsin in July 2008 and closed the Kimberly, Wisconsin, mill and its two remaining
paper machines in September 2008. During 2008, we permanently closed an aggregate of approximately 1.1 million tons of coated paper capacity. We also took 91,000 tons of market-related downtime of coated paper during 2008 and have announced that we
intend to take an additional 150,000 tons of market-related downtime of coated paper in the first quarter of 2009. We will consider the need for additional market-related downtime from time to time based on market conditions.

North American coated paper supply declined more than demand in 2007 and early 2008. However, as a result of the significant economic decline during the second half of
2008, especially during the fourth quarter, the reduction in demand exceeded the reduction in supply resulting in excess North American coated paper supply. The North American coated paper supply has been affected by North American capacity
closures, including our capacity closures, a reduction in imports into North America and market-related downtime in an attempt to align supply with the lower demand. We believe imports have been lower because of non-North American capacity closures,
unfavorable exchange rates and high transportation costs for foreign producers. However, we believe imports could begin to increase as a result of the strengthening U.S. dollar, lower oil costs and foreign overcapacity. Asian producers, in
particular, have significantly increased imports to the U.S. in recent years, and we believe that producers in China, Indonesia and South Korea have been selling in our markets at less than fair value and have been subsidized by their governments.

During 2008, we experienced significant increases in our input costs due to substantially higher prices for wood, chemicals, natural gas, coal and
electricity. In particular, costs of certain petroleum-based chemicals and transportation costs increased substantially



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during most of 2008. In the first quarter of 2009, we are starting to see the effects of lower crude oil prices in our transportation, chemical and other raw
material costs compared to the second half of 2008. Overall, we expect crude oil and energy costs to remain volatile for the foreseeable future, although at lower levels compared to the peak levels in 2008.

North American prices for coated paper products historically have been determined by North American supply and demand, rather than directly by raw material costs or
other costs of sales. We therefore have limited ability to increase prices in response to increases in our costs if demand relative to supply does not remain strong. As a result of the supply, demand and cost factors described above, coated paper
prices increased during the first three quarters of 2008. However, sales prices began to decline during the fourth quarter of 2008 as a result of lower demand in the current economic environment. Given the slowdown in the global economic outlook and
the decline in demand for coated paper exceeding the decline in supply, we expect this trend could continue through 2009.

The SENA Acquisition and
Related Transactions

On December 21, 2007, NewPage acquired all of the issued and outstanding common stock of SENA from Stora Enso Oyj
(SEO) (the Acquisition). We acquired SENA in order to create a single business platform and to enable us to remain competitive in the marketplace, serve our customers more efficiently and achieve synergies from the
Acquisition. The Acquisition more than doubled our production capacity and broadened our product line.

In connection with the closing of the Acquisition:



| |  |  | NewPage acquired all of the issued and outstanding common stock of SENA and, in exchange, SEO received:
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | $1,522 million in cash
| | - |  | ----------------------



| |  |  | shares of common stock representing 19.9% (as of the closing of the Acquisition) of the outstanding common stock of NewPage Holdings direct parent, NewPage
Group Inc. (NewPage Group)
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | senior unsecured notes issued by NewPage Group in the aggregate principal amount of $200 million due 2015 (the NewPage Group PIK Notes)
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | NewPage entered into senior secured credit facilities, consisting of a $1,600 million senior secured term loan facility and a $500 million senior secured revolving
credit facility
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | NewPage repaid $450 million of term debt outstanding under its prior credit facility
| | - |  | ------------------------------------------------------------------------------------



| |  |  | NewPage issued $456 million of 10% senior secured notes due 2012
| | - |  | ----------------------------------------------------------------

Prior to the closing of the Acquisition, we engaged in an equity reorganization:



| |  |  | Escanaba Timber LLC (Escanaba Timber), which was previously the immediate parent entity of NewPage Holding, contributed all outstanding shares of common
stock of NewPage Holding to NewPage Group in exchange for shares of common stock of NewPage Group
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Escanaba Timber distributed to Maple Timber Acquisition LLC (Maple Timber), Escanaba Timbers immediate parent entity, all outstanding shares of
NewPage Group common stock
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Maple Timber distributed all of its NewPage Group common stock to the members of Maple Timber
| | - |  | ---------------------------------------------------------------------------------------------



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As a result of this equity reorganization, NewPage Group became the direct parent entity of NewPage Holding (and
consequently the indirect parent of NewPage) and Cerberus and its affiliates and the other equity owners of Maple Timber were the sole stockholders of NewPage Group prior to the closing of the Acquisition.

Anticipated Synergies of the Acquisition and Integration of the Business

We expect to generate annualized synergies as a result of the Acquisition of approximately $265 million. These synergies are expected to result from optimizing paper production, reducing input costs and reducing
selling, general and administrative expenses. As of December 31, 2008, we remain on track to meet our long-term target in annualized synergies from the Acquisition. However, full realization of the synergies from anticipated economies of scale
may be delayed somewhat by the slowdown in demand and volume.

These expected synergies are described below.

Approximately $145 million from optimizing production.



| |  |  | Reallocate production of paper grades across our combined machine base, resulting in operation of machines in narrower ranges around their peak production
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increase production from our largest, most efficient machines allowing us to shut down or idle less efficient, higher cash cost machines
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Use our excess market pulp production internally to reduce the amount of pulp purchased from third parties, in order to reduce both input costs and cost of sales,
the latter due to the reduction in freight costs associated with current NewPage pulp sales
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Approximately $80 million from reducing
input costs.



| |  |  | Lower prices of key raw materials through volume purchases
| | - |  | ----------------------------------------------------------



| |  |  | Overall cost reductions from improved logistics
| | - |  | -----------------------------------------------



| |  |  | Reallocate production among our combined mills so we can produce more product in greater proximity to customers, which in turn will lower freight costs
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Implement best practices across our combined mill system and focus on increasing our overall profitability, rather than independently at each individual mill
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

Approximately $40 million from reducing selling, general and administrative expenses.



| |  |  | Eliminate duplicative sales, marketing, research and customer service personnel and centralization of corporate administration, management, finance and human
resource functions, to reduce headcount and associated support costs
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Lower benefit costs by freezing defined benefit pension plans and reducing retiree medical benefits for salaried employees
| | - |  | --------------------------------------------------------------------------------------------------------------------------

During 2008, we announced actions taken to integrate NewPage operations and the former SENA facilities and services. These actions were intended to create a single
business platform, enable us to remain competitive in the marketplace, serve our customers more efficiently, balance supply and customer demand and achieve the projected synergies of the Acquisition.



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The restructuring actions taken are as follows:



| |  |  | Permanently close the No. 11 paper machine in Rumford, Maine, in February 2008; approximately 60 employees were affected by the shutdown
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Permanently close the pulp mill and both paper machines in Niagara, Wisconsin, in June 2008; approximately 320 employees were affected by the shutdown
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Permanently close the No. 95 paper machine in Kimberly, Wisconsin, in May 2008 and the mill and both remaining paper machines, Nos. 96 and 97, in September
2008; approximately 600 employees were affected by the shutdowns
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Permanently close the Chillicothe, Ohio, converting facility in February 2009; approximately 160 employees were affected by the shutdown
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Reduce personnel in other areas, including sales, finance and other support functions; approximately 200 employees will be affected by this action
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------

During 2008, as a result of these actions, we incurred charges of $34 million, including $22 million in accelerated depreciation and $5
million in inventory write-offs recorded in cost of sales and $7 million of employee-related costs, of which $5 million is recorded in cost of sales and $2 million is recorded in selling, general and administrative expenses. In addition, during 2008
we recorded liabilities of $39 million in the purchase price allocation for employee-related costs of former SENA employees and $22 million for closure costs of acquired plants. Most of the affected employees had separated from the company by
December 31, 2008 and the remainder will separate in 2009. We expect all remaining closure-related activities to be substantially completed in 2009.

For a description of certain risks relating to the achievement of the synergies described above, see Risk FactorsWe may not realize the anticipated benefits of the Acquisition.

Shutdown of No. 7 Paper Machine at Luke, Maryland

During
the fourth quarter of 2006, we announced a plan to permanently shut down the No. 7 paper machine and related activities and to reduce headcount by approximately 130 employees at the Luke, Maryland, mill. As a result of this action, we incurred
pretax charges, recorded in cost of sales, of $18 million, including $15 million for accelerated depreciation and inventory write-offs recorded in the fourth quarter of 2006 and $3 million for severance and early retirement benefits, of which
$2 million was recorded in the fourth quarter of 2006 and $1 million was recorded in the first quarter of 2007. As of June 30, 2007, this action was complete.

Sale of Carbonless Paper Business and Hydroelectric Generating Facilities

Effective April 1, 2006, we completed the sale of our
carbonless paper business to P. H. Glatfelter Company for a cash sales price of $84 million. Net sales of the carbonless paper business (included in discontinued operations) were $106 million for the year ended December 31, 2006. Included in
the loss from discontinued operations for the year ended December 31, 2006, is $19 million of charges related to the sale of the business, including curtailment and settlement costs related to the employee benefit plans.

On June 8, 2006, Rumford Falls Power Company, an indirect wholly-owned subsidiary of NewPage, completed the sale of two hydroelectric generating facilities located
on the Androscoggin River in Rumford, Maine to Brookfield Power Inc. for a cash sales price of $144 million.



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Selected Factors That Affect Our Operating Results

Net Sales

Our net sales are a function of the amount of paper
that we sell and the price at which we sell it. Demand for printing paper is cyclical, which results in changes in both volume and price. Paper prices historically have been a function of macroeconomic factors, such as the strength of the United
States economy and import levels, that are largely out of our control. Price has historically been substantially more variable than volume and can change significantly over relatively short time periods. Coated freesheet paper is typically purchased
by customers on an as-needed basis, and generally is not bought under contracts that provide for fixed prices or minimum volume commitments. Coated groundwood and supercalendered paper are typically sold to customers under contracts that provide for
fixed prices and minimum volume commitments. Historically, we sold excess pulp to third parties but, following the Acquisition, we now use substantially all of our excess pulp production internally to reduce the amount of pulp purchased from third
parties. Uncoated paper and pulp prices have not historically had a material effect on our operating results because uncoated paper and pulp did not comprise a material portion of our net sales. During the fourth quarter of 2008, demand for market
pulp dramatically declined and as a result we have seen a significant decline in sales prices for market pulp driven by excess global capacity. As a result of the broadening of our product mix following the Acquisition, our operating results are
more affected by the demand for and prices of a broader range of paper types than in the past.

Our earnings are sensitive to price changes for our
principal products, with price changes in coated paper having the greatest effect. Fluctuations in paper prices historically have had a direct effect on our results for several reasons:



| |  |  | Market prices for paper products are a function of supply and demand, factors over which we have limited influence.
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | Market prices for paper products typically are not directly affected by raw material costs or other costs of sales, and consequently there is limited ability to
pass through increases in costs to customers absent increases in the market price.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The manufacturing of paper is highly capital-intensive and a large portion of operating costs is fixed. Additionally, paper machines are large, complex systems that
operate more efficiently when operated continuously. Consequently, both we and our competitors typically continue to run our machines whenever marginal sales exceed the marginal costs.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See OverviewTrends in our Business for a discussion of factors that have historically affected pricing and are expected to continue to affect our
pricing.

Cost of Sales

The principal
components of our cost of sales are chemicals, wood, energy, labor, maintenance and depreciation and amortization. Costs for commodities, including chemicals, wood and energy, are the most variable component of cost of sales because the prices of
many of the commodities that we use can fluctuate substantially, sometimes within a relatively short period of time. For a description of some of the actions we have taken to lower costs, see OverviewAnticipated Synergies of the
Acquisition and Integration of the Business.



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Wood. Our costs to purchase wood are affected directly by market costs of wood in our regional markets and
indirectly by the effect of higher fuel costs on logging and transportation of timber to our facilities. While we have fiber supply agreements in place that ensure a portion of our wood requirements, purchases under these agreements are typically at
market rates.

Purchased pulp. The NPCP mills have historically been a net purchaser of market pulp. Following the Acquisition, we now use
substantially all of our excess pulp production internally, thus reducing the amount of pulp purchased from third parties. In 2008, we produced approximately 84% of our pulp requirements, which excludes our sales of market pulp, with the remainder
supplied through open market purchases and supply agreements. We expect to produce an even greater percentage of our pulp requirements for 2009. The price of market pulp has fluctuated significantly. Pulp prices fluctuate due to changes in worldwide
consumption of pulp, pulp capacity additions, expansions or curtailments affecting the supply of pulp, changes in inventory levels by pulp consumers, which affect short-term demand, and pulp producer cost changes related to wood availability and
environmental issues.

Chemicals. Certain chemicals used in the papermaking process are petroleum-based and fluctuate with the price of crude oil.
The price for latex, the largest component of our chemical costs, has historically been volatile. The price of latex increased significantly during 2007 and 2008 as compared to 2006, and we expect the price of latex to remain volatile.

Energy. We produce a large portion of our energy requirements from burning wood waste and other byproducts of the paper manufacturing process. In 2008, we
generated approximately 45% of our energy requirements. The remaining energy we purchase from third party suppliers consists of electricity and fuel, primarily natural gas, fuel oil and coal, to generate some of our own energy. We expect crude oil
and energy costs to remain volatile for the foreseeable future. As prices fluctuate, we have the ability to switch between certain energy sources, within constraints, in order to minimize costs.

Our wholly-owned subsidiary, CWPCo, provides electric energy to our mills in central Wisconsin. CWPCo has 33.3 megawatts of generating capacity on 39 generators located
in five hydroelectric plants on the Wisconsin River. CWPCo is a regulated public utility and also provides electricity to a small number of residential, light commercial and light industrial customers.

Labor costs. Labor costs include wages, salary and benefit expenses attributable to mill personnel. Mill employees at a non-managerial level are compensated on an
hourly basis in accordance with the terms of applicable union contracts and management employees are compensated on a salaried basis. Wages, salary and benefit expenses included in cost of sales do not vary significantly over the short term.
However, the size of our salaried and hourly workforce has declined over the past 12 months as a result of the restructuring and closure activity described in this annual report. We have not experienced significant labor shortages. In connection
with the Acquisition, we lowered benefit costs by freezing defined benefit pension plans and reducing retiree medical benefits for salaried employees.

Maintenance. Maintenance expense includes day-to-day maintenance, equipment repairs and larger maintenance projects, such as paper machine shutdowns for annual maintenance. Day-to-day maintenance expenses have not varied
significantly from year to year. Larger maintenance projects and equipment expenses can produce year-to-year fluctuations in our maintenance expenses. In conjunction with our annual maintenance shutdowns, we incur incremental costs that are
primarily comprised of unabsorbed fixed costs from lower production volumes and other incremental costs for purchased materials and energy that would otherwise be produced as part of normal operations of our mills.

Depreciation and amortization. Depreciation and amortization expense for assets associated with our mill and converting operations is included in cost of sales.
Under purchase accounting, the total Acquisition consideration was allocated to our assets and liabilities



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based upon managements estimates of fair value. The final allocation of the Acquisition consideration was completed during the fourth quarter of 2008,
based upon managements consideration of final valuations, adjustments relating to the finalization of the restructuring plan, and for uncertain and deferred tax positions.

Foreign currency. We are exposed to changes in foreign currency exchange rates because most of the raw material, labor and other cost of sales at our Port Hawkesbury, Nova Scotia, mill are denominated in
Canadian dollars, while North American sales prices for the products produced at the Port Hawkesbury Mill are in U.S. dollars (to the extent shipped into the United States) or determined primarily by the U.S. dollar price per ton charged by U.S.
producers. A stronger Canadian dollar relative to the U.S. dollar increases our costs of sales. In 2008, a stronger U.S. dollar helped profitability at our Port Hawkesbury mill. If the U.S. dollar were to weaken significantly against the Canadian
dollar, it would impair the ability of the Port Hawkesbury mill to profitably compete in the U.S. market.

Selling, General and Administrative
(SG&A) Expenses

The principal components of our SG&A expenses are wages, salaries and benefits for our sales and corporate administrative
personnel, travel and entertainment expenses, advertising expenses, information technology expenses and research and development expenses. Our SG&A expenses have not historically fluctuated significantly from year to year. As a result of the
Acquisition, we lowered benefits costs by freezing defined benefit pension plans and reducing retiree medical benefits for salaried employees. In addition, we eliminated duplicative sales, marketing and customer service personnel and centralized our
corporate administration, management, finance and human resource functions. See OverviewAnticipated Synergies of the Acquisition and Integration of the Business.

Interest

Our interest expense is substantially higher after the Acquisition as a result of the indebtedness
incurred to partially finance the cash portion of the Acquisition consideration and transaction costs.

Effects of Inflation/Deflation

While inflationary increases in certain costs, such as energy, wood and chemical costs, have had a significant effect on our operating results over
the past three years, changes in general inflation have had a minimal effect on our operating results in each of the last three years. We expect to see some deflationary effects from the recent decline in oil prices, however we may not realize any
benefits if our vendors respond to deflationary pressures by taking action to curtail production. Sales prices and volumes have historically been more strongly influenced by supply and demand factors in specific markets than by inflationary or
deflationary factors.

Certain of our costs, including the prices of energy, wood and chemicals that we purchase, can fluctuate substantially, sometimes
within a relatively short period of time, and can have a significant effect on our business, financial condition and results of operations. For example, we estimate that for each $1 increase in the cost of a barrel of crude oil, our direct energy
costs (other than electricity) and indirect costs (such as costs for transportation and petroleum-derived chemicals) increase approximately $6 million annually. Energy, wood and chemical costs increased during 2007 and 2008 and are expected to
remain volatile in to 2009.



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Seasonality

We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors common in the paper industry. Typically, the first two quarters are our slowest quarters due to lower demand for coated paper during this period.
Our third quarter is typically our strongest sales quarter, reflecting an increase in sales volume as printers prepare for year-end holiday catalogs and advertising. Our accounts receivable and payable generally peak in the third quarter, while
inventory generally peaks in the second quarter in anticipation of the third quarter season. Announced price increases and the general economic environment can affect historical seasonal patterns.

Critical Accounting Estimates

Our principal accounting
policies are described in the Summary of Significant Accounting Policies in the notes to consolidated financial statements filed with the accompanying consolidated financial statements. The preparation of consolidated financial statements in
accordance with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of some assets and liabilities and, in some instances, the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Management believes the accounting estimates discussed below represent those accounting estimates requiring the exercise of
judgment where a different set of judgments could result in the greatest changes to reported results.

Income taxes. Income taxes are accounted for
in accordance with Statement of Financial Accounting Standard (SFAS) No. 109, Accounting for Income Taxes, which recognizes deferred tax assets and liabilities based on the estimated future tax effects of differences between the
financial statement and tax bases of assets and liabilities given the enacted tax laws.

We adopted the provisions of FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes, (FIN 48) on January 1, 2007. FIN 48 clarifies when tax benefits should be recorded in the financial statements and provides measurement criteria for valuing such benefits. In order for us to
recognize benefits, our tax position must be more likely than not to be sustained upon audit. The amount we recognize is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

We have tax filing requirements in many states and are subject to audit in these states, as well as at the federal level in both the U.S. and Canada. Tax
audits by their nature are often complex and can require several years to resolve. In the preparation of our consolidated financial statements, management exercises judgments in estimating the potential exposure of unresolved tax matters. While
actual results could vary, in managements judgment we have adequately accrued the ultimate outcome of these unresolved tax matters.

We evaluate the
need for a valuation allowance for deferred tax assets by assessing whether it is more likely than not that we will realize our deferred tax assets in the future. The assessment of whether or not a valuation allowance is necessary often requires
significant judgment, including forecasts of future taxable income and the evaluation of tax planning initiatives. Adjustments to the valuation allowance are made to earnings in the period when the assessment is made.

Pension and other postretirement benefits. We provide retirement benefits for certain employees through employer- and employee-funded defined benefit plans.
Benefits earned are a function of years worked and average final earnings during an employees pensionable service. Certain of the pension benefits are provided in accordance with collective bargaining agreements.



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Assumptions used in the determination of defined benefit pension expense and other postretirement benefit expense,
including the discount rate, the long-term expected rate of return on plan assets and increases in future medical costs, are evaluated by management, reviewed with the plans actuaries at least annually and updated as appropriate. Actual asset
returns and medical costs that are more favorable than assumptions can have the effect of lowering future expense and cash contributions, and conversely, actual results that are less favorable than assumptions could increase future expense and cash
contributions. In accordance with GAAP, actual results that differ from assumptions are accumulated and amortized over future periods and, therefore, affect expense in future periods. Unrecognized prior service cost and actuarial gains and losses in
the defined benefit pension and other postretirement benefit plans subject to amortization are amortized over the average remaining service of the participants.

Assumptions used in determining defined benefit pension and other postretirement benefit expense are important in determining the costs of our plans. The expected long-term rates of return on plan assets were derived based on the capital
market assumptions for each designated asset class under the respective trusts investment policy. The capital market assumptions reflect a combination of historical performance analysis and the forward-looking return expectations of the
financial markets. A 0.5 percentage-point decrease in the weighted-average long-term expected rate of return on plan assets would increase 2009 net pension expense by approximately $5 million, while a 0.5 percentage-point increase in the
weighted-average long-term expected rate of return on plan assets would decrease 2009 net pension expense by approximately $5 million.

The assumed
discount rates used in determining the benefit obligations were determined by reference to the yield on zero-coupon corporate bonds rated Aa or AA maturing in conjunction with the expected timing and amount of future benefit payments. A 0.5
percentage-point decrease in the weighted-average discount rates would increase 2009 net pension expense by approximately $6 million, while a 0.5 percentage-point increase in the weighted-average discount rates would decrease 2009 net pension
expense by approximately $5 million. The effect on other postretirement benefit expense would be negligible from such changes in the weighted-average discount rates. With respect to benefit obligations, a 0.5 percentage-point decrease in the
weighted-average discount rates would increase pension benefit obligations by approximately $75 million and would increase other postretirement benefit obligations by approximately $8 million, while a 0.5 percentage-point increase in the
weighted-average discount rates would decrease pension benefit obligations by approximately $68 million and would decrease other postretirement benefit obligations by approximately $7 million.

Equity compensation. We use the Black-Scholes option pricing model to determine the fair value of stock options. The determination of the fair value of
stock-based payment awards on the date of grant using an option-pricing model is affected by the stock price as well as assumptions regarding a number of other variables. These variables include expected stock price volatility over the term of the
awards and projected employee stock option exercise behaviors (term of option).

We estimate the expected term of options granted by incorporating the
contractual term of the options and employees expected exercise behaviors. We estimate the volatility of our common stock by considering volatility of appropriate peer companies and adjusting for factors unique to our stock, including the
effect of debt leverage.

Derivative financial instruments. Derivative financial instruments are accounted for in accordance with SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities and SFAS No. 157, Fair Value Measurements. We measure the fair values of our interest rate swaps under a Level 2 input as defined by SFAS No. 157. We value the
interest rate swaps using observable interest rate yield curves for comparable assets and liabilities at commonly quoted intervals. We measure the fair values of our natural gas contracts under a Level 2 input as defined by SFAS No. 157. We
value the natural gas contracts based on natural gas futures contracts



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priced on the New York Mercantile Exchange. We recognize the unwind value of derivative financial instruments as the fair value. This means that the fair
value for purchased contracts is based on the amount we could receive from the counterparty to settle the contract. Fair value at any point in time is based upon periodic confirmation of values received from the counterparty. We regularly monitor
the credit-worthiness of the counterparties to these agreements to manage the risk of non-performance.

Environmental and legal liabilities. We
record accruals for estimated environmental liabilities when remedial efforts are probable and the costs can be reasonably estimated. These estimates reflect assumptions and judgments as to the probable nature, magnitude and timing of required
investigation, remediation and monitoring activities as well as availability of insurance coverage and contribution by other potentially responsible parties. Due to the numerous uncertainties and variables associated with these assumptions and
judgments, and changes in governmental regulations and environmental technologies, accruals are subject to substantial uncertainties, and actual costs could be materially greater or less than the estimated amounts. We record accruals for other legal
contingencies, which are also subject to numerous uncertainties and variables associated with assumptions and judgments, when the contingency is probable of occurring and reasonably estimable.

Restructuring and other charges. We periodically record charges for the reduction of our workforce, the closure of manufacturing facilities and other actions
related to business improvement and productivity initiatives. These events require estimates of liabilities for employee separation payments and related benefits, demolition, facility closures and other costs, which could differ from actual costs
incurred.

Results of Operations

The
following table sets forth our historical results of operations for the years ended December 31, 2008, 2007 and 2006. All assets, liabilities, income, expenses and cash flows presented for all periods represent those of NewPage Holdings
wholly-owned subsidiary, NewPage, except for NewPage Holdings debt obligation and related financing costs, accrued liabilities, interest expense, write-off of costs for a withdrawn 2006 initial public offering and income tax effects. Unless
otherwise noted, the information provided pertains to both NewPage Holding and NewPage.



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|                                                                        |  |                          |   |  |       |   |  |       |   |  |       |   |  |       |   |  |       |  
|----------------------------------------------------------------------- |  | ------------------------ | - |  | ----- | - |  | ----- | - |  | ----- | - |  | ----- | - |  | ----- | -
|                                                                        |  | Years ended December 31, |  
|                                                                        |  | 2008                     |   |  | 2007  |   |  | 2006  |  
|(in millions)                                                           |  | $                        |   |  | %     |   |  | $     |   |  | %     |   |  | $     |   |  | %     |  
|Net sales                                                               |  | 4,356                    |   |  | 100.0 |   |  | 2,168 |   |  | 100.0 |   |  | 2,038 |   |  | 100.0 |  
|Cost of sales                                                           |  | 3,979                    |   |  | 91.4  |   |  | 1,895 |   |  | 87.4  |   |  | 1,825 |   |  | 89.5  |  
|Selling, general and administrative expense                             |  | 217                      |   |  | 5.0   |   |  | 127   |   |  | 5.9   |   |  | 112   |   |  | 5.5   |  
|Interest expense                                                        |  | 298                      |   |  | 6.8   |   |  | 175   |   |  | 8.1   |   |  | 165   |   |  | 8.1   |  
|Other (income) expense                                                  |  |                         |   |  | 0.0   |   |  | (1    | ) |  | (0.1  | ) |  | (25   | ) |  | (1.2  | )
|                                                                        |  |                          |   |  |       |   |  |       |   |  |       |   |  |       |   |  |       |  
|Income (loss) from continuing operations before income taxes            |  | (138                     | ) |  | (3.2  | ) |  | (28   | ) |  | (1.3  | ) |  | (39   | ) |  | (1.9  | )
|Income tax (benefit)                                                    |  | 4                        |   |  | 0.1   |   |  | (6    | ) |  | (0.3  | ) |  | (3    | ) |  | (0.2  | )
|                                                                        |  |                          |   |  |       |   |  |       |   |  |       |   |  |       |   |  |       |  
|Income (loss) from continuing operations                                |  | (142                     | ) |  | (3.3  | ) |  | (22   | ) |  | (1.0  | ) |  | (36   | ) |  | (1.7  | )
|Income (loss) from discontinued operations                              |  |                         |   |  | 0.0   |   |  |      |   |  | 0.0   |   |  | (16   | ) |  | (0.8  | )
|                                                                        |  |                          |   |  |       |   |  |       |   |  |       |   |  |       |   |  |       |  
|Net income (loss)                                                       |  | (142                     | ) |  | (3.3  | ) |  | (22   | ) |  | (1.0  | ) |  | (52   | ) |  | (2.5  | )
|                                                                        |  |                          |   |  |       |   |  |       |   |  |       |   |  |       |   |  |       |  
|                                                                        |  |                          |   |  |       |  
|Supplemental Information                                                |  |                          |   |  |       |   |  |       |   |  |       |   |  |       |   |  |       |  
|Earnings before interest, taxes, depreciation and amortization (EBITDA) |  | 477                      |   |  |       |   |  | 281   |   |  |       |   |  | 262   |   |  |       |  

2008 Compared to 2007

Net sales for 2008 were $4,356 million compared to $2,168 million for 2007. The increase was primarily a result of the Acquisition, which had net sales of $2,491 million in 2007 (prior to the Acquisition). In
addition, net sales were affected by lower sales volume of coated paper on a combined basis ($700 million) in 2008, partially offset by higher average coated paper prices ($297 million). Average coated paper prices increased to $983 per ton in 2008
from $886 per ton in 2007. Coated paper sales volume increased to 3,564,000 tons in 2008 from 2,261,000 tons in 2007. The volume increase was primarily from the acquired operations and was partially offset by a decline in coated paper demand
resulting primarily from lower demand for catalog and promotional materials by retailers and lower spending on magazine advertising. We took 91,000 tons of market-related downtime for coated paper during 2008. During 2007, we took 27,000 tons of
market-related downtime for coated paper.

Cost of sales for 2008 was $3,979 million compared to $1,895 million for 2007. The increase was primarily a
result of the Acquisition, which had cost of sales of $2,445 million in 2007 (prior to the Acquisition). In addition, we had higher costs of production in 2008, primarily as a result of inflation in wood, energy, chemicals and transportation costs
($266 million). The increase was partially offset by the effect on cost of sales of lower coated paper sales volume on a combined basis ($564 million). Depreciation and amortization expense related to the fixed assets acquired in the Acquisition was
$75 million lower in 2008 than in 2007 as a result of the purchase price allocation. As a result of the foregoing, gross margin for 2008 decreased to 8.6% compared to 12.6% for 2007. Included in cost of sales for 2008 was $22 million for accelerated
depreciation, $5 million for inventory write-offs and $5 million of employee-related costs associated with our restructuring plans.

Maintenance expense at
our mills totaled $346 million in 2008 compared to $169 million in 2007. The increase in maintenance expense was driven primarily as a result of the Acquisition. In addition, in conjunction with our annual maintenance shutdowns, we had incremental
costs of approximately $30 million in 2008 and 2007 that were primarily comprised of unabsorbed fixed costs from lower production volumes and other incremental costs for purchased materials and energy that would otherwise be produced as part of
normal operations of our mills.



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Selling, general and administrative expenses were $217 million for 2008 compared to $127 million for 2007. The increase
in 2008 was primarily as a result of the Acquisition, which had $87 million of selling, general and administrative expenses in 2007 (prior to the Acquisition), higher stock compensation expense of $4 million related to the stock option plan approved
in December 2007 and $2 million of restructuring charges. During 2007, NewPage Holding expensed $3 million of costs relating to its withdrawn 2006 initial public offering of its common stock. As a percentage of net sales, selling, general and
administrative expenses decreased to 5.0% in 2008 from 5.9% in 2007. Selling, general and administrative expenses for NewPage were $217 million in 2008 compared to $124 million in 2007, driven by the effects of the Acquisition.

Interest expense for 2008 was $298 million compared to $175 million for 2007. Interest expense for 2008 for NewPage was $277 million compared to $154 million
for 2007. The increase was primarily a result of higher average outstanding debt balances resulting from the financing for the Acquisition, partially offset by lower interest rates.

Income tax expense (benefit) was $4 million in 2008 and $(6) million in 2007. Income tax expense (benefit) for NewPage was zero in 2008 and $4 million in 2007. For the years ended December 31, 2008 and 2007, we
recorded a valuation allowance against our net deferred income tax benefit for federal income taxes and for certain states as it was more likely than not that we would not realize those benefits as a result of our history of losses.

Net income (loss) was $(142) million in 2008 compared to net income (loss) of $(22) million in 2007. The change was primarily driven by the Acquisition and the
effects of lower customer demand and inflation in input costs, partially offset by higher sales prices.

EBITDA was $477 million and $281 million for 2008
and 2007. See Reconciliation of Net Income (Loss) to EBITDA for further information on the use of EBITDA as a measurement tool.

2007
Compared to 2006

Net sales for 2007 were $2,168 million compared to $2,038 million for 2006. The increase was driven by higher coated paper sales
volume ($84 million) and the incremental increase in net sales from NPCP subsequent to the Acquisition ($60 million), offset in part by lower average coated paper prices ($16 million). Average coated paper prices decreased to $886 per ton in 2007
from $893 per ton in 2006 as a result of lower demand for coated groundwood paper and due to the continuing negative effects of low-priced imports of coated freesheet paper from China, Indonesia and South Korea. Coated paper sales volume increased
to 2,261,000 tons in 2007 from 2,116,000 tons in 2006. We took 27,000 tons of market-related downtime for coated paper during 2007 and did not take any market-related downtime for coated paper during 2006.

Cost of sales for 2007 was $1,895 million compared to $1,825 million for 2006. The increase was driven primarily by higher coated paper sales volume ($61 million) and
the incremental increase in cost of sales from NPCP subsequent to the Acquisition ($46 million). These increases were partly offset by lower costs of production, primarily a result of productivity improvements ($13 million), the absence in 2007 of
nonrecurring charges incurred during 2006 relating to the shutdown of our No. 7 paper machine at our Luke mill ($6 million) and lower depreciation and amortization expense ($18 million). As a result, gross margin for 2007 improved to 12.6%,
compared to 10.5% for 2006.

Maintenance expense at our mills totaled $169 million in 2007 compared to $168 million in 2006. In conjunction with our annual
maintenance shutdowns, we also had incremental costs of approximately $30 million in 2007 and approximately $20 million in 2006 that were primarily comprised of unabsorbed fixed costs from lower production volumes and other incremental costs for
purchased materials and energy that would otherwise be produced as part of normal operations of our mills.



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Selling, general and administrative expenses were $127 million for 2007 compared to $112 million for 2006. The increase
in selling, general and administrative expenses was primarily a result of an increase in legal fees of $8 million largely related to antidumping and countervailing duties petitions that we filed, $3 million of costs for activities related to the
withdrawn 2006 initial public offering of NewPage Holdings common stock, higher equity compensation of $3 million and SG&A costs of $4 million for NPCP subsequent to the Acquisition, partly offset by the absence of transitional costs of $8
million that were incurred in 2006 relating to the setup of our business as a stand-alone business. During 2007, we recognized $14 million in equity compensation, of which $8 million was for the vesting of Maple Timber equity interests in connection
with our reorganization prior to the Acquisition and $4 million was for the repurchase of unvested equity interests granted to former executive officers. During 2006, we recognized equity compensation expense of $11 million, primarily for former
executive officers. As a percentage of net sales, selling, general and administrative expenses increased in 2007 to 5.9% from 5.5% in 2006. Selling, general and administrative expenses for NewPage were $124 million in 2007 compared to $112 million
in 2006.

Interest expense for 2007 was $175 million compared to $165 million for 2006. Interest expense for 2007 for NewPage was $154 million
compared to $146 million for 2006. The increase was primarily driven by the write off of $17 million in deferred financing costs in December 2007 as a result of the debt refinancing effected in connection with the Acquisition, offset by lower
average outstanding debt balances prior to the Acquisition and a lower interest rate spread on our pre-Acquisition term loan.

Other (income) expense for
2006 primarily consisted of a gain of $65 million on the sale of two hydroelectric generating facilities and an unrealized non-cash loss of $47 million on our basket option contract.

Income tax expense (benefit) for 2007 and 2006 was $(6) million and $(3) million. Income tax expense (benefit) for NewPage was $4 million and $(4) million in 2007 and 2006.

Net income (loss) was $(22) million in 2007 compared to net income (loss) of $(52) million in 2006. Significant items in 2007 include a $17 million write off of
deferred financing costs in connection with the debt refinancing associated with the Acquisition, $14 million in equity compensation and $3 million of costs for activities related to the withdrawn initial public offering of NewPage Holdings
common stock. Significant items in 2006 included a $65 million gain on the sale of the hydroelectric generating facilities, a charge of $17 million associated with the shutdown of our No. 7 paper machine in Luke, $47 million of unrealized
non-cash losses on the basket option contract and maintenance and incremental costs primarily attributable to the planned shutdown which took place at our Escanaba operations for improvements to one of our paper machines, certain coated equipment
and other maintenance-related items.

EBITDA was $281 million and $262 million for 2007 and 2006. Significant items in 2007 include $14 million in equity
compensation and $3 million of costs for activities related to the subsequently withdrawn 2006 initial public offering of NewPage Holdings common stock. Significant items in 2006 included the $65 million gain on the sale of the hydroelectric
generating facilities, $47 million of unrealized non-cash losses on the basket option contract, equity compensation expense of $11 million, $8 million of expenses for transition costs and $19 million of non-cash charges and loss on the sale of the
carbonless business included in the loss from discontinued operations. See Reconciliation of Net Income (Loss) to EBITDA for further information on the use of EBITDA as a measurement tool.



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Carbonless Paper Business

Net sales for our former carbonless paper segment were $106 million in 2006, which reflects the three months of activity prior to the sale of the business, effective April 1, 2006.

The former carbonless paper segment incurred a loss before taxes of $16 million in 2006, which includes a $19 million loss on sale of the business that was offset by
lower depreciation and amortization expense of $16 million.

Reconciliation of Net Income (Loss) to EBITDA

EBITDA is defined as net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA is not a measure of our performance under GAAP, is not
intended to represent net income (loss), and should not be used as an alternative to net income (loss) as an indicator of performance. EBITDA is shown because it is a primary component of certain covenants under our senior secured credit facilities
and is a basis upon which our management assesses performance. In addition, our management believes EBITDA is useful to investors because it and similar measures are frequently used by securities analysts, investors and other interested parties in
the evaluation of companies with substantial financial leverage. The use of EBITDA instead of net income (loss) has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:



| |  |  | EBITDA does not reflect our current cash expenditure requirements, or future requirements, for capital expenditures or contractual commitments
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | EBITDA does not reflect changes in, or cash requirements for, our working capital needs
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA
does not reflect any cash requirements for such replacements
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our measure of EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of
calculation
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Because of these limitations, EBITDA should not be considered as discretionary cash available to us to reinvest in the
growth of our business.



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The following table presents a reconciliation of net income (loss) to EBITDA for the years ended December 31, 2008,
2007 and 2006:



|                              |  |      |      |   |      |   |     |      |  |   |     |  
|----------------------------- |  | ---- | ---- | - | ---- | - | --- | ---- |  | - | --- | -
|(in millions)                 |  | 2008 |      |   | 2007 |   |     | 2006 | 
|Net income (loss)             |  | $    | (142 | ) |      | $ | (22 | )    |  | $ | (52 | )
|Interest expense              |  |      | 298  |   |      |   | 175 |      |  |   | 165 |  
|Income tax (benefit)          |  |      | 4    |   |      |   | (6  | )    |  |   | (3  | )
|Depreciation and amortization |  |      | 317  |   |      |   | 134 |      |  |   | 152 |  
|                              |  |      |      |   |      |   |     |      |  |   |     |  
|EBITDA                        |  | $    | 477  |   |      | $ | 281 |      |  | $ | 262 |  
|                              |  |      |      |   |      |   |     |      |  |   |     |  

Recently Issued Accounting Standards

In December 2008, the Financial Accounting Standards Board (FASB) issued Staff Position No. FAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets (FSP FAS 132(R)-1). FSP FAS
132(R)-1 amends SFAS No. 132 (revised 2003),Employers Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employers disclosures about plan assets of a defined benefit pension or other
postretirement plan which include disclosures about investment policies and strategies, categories of plan assets, fair value measurements of plan assets and significant concentrations of risk. FSP FAS 132(R)-1 is effective for us for the year ended
December 31, 2009 and is to be applied on a prospective basis. We are currently evaluating the potential effect of the adoption of FSP FAS 132(R)-1 on our consolidated financial position, results of operations and cash flows.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS No. 141R), which replaces SFAS No. 141. SFAS
No. 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements identifiable assets acquired, liabilities assumed, any noncontrolling interest in the acquiree and goodwill acquired. The
Statement also establishes disclosure requirements, which will enable users to evaluate the nature and financial effects of the business combination. SFAS No. 141R is effective for us as of January 1, 2009. The adoption of SFAS
No. 141R will not have a material effect on our consolidated financial position, results of operations and cash flows.

In September 2006, the FASB
issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. In February 2008, the FASB
issued FSP FAS 157-2, which delayed the effective date of SFAS No. 157 by one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. For items covered by
FSP FAS 157-2, SFAS No. 157 will go into effect for us as of January 1, 2009. The adoption of SFAS No. 157 for nonfinancial assets and liabilities will not have a material effect on our consolidated financial position, results of
operations or cash flows.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statementsan
amendment of Accounting Research Bulletin No. 51 (SFAS No. 160), which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income
attributable to the parent and to the noncontrolling interest, changes in a parents ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. The Statement also establishes
reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 is effective for us as of January 1, 2009.
The adoption of SFAS No. 160 will result in the reclassification of minority interests to shareholders equity (deficit).



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In March 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activitiesan amendment of FASB Statement No. 133(SFAS No. 161). SFAS No. 161 gives financial statement users better information about the reporting entitys hedges by providing for qualitative
disclosures about the objectives and strategies for using derivatives, quantitative data about the fair value of and gains and losses on derivative contracts, and details of credit-risk-related contingent features in their hedged positions. SFAS
No. 161 is effective for us as of January 1, 2009. The adoption of SFAS No. 161 is not expected to have a material effect on our consolidated financial position, results of operations and cash flows.

Liquidity and Capital Resources

As of
December 31, 2008, our principle sources of liquidity include cash generated from operating activities and availability under our revolving senior secured credit facility. The amount of loans and letters of credit available to NewPage pursuant
to the revolving senior secured credit facility is limited to the lesser of $500 million or an amount determined pursuant to a borrowing base. As of December 31, 2008, we had $341 million available for borrowing under the revolving senior
secured credit facility, after reduction for $87 million in letters of credit. During 2008, we borrowed amounts under the revolving credit facility and repaid them as part of our daily cash management practices. There were no borrowings outstanding
under the revolving senior secured credit facility as of December 31, 2008. We have not experienced any limitations in our ability to access funds available under our revolving credit facility. We closely monitor the ability of our lenders to
continue to meet their commitments under this agreement and believe we will not experience any limitations in the future in accessing funds.

We had
outstanding aggregate indebtedness at December 31, 2008, of $3,152 million, which includes $2,962 million at NewPage. Beginning in 2011, our debt service requirements substantially increase as a result of scheduled payments of our indebtedness.
We anticipate that we will seek to refinance indebtedness prior to that time or retire portions of indebtedness with issuances of equity securities, proceeds from the sale of assets or cash generated from operations. Our ability to operate our
business, service our debt requirements and reduce our total debt will depend upon our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, many of which are beyond our
control, as well as the availability of revolving credit borrowings and other borrowings to refinance our existing indebtedness.

We believe our cash flow
from operations, available borrowings under our revolving senior secured credit facility and cash and cash equivalents will be adequate to meet our liquidity needs for the next twelve months. See Risk Factors for a discussion of various
risks and uncertainties which could affect our ability to generate sufficient cash flows to meet our liquidity needs. However, given the uncertainty of the current economic environment, we cannot assure you that our business will generate sufficient
cash flows from operations or that future borrowings will be available to us under our revolving senior secured credit facility in an amount sufficient to enable us to fund our liquidity needs. Additionally, availability under our revolving senior
secured credit facility assumes continued compliance with financial and other covenants. Non-compliance with these covenants would require repayment of the credit facilities and would affect our ability to borrow amounts under the revolving credit
facility for liquidity needs, in the absence of a waiver or other remedy. In an effort to manage credit risk exposures under our debt and derivative instruments, we regularly monitor the credit-worthiness of the counterparties to these agreements.

We continue to achieve certain cost savings resulting from operating efficiencies, synergies and other restructuring activities that resulted from the
Acquisition. However, during 2009 we will continue to experience some increased costs associated with the continuation of information systems integration and enhancements. In an effort to manage costs and cash flows in 2009, management has
implemented a wage freeze for all salaried exempt and non-exempt employees, reduced 2008 bonuses to be paid in 2009 and significantly reduced our expected capital expenditures from $165 million in 2008 to a projected $75 million in 2009.



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We have various investments held by our defined-benefit pension plan trusts. The returns on these assets have generally
matched the broader market and we have experienced significant declines in our plan assets. We are monitoring the effects of the market declines on our minimum pension funding requirements and pension expense for future periods. We do not anticipate
material minimum funding requirements during 2009.

Cash Flows

Cash provided by operating activities was $60 million during 2008 compared to $277 million during 2007. The decrease was primarily the result of a decline in sales demand and a resulting investment in inventory and
payments for severance and closure costs, as well as costs for integration of the NPCP business into the existing NewPage operations. In response to these challenges, we accelerated and completed the shutdown of operations at our Kimberly and
Niagara, Wisconsin mills in the third quarter of 2008. In addition, we took coated paper market-related downtime at other locations. We will continue to monitor North American paper demand in order to align our production to customer demand and will
consider the need for additional market-related downtime from time to time based on market conditions. Investing activities in 2008 included $165 million for capital expenditures. Financing activities in 2008 included a $7 million loan to our parent
company, an $8 million distribution from Rumford Cogeneration to the limited partners and $16 million in scheduled payments on our long-term debt. Cash and cash equivalents decreased by $140 million during 2008 to $3 million at December 31,
2008.

Cash provided by operating activities was $277 million during 2007 compared to $180 million during 2006. The change was largely a result of strong
sales demand during the second half of 2007 that resulted in a reduction in inventories and an increase in accrued expenses for sales-related costs during 2007. Investing activities in 2007 included $102 million for capital expenditures and $1.5
billion for the Acquisition. Financing activities in 2007 included $2 billion in proceeds from the issuance of debt in connection with the Acquisition, offset by $62 million in payments of deferred financing costs and $524 million in payments on
long-term debt. We increased our cash and cash equivalents at the end of the period by $99 million to $143 million as of December 31, 2007.

Indebtedness

NewPages senior secured credit facilities include a $1,600 million term loan facility, with a stated maturity of
2014, and up to $500 million in available revolving loan borrowings, with a stated maturity of 2012. The revolving credit facility and term loan facility mature on the earlier of (i) the stated maturity date and (ii) the date that is 181
days prior to the scheduled maturity date of the existing senior secured notes, the senior subordinated notes, the NewPage Holding PIK Notes and any refinancing thereof. The maturity date of the senior secured credit facilities may be accelerated if
we are unable to refinance our notes prior to their maturity. Our weighted-average interest rate on the outstanding balance of the term loan facility at December 31, 2008 was 5.3%. NewPages senior secured credit facilities contain
customary financial and other covenants, including minimum interest coverage and fixed charge coverage ratios and maximum total debt and senior debt to EBITDA ratios. The required financial covenant levels become more restrictive over the term of
the senior secured credit facilities. By December 31, 2009, the leverage ratio declines to 5.00 with further decreases over the following three years to 3.75, the senior leverage ratio declines to 2.50 with further decreases over the following
three years to 1.25, the interest coverage ratio increases to 2.00 with a further increase to 2.50 the following year and the fixed charge coverage ratio increases to 1.10. Certain items included in results of operations are excluded under the
definition of consolidated adjusted EBITDA used to calculate compliance with the financial covenants in our senior secured credit facilities. These include items such as equity award expense, the effect of LIFO inventory accounting,
non-cash pension expense, cost of restructuring activities and costs related to the integration of the two businesses, among other items.



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Below are the required financial covenant levels and the actual levels as of December 31, 2008:



|                                    |  |          |  |       
|----------------------------------- |  | -------- |  | ------
|                                    |  | Covenant |  | Actual
|Maximum Leverage Ratio              |  | 5.75     |  | 4.77  
|Maximum Senior Leverage Ratio       |  | 3.25     |  | 2.52  
|Minimum Interest Coverage Ratio     |  | 1.75     |  | 2.43  
|Minimum Fixed Charge Coverage Ratio |  | 1.00     |  | 1.41  

We were in compliance with all covenants as of December 31, 2008, and based on our projections for 2009, we
believe that we will be in compliance with all financial covenants in 2009. Our 2009 projections anticipate pricing and volume trends consistent with the unfavorable supply versus demand trend that began in the fourth quarter of 2008 and continued
volatility in energy and commodity costs, although at lower levels when compared to the 2008 peak.

We believe if volumes were to decrease somewhat
compared to current projections, that we would be able to take actions such as capacity reductions or redundancy programs to maintain compliance with our financial covenants.

If a violation of our financial covenants were likely, we would attempt to obtain a waiver or amendment to the covenants. In addition, the senior secured credit agreements allow the shareholders of NewPage Group to
make an equity contribution to NewPage within 10 days of the delivery of the compliance certificate to the administrative agent. The equity contribution would be added to consolidated adjusted EBITDA to determine compliance for an amount up to a
maximum of $50 million twice per year. We cannot provide assurance that waivers or amendments could be obtained or whether the shareholders of NewPage Group would make an equity contribution to cure a violation. If we did violate our financial
covenants and were not able to obtain a waiver or amendment to the covenants and the shareholders of NewPage Group did not make an equity contribution to cure the violation, the debt would become immediately payable. We do not have sufficient cash
on hand to satisfy such a demand. Accordingly, the inability to comply with the covenants or obtain waivers or amendments for non-compliance would have a material adverse effect on our financial position, results of operations, liquidity and cash
flows.

The senior secured credit facilities also limit our annual capital expenditures to $250 million per year. The difference between our maximum
permitted capital expenditures and actual capital expenditures in any given year is carried over to the following year. If at the end of any fiscal quarter NewPages leverage ratio is 3:50 to 1:00 or less, then there is no cap on our capital
expenditures under the senior secured credit facilities.

The revolving credit facility has a first lien on NewPages and its guarantor
subsidiaries cash, deposit accounts, accounts receivable, inventory and intercompany debt owed to NewPage Holding, NewPage and its guarantor subsidiaries. The term loan facility has a first lien on the capital stock of NewPage, the capital
stock of its guarantor subsidiaries, and all of its assets and the assets of its guarantor subsidiaries other than the assets pledged under the revolving credit facility, and has a second lien on the assets pledged under the revolving credit
facility. The senior secured notes have a second lien on all of NewPages assets and the assets of its guarantor subsidiaries other than the capital stock of its guarantor subsidiaries and the assets pledged under the revolving credit facility.

NewPage has issued $225 million of floating-rate senior secured notes due 2012, $806 million of 10% senior secured notes due 2012 (which includes $456
million of notes issued in connection with the Acquisition) and $200 million of 12% senior subordinated notes due 2013. The 2012 senior secured notes and the related subsidiary guarantees are secured equally and ratably by second priority liens on
substantially all of the assets of NewPage and its subsidiaries, other than cash deposit accounts, accounts receivables, inventory, the stock of NewPages subsidiaries and intercompany debt. The indentures governing these NewPage Notes contain
customary financial and other covenants.

We have an outstanding capital lease for a paper machine that was acquired as part of the Acquisition with a
balance of $147 million as of December 31, 2008. The lease requires payments of approximately $7 million per year and has a basic lease term which expires in 2014. At the end of the basic lease term, we have the option to purchase the machine
or the lessor can require us to renew the lease through 2025. The lease contains purchase options at amounts approximating fair market value in 2010 and at lease termination.

NewPage Holding has outstanding $190 million of floating rate senior unsecured PIK Notes due 2013. The interest rate on the NewPage Holding PIK Notes is equal to LIBOR plus 7%, reset semi-annually. As of
December 31, 2008, the interest rate on the NewPage Holding PIK Notes was 10.3%.

As of December 31, 2008, we had outstanding interest rate swaps
totaling $1,350 million, expiring from June 2009 through December 2012. We receive amounts based on LIBOR and pay amounts at a weighted-average fixed rate of 3.7%.

We do not have any off-balance sheet arrangements.



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Capital Expenditures

Capital expenditures were $165 million and $102 million for the years ended December 31, 2008 and 2007. In order to preserve liquidity, we have significantly reduced our expected capital expenditures in 2009 to approximately $75
million, consisting of approximately $13 million for maintenance capital expenditures, approximately $55 million for improvements in machinery and equipment efficiency or cost-effectiveness and approximately $7 million for integrating the two
businesses. We expect to fund our capital expenditures from cash flows from operations and our revolving senior secured credit facility. We do not believe that the lower level of capital expenditures will negatively affect our ability to meet the
requirements of our customers.

Compliance with environmental laws and regulations is a significant factor in our business. We incurred capital
expenditures of $1 million in 2008 in order to maintain compliance with applicable environmental laws and regulations and to meet new regulatory requirements. We do not expect to incur any environmental capital expenditures in 2009. Environmental
compliance may require increased capital and operating expenditures over time as environmental laws or regulations, or interpretations thereof, change or the nature of our operations require us to make significant additional expenditures.

Contractual Commitments

The following
table reflects our contractual commitments associated with our debt and other obligations as of December 31, 2008:



|                             |  |       |       |      |   |         |  |         |     |            |   |       |  |   |      
|---------------------------- |  | ----- | ----- | ---- | - | ------- |  | ------- | --- | ---------- | - | ----- |  | - | -----
|(in millions)                |  | Total |       | 2009 |   | 2010-11 |  | 2012-13 |     | Thereafter
|Contractual Obligations      |  |       |       |      |   |         |  |         |     |            |   |       |  |   |      
|Long-term debt(1)            |  | $     | 3,165 |      | $ | 16      |  | $       | 32  |            | $ | 1,453 |  | $ | 1,664
|Interest expense(2)          |  |       | 1,119 |      |   | 228     |  |         | 452 |            |   | 390   |  |   | 49   
|Operating leases             |  |       | 33    |      |   | 9       |  |         | 13  |            |   | 7     |  |   | 4    
|Fiber supply agreements(3)   |  |       | 614   |      |   | 195     |  |         | 113 |            |   | 103   |  |   | 203  
|Purchase obligations         |  |       | 468   |      |   | 159     |  |         | 127 |            |   | 77    |  |   | 105  
|Pension/postretirement plans |  |       | 498   |      |   |        |  |         | 87  |            |   | 60    |  |   | 351  
|Other long-term obligations  |  |       | 118   |      |   |        |  |         | 17  |            |   | 6     |  |   | 95   
|                             |  |       |       |      |   |         |  |         |     |            |   |       |  |   |      
|Total                        |  | $     | 6,015 |      | $ | 607     |  | $       | 841 |            | $ | 2,096 |  | $ | 2,471
|                             |  |       |       |      |   |         |  |         |     |            |   |       |  |   |      
|                             |  |       |       |      |  
|Other Commercial Commitments |  |       |       |      |   |         |  |         |     |            |   |       |  |   |      
|Standby letters of credit(4) |  | $     | 87    |      | $ | 87      |  | $       |    |            | $ |      |  | $ |     
|                             |  |       |       |      |   |         |  |         |     |            |   |       |  |   |      
|Total                        |  | $     | 87    |      | $ | 87      |  | $       |    |            | $ |      |  | $ |     
|                             |  |       |       |      |   |         |  |         |     |            |   |       |  |   |      



|(1) | Amounts shown represent scheduled maturities and do not take into account any acceleration of indebtedness resulting from mandatory payments required for events such as asset sales
or under the excess cash flows provisions of our financing instruments. The amounts for NewPage are $2,975, $16, $32, $1,263 and $1,664 for total, 2009, 2010-11, 2012-13 and thereafter, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Amounts include contractual interest payments using the interest rates as of December 31, 2008 applicable to our variable-rate debt and stated fixed interest rate for
fixed-rate debt. The amounts for NewPage are $1,002, $228, $452, $273 and $49 for total, 2009, 2010-11, 2012-13 and thereafter, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The contractual commitments consist of the minimum required expenditures to be made pursuant to the fiber supply agreements.
|--- | ----------------------------------------------------------------------------------------------------------------------------

|(4) | We are required to post letters of credit or other financial assurance obligations with certain of our energy and other suppliers.
|--- | ----------------------------------------------------------------------------------------------------------------------------------



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|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

Interest Rate Risk

As of December 31, 2008 and 2007, $1,999 million and $1,996 million of our debt consisted of borrowings with
variable interest rates. If market interest rates increase, variable-rate debt will create higher debt service requirements, which could adversely affect our cash flow or compliance with our debt covenants. The potential annual increase in interest
expense resulting from a 100 basis point increase in quoted interest rates on our debt balances outstanding at December 31, 2008 and 2007, would be $20 million, without taking into account any interest rate derivative agreements.

While we may enter into agreements limiting our exposure to higher interest rates, these agreements do not offer complete protection from this risk. As of
December 31, 2008 and 2007, we were a party to interest rate swap agreements to hedge the variability of cash flows on $1,350 million and $450 million of our floating-rate debt. Taking into account our interest rate derivative agreements and
rates in effect at December 31, 2008 and 2007, a 100 basis point increase in quoted interest rates would result in an increase in interest expense of $6 million and $15 million, respectively.



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##### Table of Contents

|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | -------------------------------------------

Index to
Financial Statements



|                                                                                                               |  |     
|-------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                               |  | Page
|Reports of Independent Registered Public Accounting Firm                                                       |  | 48  
|                                                                                                               | 
|NewPage Holding                                                                                                |  |     
|Consolidated Balance Sheets as of December 31, 2008 and 2007                                                   |  | 50  
|Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006                     |  | 51  
|Consolidated Statements of Stockholders Equity (Deficit) for the years ended December 31, 2008, 2007 and
2006 |  | 52  
|Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 2006                         |  | 53  
|                                                                                                               | 
|NewPage                                                                                                        |  |     
|Consolidated Balance Sheets as of December 31, 2008 and 2007                                                   |  | 54  
|Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006                     |  | 55  
|Consolidated Statements of Stockholders Equity for the years ended December 31, 2008, 2007 and
2006           |  | 56  
|Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006                     |  | 57  
|                                                                                                               | 
|NewPage Holding and NewPage                                                                                    |  |     
|Notes to Consolidated Financial Statements                                                                     |  | 58  



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholder and Board of Directors of NewPage Holding Corporation:

In
our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, changes in stockholders equity (deficit) and cash flows present fairly, in all material respects, the financial position of
NewPage Holding Corporation and its subsidiaries at December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2008 in conformity with accounting principles
generally accepted in the United States of America. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our
audits of these statements 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, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As
discussed in Note L to the consolidated financial statements, the Company changed the manner in which it accounts for defined benefit pension and other postretirement plans effective December 31, 2006 and as discussed in Note J to the
consolidated financial statements, the Company changed the manner in which it accounts for uncertain tax positions effective January 1, 2007.

/s/
PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Dayton, Ohio

March 2, 2009



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholder and Board of Directors of NewPage Corporation:

In our
opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, changes in stockholders equity and cash flows present fairly, in all material respects, the financial position of NewPage Corporation
and its subsidiaries at December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2008 in conformity with accounting principles generally accepted in the
United States of America. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements
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, assessing the accounting principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note L to the
consolidated financial statements, the Company changed the manner in which it accounts for defined benefit pension and other postretirement plans effective December 31, 2006 and as discussed in Note J to the consolidated financial statements,
the Company changed the manner in which it accounts for uncertain tax positions effective January 1, 2007.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Dayton, Ohio

March 2, 2009



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NEWPAGE HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER
31, 2008 and 2007

Dollars in millions, except per share amounts



|                                                                                      |  |      |       |   |      |   |       |  
|------------------------------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | -
|                                                                                      |  | 2008 |       |   | 2007 |  
|ASSETS                                                                                |  |      |       |   |      |   |       |  
|Cash and cash equivalents                                                             |  | $    | 3     |   |      | $ | 143   |  
|Accounts receivable, net of allowance for doubtful accounts of $3 and $3              |  |      | 278   |   |      |   | 351   |  
|Inventories (Note D)                                                                  |  |      | 628   |   |      |   | 584   |  
|Other current assets                                                                  |  |      | 22    |   |      |   | 43    |  
|                                                                                      |  |      |       |   |      |   |       |  
|Total current assets                                                                  |  |      | 931   |   |      |   | 1,121 |  
|                                                                                      |  |     
|Property, plant and equipment, net (Note E)                                           |  |      | 3,205 |   |      |   | 3,564 |  
|Other assets (Note F)                                                                 |  |      | 110   |   |      |   | 200   |  
|                                                                                      |  |      |       |   |      |   |       |  
|TOTAL ASSETS                                                                          |  | $    | 4,246 |   |      | $ | 4,885 |  
|                                                                                      |  |      |       |   |      |   |       |  
|                                                                                      |  |     
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                        |  |      |       |   |      |   |       |  
|Accounts payable                                                                      |  | $    | 254   |   |      | $ | 338   |  
|Other current liabilities (Note H)                                                    |  |      | 270   |   |      |   | 290   |  
|Current maturities of long-term debt (Note I)                                         |  |      | 16    |   |      |   | 16    |  
|                                                                                      |  |      |       |   |      |   |       |  
|Total current liabilities                                                             |  |      | 540   |   |      |   | 644   |  
|                                                                                      |  |     
|Long-term debt (Note I)                                                               |  |      | 3,082 |   |      |   | 3,070 |  
|Other long-term obligations                                                           |  |      | 616   |   |      |   | 351   |  
|Deferred income taxes (Note J)                                                        |  |      | 6     |   |      |   | 275   |  
|Commitments and contingencies (Note N)                                                |  |      |       |   |      |   |       |  
|Minority interest                                                                     |  |      | 26    |   |      |   | 31    |  
|                                                                                      |  |     
|STOCKHOLDERS EQUITY (DEFICIT)                                                        |  |      |       |   |      |   |       |  
|Common stock, 10 shares authorized, issued and outstanding, $0.01 per share par value |  |      |      |   |      |   |      |  
|Additional paid-in capital                                                            |  |      | 661   |   |      |   | 632   |  
|Accumulated deficit                                                                   |  |      | (283  | ) |      |   | (141  | )
|Accumulated other comprehensive income (loss)                                         |  |      | (402  | ) |      |   | 23    |  
|                                                                                      |  |      |       |   |      |   |       |  
|Total stockholders equity (deficit)                                                  |  |      | (24   | ) |      |   | 514   |  
|                                                                                      |  |      |       |   |      |   |       |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                  |  | $    | 4,246 |   |      | $ | 4,885 |  
|                                                                                      |  |      |       |   |      |   |       |  

See notes to consolidated financial statements.



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NEWPAGE HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

Dollars in millions



|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  
|-------------------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                                           |  | 2008 |       |   | 2007 |   |       | 2006 | 
|Net sales                                                                  |  | $    | 4,356 |   |      | $ | 2,168 |      |  | $ | 2,038 |  
|                                                                           |  |      |      
|Cost of sales                                                              |  |      | 3,979 |   |      |   | 1,895 |      |  |   | 1,825 |  
|Selling, general and administrative expenses                               |  |      | 217   |   |      |   | 127   |      |  |   | 112   |  
|Interest expense (including non-cash interest expense of $47, $47 and $29) |  |      | 298   |   |      |   | 175   |      |  |   | 165   |  
|Other (income) expense, net                                                |  |      |      |   |      |   | (1    | )    |  |   | (25   | )
|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  
|                                                                           |  |      |      
|Income (loss) from continuing operations before income taxes               |  |      | (138  | ) |      |   | (28   | )    |  |   | (39   | )
|Income tax (benefit)                                                       |  |      | 4     |   |      |   | (6    | )    |  |   | (3    | )
|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  
|Income (loss) from continuing operations                                   |  |      | (142  | ) |      |   | (22   | )    |  |   | (36   | )
|Income (loss) from discontinued operations (Note R)                        |  |      |      |   |      |   |      |      |  |   | (16   | )
|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  
|Net income (loss)                                                          |  | $    | (142  | ) |      | $ | (22   | )    |  | $ | (52   | )
|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  

See notes to consolidated financial statements.



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NEWPAGE HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

Dollars in millions



|                                                                                                       |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|------------------------------------------------------------------------------------------------------ |  | ------------ |  | ----------------- | - | ------- | ----------- | --- | ------- | ----------------------------- | - | ------------- | ------------- |  | ------------- | ---- | - |  | - | ---- | -
|                                                                                                       |  | Common Stock |  | AdditionalPaid-in |   |         | Accumulated |     |         | AccumulatedOtherComprehensive |   |               | Comprehensive | 
|                                                                                                       |  | Shares       |  | Amount            |   | Capital |             |     | Deficit |                               |   | Income (Loss) |               |  | Income (Loss) |     
|Balance at December 31, 2005                                                                           |  | 10           |  | $                 |  |         | $           | 289 |         |                               | $ | (67           | )             |  | $             | 5    |   |  |   |      |  
|Net income (loss)                                                                                      |  |              |  |                   |   |         |             |     |         |                               |   | (52           | )             |  |               |      |   |  | $ | (52  | )
|Net actuarial gains on defined benefit plans                                                           |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | 14   |   |  |   |      |  
|Cash-flow hedges:                                                                                      |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Change in unrealized gains                                                                             |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | 5    |   |  |   | 5    |  
|Reclassification adjustment to net income (loss)                                                       |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (4   | ) |  |   | (4   | )
|Equity awards (Note K)                                                                                 |  |              |  |                   |   |         |             | 11  |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Loan to Maple Timber                                                                                   |  |              |  |                   |   |         |             | (7  | )       |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                       |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Balance at December 31, 2006                                                                           |  | 10           |  |                   |  |         |             | 293 |         |                               |   | (119          | )             |  |               | 20   |   |  | $ | (51  | )
|                                                                                                       |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                       |  |              |  |                   |   |        
|Net income (loss)                                                                                      |  |              |  |                   |   |         |             |     |         |                               |   | (22           | )             |  |               |      |   |  | $ | (22  | )
|Net actuarial gains on defined benefit plans, net of tax of $10                                        |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | 9    |   |  |   | 9    |  
|Cash-flow hedges:                                                                                      |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Change in unrealized gains (losses), net of tax benefit of $2                                          |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (3   | ) |  |   | (3   | )
|Reclassification adjustment to net income (loss), net of tax benefit of $2                             |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (3   | ) |  |   | (3   | )
|Additional capital contributed by NewPage Group in connection with the Acquisition (Note C)            |  |              |  |                   |   |         |             | 329 |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Equity awards (Note K)                                                                                 |  |              |  |                   |   |         |             | 14  |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Loan to Maple Timber                                                                                   |  |              |  |                   |   |         |             | (4  | )       |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                       |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Balance at December 31, 2007                                                                           |  | 10           |  |                   |  |         |             | 632 |         |                               |   | (141          | )             |  |               | 23   |   |  | $ | (19  | )
|                                                                                                       |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                       |  |              |  |                   |   |        
|Net income (loss)                                                                                      |  |              |  |                   |   |         |             |     |         |                               |   | (142          | )             |  |               |      |   |  | $ | (142 | )
|Unrecognized gain (loss) on defined benefit plans                                                      |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (360 | ) |  |   | (360 | )
|Cash-flow hedges:                                                                                      |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Change in unrealized gains (losses)                                                                    |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (62  | ) |  |   | (62  | )
|Reclassification adjustment to net income (loss)                                                       |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | 6    |   |  |   | 6    |  
|Foreign currency translation adjustment                                                                |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (9   | ) |  |   | (9   | )
|Adjustment to fair value of equity issued by NewPage Group in connection with the Acquisition (Note C) |  |              |  |                   |   |         |             | 18  |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Equity awards (Note K)                                                                                 |  |              |  |                   |   |         |             | 18  |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Loan to NewPage Group (Note K)                                                                         |  |              |  |                   |   |         |             | (7  | )       |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                       |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Balance at December 31, 2008                                                                           |  | 10           |  | $                 |  |         | $           | 661 |         |                               | $ | (283          | )             |  | $             | (402 | ) |  | $ | (567 | )
|                                                                                                       |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  

See notes to consolidated financial statements.



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NEWPAGE HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

Dollars in millions



|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|----------------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- | - | ------ | ---- |  | - | ---- | -
|                                                                                          |  | 2008 |      |   | 2007 |   |        | 2006 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                      |  |      |      |   |      |   |        |      |  |   |      |  
|Net income (loss)                                                                         |  | $    | (142 | ) |      | $ | (22    | )    |  | $ | (52  | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities:  |  |      |      |   |      |   |        |      |  |   |      |  
|(Gain) loss on discontinued operations                                                    |  |      |     |   |      |   |       |      |  |   | 16   |  
|Depreciation and amortization                                                             |  |      | 317  |   |      |   | 134    |      |  |   | 152  |  
|Non-cash interest expense                                                                 |  |      | 47   |   |      |   | 47     |      |  |   | 29   |  
|(Gain) loss on disposal of assets                                                         |  |      | 11   |   |      |   | 3      |      |  |   | (63  | )
|Unrealized (gain) loss on option contracts                                                |  |      |     |   |      |   |       |      |  |   | 48   |  
|Deferred income taxes                                                                     |  |      | 8    |   |      |   | (6     | )    |  |   | (3   | )
|Write-off of costs of withdrawn 2006 initial public offering                              |  |      |     |   |      |   | 3      |      |  |   |     |  
|LIFO effect                                                                               |  |      | 30   |   |      |   | 1      |      |  |   | (2   | )
|Equity award expense (Note K)                                                             |  |      | 18   |   |      |   | 14     |      |  |   | 11   |  
|Change in operating assets and liabilities:                                               |  |      |      |   |      |   |        |      |  |   |      |  
|Accounts receivable                                                                       |  |      | 73   |   |      |   | 2      |      |  |   | 40   |  
|Inventories                                                                               |  |      | (116 | ) |      |   | 56     |      |  |   | 29   |  
|Other operating assets                                                                    |  |      | (10  | ) |      |   | (1     | )    |  |   | 1    |  
|Accounts payable                                                                          |  |      | (76  | ) |      |   | 4      |      |  |   | (30  | )
|Accrued expenses and other obligations                                                    |  |      | (100 | ) |      |   | 42     |      |  |   | 15   |  
|Net cash flows of discontinued operations                                                 |  |      |     |   |      |   |       |      |  |   | (11  | )
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Net cash provided by operating activities                                                 |  |      | 60   |   |      |   | 277    |      |  |   | 180  |  
|                                                                                          |  |      |     
|CASH FLOWS FROM INVESTING ACTIVITIES                                                      |  |      |      |   |      |   |        |      |  |   |      |  
|Cash paid for acquisition                                                                 |  |      | (8   | ) |      |   | (1,486 | )    |  |   |     |  
|Proceeds from sales of assets                                                             |  |      | 6    |   |      |   |       |      |  |   | 229  |  
|Capital expenditures                                                                      |  |      | (165 | ) |      |   | (102   | )    |  |   | (88  | )
|Net cash flows of discontinued operations                                                 |  |      |     |   |      |   |       |      |  |   | (1   | )
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Net cash provided by (used for) investing activities                                      |  |      | (167 | ) |      |   | (1,588 | )    |  |   | 140  |  
|                                                                                          |  |      |     
|CASH FLOWS FROM FINANCING ACTIVITIES                                                      |  |      |      |   |      |   |        |      |  |   |      |  
|Proceeds from issuance of long-term debt                                                  |  |      |     |   |      |   | 2,008  |      |  |   |     |  
|Payment of financing costs                                                                |  |      |     |   |      |   | (62    | )    |  |   | (4   | )
|Distributions from Rumford Cogeneration to limited partners                               |  |      | (8   | ) |      |   | (8     | )    |  |   | (6   | )
|Loans to parent companies (Note K)                                                        |  |      | (7   | ) |      |   | (4     | )    |  |   | (7   | )
|Repayments of long-term debt                                                              |  |      | (16  | ) |      |   | (524   | )    |  |   | (224 | )
|Borrowings on revolving credit facility                                                   |  |      | 153  |   |      |   |       |      |  |   |     |  
|Payments on revolving credit facility                                                     |  |      | (153 | ) |      |   |       |      |  |   | (46  | )
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Net cash provided by (used for) financing activities                                      |  |      | (31  | ) |      |   | 1,410  |      |  |   | (287 | )
|                                                                                          |  |      |     
|Effect of exchange rate changes on cash and cash equivalents                              |  |      | (2   | ) |      |   |       |      |  |   |     |  
|Increase in cash and cash equivalents from initial consolidation of Rumford Cogeneration  |  |      |     |   |      |   |       |      |  |   | 10   |  
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|                                                                                          |  |      |     
|Net increase (decrease) in cash and cash equivalents                                      |  |      | (140 | ) |      |   | 99     |      |  |   | 43   |  
|Cash and cash equivalents at beginning of period                                          |  |      | 143  |   |      |   | 44     |      |  |   | 1    |  
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Cash and cash equivalents at end of period                                                |  | $    | 3    |   |      | $ | 143    |      |  | $ | 44   |  
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|                                                                                          |  |      |     
|SUPPLEMENTAL INFORMATION                                                                  |  |      |      |   |      |   |        |      |  |   |      |  
|Cash paid for interest                                                                    |  | $    | 251  |   |      | $ | 128    |      |  | $ | 139  |  
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Non-cash transactionIssuance of securities by NewPage Group as acquisition consideration |  | $    |     |   |      | $ | 347    |      |  | $ |     |  

See notes to consolidated financial statements.



53



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NEWPAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER
31, 2008 and 2007

Dollars in millions, except per share amounts



|                                                                                       |  |      |       |   |      |   |       |  
|-------------------------------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | -
|                                                                                       |  | 2008 |       |   | 2007 |  
|ASSETS                                                                                 |  |      |       |   |      |   |       |  
|Cash and cash equivalents                                                              |  | $    | 3     |   |      | $ | 143   |  
|Accounts receivable, net of allowance for doubtful accounts of $3 and $3               |  |      | 278   |   |      |   | 351   |  
|Inventories (Note D)                                                                   |  |      | 628   |   |      |   | 584   |  
|Other current assets                                                                   |  |      | 22    |   |      |   | 43    |  
|                                                                                       |  |      |       |   |      |   |       |  
|Total current assets                                                                   |  |      | 931   |   |      |   | 1,121 |  
|                                                                                       |  |     
|Property, plant and equipment, net (Note E)                                            |  |      | 3,205 |   |      |   | 3,564 |  
|Other assets (Note F)                                                                  |  |      | 109   |   |      |   | 198   |  
|                                                                                       |  |      |       |   |      |   |       |  
|TOTAL ASSETS                                                                           |  | $    | 4,245 |   |      | $ | 4,883 |  
|                                                                                       |  |      |       |   |      |   |       |  
|                                                                                       |  |     
|LIABILITIES AND STOCKHOLDERS EQUITY                                                   |  |      |       |   |      |   |       |  
|Accounts payable                                                                       |  | $    | 254   |   |      | $ | 338   |  
|Other current liabilities (Note H)                                                     |  |      | 270   |   |      |   | 290   |  
|Current maturities of long-term debt (Note I)                                          |  |      | 16    |   |      |   | 16    |  
|Total current liabilities                                                              |  |      | 540   |   |      |   | 644   |  
|                                                                                       |  |     
|Long-term debt (Note I)                                                                |  |      | 2,900 |   |      |   | 2,909 |  
|Other long-term obligations                                                            |  |      | 616   |   |      |   | 351   |  
|Deferred income taxes (Note J)                                                         |  |      | 6     |   |      |   | 293   |  
|Commitments and contingencies (Note N)                                                 |  |      |       |   |      |   |       |  
|Minority interest                                                                      |  |      | 26    |   |      |   | 31    |  
|                                                                                       |  |     
|STOCKHOLDERS EQUITY                                                                   |  |      |       |   |      |   |       |  
|Common stock, 100 shares authorized, issued and outstanding, $0.01 per share par value |  |      |      |   |      |   |      |  
|Additional paid-in capital                                                             |  |      | 767   |   |      |   | 729   |  
|Accumulated deficit                                                                    |  |      | (214  | ) |      |   | (97   | )
|Accumulated other comprehensive income (loss)                                          |  |      | (396  | ) |      |   | 23    |  
|Total stockholders equity                                                             |  |      | 157   |   |      |   | 655   |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                             |  | $    | 4,245 |   |      | $ | 4,883 |  

See notes to consolidated financial statements.



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NEWPAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

Dollars in millions



|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  
|-------------------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                                           |  | 2008 |       |   | 2007 |   |       | 2006 | 
|Net sales                                                                  |  | $    | 4,356 |   |      | $ | 2,168 |      |  | $ | 2,038 |  
|                                                                           |  |      |      
|Cost of sales                                                              |  |      | 3,979 |   |      |   | 1,895 |      |  |   | 1,825 |  
|Selling, general and administrative expenses                               |  |      | 217   |   |      |   | 124   |      |  |   | 112   |  
|Interest expense (including non-cash interest expense of $26, $26 and $10) |  |      | 277   |   |      |   | 154   |      |  |   | 146   |  
|Other (income) expense, net                                                |  |      |      |   |      |   | (1    | )    |  |   | (25   | )
|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  
|                                                                           |  |      |      
|Income (loss) from continuing operations before income taxes               |  |      | (117  | ) |      |   | (4    | )    |  |   | (20   | )
|Income tax (benefit)                                                       |  |      |      |   |      |   | 4     |      |  |   | (4    | )
|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  
|Income (loss) from continuing operations                                   |  |      | (117  | ) |      |   | (8    | )    |  |   | (16   | )
|Income (loss) from discontinued operations (Note R)                        |  |      |      |   |      |   |      |      |  |   | (16   | )
|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  
|Net income (loss)                                                          |  | $    | (117  | ) |      | $ | (8    | )    |  | $ | (32   | )
|                                                                           |  |      |       |   |      |   |       |      |  |   |       |  

See notes to consolidated financial statements.



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NEWPAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

Dollars in millions



|                                                                                                                                                     |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  | ----------------- | - | ------- | ----------- | --- | ------- | ----------------------------- | - | ------------- | ------------- |  | ------------- | ---- | - |  | - | ---- | -
|                                                                                                                                                     |  | Common Stock |  | AdditionalPaid-in |   |         | Accumulated |     |         | AccumulatedOtherComprehensive |   |               | Comprehensive | 
|                                                                                                                                                     |  | Shares       |  | Amount            |   | Capital |             |     | Deficit |                               |   | Income (Loss) |               |  | Income (Loss) |     
|Balance at December 31, 2005                                                                                                                         |  | 100          |  | $                 |  |         | $           | 399 |         |                               | $ | (57           | )             |  | $             | 5    |   |  |   |      |  
|Net income (loss)                                                                                                                                    |  |              |  |                   |   |         |             |     |         |                               |   | (32           | )             |  |               |      |   |  | $ | (32  | )
|Net actuarial gains on defined benefit plans                                                                                                         |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | 14   |   |  |   |      |  
|Cash-flow hedges:                                                                                                                                    |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Change in unrealized gains                                                                                                                           |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | 5    |   |  |   | 5    |  
|Reclassification adjustment to net income (loss)                                                                                                     |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (4   | ) |  |   | (4   | )
|Equity awards (Note K)                                                                                                                               |  |              |  |                   |   |         |             | 11  |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Loans to parent companies                                                                                                                            |  |              |  |                   |   |         |             | (10 | )       |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                                                                     |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Balance at December 31, 2006                                                                                                                         |  | 100          |  |                   |  |         |             | 400 |         |                               |   | (89           | )             |  |               | 20   |   |  | $ | (31  | )
|                                                                                                                                                     |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                                                                     |  |              |  |                   |   |        
|Net income (loss)                                                                                                                                    |  |              |  |                   |   |         |             |     |         |                               |   | (8            | )             |  |               |      |   |  | $ | (8   | )
|Net actuarial gains on defined benefit plans, net of tax of $10                                                                                      |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | 9    |   |  |   | 9    |  
|Cash-flow hedges:                                                                                                                                    |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Change in unrealized gains (losses), net of tax benefit of $2                                                                                        |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (3   | ) |  |   | (3   | )
|Reclassification adjustment to net income (loss), net of tax benefit of $2                                                                           |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (3   | ) |  |   | (3   | )
|Additional capital contributed by NewPage Group in connection with the Acquisition (Note C)                                                          |  |              |  |                   |   |         |             | 329 |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Pushdown from NewPage Holding for reversal of tax valuation allowance attributed to the Acquisition                                                  |  |              |  |                   |   |         |             | (9  | )       |                               |   |               |               |  |               |      |   |  |   |      |  
|Equity awards (Note K)                                                                                                                               |  |              |  |                   |   |         |             | 14  |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Loans to parent companies                                                                                                                            |  |              |  |                   |   |         |             | (5  | )       |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                                                                     |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Balance at December 31, 2007                                                                                                                         |  | 100          |  |                   |  |         |             | 729 |         |                               |   | (97           | )             |  |               | 23   |   |  | $ | (5   | )
|                                                                                                                                                     |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                                                                     |  |              |  |                   |   |        
|Net income (loss)                                                                                                                                    |  |              |  |                   |   |         |             |     |         |                               |   | (117          | )             |  |               |      |   |  | $ | (117 | )
|Unrecognized gain (loss) on defined benefit plans, net of tax benefit of $10                                                                         |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (350 | ) |  |   | (350 | )
|Cash-flow hedges:                                                                                                                                    |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Change in unrealized gains (losses), net of tax of $2                                                                                                |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (64  | ) |  |   | (64  | )
|Reclassification adjustment to net income (loss), net of tax of $2                                                                                   |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | 4    |   |  |   | 4    |  
|Foreign currency translation adjustment                                                                                                              |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               | (9   | ) |  |   | (9   | )
|Restoration of tax valuation allowance on NewPage Holding as a result of changes in deferred income tax position related to the Acquisition
(Note C) |  |              |  |                   |   |         |             | 9   |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Adjustment to fair value of equity issued by NewPage Group in connection with the Acquisition (Note C)                                               |  |              |  |                   |   |         |             | 18  |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Equity awards (Note K)                                                                                                                               |  |              |  |                   |   |         |             | 18  |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Loans to NewPage Group (Note K)                                                                                                                      |  |              |  |                   |   |         |             | (7  | )       |                               |   |               |               |  |               |      |   |  |   |      |  
|                                                                                                                                                     |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  
|Balance at December 31, 2008                                                                                                                         |  | 100          |  | $                 |  |         | $           | 767 |         |                               | $ | (214          | )             |  | $             | (396 | ) |  | $ | (536 | )
|                                                                                                                                                     |  |              |  |                   |   |         |             |     |         |                               |   |               |               |  |               |      |   |  |   |      |  

See notes to consolidated financial statements.



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NEWPAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

Dollars in millions



|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|----------------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- | - | ------ | ---- |  | - | ---- | -
|                                                                                          |  | 2008 |      |   | 2007 |   |        | 2006 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                      |  |      |      |   |      |   |        |      |  |   |      |  
|Net income (loss)                                                                         |  | $    | (117 | ) |      | $ | (8     | )    |  | $ | (32  | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities:  |  |      |      |   |      |   |        |      |  |   |      |  
|(Gain) loss on discontinued operations                                                    |  |      |     |   |      |   |       |      |  |   | 16   |  
|Depreciation and amortization                                                             |  |      | 317  |   |      |   | 134    |      |  |   | 152  |  
|Non-cash interest expense                                                                 |  |      | 26   |   |      |   | 26     |      |  |   | 10   |  
|(Gain) loss on disposal of assets                                                         |  |      | 11   |   |      |   | 3      |      |  |   | (63  | )
|Unrealized (gain) loss on option contracts                                                |  |      |     |   |      |   |       |      |  |   | 48   |  
|Deferred income taxes                                                                     |  |      | 4    |   |      |   | 4      |      |  |   | (4   | )
|LIFO effect                                                                               |  |      | 30   |   |      |   | 1      |      |  |   | (2   | )
|Equity award expense (Note K)                                                             |  |      | 18   |   |      |   | 14     |      |  |   | 11   |  
|Change in operating assets and liabilities:                                               |  |      |      |   |      |   |        |      |  |   |      |  
|Accounts receivable                                                                       |  |      | 73   |   |      |   | 2      |      |  |   | 40   |  
|Inventories                                                                               |  |      | (116 | ) |      |   | 56     |      |  |   | 29   |  
|Other operating assets                                                                    |  |      | (10  | ) |      |   | (1     | )    |  |   | 1    |  
|Accounts payable                                                                          |  |      | (76  | ) |      |   | 4      |      |  |   | (30  | )
|Accrued expenses and other obligations                                                    |  |      | (100 | ) |      |   | 43     |      |  |   | 15   |  
|Net cash flows of discontinued operations                                                 |  |      |     |   |      |   |       |      |  |   | (11  | )
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Net cash provided by operating activities                                                 |  |      | 60   |   |      |   | 278    |      |  |   | 180  |  
|                                                                                          |  |      |     
|CASH FLOWS FROM INVESTING ACTIVITIES                                                      |  |      |      |   |      |   |        |      |  |   |      |  
|Cash paid for acquisition                                                                 |  |      | (8   | ) |      |   | (1,486 | )    |  |   |     |  
|Proceeds from sales of assets                                                             |  |      | 6    |   |      |   |       |      |  |   | 229  |  
|Capital expenditures                                                                      |  |      | (165 | ) |      |   | (102   | )    |  |   | (88  | )
|Net cash flows of discontinued operations                                                 |  |      |     |   |      |   |       |      |  |   | (1   | )
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Net cash provided by (used for) investing activities                                      |  |      | (167 | ) |      |   | (1,588 | )    |  |   | 140  |  
|                                                                                          |  |      |     
|CASH FLOWS FROM FINANCING ACTIVITIES                                                      |  |      |      |   |      |   |        |      |  |   |      |  
|Proceeds from issuance of long-term debt                                                  |  |      |     |   |      |   | 2,008  |      |  |   |     |  
|Payment of financing costs                                                                |  |      |     |   |      |   | (62    | )    |  |   | (1   | )
|Distributions from Rumford Cogeneration to limited partners                               |  |      | (8   | ) |      |   | (8     | )    |  |   | (6   | )
|Loans to parent companies (Note K)                                                        |  |      | (7   | ) |      |   | (5     | )    |  |   | (10  | )
|Repayments of long-term debt                                                              |  |      | (16  | ) |      |   | (524   | )    |  |   | (224 | )
|Borrowings on revolving credit facility                                                   |  |      | 153  |   |      |   |       |      |  |   |     |  
|Payments on revolving credit facility                                                     |  |      | (153 | ) |      |   |       |      |  |   | (46  | )
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Net cash provided by (used for) financing activities                                      |  |      | (31  | ) |      |   | 1,409  |      |  |   | (287 | )
|                                                                                          |  |      |     
|Effect of exchange rate changes on cash and cash equivalents                              |  |      | (2   | ) |      |   |       |      |  |   |     |  
|Increase in cash and cash equivalents from initial consolidation of Rumford Cogeneration  |  |      |     |   |      |   |       |      |  |   | 10   |  
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|                                                                                          |  |      |     
|Net increase (decrease) in cash and cash equivalents                                      |  |      | (140 | ) |      |   | 99     |      |  |   | 43   |  
|Cash and cash equivalents at beginning of period                                          |  |      | 143  |   |      |   | 44     |      |  |   | 1    |  
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Cash and cash equivalents at end of period                                                |  | $    | 3    |   |      | $ | 143    |      |  | $ | 44   |  
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|                                                                                          |  |      |     
|SUPPLEMENTAL INFORMATION                                                                  |  |      |      |   |      |   |        |      |  |   |      |  
|Cash paid for interest                                                                    |  | $    | 251  |   |      | $ | 128    |      |  | $ | 139  |  
|                                                                                          |  |      |      |   |      |   |        |      |  |   |      |  
|Non-cash transactionIssuance of securities by NewPage Group as acquisition consideration |  | $    |     |   |      | $ | 347    |      |  | $ |     |  

See notes to consolidated financial statements.



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NEWPAGE HOLDING CORPORATION AND SUBSIDIARIES

NEWPAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

Dollars in millions, except per share amounts



|A. | BASIS OF PRESENTATION
|-- | ---------------------

NewPage Holding Corporation (NewPage
Holding) and its subsidiaries are engaged in manufacturing, marketing and distributing printing papers used primarily for commercial printing, magazines, catalogs, textbooks and labels. Our products include coated, uncoated, supercalendered,
newsprint and specialty papers and market pulp. Our products are manufactured at multiple mills in the United States and one mill in Canada and supported by multiple distribution and converting locations. We operate within one operating segment. The
consolidated financial statements include the accounts of NewPage Holding and all entities it controls, including Rumford Cogeneration Company L.P. (Rumford Cogeneration), a limited partnership for which we are the general partner,
created to generate power for our use and for third-party sale. All intercompany transactions and balances have been eliminated.

Unless otherwise noted,
the terms we, our and us refer to NewPage Holding and its consolidated subsidiaries, including NewPage Corporation, a separate public-reporting company. Unless otherwise noted, NewPage refers to
NewPage Corporation and its consolidated subsidiaries. Other than NewPage Holdings debt obligation and related financing costs, accounts payable, interest expense, write-off of costs for a withdrawn 2006 initial public offering and income tax
effects, all other assets, liabilities, income, expenses, and cash flows presented for all periods represent those of its wholly-owned subsidiary, NewPage. Unless otherwise noted, the information provided pertains to both NewPage Holding and
NewPage.

Effective April 1, 2006, we completed the sale of our carbonless paper business, which comprised our carbonless paper segment, to P. H.
Glatfelter Company. In the quarter ended March 31, 2006, we began reporting the carbonless paper business as a discontinued operation. See Note R for further information.

On December 21, 2007, we acquired all of the common stock of Stora Enso North America Inc. (SENA). See Note C for further information.

During 2008, we announced actions being taken to integrate NewPage operations and the former SENA facilities and services. See Note M for further information.



|B. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Estimates and
assumptions

The preparation of these consolidated financial statements required management to make estimates and assumptions that affect the
reported amounts of some assets and liabilities and, in some instances, the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash equivalents

Highly liquid securities with an original
maturity of three months or less are considered to be cash equivalents.



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Foreign currency translation

The statements of operations of our Canadian entity, whose functional currency is the Canadian dollar, are translated into U.S. dollars using the average exchange rates for the period and the balance sheets are
translated using the exchange rates at the reporting date. Exchange rate differences arising from the translation of the net investments in foreign entities are recorded as a component of accumulated other comprehensive income (loss).

Concentration of credit risk

We are potentially subject to
concentrations of credit risk related to our accounts receivable. The majority of accounts receivable are with paper merchants, printers and publishers. We limit our credit risk by performing ongoing credit evaluations and, when deemed necessary, by
requiring accelerated payment terms, letters of credit, guarantees or collateral. For each of the years ended December 31, 2008, 2007 and 2006, sales to our largest customer were 21%, 25% and 21% of net sales. Accounts receivable at
December 31, 2008, relating to our two largest customers were 17% and 11% of accounts receivable, net. Accounts receivable at December 31, 2007, relating to our largest customer were 23% of accounts receivable, net. Our ten largest
customers accounted for approximately 52%, 57% and 54% of our net sales for each of the years ended December 31, 2008, 2007 and 2006.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out (LIFO) method for
substantially all raw materials and finished goods for U.S.-based operations. Cost of all other inventories, mainly stores and supplies inventories and Canadian inventories, is determined by the average cost and first-in, first-out (FIFO) methods.

Property, plant and equipment

Owned assets are
recorded at cost. Costs of renewals and betterments of properties are capitalized. Costs of maintenance and repairs are charged to expense using the direct-expensing method, whereby costs are recorded in the statement of operations in the same
period that they are incurred. The cost of plant and equipment is depreciated utilizing the straight-line method over the estimated useful lives of the assets, which range from 20 to 40 years for buildings and 5 to 30 years for machinery and
equipment.

Impairment of long-lived assets

We
periodically evaluate whether current events or circumstances indicate that the carrying value of our long-lived assets to be held and used may not be recoverable. If these circumstances are determined to exist, an estimate of undiscounted future
cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists. We report an asset to be disposed of at the lower of its carrying value or its estimated
net realizable value.

Derivative financial instruments

We periodically use derivative financial instruments as part of our overall strategy to manage exposure to market risks associated with interest rate, foreign currency exchange rate and natural gas price fluctuations. These derivative
instruments are measured at fair value and are classified as other assets or other long-term obligations on our balance sheets depending on the fair value of the instrument. If the derivative is designated as a fair-value hedge, the changes in the
fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash-flow hedge, the effective portion of the change in



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the fair value of the derivative is recorded in other comprehensive income (loss) and is recognized in the consolidated statements of operations when the
hedged item affects earnings. Ineffective portions of changes in the fair value of cash-flow hedges and financial instruments not designated as hedges are recognized in earnings.

Fair value of financial instruments

The fair value of long-term debt is based upon quoted market prices for
the same or similar issues or on the current interest rates available to the company for debt of similar terms and maturities. We value interest rate swaps using observable interest rate yield curves for comparable assets and liabilities at commonly
quoted intervals. We value natural gas contracts based on natural gas futures contracts priced on the New York Mercantile Exchange. At December 31, 2008 and 2007, the carrying amounts of all other assets and liabilities that qualify as
financial instruments approximated their fair value. We measure the fair values of our interest rate swaps, natural gas contracts and long-term debt under a Level 2 input as defined by SFAS No. 157, Fair Value Measurements (SFAS
No. 157). Details of our assets (liabilities) recorded on our balance sheets for our financial instruments are as follows:



|                      |  |           |        |   |                |   |        |           |  |   |                |   |  |   |        |  
|--------------------- |  | --------- | ------ | - | -------------- | - | ------ | --------- |  | - | -------------- | - |  | - | ------ | -
|                      |  | 2008      |        |   | 2007           |  
|                      |  | FairValue |        |   | CarryingAmount |   |        | FairValue |  |   | CarryingAmount |  
|Interest rate swaps   |  | $         | (58    | ) |                | $ | (58    | )         |  | $ | (2             | ) |  | $ | (2     | )
|Natural gas contracts |  |           | (2     | ) |                |   | (2     | )         |  |   |               |   |  |   |       |  
|Long-term debt:       |  |           |        |   |                |   |        |           |  |   |                |   |  |   |        |  
|NewPage Holding       |  |           | (1,343 | ) |                |   | (2,951 | )         |  |   | (2,997         | ) |  |   | (2,940 | )
|NewPage               |  |           | (1,305 | ) |                |   | (2,769 | )         |  |   | (2,834         | ) |  |   | (2,779 | )

Environmental

Environmental expenditures that increase useful lives of assets are capitalized, while other environmental expenditures are expensed. Liabilities are recorded when remedial efforts are probable and the costs can be reasonably estimated.

Landfills and other asset retirement obligations

We follow Statement of Financial Accounting Standard (SFAS) No. 143, Accounting for Asset Retirement Obligations, and FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, an interpretation
of FASB Statement No. 143,in accounting for costs related to the closure and post-closure monitoring of our owned landfills. SFAS No. 143 and Interpretation No. 47 require that an obligation associated with the retirement of a
tangible long-lived asset be recognized as a liability when incurred. Subsequent to initial measurement, an entity recognizes changes in the amount of the liability resulting from the passage of time and revisions to either the timing or amount of
estimated cash flows.

Pension and other postretirement benefits

We maintain various defined benefit pension and other postretirement benefit plans in the United States and Canada. The plans are generally funded through payments to pension funds/trusts or directly by the company
and/or employees.

Defined benefit pension and other postretirement benefit expense is recorded on a full accrual basis, as opposed to a cash paid basis,
and is reflected in the consolidated statements of operations over the expected working lives of the employees provided with such benefits. The economic and demographic assumptions used in calculating defined benefit pension and other postretirement
benefit expense are required to be reviewed and updated periodically to the extent that local market economic conditions and demographics change.



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Revenue recognition

We recognize revenue at the point when title and the risk of ownership passes to the customer. Substantially all of our revenues are generated through product sales, and shipping terms generally indicate when title and the risk of ownership
have passed. Revenue is recognized at the time of shipment for sales where shipping terms transfer title and risk of loss at the shipping point. For sales where shipping terms transfer title and risk of loss at the destination point, revenue is
recognized when the goods are received by the customer. For sales made under consignment programs, revenue is recognized in accordance with the terms of the contract. We provide allowances for estimated returns and other customer credits, such as
discounts and volume rebates, when the revenue is recognized based on historical experience. Sales of byproducts produced during the manufacturing process are recognized as a reduction of cost of sales. We do not recognize sales taxes collected from
customers as revenue; rather we record these taxes on a net basis in our statement of operations.

International sales

We had net sales to customers outside of the United States of $318, $217 and $213 for the years ended December 31, 2008, 2007 and 2006. We have no material
long-lived assets outside of the United States.

Income taxes

Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax bases of assets and liabilities. Deferred tax assets and liabilities reflect the enacted tax rates
in effect for the years the differences are expected to reverse. We evaluate the need for a deferred tax asset valuation allowance by assessing whether it is more likely than not that we will realize the deferred tax assets in the future. We
recognize all income tax-related interest expense and statutory penalties imposed by taxing authorities as income tax expense.

Equity compensation

We account for equity compensation under the provisions of SFAS No. 123 (Revised), Share-based Payment, which requires that equity
awards to employees be expensed over the vesting period of the award. We use the graded vesting attribution method for recognizing stock compensation cost whereby the cost for a stock award is determined on a straight-line basis over the service
period for each separate vesting portion of the award as if the award was multiple awards.



|C. | ACQUISITION AND RELATED TRANSACTIONS
|-- | ------------------------------------

On December 21, 2007,
NewPage acquired all of the issued and outstanding common stock of SENA from Stora Enso Oyj (SEO) (the Acquisition). We acquired SENA in order to create a single business platform and to enable us to remain competitive in the
marketplace, serve our customers more efficiently and achieve synergies from the Acquisition. The Acquisition more than doubled our production capacity and broadened our product line. Following the Acquisition, SENA changed its name to NewPage
Consolidated Papers Inc. (NPCP). References to both SENA and NPCP are to the acquired business.



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In connection with the closing of the Acquisition:



| |  |  | NewPage acquired all of the issued and outstanding common stock of SENA and, in exchange, SEO received:
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | $1,522 in cash
| | - |  | --------------



| |  |  | shares of common stock representing 19.9% (as of the closing of the Acquisition) of the outstanding common stock of NewPage Holdings direct parent, NewPage
Group Inc. (NewPage Group)
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | senior unsecured notes issued by NewPage Group in the aggregate principal amount of $200 due 2015 (the NewPage Group PIK Notes)
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | NewPage entered into senior secured credit facilities, consisting of a $1,600 senior secured term loan facility and a $500 senior secured revolving credit facility
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | NewPage repaid $450 of term debt outstanding under its prior credit facility
| | - |  | ----------------------------------------------------------------------------



| |  |  | NewPage issued $456 of 10% senior secured notes due 2012
| | - |  | --------------------------------------------------------

Prior to the closing of the Acquisition, we engaged in an equity reorganization:



| |  |  | Escanaba Timber LLC (Escanaba Timber), which was previously the immediate parent entity of NewPage Holding, contributed all outstanding shares of common
stock of NewPage Holding to NewPage Group in exchange for shares of common stock of NewPage Group
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Escanaba Timber distributed to Maple Timber Acquisition LLC (Maple Timber), Escanaba Timbers immediate parent entity, all outstanding shares of
NewPage Group common stock
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Maple Timber distributed all of its NewPage Group common stock to the members of Maple Timber
| | - |  | ---------------------------------------------------------------------------------------------

As a result of this equity reorganization, NewPage Group became the direct parent entity of NewPage Holding (and consequently the indirect parent of NewPage) and
Cerberus Capital Management, L.P. (Cerberus), our equity sponsor, and its affiliates and the other equity owners of Maple Timber were the sole stockholders of NewPage Group prior to the closing of the Acquisition.

The consolidated balance sheets in these financial statements include the assets acquired and liabilities assumed of SENA and reflect the final allocation of the
purchase price based on fair values at the date of the Acquisition. The following table shows the reconciliation of the purchase price paid by NewPage:



|                                                      |  |   |      
|----------------------------------------------------- |  | - | -----
|Cash paid for acquisition, net of cash acquired       |  | $ | 1,494
|NewPage Group equity issued to SEO (at fair value)    |  |   | 141  
|NewPage Group PIK Notes issued to SEO (at fair value) |  |   | 206  
|                                                      |  |   |      
|Total purchase price                                  |  | $ | 1,841
|                                                      |  |   |      



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A summary of the final purchase price allocation for the fair value of the assets acquired and the liabilities assumed at
the date of the Acquisition is presented below.



|                              |  |   |       |  
|----------------------------- |  | - | ----- | -
|Accounts receivable           |  | $ | 206   |  
|Inventories                   |  |   | 314   |  
|Other current assets          |  |   | 2     |  
|Property, plant and equipment |  |   | 2,083 |  
|Other assets                  |  |   | 55    |  
|                              |  |   |       |  
|Total assets acquired         |  |   | 2,660 |  
|Accounts payable              |  |   | (198  | )
|Other current liabilities     |  |   | (197  | )
|Long-term debtcapital lease  |  |   | (146  | )
|Deferred income taxes         |  |   | (4    | )
|Other long-term obligations   |  |   | (274  | )
|                              |  |   |       |  
|Total liabilities assumed     |  |   | (819  | )
|                              |  |   |       |  
|Net purchase price allocated  |  | $ | 1,841 |  
|                              |  |   |       |  

During 2008, as a result of the finalization of our purchase price valuations and completion of our restructuring
plan, we recorded the following adjustments to the initial purchase price allocation, which are reflected in the table above:



| |  |  | an increase of $18 to the fair value of equity issued by NewPage Group in connection with the Acquisition based on the finalization of our valuation of NewPage
Groups equity
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | adjustments made to reduce retirement benefits for salaried employees to reflect a $29 reduction in benefit obligations under the SENA pension plans and a $25
reduction in benefit obligations under a SENA postretirement benefit plan
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an adjustment to recognize $39 of accrued expenses for employee-related costs for former SENA employees and $22 of costs for plant closures
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an increase of $281 to deferred income tax assets, primarily related to the completion of our analysis of the SENA opening balance sheet to recognize the difference
between the book and tax bases for the investment in our Canadian subsidiary and the completion of the related corporate reorganization that generated a worthless stock deduction for tax purposes related to the investment in our Canadian subsidiary
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The tax effect of these adjustments changed our net deferred income tax position from a net deferred income tax liability position to a
net deferred income tax asset position. As a result, in 2008 we restored the $39 valuation allowance on NewPage Holdings deferred income taxes that was originally reversed at December 21, 2007. We also recorded a valuation allowance
against our net deferred income tax benefit for federal income taxes and for certain state income taxes as it was more likely than not that we would not realize those benefits as a result of our history of losses. These adjustments resulted in
corresponding adjustments to the value assigned to property, plant and equipment. During the fourth quarter of 2008, we recognized an adjustment of $17 to increase depreciation and amortization expense as a result of the finalization of the purchase
price allocation.

The results of operations for the year ended December 31, 2007 include the results for SENA from the date of Acquisition. The
following table summarizes selected unaudited pro forma consolidated statements of operations data for the years ended December 31, 2007 and 2006 as if the Acquisition had been completed at the beginning of the year.



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|                                    |  |      |       |   |      |   |       |  
|----------------------------------- |  | ---- | ----- | - | ---- | - | ----- | -
|Unaudited pro forma financial data: |  | 2007 |       |   | 2006 |  
|Net sales                           |  | $    | 4,476 |   |      | $ | 4,068 |  
|Net income (loss):                  |  |      |       |   |      |   |       |  
|NewPage Holding                     |  |      | (109  | ) |      |   | (233  | )
|NewPage                             |  |      | (95   | ) |      |   | (213  | )

This selected unaudited pro forma consolidated financial data is included only for the purpose of illustration and
does not necessarily indicate what the operating results would have been if the Acquisition had been completed on that date. Moreover, this information does not necessarily indicate what our future operating results will be. This information
includes actual data in 2007 for the period subsequent to the date of the Acquisition. For periods prior to the Acquisition, the unaudited pro forma information includes certain expenses of SENA that are no longer incurred after the date of the
Acquisition.



|D. | INVENTORIES
|-- | -----------

Inventories as of December 31, 2008 and 2007,
consist of:



|                              |  |      |     |      |   |    
|----------------------------- |  | ---- | --- | ---- | - | ---
|                              |  | 2008 |     | 2007
|Finished and in-process goods |  | $    | 385 |      | $ | 304
|Raw materials                 |  |      | 110 |      |   | 123
|Stores and supplies           |  |      | 133 |      |   | 157
|                              |  |      |     |      |   |    
|                              |  | $    | 628 |      | $ | 584
|                              |  |      |     |      |   |    

Approximately 76% and 70% of inventories at December 31, 2008 and 2007 are valued using the LIFO method. If
inventories had been valued at current costs, they would have been valued at $630 and $564 at December 31, 2008 and 2007.



|E. | PROPERTY, PLANT AND EQUIPMENT
|-- | -----------------------------

Property, plant and equipment as of
December 31, 2008 and 2007, consist of:



|                                                |  |      |       |   |      |   |       |  
|----------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | -
|                                                |  | 2008 |       |   | 2007 |  
|Land and land improvements                      |  | $    | 110   |   |      | $ | 118   |  
|Buildings                                       |  |      | 361   |   |      |   | 419   |  
|Machinery and other                             |  |      | 3,297 |   |      |   | 3,313 |  
|Construction in progress                        |  |      | 78    |   |      |   | 80    |  
|                                                |  |      |       |   |      |   |       |  
|                                                |  |      | 3,846 |   |      |   | 3,930 |  
|Less: accumulated depreciation and amortization |  |      | (641  | ) |      |   | (366  | )
|                                                |  |      |       |   |      |   |       |  
|                                                |  | $    | 3,205 |   |      | $ | 3,564 |  
|                                                |  |      |       |   |      |   |       |  

See Note O for information related to the capital lease.



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|F. | OTHER ASSETS
|-- | ------------

Other assets as of December 31, 2008 and 2007,
consist of:



|                                                                 |  |      |     |      |   |    
|---------------------------------------------------------------- |  | ---- | --- | ---- | - | ---
|                                                                 |  | 2008 |     | 2007
|NewPage:                                                         |  |      |     |      |   |    
|Prepaid pension                                                  |  | $    |    |      | $ | 88 
|Financing costs (net of accumulated amortization of $38 and $26) |  |      | 59  |      |   | 70 
|Other                                                            |  |      | 50  |      |   | 40 
|                                                                 |  |      |     |      |   |    
|Subtotal                                                         |  |      | 109 |      |   | 198
|NewPage Holding                                                 |  |      |     |      |   |    
|Other                                                            |  |      | 1   |      |   | 2  
|                                                                 |  |      |     |      |   |    
|                                                                 |  | $    | 110 |      | $ | 200
|                                                                 |  |      |     |      |   |    

Amortization expense was $28, $19 and $17 for the years ended December 31, 2008, 2007 and 2006. Amortization
expense for the next five years is expected to be $28 in 2009, $28 in 2010, $29 in 2011, $26 in 2012 and $22 in 2013.

Amortization expense for NewPage was
$26, $17 and $15 for the years ended December 31, 2008, 2007 and 2006. Amortization expense for NewPage for the next five years is expected to be $27 in 2009, $26 in 2010, $27 in 2011, $24 in 2012 and $20 in 2013.



|G. | DERIVATIVE FINANCIAL INSTRUMENTS
|-- | --------------------------------

We periodically use derivative
financial instruments as part of our overall strategy to manage exposure to market risks associated with interest rate, foreign currency exchange rate and natural gas price fluctuations. We do not hold or issue derivative financial instruments for
trading purposes. We regularly monitor the credit-worthiness of the counterparties to our derivative instruments in order to manage our credit risk exposures under these agreements. Our risk of loss in the event of nonperformance by any counterparty
under derivative financial instrument agreements is not considered significant by management.

Interest Rates

We utilize interest-rate swap agreements to manage a portion of our interest-rate risk on our variable-rate debt instruments. As of December 31, 2008, we had
outstanding interest rate swaps, designated as cash-flow hedges, totaling $1,350, expiring from June 2009 through December 2012. We receive amounts based on LIBOR and pay amounts at a weighted-average fixed rate of 3.7%.

We measure the fair values of our interest rate swaps under a Level 2 input as defined by SFAS No. 157. We value the interest rate swaps using observable interest
rate yield curves for comparable assets and liabilities at commonly quoted intervals. As of December 31, 2008 and 2007, the fair values of the interest rate swaps were a liability of $(58) and $(2) included in other long-term obligations. We
received (paid) cash on our interest rate agreements of $(6), $5 and $4 for the years ended December 31, 2008, 2007 and 2006, which was recorded in interest expense.

Natural Gas

In order to hedge the future cost of natural gas consumed at our mills, we engage in financial
hedging of future gas purchase prices. We hedge with financial instruments that are priced based on New York Mercantile Exchange (NYMEX) natural gas futures contracts. We do not hedge basis (the effect of varying delivery points or locations) or
transportation costs (the cost to transport the gas from the delivery point to a company location) under these transactions.



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We measure the fair values of our natural gas contracts under a Level 2 input as defined by SFAS No. 157. We value
the natural gas contracts based on natural gas futures contracts priced on the NYMEX. As of December 31, 2008, the fair value of the natural gas contracts was a liability of $(2) included in other long-term obligations.

Commodity Basket Option

As of May 2, 2005, we entered
into a commodity basket option contract with J. Aron & Company, an affiliate of Goldman, Sachs & Co., and paid a premium of $72 for the contract, which was the fair value of the option at inception. We did not apply hedge
accounting treatment for this contract and recorded changes in the fair value of the contract in other (income) expense. Other (income) expense for the year ended December 31, 2006 included non-cash losses of $47 determined based on the
mark-to-market value of the option contract. This contract had a fair value of zero at December 31, 2007 and expired in April 2008.



|H. | OTHER CURRENT LIABILITIES
|-- | -------------------------

Accounts payable as of December 31,
2008 and 2007 includes $28 and zero of outstanding checks in excess of cash.

Other current liabilities as of December 31, 2008 and 2007 consist of:



|                                   |  |      |     |      |   |    
|---------------------------------- |  | ---- | --- | ---- | - | ---
|                                   |  | 2008 |     | 2007
|Payroll and employee benefit costs |  | $    | 97  |      | $ | 152
|Restructuring                      |  |      | 33  |      |   | 4  
|Interest                           |  |      | 25  |      |   | 26 
|Customer rebates                   |  |      | 28  |      |   | 25 
|Other                              |  |      | 87  |      |   | 83 
|                                   |  |      |     |      |   |    
|                                   |  | $    | 270 |      | $ | 290
|                                   |  |      |     |      |   |    



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|1. | LONG-TERM DEBT
|-- | --------------

The balances of long-term debt as of
December 31, 2008 and 2007 are as follows:



|                                                                                           |  |      |       |      |   |      
|------------------------------------------------------------------------------------------ |  | ---- | ----- | ---- | - | -----
|                                                                                           |  | 2008 |       | 2007
|NewPage:                                                                                   |  |      |       |      |   |      
|Term loan senior secured credit facility (face amount $1,584 and $1,600; LIBOR plus 3.75%) |  | $    | 1,541 |      | $ | 1,552
|Floating rate senior secured notes (LIBOR plus 6.25%)                                      |  |      | 225   |      |   | 225  
|10% senior secured notes (face amount $806)                                                |  |      | 804   |      |   | 804  
|12% senior subordinated notes (face amount $200)                                           |  |      | 199   |      |   | 198  
|Capital lease                                                                              |  |      | 147   |      |   | 146  
|                                                                                           |  |      |       |      |   |      
|Total long-term debt, including current portion                                            |  |      | 2,916 |      |   | 2,925
|Current portion of long-term debt                                                          |  |      | 16    |      |   | 16   
|                                                                                           |  |      |       |      |   |      
|Subtotal                                                                                   |  |      | 2,900 |      |   | 2,909
|NewPage Holding                                                                           |  |      |       |      |   |      
|Senior unsecured NewPage Holding PIK Notes (face amount $190 and $171; LIBOR plus 7.00%)   |  |      | 182   |      |   | 161  
|                                                                                           |  |      |       |      |   |      
|Long-term debt                                                                             |  | $    | 3,082 |      | $ | 3,070
|                                                                                           |  |      |       |      |   |      

In connection with the Acquisition, NewPage entered into senior secured credit facilities consisting of a $1,600
senior secured term loan facility and a $500 senior secured revolving credit facility and applied the proceeds from the term loan to finance a portion of the Acquisition, repay the prior senior secured credit facilities and pay related expenses.
Included in interest expense for the year ended December 31, 2007, is $17 for the write-off of financing costs related to the pre-Acquisition term loan and unused bridge financing commitment fees.

Substantially all of our assets are pledged as collateral under our various debt agreements.

Principal payments on long-term debt for the next five years are payable as follows: $16 in 2009, $16 in 2010, $16 in 2011, $1,047 in 2012 and $406 in 2013. For NewPage, principal payments on long-term debt for the
next five years are payable as follows: $16 in 2009, $16 in 2010, $16 in 2011, $1,047 in 2012 and $216 in 2013.

See Note O for additional information on
the capital lease.

Senior Secured Credit Facilities

The senior secured credit facilities consist of a senior secured term loan of $1,600 and a senior secured revolving credit facility of $500. The senior secured credit facilities may be accelerated if NewPage, as borrower, is unable to
refinance the senior secured and subordinated notes prior to their maturity. Subject to customary conditions, including the absence of defaults under the revolving credit facility, amounts available under the revolving credit facility may be
borrowed, repaid and re-borrowed, including in the form of letters of credit and swing line loans, until the maturity date thereof. The revolving credit facility may be utilized to fund working capital, to fund permitted acquisitions and capital
expenditures, and for other general corporate purposes. The availability under the revolving credit facility is reduced by NewPages outstanding letters of credit, which totaled $87 and $74 at December 31, 2008 and 2007. The amount of
loans and letters of credit available to NewPage pursuant to the revolving credit facility is limited to the lesser of $500 or an amount determined pursuant to a borrowing base. Based on availability under the borrowing base as of December 31,
2008, NewPage had $341 of additional borrowing availability under the revolving credit facility. There were no borrowings outstanding under the revolving credit facility as of December 31, 2008 or 2007. The revolving credit facility matures the
first to



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occur of (i) December 21, 2012 and (ii) the date that is 181 days prior to the scheduled maturity date of the term loan, senior secured notes,
senior subordinated notes, the NewPage Holding PIK notes, and any refinancing thereof. Amounts outstanding under the revolving credit facility bear interest, at the option of NewPage, at a rate per annum equal to either (i) the base rate plus
1.00%, or (ii) LIBOR plus 2.00%. The interest rate spreads are subject to reduction upon meeting certain leverage thresholds or upon the occurrence of an initial public offering. Certain customary fees are payable to the lenders and the agents
under the senior secured credit facilities, including, without limitation, a commitment fee for the revolving credit facility based upon non-use of available funds and letter of credit fees and issuer fronting fees.

The term loan matures on the first to occur of (i) December 21, 2014 and (ii) the date that is 181 days prior to the scheduled maturity date of the senior
secured notes, senior subordinated notes, the NewPage Holding PIK notes, and any refinancing thereof and will amortize in equal quarterly installments in an aggregate annual amount equal to 1% of the original principal amount of the senior term
facility, with the balance payable at maturity. Future payments are reduced ratably for early principal repayments. The term loan is subject to mandatory prepayment with, in general, (i) 100% of the net cash proceeds of certain asset sales,
subject to certain reinvestment rights; (ii) 100% of the net cash proceeds of certain insurance and condemnation payments, subject to certain reinvestment rights; (iii) 50% of the net cash proceeds of equity offerings; (iv) 100% of
the net cash proceeds of debt incurrence (other than debt incurrence permitted under the term facility); and (v) 50% of excess cash flow, as defined in the senior secured credit facility; generally the mandatory prepayment rates decline in
accordance with a leverage ratio test. The loans under the term loan facility bear interest, at the option of NewPage, at a rate per annum equal to either (i) the base rate plus 2.75%, or (ii) LIBOR plus 3.75%. The interest rate spreads
are subject to reduction upon meeting certain leverage thresholds or upon the occurrence of an initial public offering. The weighted-average interest rate on the outstanding balance at December 31, 2008 and 2007 was 5.3% and 8.7%.

The senior secured credit facilities are jointly and severally guaranteed by NewPage Holding and each of NewPages guarantor subsidiaries. Subject to certain
customary exceptions, NewPage and each of its guarantors granted to the lenders under the revolving credit facility a first priority security interest in and lien on NewPages and NewPages guarantor subsidiaries present and future
cash, deposit accounts, accounts receivable, inventory and intercompany debt owed to NewPage, NewPage Holding and NewPages guarantor subsidiaries. Subject to certain customary exceptions, NewPage and each of the guarantors granted to the
lenders under the term loan (i) a first priority security interest in and lien on substantially all of NewPages and NewPages guarantor subsidiaries present and future property and assets (other than cash, deposit accounts,
accounts receivable, inventory and intercompany debt owed to NewPage, NewPage Holding and NewPages guarantor subsidiaries), including the capital stock of the guarantor subsidiaries and 65% of the capital stock of NewPages foreign
subsidiaries, if any, as well as NewPage capital stock owned by NewPage Holding and (ii) a second priority security interest in and lien on NewPage and NewPages guarantor subsidiaries present and future cash, deposit accounts,
accounts receivable, inventory and intercompany debt owed to NewPage, NewPage Holding or the guarantor subsidiaries.

The senior secured credit facilities
contain various customary affirmative and negative covenants (subject to customary exceptions and certain existing obligations and liabilities), including, but not limited to, restrictions on NewPages ability and the ability of NewPages
subsidiaries to (i) dispose of assets, (ii) incur additional indebtedness and guarantee obligations, (iii) repay other indebtedness, (iv) pay certain restricted payments and dividends, (v) create liens on assets or prohibit
the creation of liens on assets, (vi) make investments, loans or advances, (vii) restrict distributions to NewPage from its subsidiaries, (viii) make certain acquisitions, (ix) engage in mergers or consolidations, (x) enter
into sale and leaseback transactions, (xi) engage in certain transactions with



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subsidiaries that are not guarantors of the senior secured credit facilities or with affiliates or (xii) amend the terms of the notes and otherwise
restrict corporate activities. In addition, under the term loan (and under the revolving credit facility to the extent that NewPages unused borrowing availability under the revolving credit facility plus excess cash are below $50 for 10
consecutive business days or $25 for three consecutive days), NewPage is required to comply with specified financial ratios and tests, including a minimum interest and fixed charge coverage ratios, maximum senior and total leverage ratios and
maximum capital expenditures. The required financial covenant levels become more restrictive over the term of the senior secured credit facilities. By December 31, 2009, the leverage ratio declines to 5.00 with further decreases over the
following three years to 3.75, the senior leverage ratio declines to 2.50 with further decreases over the following three years to 1.25, the interest coverage ratio increases to 2.00 with a further increase to 2.50 the following year and the fixed
charge coverage ratio increases to 1.10. Certain items included in results of operations are excluded under the definition of consolidated adjusted EBITDA used to calculate compliance with the financial covenants in our senior secured
credit facilities. These include items such as equity award expense, the effect of LIFO inventory accounting, non-cash pension expense, cost of restructuring activities and costs related to the integration of the two businesses, among other items.

Below are the required financial covenant levels and the actual levels as of December 31, 2008:



|                                    |  |          |  |       
|----------------------------------- |  | -------- |  | ------
|                                    |  | Covenant |  | Actual
|Maximum Leverage Ratio              |  | 5.75     |  | 4.77  
|Maximum Senior Leverage Ratio       |  | 3.25     |  | 2.52  
|Minimum Interest Coverage Ratio     |  | 1.75     |  | 2.43  
|Minimum Fixed Charge Coverage Ratio |  | 1.00     |  | 1.41  

We were in compliance with all covenants as of December 31, 2008. Despite the current negative economic
environment, we believe our cash flows from operations, available borrowings under our revolving credit facility and cash and cash equivalents will be adequate to meet our liquidity needs for the next twelve months. Based on our projections for
2009, we believe that we will be in compliance with all financial covenants in 2009 and based on our evaluation of the current credit worthiness of the participating lenders under our revolving credit facility, believe we will continue to be able to
access funds under this facility in 2009. Our 2009 projections anticipate pricing and volume trends consistent with the unfavorable supply versus demand trend that began in the fourth quarter of 2008 and continued volatility in energy and commodity
costs, although at lower levels when compared to the 2008 peak.

We believe if volumes were to decrease somewhat compared to current projections, that we
would be able to take actions such as capacity reductions or redundancy programs to maintain compliance with our financial covenants.

If a violation of
our financial covenants were likely, we would attempt to obtain a waiver or amendment to the covenants. In addition, the senior secured credit agreements allow the shareholders of NewPage Group to make an equity contribution to NewPage within 10
days of the delivery of the compliance certificate to the administrative agent. The equity contribution would be added to consolidated adjusted EBITDA to determine compliance for an amount up to a maximum of $50 twice per year. We cannot provide
assurance that waivers or amendments could be obtained or whether the shareholders of NewPage Group would make an equity contribution to cure a violation. If we did violate our financial covenants and were not able to obtain a waiver or amendment to
the covenants and the shareholders of NewPage Group did not make an equity contribution to cure the violation, the debt would become immediately payable. We do not have sufficient cash on hand to satisfy such a demand. Accordingly, the inability to
comply with the covenants or obtain waivers or amendments for non-compliance would have a material adverse effect on our financial position, results of operations, liquidity and cash flows.

Floating Rate and 10% Senior Secured Notes

The senior secured
notes consist of $806 face value of 10% senior secured notes and $225 of floating rate senior secured notes issued by NewPage. The senior secured notes mature on May 1, 2012. Interest on the 10% senior secured notes is payable semi-annually in
arrears on May 1 and November 1. Interest on the 10% senior secured notes is computed on the basis of a 360-day year comprised of twelve 30-day months. Interest on the floating rate senior secured notes accrues at a rate per annum, reset
quarterly, equal to LIBOR plus 6.25% (9.4% and 11.2% at December 31, 2008 and 2007). NewPage pays interest on the floating rate senior secured notes quarterly, in arrears, on every February 1, May 1, August 1 and
November 1.

The senior secured notes are secured on a second-priority basis by liens on all of the assets of NewPage and the guarantors other than
the collateral securing the revolving credit facility and the stock of NewPages subsidiaries; are subordinated, to the extent of the value of the assets securing that indebtedness, to the senior secured credit facility; are senior in right of
payment to NewPages existing and future subordinated indebtedness, including the senior subordinated notes; and are jointly and severally unconditionally guaranteed by most of NewPages subsidiaries.

At any time prior to May 1, 2009, NewPage may redeem all or a part of the 10% senior secured notes at a redemption price equal to 100% plus a make-whole
premium. On or after May 1, 2009, NewPage may redeem all or a part of the 10% senior secured notes at an initial redemption price of 106%. On or after May 1, 2009, NewPage may redeem all or a part of the floating rate senior secured notes
at an initial redemption price of 103%. If a change of control occurs, each holder of senior secured notes has the right to require NewPage to repurchase all or any part of that holders senior secured notes at 101% of the face value.

The senior secured notes contain various customary covenants (subject to customary exceptions and certain existing obligations and liabilities),
including, but not limited to, restrictions on NewPages ability and the ability of its subsidiaries to (i) dispose of assets, (ii) incur additional indebtedness and guarantee obligations or issue preferred stock, (iii) repay
other indebtedness, (iv) pay certain restricted payments and dividends, (v) create liens on assets or prohibit the creation of liens on assets, (vi) make investments, loans or advances, (vii) restrict distributions to NewPage
from its subsidiaries, (viii) make certain acquisitions, (ix) engage in mergers or consolidations, (x) enter into sale and leaseback transactions, (xi) engage in certain transactions with subsidiaries that are not guarantors of
the senior secured credit facilities or with affiliates or (xii) amend the terms of the notes and otherwise restrict corporate activities.



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12% Senior Subordinated Notes

The senior subordinated notes, issued by NewPage, consist of $200 face value senior subordinated notes that mature on May 1, 2013. The senior subordinated notes are general unsecured obligations and are
subordinated in right of payment to all NewPages existing and future senior debt, including the senior secured notes and borrowings under the senior secured credit facilities. Interest on the senior subordinated notes accrues at the rate of
12.0% per annum and is payable semi-annually in arrears on May 1 and November 1. The senior subordinated notes are jointly and severally guaranteed by most of NewPages subsidiaries.

At any time prior to May 1, 2009, NewPage may redeem all or a part of the senior subordinated notes at a redemption price equal to 100% plus a
make-whole premium. On or after May 1, 2009, NewPage may redeem all or a part of the senior subordinated notes at an initial redemption price of 106%. If a change of control occurs, each holder of the senior subordinated notes has
the right to require NewPage to repurchase all or any part of that holders senior subordinated notes at 101% of the face value.

The senior
subordinated notes contain various customary covenants (subject to customary exceptions and certain existing obligations and liabilities), including, but not limited to, restrictions on NewPages ability and the ability of its subsidiaries to
(i) dispose of assets, (ii) incur additional indebtedness and guarantee obligations or issue preferred stock, (iii) repay other indebtedness, (iv) pay certain restricted payments and dividends, (v) create liens on assets or
prohibit the creation of liens on assets, (vi) make investments, loans or advances, (vii) restrict distributions to NewPage from its subsidiaries, (viii) make certain acquisitions, (ix) engage in mergers or consolidations,
(x) enter into sale and leaseback transactions, (xi) engage in certain transactions with subsidiaries that are not guarantors of the senior secured credit facilities or with affiliates or (xii) amend the terms of the notes and
otherwise restrict corporate activities.

NewPage Holding Senior Unsecured PIK Notes

The NewPage Holding PIK Notes mature on November 1, 2013. Interest accrues at a rate per annum, reset semi-annually, equal to LIBOR plus 7.00% (10.3% and 11.8% at
December 31, 2008 and 2007) and is payable by the issuance of additional NewPage Holding PIK Notes until maturity. The NewPage Holding PIK Notes are unsecured and are not guaranteed.

NewPage Holding may redeem all or part of the NewPage Holding PIK Notes at specified redemption prices. Upon a change of control, as defined in the NewPage Holding PIK
Notes indenture, and certain asset sales, holders of the NewPage Holding PIK Notes will have the right to require NewPage Holding to repurchase all or part of the holders NewPage Holding PIK Notes.

The NewPage Holding PIK Notes indenture contains various customary negative covenants, including restrictions on our ability and the ability of our subsidiaries to
(i) incur indebtedness, (ii) allow liens to exist, (iii) permit restrictions to exist on dividends by our subsidiaries, (iv) merge, consolidate or sell assets and (v) enter into transactions with affiliates. The covenants
applicable to us and our subsidiaries are substantially the same as the corresponding covenants contained in the indenture for the senior subordinated notes. Additionally, the NewPage Holding PIK Notes indenture contains restrictions on NewPage
Holdings ability to (i) incur additional indebtedness other than (a) NewPage Holding PIK Notes paid as interest and (b) guarantees of the debt obligations of subsidiaries of NewPage Holding and (ii) pay dividends. The
NewPage Holding PIK Notes indenture contains customary events of default.



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|J. | INCOME TAXES
|-- | ------------

The principal current and noncurrent deferred tax
assets and liabilities as of December 31, 2008 and 2007 are as follows:



|                                                 |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|------------------------------------------------ |  | -------------- | ----- | - | ------- | - | ---- | ---- |  | - | ----- | - |  | - | ---- | -
|                                                 |  | NewPageHolding |       |   | NewPage |  
|                                                 |  | 2008           |       |   | 2007    |   |      | 2008 |  |   | 2007  |  
|Deferred tax assets:                             |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|Net operating loss carryforwards                 |  | $              | 903   |   |         | $ | 603  |      |  | $ | 903   |   |  | $ | 602  |  
|Compensation-related costs                       |  |                | 296   |   |         |   | 154  |      |  |   | 296   |   |  |   | 154  |  
|Intangible assets                                |  |                | 60    |   |         |   | 67   |      |  |   | 60    |   |  |   | 67   |  
|Tax credits                                      |  |                | 64    |   |         |   | 42   |      |  |   | 64    |   |  |   | 42   |  
|Other accruals and reserves                      |  |                | 94    |   |         |   | 55   |      |  |   | 68    |   |  |   | 38   |  
|                                                 |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|Total deferred tax assets                        |  |                | 1,417 |   |         |   | 921  |      |  |   | 1,391 |   |  |   | 903  |  
|Valuation allowance                              |  |                | (649  | ) |         |   | (391 | )    |  |   | (623  | ) |  |   | (391 | )
|                                                 |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|Net deferred tax assets                          |  |                | 768   |   |         |   | 530  |      |  |   | 768   |   |  |   | 512  |  
|                                                 |  |                |       |  
|Deferred tax liabilities:                        |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|Property, plant and equipment                    |  |                | (761  | ) |         |   | (760 | )    |  |   | (761  | ) |  |   | (760 | )
|Inventory                                        |  |                | (18   | ) |         |   | (10  | )    |  |   | (18   | ) |  |   | (10  | )
|Other                                            |  |                | (2    | ) |         |   | (16  | )    |  |   | (2    | ) |  |   | (16  | )
|                                                 |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|Total deferred tax liabilities                   |  |                | (781  | ) |         |   | (786 | )    |  |   | (781  | ) |  |   | (786 | )
|                                                 |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|                                                 |  |                |       |  
|Net deferred tax liability                       |  | $              | (13   | ) |         | $ | (256 | )    |  | $ | (13   | ) |  | $ | (274 | )
|                                                 |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|                                                 |  |                |       |  
|Included in the balance sheet:                   |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|Other current assetsdeferred tax asset          |  | $              |      |   |         | $ | 19   |      |  | $ |      |   |  | $ | 19   |  
|Other current liabilitiesdeferred tax liability |  |                | (7    | ) |         |   |     |      |  |   | (7    | ) |  |   |     |  
|Noncurrent net deferred tax liability            |  |                | (6    | ) |         |   | (275 | )    |  |   | (6    | ) |  |   | (293 | )
|                                                 |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  
|Net deferred tax liability                       |  | $              | (13   | ) |         | $ | (256 | )    |  | $ | (13   | ) |  | $ | (274 | )
|                                                 |  |                |       |   |         |   |      |      |  |   |       |   |  |   |      |  

We adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes,
on January 1, 2007. As a result of the implementation of Interpretation 48, we recognized a $1 reduction in deferred tax assets and a corresponding decrease in the valuation allowance. A reconciliation of the beginning and ending amount of
unrecognized tax benefits is as follows:



|                                     |  |   |    
|------------------------------------ |  | - | ---
|Balance at January 1, 2007           |  | $ | 1  
|Additions related to the Acquisition |  |   | 62 
|                                     |  |   |    
|Balance at December 31, 2007         |  |   | 63 
|Additions related to the Acquisition |  |   | 58 
|                                     |  |   |    
|Balance at December 31, 2008         |  | $ | 121
|                                     |  |   |    



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The significant components of the income tax provision (benefit) are as follows:



|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ---- | -- | ---- | - | ------ | ---- |  | - | ---- | -
|                                                                                                                                                                                                     |  | Year Ended December 31, |     
|                                                                                                                                                                                                     |  | 2008                    |      |    | 2007 |   |        | 2006 | 
|NewPage Holding:                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Deferred income tax expense (benefit):                                                                                                                                                               |  |                         |      |    |      |   |        |      |  |   |      |  
|U.S. federal                                                                                                                                                                                         |  | $                       | (58  | )  |      | $ | 1      |      |  | $ | (19  | )
|State and local                                                                                                                                                                                      |  |                         | (34  | )  |      |   | (4     | )    |  |   |     |  
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Total deferred income tax expense (benefit)                                                                                                                                                          |  |                         | (92  | )  |      |   | (3     | )    |  |   | (19  | )
|Valuation allowance                                                                                                                                                                                  |  |                         | 96   |    |      |   | 3      |      |  |   | 16   |  
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|                                                                                                                                                                                                     |  |                         | 4    |    |      |   |       |      |  |   | (3   | )
|Allocation to other comprehensive income (loss)                                                                                                                                                      |  |                         |     |    |      |   | 6      |      |  |   |     |  
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Income tax (benefit)                                                                                                                                                                                 |  | $                       | 4    |    |      | $ | (6     | )    |  | $ | (3   | )
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|                                                                                                                                                                                                     | 
|                                                                                                                                                                                                     |  | Year Ended December 31, |     
|                                                                                                                                                                                                     |  | 2008                    |      |    | 2007 |   |        | 2006 | 
|NewPage:                                                                                                                                                                                             |  |                         |      |    |      |   |        |      |  |   |      |  
|Deferred income tax expense (benefit):                                                                                                                                                               |  |                         |      |    |      |   |        |      |  |   |      |  
|U.S. federal                                                                                                                                                                                         |  | $                       | (60  | )  |      | $ | 10     |      |  | $ | (13  | )
|State and local                                                                                                                                                                                      |  |                         | (33  | )  |      |   | (4     | )    |  |   | 1    |  
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Total deferred income tax expense (benefit)                                                                                                                                                          |  |                         | (93  | )  |      |   | 6      |      |  |   | (12  | )
|Valuation allowance                                                                                                                                                                                  |  |                         | 87   |    |      |   | 4      |      |  |   | 8    |  
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|                                                                                                                                                                                                     |  |                         | (6   | )  |      |   | 10     |      |  |   | (4   | )
|Allocation to other comprehensive income (loss)                                                                                                                                                      |  |                         | (6   | )  |      |   | 6      |      |  |   |     |  
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Income tax (benefit)                                                                                                                                                                                 |  | $                       |     |    |      | $ | 4      |      |  | $ | (4   | )
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|                                                                                                                                                                                                    
|The following tables summarizes the major differences between the actual income tax provision (benefit) attributable to continuing operations and taxes computed at the U.S. federal
statutory rate: | 
|                                                                                                                                                                                                     | 
|                                                                                                                                                                                                     |  | Year Ended December 31, |     
|                                                                                                                                                                                                     |  | 2008                    |      |    | 2007 |   |        | 2006 | 
|NewPage Holding:                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Income tax benefit computed at the U.S. federal statutory rate of 35%                                                                                                                                |  | $                       | (54  | )  |      | $ | (10    | )    |  | $ | (13  | )
|State and local income taxes, net of federal benefit                                                                                                                                                 |  |                         | (34  | )  |      |   | (4     | )    |  |   | 2    |  
|Permanent differences                                                                                                                                                                                |  |                         |     |    |      |   | 6      |      |  |   | 3    |  
|Tax credits                                                                                                                                                                                          |  |                         | (8   | )  |      |   | (1     | )    |  |   | (2   | )
|Valuation allowance                                                                                                                                                                                  |  |                         | 96   |    |      |   | 3      |      |  |   | 16   |  
|Other                                                                                                                                                                                                |  |                         | 4    |    |      |   |       |      |  |   | (9   | )
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Income tax (benefit)                                                                                                                                                                                 |  | $                       | 4    |    |      | $ | (6     | )    |  | $ | (3   | )
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Effective tax rate                                                                                                                                                                                   |  |                         | (3.2 | )% |      |   | 19.1   | %    |  |   | 8.3  | %
|                                                                                                                                                                                                     | 
|                                                                                                                                                                                                     |  | Year Ended December 31, |     
|                                                                                                                                                                                                     |  | 2008                    |      |    | 2007 |   |        | 2006 | 
|NewPage:                                                                                                                                                                                             |  |                         |      |    |      |   |        |      |  |   |      |  
|Income tax benefit computed at the U.S. federal statutory rate of 35%                                                                                                                                |  | $                       | (46  | )  |      | $ | (1     | )    |  | $ | (7   | )
|State and local income taxes, net of federal benefit                                                                                                                                                 |  |                         | (33  | )  |      |   | (4     | )    |  |   | 2    |  
|Permanent differences                                                                                                                                                                                |  |                         |     |    |      |   | 6      |      |  |   | 3    |  
|Tax credits                                                                                                                                                                                          |  |                         | (8   | )  |      |   | (1     | )    |  |   | (2   | )
|Valuation allowance                                                                                                                                                                                  |  |                         | 87   |    |      |   | 4      |      |  |   | 8    |  
|Other                                                                                                                                                                                                |  |                         |     |    |      |   |       |      |  |   | (8   | )
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Income tax (benefit)                                                                                                                                                                                 |  | $                       |     |    |      | $ | 4      |      |  | $ | (4   | )
|                                                                                                                                                                                                     |  |                         |      |    |      |   |        |      |  |   |      |  
|Effective tax rate                                                                                                                                                                                   |  |                         | (0.2 | )% |      |   | (101.4 | )%   |  |   | 18.6 | %



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We file income tax returns in the United States for federal and various state jurisdictions and in Canada. As of
December 31, 2008, periods beginning in 2005 are still open for examination by various taxing authorities.

The federal net operating loss
carryforward at December 31, 2008 was $1,790 and expires between 2021 and 2028. The Canadian federal net operating loss carryforward available to reduce Canadian federal taxable income at December 31, 2008 was C$1,116 and expires between
2025 and 2027. We have recorded a valuation allowance against our net deferred tax assets for U.S. and Canadian federal income taxes and for certain states since it is more likely than not that we will not realize these benefits as a result of the
negative evidence presented by our history of losses. A reconciliation of the valuation allowance on deferred tax assets is as follows:



|                                |  |                |     |         |   |    
|------------------------------- |  | -------------- | --- | ------- | - | ---
|                                |  | NewPageHolding |     | NewPage
|Balance at December 31, 2007    |  | $              | 391 |         | $ | 391
|Acquisition-related adjustments |  |                | 162 |         |   | 145
|Current year activity           |  |                | 96  |         |   | 87 
|                                |  |                |     |         |   |    
|Balance at December 31, 2008    |  | $              | 649 |         | $ | 623
|                                |  |                |     |         |   |    

During 2008, we recognized an increase in deferred income tax assets of $281, primarily related to the completion
of our analysis of the SENA opening balance sheet to recognize the difference between the book and tax bases for the investment in our Canadian subsidiary and the completion of the related corporate reorganization that generated a worthless stock
deduction for tax purposes related to the investment in our Canadian subsidiary. These changes also resulted in an increase in the amount of unrecognized tax benefits of $58.

The tax effect of these adjustments changed our net deferred income tax position from a net deferred income tax liability position to a net deferred income tax asset position. As a result, in 2008 we restored the $39
valuation allowance on NewPage Holdings deferred income taxes that was originally reversed at December 21, 2007. We also recorded a valuation allowance against our net deferred income tax benefit for federal income taxes and for certain
state income taxes as it was more likely than not that we would not realize those benefits as a result of our history of losses. Because of the change to a net deferred income tax asset position, we also reversed the tax benefit recorded in 2007 for
NewPage Holding and recognized income tax expense of $4 in the fourth quarter of 2008, as well as the reversal of the allocation to other comprehensive income (loss) for income tax expense of $6 for NewPage.



|K. | EQUITY
|-- | ------

As of December 31, 2008, NewPage Group was the sole
holder of record of the shares of NewPage Holding common stock and NewPage Holding was the sole holder of record of the shares of NewPage common stock. There is no established public trading market for our common stock and we have never paid or
declared a cash dividend on the common stock. Our debt agreements restrict our ability and the ability of our subsidiaries to pay dividends. On December 21, 2007, Escanaba Timber contributed all of its outstanding common stock of NewPage
Holding to NewPage Group in exchange for NewPage Group common stock.

In conjunction with the Acquisition, we recorded an equity contribution of $347 from
NewPage Group, which consists of the fair value for the NewPage Group PIK Notes of $206 and the fair value of the 19.9% ownership of NewPage Groups common stock issued to SEO of $141.



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Equity Compensation

Maple Timber Management Interests

Certain members of management were granted Common Percentage Interests (Management Interests)
in Maple Timber, our former indirect parent. In connection with the equity reorganization, all unvested Management Interests became vested as of December 21, 2007, the Management Interests were exchanged for NewPage Group common stock, and we
recognized additional expense of $8 in 2007 as a result of the exchange. The fair value of Management Interests granted totaled $3 for the year ended December 31, 2006.

We have recognized expense related to the Management Interests of $13 and $11, included in selling, general and administrative expenses, for the years ended December 31, 2007 and 2006. The 2007 expense includes
$4 for the repurchase of unvested equity interests granted to former executive officers and $8 for the vesting of the unvested Management Interests. The 2006 expense includes $9 for the repurchase of unvested equity interests granted to former
executive officers.

Under repurchase agreements entered into with each of the executive officers, Maple Timber agreed to repurchase each executive
officers Common Percentage Interests in certain situations, including termination of employment by NewPage without cause. NewPage loaned an aggregate of $11 to Maple Timber to enable it to satisfy its repurchase obligations in 2006 and 2007.
The same repurchase obligations apply to NewPage Group common stock issued to replace the exchanged Common Percentage Interests and in 2008, NewPage loaned $6 to NewPage Group to enable it to satisfy its repurchase obligations. These loans were
recorded as a reduction in shareholders equity as repayment is not assured.

Furthermore, certain other members of management were issued options to
purchase Common Percentage Interests that only vest upon the occurrence of a change of control or an initial public offering. In connection with the equity reorganization these options were converted to options to purchase NewPage Group common
stock.

NewPage Group Equity Incentive Plan

In 2007,
the board of directors of NewPage Group adopted the NewPage Group Equity Incentive Plan and authorized 9.9 million shares for issuance under the plan. Grants under the incentive plan may include stock options, stock appreciation rights,
restricted stock, performance awards (including cash performance awards) and other equity-based awards. Grants of stock options and other stock-based compensation awards are approved by the compensation committee of NewPage Groups board of
directors.

Stock options are the only form of compensation granted under the incentive plan as of December 31, 2008. Stock options expire not later
than ten years from the date of grant. Effective as of December 21, 2007, options on 6,282,315 shares were awarded under the plan. Half of the options will vest in three equal annual installments through December 31, 2010. The other 50% of
the options will vest in three equal annual installments based on meeting performance targets at the sole discretion of the compensation committee, during 2008, 2009 and 2010. To the extent performance targets are not met in a given year, they can
still be met on a cumulative basis in a subsequent period during the three-year vesting period. All options will vest only to the extent the employee remains employed by us on each vesting date. However, a portion of the options will automatically
vest upon a change of control or an initial public offering. Because the performance targets are determined annually, the performance-based options will not be considered granted until the performance criteria are approved by the compensation
committee. Thus, while the performance-based options have already been awarded, for accounting purposes they will not be considered granted until the performance criteria are approved by the compensation committee in a future period. The performance
criteria for the 2008 tranche of the performance-based options were



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approved on March 24, 2008 and those options were considered granted at that date. Expense for these grants was recognized during the first three
quarters of 2008. During the fourth quarter of 2008, the previously recognized expense of $7 associated with these grants was reversed when it became improbable that performance targets would be met for 2008. Awards made in 2008 have similar terms.

The following table summarizes activity in the plan:



|                                                                   |  |         |   |  |                               |      
|------------------------------------------------------------------ |  | ------- | - |  | ----------------------------- | -----
|Shares of NewPage Group issuable under
stock options, in thousands |  | Options |   |  | Weighted-averageexerciseprice
|Outstanding at December 31, 2007                                   |  | 3,373   |   |  | $                             | 19.83
|Granted                                                            |  | 1,692   |   |  |                               | 21.26
|Forfeited                                                          |  | (1,043  | ) |  |                               | 21.22
|                                                                   |  |         |   |  |                               |      
|Outstanding at December 31, 2008                                   |  | 4,022   |   |  |                               | 20.46
|                                                                   |  |         |   |  |                               |      
|Exercisable at December 31, 2008                                   |  | 847     |   |  |                               | 21.24
|                                                                   |  |         |   |  |                               |      

The outstanding options and the exercisable options at December 31, 2008, each have a weighted-average
remaining contractual life of 9.0 years. As of December 31, 2008, unrecognized compensation cost for outstanding options totaled $14. Stock compensation expense is expected to be $9, $4 and $1 in 2009, 2010 and 2011 for these options.

We utilize a Black-Scholes pricing model to determine the fair value of options granted in accordance with SFAS 123R. The determination of the fair value
of stock-based payment awards on the date of grant using an option-pricing model is affected by the stock price as well as assumptions regarding a number of other variables. These variables include expected stock price volatility over the term of
the awards and projected employee stock option exercise behaviors (term of option). We estimate the expected term of options granted by incorporating the contractual term of the options and employees expected exercise behaviors. We estimate
the volatility of our common stock by considering volatility of appropriate peer companies and adjusting for factors unique to our stock, including the effect of debt leverage. Assumptions used to determine the fair value of option grants are as
follows:



|                                               |  |              |       |   |      |   |       |  
|---------------------------------------------- |  | ------------ | ----- | - | ---- | - | ----- | -
|                                               |  | Year ended   |      
|                                               |  | December 31, |      
|                                               |  | 2008         |       |   | 2007 |  
|Weighted-average fair value of options granted |  | $            | 12.33 |   |      | $ | 12.28 |  
|Weighted average assumptions used for grants:  |  |              |       |   |      |   |       |  
|Expected volatility                            |  |              | 60    | % |      |   | 60    | %
|Risk-free interest rate                        |  |              | 3.2   | % |      |   | 3.7   | %
|Expected life of option (in years)             |  |              | 5     |   |      |   | 6     |  

We have recognized expense for options of $18 and $1, included in selling, general and administrative expenses,
for the years ended December 31, 2008 and 2007.



|l. | RETIREMENT AND OTHER POSTRETIREMENT BENEFITS
|-- | --------------------------------------------

We provide retirement
benefits for certain employees. In the U.S., pension benefits are provided through employer-funded qualified and non-qualified (unfunded) defined benefit plans and are a function of either years worked multiplied by a flat monetary benefit, or of
years worked multiplied by the highest five years average earnings out of the last ten years of an employees pensionable service. As of January 1, 2009, benefits for U.S. salaried employees will be determined under a cash balance plan and
existing accumulated



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benefits will be frozen. In Canada, pension benefits are provided through employer- and employee-funded defined benefit
plans and benefits are a function of years worked and average final earnings during an employees pensionable service. Certain of the pension benefits are provided in accordance with collective bargaining agreements. Where pre-funding is
required, independent actuaries determine the employer contributions necessary to meet the future obligations of the plans and such plan assets are held in trust for the plans. Benefits under our Canadian supplemental pension plan are unfunded but
are secured through a letter of credit arrangement (Note N).

We also provide other retirement and post-employment benefits for certain employees, which
may include healthcare benefits for certain retirees prior to their reaching age 65, healthcare benefits for certain retirees on and after their reaching age 65, long-term disability benefits, continued group life insurance and extended health and
dental benefits. These benefits are provided through various employer- and/or employee-funded postretirement benefit plans. We generally fund the employer portion of these other postretirement benefits on a pay-as-you-go basis. In certain instances
in the United States, benefits had been voluntarily pre-funded through a Voluntary Employee Benefit Association (VEBA). For certain U.S. postretirement healthcare plans, the employer contributions toward the annual healthcare premium
equivalent for retirees are limited to a specific monetary value or percentage, in which instance the remainder of the premium equivalent is the responsibility of the retiree. Certain of the other postretirement benefits are provided in accordance
with collective bargaining agreements.

We also sponsor defined contribution plans for certain U.S. employees. Employees may elect to contribute a
percentage of their salary on a pre-tax basis, subject to regulatory limitations, into an account with an independent trustee which can then be invested in a variety of investment options at the employees discretion. We may also contribute to
the employees account depending upon the requirements of the plan. For certain employees these employer contributions may be in the form of a specified percentage of each employees total compensation or in the form of discretionary
profit-sharing that may vary depending on the achievement of certain objectives. Certain of the U.S. defined contribution benefits are provided in accordance with collective bargaining agreements. During the years ended December 31, 2008, 2007
and 2006, we incurred expenses of $21, $16 and $15 for employer contributions to these defined contribution plans.

The following tables set forth the
changes in the benefit obligation relating to defined benefit pension and other postretirement benefits and fair value of plan assets during the year and also the funded status of our defined benefit pension and other postretirement benefit plans
showing the amounts recognized in our consolidated balance sheets as of December 31, 2008 and 2007. The U.S. defined benefit pension obligations include unfunded liabilities of $13 and $12 as of December 31, 2008 and 2007, associated with
a non-qualified defined benefit pension plan in the United States.



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|                                                          |  |               |       |   |                |   |       |      |  |   |      |   |  |   |     |  
|--------------------------------------------------------- |  | ------------- | ----- | - | -------------- | - | ----- | ---- |  | - | ---- | - |  | - | --- | -
|                                                          |  | Pension Plans |      
|                                                          |  | U.S. Plans    |       |   | Canadian Plans |  
|                                                          |  | 2008          |       |   | 2007           |   |       | 2008 |  |   | 2007 |  
|Benefit obligation at beginning of period                 |  | $             | 1,007 |   |                | $ | 197   |      |  | $ | 333  |   |  | $ |    |  
|Acquisition (adjustment)                                  |  |               | (29   | ) |                |   | 804   |      |  |   |     |   |  |   | 325 |  
|Service cost                                              |  |               | 17    |   |                |   | 9     |      |  |   | 3    |   |  |   |    |  
|Interest cost                                             |  |               | 61    |   |                |   | 16    |      |  |   | 17   |   |  |   | 1   |  
|Plan participant contributions                            |  |               |      |   |                |   |      |      |  |   | 2    |   |  |   |    |  
|Benefits paid                                             |  |               | (65   | ) |                |   | (12   | )    |  |   | (19  | ) |  |   |    |  
|Plan amendments                                           |  |               | 3     |   |                |   |      |      |  |   |     |   |  |   |    |  
|Termination benefits                                      |  |               | 1     |   |                |   | 1     |      |  |   |     |   |  |   |    |  
|Foreign currency exchange rate changes                    |  |               |      |   |                |   |      |      |  |   | (55  | ) |  |   |    |  
|Actuarial (gains) losses                                  |  |               | 58    |   |                |   | (8    | )    |  |   | (47  | ) |  |   | 7   |  
|                                                          |  |               |       |   |                |   |       |      |  |   |      |   |  |   |     |  
|Benefit obligation at end of period                       |  |               | 1,053 |   |                |   | 1,007 |      |  |   | 234  |   |  |   | 333 |  
|                                                          |  |               |       |  
|Fair value of plan assets at beginning of period          |  |               | 1,084 |   |                |   | 244   |      |  |   | 296  |   |  |   |    |  
|Acquisition                                               |  |               |      |   |                |   | 808   |      |  |   |     |   |  |   | 296 |  
|Actual return (loss) on plan assets                       |  |               | (222  | ) |                |   | 44    |      |  |   | (43  | ) |  |   |    |  
|Plan participant contributions                            |  |               |      |   |                |   |      |      |  |   | 2    |   |  |   |    |  
|Employer contributions                                    |  |               | 1     |   |                |   |      |      |  |   | 9    |   |  |   |    |  
|Benefits paid                                             |  |               | (65   | ) |                |   | (12   | )    |  |   | (19  | ) |  |   |    |  
|Foreign currency exchange rate changes                    |  |               |      |   |                |   |      |      |  |   | (48  | ) |  |   |    |  
|                                                          |  |               |       |   |                |   |       |      |  |   |      |   |  |   |     |  
|Fair value of plan assets at end of period                |  |               | 798   |   |                |   | 1,084 |      |  |   | 197  |   |  |   | 296 |  
|                                                          |  |               |       |   |                |   |       |      |  |   |      |   |  |   |     |  
|                                                          |  |               |       |  
|Funded status at end of period                            |  | $             | (255  | ) |                | $ | 77    |      |  | $ | (37  | ) |  | $ | (37 | )
|                                                          |  |               |       |   |                |   |       |      |  |   |      |   |  |   |     |  
|                                                          |  |               |       |  
|Included in the balance sheet:                            |  |               |       |   |                |   |       |      |  |   |      |   |  |   |     |  
|Other assets                                              |  | $             |      |   |                | $ | 89    |      |  | $ |     |   |  | $ |    |  
|Other current liabilities                                 |  |               | (1    | ) |                |   | (1    | )    |  |   |     |   |  |   |    |  
|Other long-term obligations                               |  |               | (254  | ) |                |   | (11   | )    |  |   | (37  | ) |  |   | (37 | )
|                                                          |  |               |       |   |                |   |       |      |  |   |      |   |  |   |     |  
|Total net asset (liability)                               |  | $             | (255  | ) |                | $ | 77    |      |  | $ | (37  | ) |  | $ | (37 | )
|                                                          |  |               |       |   |                |   |       |      |  |   |      |   |  |   |     |  
|                                                          |  |               |       |  
|Weighted-average assumptions:                             |  |               |       |   |                |   |       |      |  |   |      |   |  |   |     |  
|Discount rate                                             |  |               | 6.2   | % |                |   | 6.4   | %    |  |   | 7.5  | % |  |   | 5.5 | %
|Rate of compensation increase forcompensation-based plans |  |               | 4.0   | % |                |   | 4.5   | %    |  |   | 3.0  | % |  |   | 2.5 | %



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|                                                 |  |                            |      |   |                |   |      |      |  |   |      |   |  |   |     |  
|------------------------------------------------ |  | -------------------------- | ---- | - | -------------- | - | ---- | ---- |  | - | ---- | - |  | - | --- | -
|                                                 |  | Other Postretirement Plans |     
|                                                 |  | U.S. Plans                 |      |   | Canadian Plans |  
|                                                 |  | 2008                       |      |   | 2007           |   |      | 2008 |  |   | 2007 |  
|Benefit obligation at beginning of period        |  | $                          | 272  |   |                | $ | 23   |      |  | $ | 27   |   |  | $ |    |  
|Acquisition (adjustment)                         |  |                            | (26  | ) |                |   | 247  |      |  |   |     |   |  |   | 26  |  
|Service cost                                     |  |                            | 2    |   |                |   | 1    |      |  |   | 1    |   |  |   |    |  
|Interest cost                                    |  |                            | 14   |   |                |   | 2    |      |  |   | 1    |   |  |   |    |  
|Plan participant contributions                   |  |                            |     |   |                |   | 1    |      |  |   |     |   |  |   |    |  
|Benefits paid                                    |  |                            | (30  | ) |                |   | (2   | )    |  |   | (2   | ) |  |   |    |  
|Plan amendments                                  |  |                            | (10  | ) |                |   |     |      |  |   |     |   |  |   |    |  
|Foreign currency exchange rate changes           |  |                            |     |   |                |   |     |      |  |   | (4   | ) |  |   |    |  
|Actuarial (gains) losses                         |  |                            | (2   | ) |                |   |     |      |  |   | (7   | ) |  |   | 1   |  
|                                                 |  |                            |      |   |                |   |      |      |  |   |      |   |  |   |     |  
|Benefit obligation at end of period              |  |                            | 220  |   |                |   | 272  |      |  |   | 16   |   |  |   | 27  |  
|                                                 |  |                            |      |  
|Fair value of plan assets at beginning of period |  |                            | 10   |   |                |   |     |      |  |   |     |   |  |   |    |  
|Acquisition                                      |  |                            |     |   |                |   | 10   |      |  |   |     |   |  |   |    |  
|Plan participant contributions                   |  |                            |     |   |                |   | 1    |      |  |   |     |   |  |   |    |  
|Employer contributions                           |  |                            | 20   |   |                |   | 1    |      |  |   | 2    |   |  |   |    |  
|Benefits paid                                    |  |                            | (30  | ) |                |   | (2   | )    |  |   | (2   | ) |  |   |    |  
|                                                 |  |                            |      |   |                |   |      |      |  |   |      |   |  |   |     |  
|Fair value of plan assets at end of period       |  |                            |     |   |                |   | 10   |      |  |   |     |   |  |   |    |  
|                                                 |  |                            |      |   |                |   |      |      |  |   |      |   |  |   |     |  
|                                                 |  |                            |      |  
|Funded status at end of period                   |  | $                          | (220 | ) |                | $ | (262 | )    |  | $ | (16  | ) |  | $ | (27 | )
|                                                 |  |                            |      |   |                |   |      |      |  |   |      |   |  |   |     |  
|                                                 |  |                            |      |  
|Included in the balance sheet:                   |  |                            |      |   |                |   |      |      |  |   |      |   |  |   |     |  
|Other current liabilities                        |  | $                          | (27  | ) |                | $ | (27  | )    |  | $ | (1   | ) |  | $ |    |  
|Other long-term obligations                      |  |                            | (193 | ) |                |   | (235 | )    |  |   | (15  | ) |  |   | (27 | )
|                                                 |  |                            |      |   |                |   |      |      |  |   |      |   |  |   |     |  
|Total net asset (liability)                      |  | $                          | (220 | ) |                | $ | (262 | )    |  | $ | (16  | ) |  | $ | (27 | )
|                                                 |  |                            |      |   |                |   |      |      |  |   |      |   |  |   |     |  
|                                                 |  |                            |      |  
|Weighted-average assumptionsDiscount rate       |  |                            | 6.2  | % |                |   | 6.1  | %    |  |   | 7.3  | % |  |   | 5.0 | %

The assumed discount rates used in determining the benefit obligations were determined by reference to the yield
on zero-coupon corporate bonds rated Aa or AA maturing in conjunction with the expected timing and amount of future benefit payments.

The amounts in
accumulated other comprehensive income (loss) that have not been recognized as components of net periodic defined benefit pension and other postretirement benefit cost as of December 31, 2008 and 2007 are as follows:



|                                                    |  |              |     |                            |   |      |  |   |        |   |  |       |    |   |  |   |     |  
|--------------------------------------------------- |  | ------------ | --- | -------------------------- | - | ---- |  | - | ------ | - |  | ----- | -- | - |  | - | --- | -
|                                                    |  | 2008         |    
|                                                    |  | PensionPlans |     | Other Post-retirementPlans |   |      |  |  
|                                                    |  | U.S.         |     | Canada                     |   | U.S. |  |   | Canada |   |  | Total |   
|Unrecognized net actuarial (gains) losses           |  | $            | 323 |                            | $ | 20   |  | $ | (4     | ) |  | $     | (6 | ) |  | $ | 333 |  
|Net prior service cost (credit)                     |  |              | 3   |                            |   |     |  |   | (9     | ) |  |       |   |   |  |   | (6  | )
|                                                    |  |              |     |                            |   |      |  |   |        |   |  |       |    |   |  |   |     |  
|Total accumulated other comprehensive income (loss) |  | $            | 326 |                            | $ | 20   |  | $ | (13    | ) |  | $     | (6 | ) |  | $ | 327 |  
|                                                    |  |              |     |                            |   |      |  |   |        |   |  |       |    |   |  |   |     |  



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|                                                                                                                                       |  |              |     |   |                            |   |    |      |  |   |        |   |  |       |    |   |  |   |     |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --- | - | -------------------------- | - | -- | ---- |  | - | ------ | - |  | ----- | -- | - |  | - | --- | -
|                                                                                                                                       |  | 2007         |    
|                                                                                                                                       |  | PensionPlans |     |   | Other Post-retirementPlans |   |    |      | 
|                                                                                                                                       |  | U.S.         |     |   | Canada                     |   |    | U.S. |  |   | Canada |   |  | Total |   
|Total accumulated other comprehensive income (loss)  Unrecognized net actuarial (gains) losses                                        |  | $            | (39 | ) |                            | $ | 8  |      |  | $ | (2     | ) |  | $     |   |   |  | $ | (33 | )
|                                                                                                                                       |  |              |     |   |                            |   |    |      |  |   |        |   |  |       |    |   |  |   |     |  
|                                                                                                                                      
|The components of other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows: | 
|                                                                                                                                       | 
|                                                                                                                                       |  | 2008         |    
|                                                                                                                                       |  | PensionPlans |     |   | Other Post-RetirementPlans |   |    |      | 
|                                                                                                                                       |  | U.S.         |     |   | Canada                     |   |    | U.S. |  |   | Canada |   |  | Total |   
|Net actuarial (gains) losses                                                                                                           |  | $            | 362 |   |                            | $ | 15 |      |  | $ | (2     | ) |  | $     | (7 | ) |  | $ | 368 |  
|Net prior service cost (credit)                                                                                                        |  |              | 3   |   |                            |   |   |      |  |   | (10    | ) |  |       |   |   |  |   | (7  | )
|Amortization of net prior service credit                                                                                               |  |              |    |   |                            |   |   |      |  |   | 1      |   |  |       |   |   |  |   | 1   |  
|Foreign currency exchange rate changes                                                                                                 |  |              |    |   |                            |   | (3 | )    |  |   |       |   |  |       | 1  |   |  |   | (2  | )
|                                                                                                                                       |  |              |     |   |                            |   |    |      |  |   |        |   |  |       |    |   |  |   |     |  
|Total recognized in other comprehensive income (loss)                                                                                  |  | $            | 365 |   |                            | $ | 12 |      |  | $ | (11    | ) |  | $     | (6 | ) |  | $ | 360 |  
|                                                                                                                                       |  |              |     |   |                            |   |    |      |  |   |        |   |  |       |    |   |  |   |     |  
|                                                                                                                                       | 
|                                                                                                                                       |  | 2007         |    
|                                                                                                                                       |  | PensionPlans |     |   | Other Post-retirementPlans |   |    |      | 
|                                                                                                                                       |  | U.S.         |     |   | Canada                     |   |    | U.S. |  |   | Canada |   |  | Total |   
|Total recognized in other comprehensive income (loss)  Net actuarial (gains) losses                                                   |  | $            | (25 | ) |                            | $ | 8  |      |  | $ | (2     | ) |  | $     |   |   |  | $ | (19 | )
|                                                                                                                                       |  |              |     |   |                            |   |    |      |  |   |        |   |  |       |    |   |  |   |     |  

The estimated net actuarial loss and prior service cost for the U.S. defined benefit pension plans that will be
amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next year are $22 and less than $1. The estimated net actuarial loss for the Canadian defined benefit pension plans that will be amortized from
accumulated other comprehensive income (loss) into net periodic benefit cost over the next year is less than $1. The estimated net actuarial (gain) and prior service cost for U.S. other postretirement benefit plans that will be amortized from
accumulated other comprehensive income (loss) into net periodic benefit cost over the next year is zero and $(1). The estimated net actuarial (gain) for Canadian other postretirement benefit plans that will be amortized from accumulated other
comprehensive income (loss) into net periodic benefit cost over the next year is less than $(1).

Total accumulated benefit obligation (ABO) as
of December 31, 2008 and 2007 was $1,053 and $976 for all U.S. defined benefit pension plans and $227 and $318 for all Canadian defined benefit pension plans.



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For defined benefit pension plans where the ABO exceeds the fair value of plan assets, the ABO, the projected benefit
obligation (PBO) and the fair value of plan assets as of December 31, 2008 and 2007 are as follows:



|                     |  |      |       |        |   |      |  |        |    |  |   |    
|-------------------- |  | ---- | ----- | ------ | - | ---- |  | ------ | -- |  | - | ---
|                     |  | 2008 |       | 2007  
|                     |  | U.S. |       | Canada |   | U.S. |  | Canada
|ABO                  |  | $    | 1,053 |        | $ | 227  |  | $      | 12 |  | $ | 220
|PBO                  |  |      | 1,053 |        |   | 234  |  |        | 12 |  |   | 231
|Fair value of assets |  |      | 798   |        |   | 197  |  |        |   |  |   | 197

For defined benefit pension plans where the PBO exceeds the fair value of plan assets, the ABO, the PBO and fair
value of plan assets as of December 31, 2008 and 2007 are as follows:



|                     |  |      |       |        |   |      |  |        |    |  |   |    
|-------------------- |  | ---- | ----- | ------ | - | ---- |  | ------ | -- |  | - | ---
|                     |  | 2008 |       | 2007  
|                     |  | U.S. |       | Canada |   | U.S. |  | Canada
|ABO                  |  | $    | 1,053 |        | $ | 227  |  | $      | 12 |  | $ | 318
|PBO                  |  |      | 1,053 |        |   | 234  |  |        | 12 |  |   | 333
|Fair value of assets |  |      | 798   |        |   | 197  |  |        |   |  |   | 296

Pension plan assets are held in trusts with investment policies providing a framework within which to manage the
assets in each trust. The long-term strategic allocation target ranges for investments for the U.S. and Canadian pension plans are as follows:



|                                         |  |            |  |           
|---------------------------------------- |  | ---------- |  | ----------
|                                         |  | U.S.       |  | Canada    
|Cash and cash equivalents                |  | 0% to 10%  |  | 0% to 10% 
|Equity securities                        |  | 45% to 65% |  | 55% to 65%
|Debt securities                          |  | 30% to 40% |  | 35% to 45%
|Real estate                              |  | 0% to 10%  |  | N/A       
|Other, including alternative investments |  | 0% to 10%  |  | N/A       

The expected role of equity investments is to invest in well-diversified portfolios of domestic and international
securities. The role of debt investments is to invest in well-diversified portfolios of debt instruments such that the average weighted duration does not exceed the duration of the Lehman Brothers Aggregate Index by more than approximately two
years. We review investment policy statements at least once per year. In addition, the portfolios are reviewed at least quarterly to determine their deviation from target weightings and are rebalanced as necessary.



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Defined benefit pension plan assets percentage of fair value by asset category at December 31, 2008 and 2007 are as
follows:



|                                         |  |        |  |         |  |       |  |        
|---------------------------------------- |  | ------ |  | ------- |  | ----- |  | -------
|                                         |  | 2008   |  | 2007   
|                                         |  | U.S. % |  | Canada% |  | U.S.% |  | Canada%
|Cash and cash equivalents                |  | 2      |  |        |  | 6     |  | 5      
|Equity securities                        |  | 46     |  | 57      |  | 55    |  | 54     
|Debt securities                          |  | 42     |  | 42      |  | 29    |  | 41     
|Real estate                              |  | 4      |  |        |  | 4     |  |       
|Other, including alternative investments |  | 6      |  | 1       |  | 6     |  |       
|                                         |  |        |  |         |  |       |  |        
|Total                                    |  | 100    |  | 100     |  | 100   |  | 100    
|                                         |  |        |  |         |  |       |  |        

The expected long-term rates of return on plan assets were derived based on the capital market assumptions for
each designated asset class under the respective trusts investment policy. The capital market assumptions reflect a combination of historical performance analysis and the forward-looking return expectations of the financial markets.

A summary of the components of net periodic costs for the years ended December 31, 2008, 2007 and 2006, is as follows:

Pension Plans



|                                                              |  |                        |     |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |     |  
|------------------------------------------------------------- |  | ---------------------- | --- | - | ---------------------- | - | --- | ---- |  | - | ---- | - |  | ---- | --- | - |  | - | --- | -
|                                                              |  | U.S. Plans             |     |   | Canadian Plans         |  
|                                                              |  | Year EndedDecember 31, |     |   | Year EndedDecember 31, |  
|                                                              |  | 2008                   |     |   | 2007                   |   |     | 2006 |  |   | 2008 |   |  | 2007 |    
|Service cost                                                  |  | $                      | 17  |   |                        | $ | 8   |      |  | $ | 9    |   |  | $    | 3   |   |  | $ |    |  
|Interest cost                                                 |  |                        | 61  |   |                        |   | 13  |      |  |   | 12   |   |  |      | 17  |   |  |   | 1   |  
|Termination benefits                                          |  |                        | 1   |   |                        |   | 1   |      |  |   |     |   |  |      |    |   |  |   |    |  
|Expected return on plan assets                                |  |                        | (82 | ) |                        |   | (20 | )    |  |   | (19  | ) |  |      | (19 | ) |  |   | (1  | )
|                                                              |  |                        |     |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |     |  
|Net periodic cost before settlement and curtailment           |  |                        | (3  | ) |                        |   | 2   |      |  |   | 2    |   |  |      | 1   |   |  |   |    |  
|Settlement loss                                               |  |                        |    |   |                        |   |    |      |  |   | 5    |   |  |      |    |   |  |   |    |  
|Curtailment loss                                              |  |                        |    |   |                        |   |    |      |  |   | 2    |   |  |      |    |   |  |   |    |  
|                                                              |  |                        |     |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |     |  
|Net periodic cost (income) after settlement and curtailment   |  |                        | (3  | ) |                        |   | 2   |      |  |   | 9    |   |  |      | 1   |   |  |   |    |  
|Less  cost (income) allocated to discontinued operations     |  |                        |    |   |                        |   |    |      |  |   | 7    |   |  |      |    |   |  |   |    |  
|                                                              |  |                        |     |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |     |  
|Net periodic cost (income) allocated to continuing operations |  | $                      | (3  | ) |                        | $ | 2   |      |  | $ | 2    |   |  | $    | 1   |   |  | $ |    |  
|                                                              |  |                        |     |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |     |  
|                                                              |  |                        |     |   |                       
|Weighted-average assumptions:                                 |  |                        |     |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |     |  
|Discount rate                                                 |  |                        | 6.4 | % |                        |   | 6.3 | %    |  |   | 5.7  | % |  |      | 5.5 | % |  |   | 5.7 | %
|Long-term expected rate of return on plan assets              |  |                        | 7.9 | % |                        |   | 7.9 | %    |  |   | 7.4  | % |  |      | 7.0 | % |  |   | 7.0 | %
|Rate of compensation increase for compensation-based plans    |  |                        | 4.5 | % |                        |   | 4.5 | %    |  |   | N/A  |   |  |      | 3.0 | % |  |   | 2.5 | %



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Other Postretirement Plans



|                                                            |  |                        |      |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |      |  
|----------------------------------------------------------- |  | ---------------------- | ---- | - | ---------------------- | - | --- | ---- |  | - | ---- | - |  | ---- | --- | - |  | - | ---- | -
|                                                            |  | U.S. Plans             |      |   | Canadian Plans         |  
|                                                            |  | Year EndedDecember 31, |      |   | Year EndedDecember 31, |  
|                                                            |  | 2008                   |      |   | 2007                   |   |     | 2006 |  |   | 2008 |   |  | 2007 |    
|Service cost                                                |  | $                      | 2    |   |                        | $ | 1   |      |  | $ | 1    |   |  | $    | 1   |   |  | $ |     |  
|Interest cost                                               |  |                        | 14   |   |                        |   | 2   |      |  |   | 1    |   |  |      | 1   |   |  |   |     |  
|Expected return on plan assets                              |  |                        | (1   | ) |                        |   |    |      |  |   |     |   |  |      |    |   |  |   |     |  
|Amortization of net prior service cost (credit)             |  |                        | (1   | ) |                        |   |    |      |  |   |     |   |  |      |    |   |  |   |     |  
|Termination benefits                                        |  |                        |     |   |                        |   |    |      |  |   | 1    |   |  |      |    |   |  |   |     |  
|                                                            |  |                        |      |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |      |  
|Net periodic cost before settlement and curtailment         |  |                        | 14   |   |                        |   | 3   |      |  |   | 3    |   |  |      | 2   |   |  |   |     |  
|Curtailment (gain) loss                                     |  |                        |     |   |                        |   |    |      |  |   | (8   | ) |  |      |    |   |  |   |     |  
|                                                            |  |                        |      |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |      |  
|Net periodic cost (income) after settlement and curtailment |  |                        | 14   |   |                        |   | 3   |      |  |   | (5   | ) |  |      | 2   |   |  |   |     |  
|Lesscost (income) allocated to discontinued operations     |  |                        |     |   |                        |   |    |      |  |   | (7   | ) |  |      |    |   |  |   |     |  
|                                                            |  |                        |      |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |      |  
|Net periodic cost allocated to continuing operations        |  | $                      | 14   |   |                        | $ | 3   |      |  | $ | 2    |   |  | $    | 2   |   |  | $ |     |  
|                                                            |  |                        |      |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |      |  
|                                                            |  |                        |      |   |                       
|Weighted-average assumptions:                               |  |                        |      |   |                        |   |     |      |  |   |      |   |  |      |     |   |  |   |      |  
|Discount rate                                               |  |                        | 6.1  | % |                        |   | 6.1 | %    |  |   | 5.6  | % |  |      | 5.0 | % |  |   | 5.2  | %
|Weighted-average healthcare cost trend rate                 |  |                        | 10.0 | % |                        |   | 8.4 | %    |  |   | 11.0 | % |  |      | 9.5 | % |  |   | 13.0 | %
|Long-term expected rate of return on plan assets            |  |                        | 4.5  | % |                        |   | 4.5 | %    |  |   |     |   |  |      |    |   |  |   |     |  

The annual rate of increase in healthcare costs in the U.S. is assumed to decline ratably each year until reaching
5.0% in 2017. The annual rate of increase in healthcare costs in Canada is assumed to decline ratably each year until reaching 5.5% in 2014.

A
one-percentage-point change in assumed retiree healthcare costs trend rates would have the following effects at December 31, 2008:



|                                                        |  |          |   |          |   |      |  |   |        |   |  |   |  
|------------------------------------------------------- |  | -------- | - | -------- | - | ---- |  | - | ------ | - |  | - | -
|                                                        |  | Increase |   | Decrease
|                                                        |  | U.S.     |   | Canada   |   | U.S. |  |   | Canada
|Effect on total service and interest cost components    |  | $        |  |          | $ |     |  | $ |       |   |  | $ | 
|Effect on accumulated postretirement benefit obligation |  |          | 2 |          |   |     |  |   | (2     | ) |  |   | 



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Estimated future benefit payments for the plans for each of the next five years and for the five years thereafter are
expected to be paid as follows:



|                  |  |              |     |                          |   |      |  |        |    |  |   |  
|----------------- |  | ------------ | --- | ------------------------ | - | ---- |  | ------ | -- |  | - | -
|                  |  | PensionPlans |     | OtherPostretirementPlans
|                  |  | U.S.         |     | Canada                   |   | U.S. |  | Canada
|2009              |  | $            | 63  |                          | $ | 17   |  | $      | 27 |  | $ | 2
|2010              |  |              | 64  |                          |   | 17   |  |        | 26 |  |   | 2
|2011              |  |              | 65  |                          |   | 18   |  |        | 25 |  |   | 2
|2012              |  |              | 67  |                          |   | 18   |  |        | 24 |  |   | 2
|2013              |  |              | 68  |                          |   | 18   |  |        | 22 |  |   | 2
|2014 through 2018 |  |              | 366 |                          |   | 90   |  |        | 95 |  |   | 7

Expected employer contributions to be paid during the next year are as follows:



|                              |  |              |   |                          |   |      |  |        |    |  |   |  
|----------------------------- |  | ------------ | - | ------------------------ | - | ---- |  | ------ | -- |  | - | -
|                              |  | PensionPlans |   | OtherPostretirementPlans
|                              |  | U.S.         |   | Canada                   |   | U.S. |  | Canada
|Expected payments during 2009 |  | $            | 1 |                          | $ | 15   |  | $      | 27 |  | $ | 2

A curtailment loss of $1 resulted from the permanent shutdown of our No. 7 paper machine and related
activities at the Luke, Maryland, mill during the fourth quarter of 2006. Because the curtailment loss occurred after the plan measurement date, but before our year end, the loss was recognized in the first quarter of 2007 in accordance with SFAS
No. 88, Employers Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits.

As a result
of the restructuring actions described in Note M, during the first quarter of 2008 we recognized a special termination charge of $1 in cost of sales for employees affected by the shutdown of the No. 11 paper machine in Rumford, Maine. During
2008, we recorded adjustments to the purchase price allocation for decisions made to reduce benefits for salaried employees to reflect a $29 reduction in benefit obligations under the NPCP pension plans and a $25 reduction in benefit obligations
under a NPCP postretirement plan.



|M. | RESTRUCTURING
|-- | -------------

SENA Acquisition

During 2008, we announced actions being taken to integrate NewPage operations and the former SENA facilities and services. These actions were intended to create a single
business platform, enable us to remain competitive in the marketplace, serve our customers more efficiently, balance supply and customer demand and deliver on the projected synergies of the Acquisition.

The restructuring actions taken are as follows:



| |  |  | Permanently close the No. 11 paper machine in Rumford, Maine, in February 2008; approximately 60 employees were affected by the shutdown
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Permanently close the pulp mill and both paper machines in Niagara, Wisconsin, in June 2008; approximately 320 employees were affected by the shutdown
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Permanently close the No. 95 paper machine in Kimberly, Wisconsin, in May 2008 and the mill and both remaining paper machines, Nos. 96 and 97, in September
2008; approximately 600 employees were affected by the shutdowns
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Permanently close the Chillicothe, Ohio, converting facility in February 2009; approximately 160 employees were affected by the shutdown
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Reduce personnel in other areas, including sales, finance and other support functions; approximately 200 employees will be affected by this action
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------

During 2008, as a result of these actions, we incurred charges of $34, including $22 in accelerated depreciation and $5 in inventory
write-offs recorded in cost of sales and $7 of employee-related costs, of which $5 is recorded in cost of sales and $2 is recorded in selling, general and administrative expenses. In addition, during 2008 we recorded liabilities of $39 for
employee-related costs of former SENA employees and $22 for closure costs of acquired plants in the purchase price allocation. Most of the affected employees had separated from the company by December 31, 2008 and the remainder will separate in
2009. We expect all remaining closure-related activities to be substantially completed in 2009.

The activity in the accrued restructuring liability
relating to these actions for the year ended December 31, 2008 was as follows:



|                                                               |  |              |    |   |               |   |     |  
|-------------------------------------------------------------- |  | ------------ | -- | - | ------------- | - | --- | -
|                                                               |  | ClosureCosts |    |   | EmployeeCosts |  
|Balance accrued at December 31, 2007                           |  | $            |   |   |               | $ | 4   |  
|Additions to reserve recorded in the purchase price allocation |  |              | 22 |   |               |   | 39  |  
|Current charges                                                |  |              |   |   |               |   | 7   |  
|Payments                                                       |  |              | (8 | ) |               |   | (31 | )
|                                                               |  |              |    |   |               |   |     |  
|Balance accrued at December 31, 2008                           |  | $            | 14 |   |               | $ | 19  |  
|                                                               |  |              |    |   |               |   |     |  

Shutdown of No. 7 Paper Machine at Luke, Maryland

During the fourth quarter of 2006, we announced a plan to permanently shut down the No. 7 paper machine and related activities and to reduce headcount by
approximately 130 employees at the Luke, Maryland mill. As a result of this action, we incurred pretax charges, recorded in cost of sales, of $18, including $15 for accelerated depreciation and inventory write-offs recorded in the fourth quarter of
2006 and $3 for severance and early retirement benefits, of which $2 was recorded in the fourth quarter of 2006 and $1 was recorded in the first quarter of 2007. As of June 30, 2007, this action was complete.



|N. | COMMITMENTS AND CONTINGENCIES
|-- | -----------------------------

Contingencies

Claims have been made against us for the costs of environmental remedial measures taken or to be taken. Reserves for these liabilities have been
established and no insurance recoveries have been anticipated in the determination of the reserves. We are involved in various other litigation and administrative proceedings arising in the normal course of business. Although the ultimate outcome of
these matters cannot be predicted with certainty, we do not believe that the currently expected outcome of any matter, lawsuit or claim that is pending or threatened, or all of them combined, will have a material adverse effect on our financial
condition, results of operations or liquidity.



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Commitments

We are party to fiber supply agreements that entitle us to purchase minimum volumes of wood at market prices for periods through 2026, with renewal periods at our option. We are required to purchase minimum levels and have optional volumes
that we can purchase under some of the agreements. The agreements include a limitation of damages under which our maximum potential damages for default are based on a price per ton of wood not delivered, and excuse performance if the failure is the
result of a force majeure event that would have prevented either party from performing its obligations. The aggregate maximum amount of potential damages declines from approximately $21 per year in 2009 and totals an aggregate of $192 for all
periods. These contracts are assignable by either party with mutual consent.

We have provided letters of credit to various environmental agencies as a
means of providing financial assurance with regard to environmental liabilities. We also provided a letter of credit for securing a supplemental pension obligation and letters of credit or other financial assurance obligations to fulfill supplier
financial assurance requirements. As of December 31, 2008, we had $87 in outstanding letters of credit. Payment would only be required under these letters of credit if we defaulted on commitments made under these arrangements.

We are a party to a service agreement that provides information technology services through December 31, 2017 and human resources services through January 31,
2013 necessary to support our operations, at specified monthly base prices. The base price for services under the agreement is approximately $25 annually and can be terminated with an early termination payment that declines over time.

In 2006, we were awarded financial assistance in the amount of Canadian $65 from the Province of Nova Scotia in settlement of its commitment to provide licensed land to
the Port Hawkesbury mill. The amount will be paid out over seven years (C$10 in each of the first six years, and C$5 in the seventh year) and is recorded in cost of sales. Payout is to be made upon completion of each cumulative 12 month period of
operation of the paper machines. If there is no production for 24 continuous months, all current and future payments will be forfeited.



|O. | LEASE OBLIGATIONS
|-- | -----------------

We lease certain buildings, transportation
equipment and office equipment under operating leases with terms of one to 10 years. Rental expense for the years ended December 31, 2008, 2007 and 2006 was $23, $15 and $15.

As part of the Acquisition, we assumed the rights and obligations associated with a capital lease for a paper machine. The lease has a basic lease term which expires in 2014. At the end of the basic lease term, we
have the option to purchase the machine or the lessor can require us to renew the lease through 2025. The lease contains purchase options at amounts approximating fair market value in 2010 and at lease termination. This lease requires us to pay
customary operating and repair expenses and to observe certain operating restrictions. The leased asset is included in property, plant and equipment.



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Future minimum non-cancelable operating lease payments and capital lease payments and the related present value of the
capital lease payments at December 31, 2008 are as follows:



|                                            |  |                 |    |              |   |     |  
|------------------------------------------- |  | --------------- | -- | ------------ | - | --- | -
|                                            |  | OperatingLeases |    | CapitalLease |  
|2009                                        |  | $               | 9  |              | $ | 7   |  
|2010                                        |  |                 | 7  |              |   | 7   |  
|2011                                        |  |                 | 6  |              |   | 7   |  
|2012                                        |  |                 | 4  |              |   | 7   |  
|2013                                        |  |                 | 3  |              |   | 8   |  
|Thereafter                                  |  |                 | 4  |              |   | 164 |  
|                                            |  |                 |    |              |   |     |  
|Total minimum lease payments                |  | $               | 33 |              |   | 200 |  
|                                            |  |                 |    |              |   |     |  
|Portion representing interest               |  |                 |    |              |   | (53 | )
|                                            |  |                 |    |              |   |     |  
|Present value of net minimum lease payments |  |                 |    |              | $ | 147 |  
|                                            |  |                 |    |              |   |     |  



|P. | RELATED PARTY TRANSACTIONS
|-- | --------------------------

Cerberus retains consultants that
specialize in operations management and support and who provide Cerberus with consulting advice concerning portfolio companies in which funds and accounts managed by Cerberus or its affiliates have invested. From time to time, Cerberus makes the
services of these consultants available to Cerberus portfolio companies. We believe that the terms of these consulting arrangements are materially consistent with those terms that would have been obtained in an arrangement with an unaffiliated third
party. We have commercial arrangements with other entities that are owned or controlled by Cerberus. We are a party to a capital lease for which Chrysler Capital, an affiliate of Cerberus, is an equity investor and is entitled to certain equity
buyout payments no earlier than 2014. The lease was entered into before Chrysler Capital became an affiliate of Cerberus. In addition, Commercial Finance LLC, an affiliate of Cerberus, is a lender under our senior secured revolving credit facility.
We believe that these transactions are on arms-length terms and are not material to our results of operations or financial position.

Subsequent to
the Acquisition, we are a party to various purchase agreements with SEO. We also sell power generated at Consolidated Water Power Company, a wholly-owned subsidiary, to a subsidiary of SEO. We believe that these transactions are on arms-length
terms and are not material to our results of operations or financial position.



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|Q. | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|-- | ---------------------------------------------

Total comprehensive
income (loss) is comprised of net income (loss), net unrealized gain (loss) on cash flow hedges, foreign currency translation adjustments and net actuarial gain (loss) and net prior service cost (credit) on our defined benefit plans. The components
of accumulated other comprehensive income (loss) as of December 31, 2008 and 2007 are as follows:



|                                                                                         |  |      |      |   |      |   |   
|---------------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- | - | --
|                                                                                         |  | 2008 |      |   | 2007
|NewPage:                                                                                 |  |      |      |   |      |   |   
|Unrealized gain (loss) on cash flow hedge, net of tax expense (benefit) of $3 and $(1)   |  | $    | (60  | ) |      | $ |  
|Foreign currency translation adjustment                                                  |  |      | (9   | ) |      |   |  
|Unrecognized gain (loss) on defined benefit plans, net of tax expense of zero and $10    |  |      | (327 | ) |      |   | 23
|                                                                                         |  |      |      |   |      |   |   
|                                                                                         |  | $    | (396 | ) |      | $ | 23
|                                                                                         |  |      |      |   |      |   |   
|NewPage Holding:                                                                         |  |      |      |   |      |   |   
|Unrealized gain (loss) on cash flow hedge, net of tax expense (benefit) of $(1) and $(1) |  | $    | (56  | ) |      | $ |  
|Foreign currency translation adjustment                                                  |  |      | (9   | ) |      |   |  
|Unrecognized gain (loss) on defined benefit plans, net of tax expense of $10 and $10     |  |      | (337 | ) |      |   | 23
|                                                                                         |  |      |      |   |      |   |   
|                                                                                         |  | $    | (402 | ) |      | $ | 23
|                                                                                         |  |      |      |   |      |   |   



|R. | DISPOSITIONS
|-- | ------------

Sale of Hydroelectric Facilities

Included in other income (expense) for the year ended December 31, 2006 is a gain of $65 on the sale of two hydroelectric generating
facilities located on the Androscoggin River in Rumford, Maine. We received cash proceeds of $144 from the sale.

Sales of Carbonless Paper Business

Effective April 1, 2006, we completed the sale of our carbonless paper business to P. H. Glatfelter Company for a cash sales price of $84.

Net sales of the carbonless paper business (included in discontinued operations) were $106 for the year ended December 31, 2006. Included in the loss
from discontinued operations for the year ended December 31, 2006, is $19 of charges related to the sale of the business, including curtailment and settlement costs related to the employee benefit plans.



|S. | INITIAL PUBLIC OFFERING OF NEWPAGE GROUP
|-- | ----------------------------------------

On May 5, 2008,
NewPage Group filed a registration statement on Form S-1 with the Securities and Exchange Commission relating to an initial public offering of its common stock. The registration statement indicates that NewPage Group intends to use the proceeds from
the offering to redeem in full NewPage Groups PIK Notes and NewPage Holdings PIK Notes. There can be no assurance that our parent will complete the offering or what the terms of the offering will be.



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|T. | RECENTLY ISSUED ACCOUNTING STANDARDS
|-- | ------------------------------------

In December 2008, the
Financial Accounting Standards Board (FASB) issued Staff Position No. FAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets (FSP FAS 132(R)-1). FSP FAS 132(R)-1 amends SFAS No. 132 (revised 2003),Employers Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employers disclosures about plan assets of a defined benefit pension or other postretirement plan which include disclosures about
investment policies and strategies, categories of plan assets, fair value measurements of plan assets and significant concentrations of risk. FSP FAS 132(R)-1 is effective for us for the year ended December 31, 2009 and is to be applied on a
prospective basis. We are currently evaluating the potential effect of the adoption of FSP FAS 132(R)-1 on our consolidated financial position, results of operations and cash flows.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS No. 141R), which replaces SFAS No. 141. SFAS No. 141R establishes principles and requirements for
how an acquirer recognizes and measures in its financial statements identifiable assets acquired, liabilities assumed, any noncontrolling interest in the acquiree and goodwill acquired. The Statement also establishes disclosure requirements, which
will enable users to evaluate the nature and financial effects of the business combination. SFAS No. 141R is effective for us as of January 1, 2009. The adoption of SFAS No. 141R will not have a material effect on our consolidated
financial position, results of operations and cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS
No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. In February 2008, the FASB issued FSP FAS 157-2, which delayed the effective date of SFAS
No. 157 by one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. For items covered by FSP FAS 157-2, SFAS No. 157 will go into effect for us as
of January 1, 2009. The adoption of SFAS No. 157 for nonfinancial assets and liabilities will not have a material effect on our consolidated financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of Accounting Research Bulletin
No. 51 (SFAS No. 160), which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the
noncontrolling interest, changes in a parents ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. The Statement also establishes reporting requirements that provide sufficient
disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 is effective for us as of January 1, 2009. The adoption of SFAS No. 160 will result in
the reclassification of minority interests to shareholders equity (deficit).

In March 2008, the Financial Accounting Standards Board (FASB) issued
SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No. 133(SFAS No. 161). SFAS No. 161 gives financial statement users better information about the reporting
entitys hedges by providing for qualitative disclosures about the objectives and strategies for using derivatives, quantitative data about the fair value of and gains and losses on derivative contracts, and details of credit-risk-related
contingent features in their hedged positions. SFAS No. 161 is effective for us as of January 1, 2009. The adoption of SFAS No. 161 is not expected to have a material effect on our consolidated financial position, results of
operations and cash flows.



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|U. | SUPPLEMENTAL CONSOLIDATING INFORMATION
|-- | --------------------------------------

NewPage has issued $225
face amount of floating rate senior secured notes due May 2012, $806 face amount of 10% senior secured notes due May 2012 and $200 face amount of 12% senior subordinated notes due May 2013 (the Notes). The Notes are jointly and severally
guaranteed on a full and unconditional basis by NewPages 100%-owned subsidiaries, except Consolidated Water Power Company, our non-guarantor subsidiary.

The following condensed consolidating financial statements have been prepared from financial information on the same basis of accounting as the consolidated financial statements. Investments in our subsidiaries are accounted for under the
equity method.



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NEWPAGE CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2008



|                                           |  |                    |       |   |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|------------------------------------------ |  | ------------------ | ----- | - | --------------------- | - | ----------------------- |  | -------------------------- | -- |  | ------------ | ------ | - |  | - | -----
|                                           |  | NewPageCorporation |       |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiary |  | Consolidation/Eliminations |    |  | Consolidated
|ASSETS                                     |  |                    |       |   |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|Cash and cash equivalents                  |  | $                  | 1     |   |                       | $ |                        |  | $                          | 2  |  | $            |       |   |  | $ | 3    
|Accounts receivable                        |  |                    | 242   |   |                       |   | 35                      |  |                            | 1  |  |              |       |   |  |   | 278  
|Inventories                                |  |                    | 249   |   |                       |   | 379                     |  |                            |   |  |              |       |   |  |   | 628  
|Other current assets                       |  |                    | 11    |   |                       |   | 10                      |  |                            | 1  |  |              |       |   |  |   | 22   
|                                           |  |                    |       |   |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|Total current assets                       |  |                    | 503   |   |                       |   | 424                     |  |                            | 4  |  |              |       |   |  |   | 931  
|Intercompany receivables                   |  |                    | 1,194 |   |                       |   | 168                     |  |                            | 20 |  |              | (1,382 | ) |  |   |     
|Property, plant and equipment, net         |  |                    | 16    |   |                       |   | 3,122                   |  |                            | 40 |  |              | 27     |   |  |   | 3,205
|Investment in subsidiaries                 |  |                    | 2,051 |   |                       |   | 47                      |  |                            |   |  |              | (2,098 | ) |  |   |     
|Other assets                               |  |                    | 97    |   |                       |   | 12                      |  |                            | 1  |  |              | (1     | ) |  |   | 109  
|                                           |  |                    |       |   |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|TOTAL ASSETS                               |  | $                  | 3,861 |   |                       | $ | 3,773                   |  | $                          | 65 |  | $            | (3,454 | ) |  | $ | 4,245
|                                           |  |                    |       |   |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|                                           |  |                    |       |   |                      
|LIABILITIES AND STOCKHOLDERS EQUITY       |  |                    |       |   |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|Accounts payable                           |  | $                  | 51    |   |                       | $ | 201                     |  | $                          | 1  |  | $            | 1      |   |  | $ | 254  
|Other current liabilities                  |  |                    | 99    |   |                       |   | 164                     |  |                            | 7  |  |              |       |   |  |   | 270  
|Current maturities of long-termdebt        |  |                    | 16    |   |                       |   |                        |  |                            |   |  |              |       |   |  |   | 16   
|                                           |  |                    |       |   |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|Total current liabilities                  |  |                    | 166   |   |                       |   | 365                     |  |                            | 8  |  |              | 1      |   |  |   | 540  
|Intercompany payables                      |  |                    | 244   |   |                       |   | 1,139                   |  |                            |   |  |              | (1,383 | ) |  |   |     
|Long-term debt                             |  |                    | 2,753 |   |                       |   | 147                     |  |                            |   |  |              |       |   |  |   | 2,900
|Other long-term liabilities                |  |                    | 547   |   |                       |   | 69                      |  |                            |   |  |              |       |   |  |   | 616  
|Deferred income taxes                      |  |                    | (6    | ) |                       |   | 2                       |  |                            | 10 |  |              |       |   |  |   | 6    
|Minority interest                          |  |                    |      |   |                       |   |                        |  |                            |   |  |              | 26     |   |  |   | 26   
|Stockholders equity                       |  |                    | 157   |   |                       |   | 2,051                   |  |                            | 47 |  |              | (2,098 | ) |  |   | 157  
|                                           |  |                    |       |   |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |  | $                  | 3,861 |   |                       | $ | 3,773                   |  | $                          | 65 |  | $            | (3,454 | ) |  | $ | 4,245
|                                           |  |                    |       |   |                       |   |                         |  |                            |    |  |              |        |   |  |   |      



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NEWPAGE CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2007



|                                           |  |                    |       |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|------------------------------------------ |  | ------------------ | ----- | --------------------- | - | ----------------------- |  | -------------------------- | -- |  | ------------ | ------ | - |  | - | -----
|                                           |  | NewPageCorporation |       | GuarantorSubsidiaries |   | Non-GuarantorSubsidiary |  | Consolidation/Eliminations |    |  | Consolidated
|ASSETS                                     |  |                    |       |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|Cash and cash equivalents                  |  | $                  | 88    |                       | $ | 49                      |  | $                          | 5  |  | $            | 1      |   |  | $ | 143  
|Accounts receivable                        |  |                    | 160   |                       |   | 187                     |  |                            | 2  |  |              | 2      |   |  |   | 351  
|Inventories                                |  |                    | 141   |                       |   | 443                     |  |                            |   |  |              |       |   |  |   | 584  
|Other current assets                       |  |                    | 24    |                       |   | 18                      |  |                            | 1  |  |              |       |   |  |   | 43   
|                                           |  |                    |       |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|Total current assets                       |  |                    | 413   |                       |   | 697                     |  |                            | 8  |  |              | 3      |   |  |   | 1,121
|Intercompany receivables                   |  |                    | 1,123 |                       |   | 201                     |  |                            | 14 |  |              | (1,338 | ) |  |   |     
|Property, plant and equipment, net         |  |                    | 14    |                       |   | 3,485                   |  |                            | 36 |  |              | 29     |   |  |   | 3,564
|Investment in subsidiaries                 |  |                    | 2,072 |                       |   | 43                      |  |                            |   |  |              | (2,115 | ) |  |   |     
|Other assets                               |  |                    | 178   |                       |   | 20                      |  |                            | 1  |  |              | (1     | ) |  |   | 198  
|                                           |  |                    |       |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|TOTAL ASSETS                               |  | $                  | 3,800 |                       | $ | 4,446                   |  | $                          | 59 |  | $            | (3,422 | ) |  | $ | 4,883
|                                           |  |                    |       |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|                                           |  |                    |       |                       |  
|LIABILITIES AND STOCKHOLDERS EQUITY       |  |                    |       |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|Accounts payable                           |  | $                  | 27    |                       | $ | 303                     |  | $                          | 8  |  | $            |       |   |  | $ | 338  
|Other current liabilities                  |  |                    | 97    |                       |   | 193                     |  |                            |   |  |              |       |   |  |   | 290  
|Current maturities of long-term debt       |  |                    | 16    |                       |   |                        |  |                            |   |  |              |       |   |  |   | 16   
|                                           |  |                    |       |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|Total current liabilities                  |  |                    | 140   |                       |   | 496                     |  |                            | 8  |  |              |       |   |  |   | 644  
|Intercompany payables                      |  |                    | 61    |                       |   | 1,277                   |  |                            |   |  |              | (1,338 | ) |  |   |     
|Long-term debt                             |  |                    | 2,763 |                       |   | 146                     |  |                            |   |  |              |       |   |  |   | 2,909
|Other long-term liabilities                |  |                    | 51    |                       |   | 300                     |  |                            |   |  |              |       |   |  |   | 351  
|Deferred income taxes                      |  |                    | 130   |                       |   | 155                     |  |                            | 8  |  |              |       |   |  |   | 293  
|Minority interest                          |  |                    |      |                       |   |                        |  |                            |   |  |              | 31     |   |  |   | 31   
|Stockholders equity                       |  |                    | 655   |                       |   | 2,072                   |  |                            | 43 |  |              | (2,115 | ) |  |   | 655  
|                                           |  |                    |       |                       |   |                         |  |                            |    |  |              |        |   |  |   |      
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |  | $                  | 3,800 |                       | $ | 4,446                   |  | $                          | 59 |  | $            | (3,422 | ) |  | $ | 4,883
|                                           |  |                    |       |                       |   |                         |  |                            |    |  |              |        |   |  |   |      



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NEWPAGE CORPORATION

SUPPLEMENTAL CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2008



|                                             |  |                    |       |   |                       |   |       |                         |  |                            |    |  |              |        |   |  |   |       |  
|-------------------------------------------- |  | ------------------ | ----- | - | --------------------- | - | ----- | ----------------------- |  | -------------------------- | -- |  | ------------ | ------ | - |  | - | ----- | -
|                                             |  | NewPageCorporation |       |   | GuarantorSubsidiaries |   |       | Non-GuarantorSubsidiary |  | Consolidation/Eliminations |    |  | Consolidated |       
|Net sales                                    |  | $                  | 2,144 |   |                       | $ | 3,911 |                         |  | $                          | 89 |  | $            | (1,788 | ) |  | $ | 4,356 |  
|Cost of sales                                |  |                    | 1,905 |   |                       |   | 3,776 |                         |  |                            | 89 |  |              | (1,791 | ) |  |   | 3,979 |  
|Selling, general and administrative expenses |  |                    | 148   |   |                       |   | 69    |                         |  |                            |   |  |              |       |   |  |   | 217   |  
|Equity in (earnings) loss of subsidiaries    |  |                    | (64   | ) |                       |   |      |                         |  |                            |   |  |              | 64     |   |  |   |      |  
|Interest expense                             |  |                    | 268   |   |                       |   | 9     |                         |  |                            |   |  |              |       |   |  |   | 277   |  
|Other (income) expense, net                  |  |                    | 5     |   |                       |   | (5    | )                       |  |                            |   |  |              |       |   |  |   |      |  
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |    |  |              |        |   |  |   |       |  
|Income (loss) before income taxes            |  |                    | (118  | ) |                       |   | 62    |                         |  |                            |   |  |              | (61    | ) |  |   | (117  | )
|Income tax (benefit)                         |  |                    | 2     |   |                       |   | (2    | )                       |  |                            |   |  |              |       |   |  |   |      |  
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |    |  |              |        |   |  |   |       |  
|Net income (loss)                            |  | $                  | (120  | ) |                       | $ | 64    |                         |  | $                          |   |  | $            | (61    | ) |  | $ | (117  | )
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |    |  |              |        |   |  |   |       |  

NEWPAGE CORPORATION

SUPPLEMENTAL CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED
DECEMBER 31, 2007



|                                             |  |                    |       |   |                       |   |       |                         |  |                            |   |  |              |        |   |  |   |       |  
|-------------------------------------------- |  | ------------------ | ----- | - | --------------------- | - | ----- | ----------------------- |  | -------------------------- | - |  | ------------ | ------ | - |  | - | ----- | -
|                                             |  | NewPageCorporation |       |   | GuarantorSubsidiaries |   |       | Non-GuarantorSubsidiary |  | Consolidation/Eliminations |   |  | Consolidated |       
|Net sales                                    |  | $                  | 2,106 |   |                       | $ | 1,832 |                         |  | $                          | 2 |  | $            | (1,772 | ) |  | $ | 2,168 |  
|Cost of sales                                |  |                    | 1,869 |   |                       |   | 1,799 |                         |  |                            | 2 |  |              | (1,775 | ) |  |   | 1,895 |  
|Selling, general and administrative expenses |  |                    | 120   |   |                       |   | 4     |                         |  |                            |  |  |              |       |   |  |   | 124   |  
|Equity in (earnings) of subsidiaries         |  |                    | (19   | ) |                       |   |      |                         |  |                            |  |  |              | 19     |   |  |   |      |  
|Interest expense                             |  |                    | 154   |   |                       |   |      |                         |  |                            |  |  |              |       |   |  |   | 154   |  
|Other (income) expense, net                  |  |                    | (3    | ) |                       |   | (1    | )                       |  |                            |  |  |              | 3      |   |  |   | (1    | )
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |   |  |              |        |   |  |   |       |  
|Income (loss) before income taxes            |  |                    | (15   | ) |                       |   | 30    |                         |  |                            |  |  |              | (19    | ) |  |   | (4    | )
|Income tax (benefit)                         |  |                    | (7    | ) |                       |   | 11    |                         |  |                            |  |  |              |       |   |  |   | 4     |  
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |   |  |              |        |   |  |   |       |  
|Net income (loss)                            |  | $                  | (8    | ) |                       | $ | 19    |                         |  | $                          |  |  | $            | (19    | ) |  | $ | (8    | )
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |   |  |              |        |   |  |   |       |  

NEWPAGE CORPORATION

SUPPLEMENTAL CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED
DECEMBER 31, 2006



|                                             |  |                    |       |   |                       |   |       |                         |  |                            |   |  |              |        |   |  |   |       |  
|-------------------------------------------- |  | ------------------ | ----- | - | --------------------- | - | ----- | ----------------------- |  | -------------------------- | - |  | ------------ | ------ | - |  | - | ----- | -
|                                             |  | NewPageCorporation |       |   | GuarantorSubsidiaries |   |       | Non-GuarantorSubsidiary |  | Consolidation/Eliminations |   |  | Consolidated |       
|Net sales                                    |  | $                  | 2,034 |   |                       | $ | 1,761 |                         |  | $                          |  |  | $            | (1,757 | ) |  | $ | 2,038 |  
|Cost of sales                                |  |                    | 1,839 |   |                       |   | 1,744 |                         |  |                            |  |  |              | (1,758 | ) |  |   | 1,825 |  
|Selling, general and administrative expenses |  |                    | 111   |   |                       |   | 1     |                         |  |                            |  |  |              |       |   |  |   | 112   |  
|Equity in (earnings) of subsidiaries         |  |                    | (17   | ) |                       |   |      |                         |  |                            |  |  |              | 17     |   |  |   |      |  
|Interest expense                             |  |                    | 146   |   |                       |   |      |                         |  |                            |  |  |              |       |   |  |   | 146   |  
|Other (income) expense, net                  |  |                    | (24   | ) |                       |   | (2    | )                       |  |                            |  |  |              | 1      |   |  |   | (25   | )
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |   |  |              |        |   |  |   |       |  
|Income (loss) from continuing operations     |  |                    | (21   | ) |                       |   | 18    |                         |  |                            |  |  |              | (17    | ) |  |   | (20   | )
|Income tax (benefit)                         |  |                    | (11   | ) |                       |   | 7     |                         |  |                            |  |  |              |       |   |  |   | (4    | )
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |   |  |              |        |   |  |   |       |  
|Income (loss) from continuing operations     |  |                    | (10   | ) |                       |   | 11    |                         |  |                            |  |  |              | (17    | ) |  |   | (16   | )
|Income (loss) from discontinued operations   |  |                    | (22   | ) |                       |   | 6     |                         |  |                            |  |  |              |       |   |  |   | (16   | )
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |   |  |              |        |   |  |   |       |  
|Net income (loss)                            |  | $                  | (32   | ) |                       | $ | 17    |                         |  | $                          |  |  | $            | (17    | ) |  | $ | (32   | )
|                                             |  |                    |       |   |                       |   |       |                         |  |                            |   |  |              |        |   |  |   |       |  



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NEWPAGE CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2008



|                                                             |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  
|------------------------------------------------------------ |  | ------------------ | ---- | - | --------------------- | - | ---- | ----------------------- |  | - | -------------------------- | - |  | ------------ | -- | - |  | - | ---- | -
|                                                             |  | NewPageCorporation |      |   | GuarantorSubsidiaries |   |      | Non-GuarantorSubsidiary |  |   | Consolidation/Eliminations |   |  | Consolidated |   
|CASH FLOWS FROM OPERATING ACTIVITES                          |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  
|Net cash provided by (used for) operating activities         |  | $                  | (45  | ) |                       | $ | 103  |                         |  | $ | (5                         | ) |  | $            | 7  |   |  | $ | 60   |  
|                                                             |  |                    |      |   |                      
|CASH FLOWS FROM INVESTING ACTIVITIES                         |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  
|Proceeds from sales of assets                                |  |                    |     |   |                       |   | 4    |                         |  |   | 2                          |   |  |              |   |   |  |   | 6    |  
|Cash paid for acquisition                                    |  |                    | (8   | ) |                       |   |     |                         |  |   |                           |   |  |              |   |   |  |   | (8   | )
|Capital expenditures                                         |  |                    | (11  | ) |                       |   | (154 | )                       |  |   |                           |   |  |              |   |   |  |   | (165 | )
|                                                             |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  
|Net cash provided by (used for) investing activities         |  |                    | (19  | ) |                       |   | (150 | )                       |  |   | 2                          |   |  |              |   |   |  |   | (167 | )
|                                                             |  |                    |      |   |                      
|CASH FLOWS FROM FINANCING ACTIVITIES                         |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  
|Distributions from Rumford                                   |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  
|Cogeneration to limited partners                             |  |                    |     |   |                       |   |     |                         |  |   |                           |   |  |              | (8 | ) |  |   | (8   | )
|Loans to parent companies                                    |  |                    | (7   | ) |                       |   |     |                         |  |   |                           |   |  |              |   |   |  |   | (7   | )
|Borrowings on revolving credit facility                      |  |                    | 153  |   |                       |   |     |                         |  |   |                           |   |  |              |   |   |  |   | 153  |  
|Payments on revolving credit facility                        |  |                    | (153 | ) |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   | (153 | )
|Repayments of long-term debt                                 |  |                    | (16  | ) |                       |   |     |                         |  |   |                           |   |  |              |   |   |  |   | (16  | )
|                                                             |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  
|Net cash provided by (used for) financing activities         |  |                    | (23  | ) |                       |   |     |                         |  |   |                           |   |  |              | (8 | ) |  |   | (31  | )
|                                                             |  |                    |      |   |                      
|Effect of exchange rate changes on cash and cash equivalents |  |                    |     |   |                       |   | (2   | )                       |  |   |                           |   |  |              |   |   |  |   | (2   | )
|                                                             |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  
|                                                             |  |                    |      |   |                      
|Net increase (decrease) in cash and cash equivalents         |  |                    | (87  | ) |                       |   | (49  | )                       |  |   | (3                         | ) |  |              | (1 | ) |  |   | (140 | )
|Cash and cash equivalents at beginning of period             |  |                    | 88   |   |                       |   | 49   |                         |  |   | 5                          |   |  |              | 1  |   |  |   | 143  |  
|                                                             |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  
|Cash and cash equivalents at end of period                   |  | $                  | 1    |   |                       | $ |     |                         |  | $ | 2                          |   |  | $            |   |   |  | $ | 3    |  
|                                                             |  |                    |      |   |                       |   |      |                         |  |   |                            |   |  |              |    |   |  |   |      |  



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NEWPAGE CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2007



|                                                     |  |                    |        |   |                       |   |     |                         |  |                            |   |  |              |     |   |  |   |        |  
|---------------------------------------------------- |  | ------------------ | ------ | - | --------------------- | - | --- | ----------------------- |  | -------------------------- | - |  | ------------ | --- | - |  | - | ------ | -
|                                                     |  | NewPageCorporation |        |   | GuarantorSubsidiaries |   |     | Non-GuarantorSubsidiary |  | Consolidation/Eliminations |   |  | Consolidated |    
|CASH FLOWS FROM OPERATING ACTIVITES                  |  |                    |        |   |                       |   |     |                         |  |                            |   |  |              |     |   |  |   |        |  
|Net cash provided by (used for) operating activities |  | $                  | 196    |   |                       | $ | 84  |                         |  | $                          |  |  | $            | (2  | ) |  | $ | 278    |  
|                                                     |  |                    |        |   |                      
|CASH FLOWS FROM INVESTING ACTIVITIES                 |  |                    |        |   |                       |   |     |                         |  |                            |   |  |              |     |   |  |   |        |  
|Cash paid for acquisition                            |  |                    | (1,552 | ) |                       |   | 61  |                         |  |                            | 5 |  |              |    |   |  |   | (1,486 | )
|Capital expenditures                                 |  |                    | (6     | ) |                       |   | (96 | )                       |  |                            |  |  |              |    |   |  |   | (102   | )
|                                                     |  |                    |        |   |                       |   |     |                         |  |                            |   |  |              |     |   |  |   |        |  
|Net cash provided by (used for) investing activities |  |                    | (1,558 | ) |                       |   | (35 | )                       |  |                            | 5 |  |              |    |   |  |   | (1,588 | )
|                                                     |  |                    |        |   |                      
|CASH FLOWS FROM FINANCING ACTIVITIES                 |  |                    |        |   |                       |   |     |                         |  |                            |   |  |              |     |   |  |   |        |  
|Proceeds from issuance of long-term debt             |  |                    | 2,008  |   |                       |   |    |                         |  |                            |  |  |              |    |   |  |   | 2,008  |  
|Payment of financing costs                           |  |                    | (62    | ) |                       |   |    |                         |  |                            |  |  |              |    |   |  |   | (62    | )
|Distributions from Rumford                           |  |                    |        |   |                       |   |     |                         |  |                            |   |  |              |     |   |  |   |        |  
|Cogeneration to limited partners                     |  |                    |       |   |                       |   |    |                         |  |                            |  |  |              | (8  | ) |  |   | (8     | )
|Loans to parent companies                            |  |                    | (5     | ) |                       |   |    |                         |  |                            |  |  |              |    |   |  |   | (5     | )
|Repayments of long-term debt                         |  |                    | (524   | ) |                       |   |    |                         |  |                            |  |  |              |    |   |  |   | (524   | )
|                                                     |  |                    |        |   |                       |   |     |                         |  |                            |   |  |              |     |   |  |   |        |  
|Net cash provided by (used for) financing activities |  |                    | 1,417  |   |                       |   |    |                         |  |                            |  |  |              | (8  | ) |  |   | 1,409  |  
|                                                     |  |                    |        |   |                      
|Net increase (decrease) in cash and cash equivalents |  |                    | 55     |   |                       |   | 49  |                         |  |                            | 5 |  |              | (10 | ) |  |   | 99     |  
|Cash and cash equivalents at beginning of period     |  |                    | 33     |   |                       |   |    |                         |  |                            |  |  |              | 11  |   |  |   | 44     |  
|                                                     |  |                    |        |   |                       |   |     |                         |  |                            |   |  |              |     |   |  |   |        |  
|Cash and cash equivalents at end of period           |  | $                  | 88     |   |                       | $ | 49  |                         |  | $                          | 5 |  | $            | 1   |   |  | $ | 143    |  
|                                                     |  |                    |        |   |                       |   |     |                         |  |                            |   |  |              |     |   |  |   |        |  



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NEWPAGE CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2006



|                                                                                         |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  
|---------------------------------------------------------------------------------------- |  | ------------------ | ---- | - | --------------------- | - | ---- | ----------------------- |  | -------------------------- | - |  | ------------ | -- | - |  | - | ---- | -
|                                                                                         |  | NewPageCorporation |      |   | GuarantorSubsidiaries |   |      | Non-GuarantorSubsidiary |  | Consolidation/Eliminations |   |  | Consolidated |   
|CASH FLOWS FROM OPERATING ACTIVITES                                                      |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  
|Net cash provided by (used for) operating activities                                     |  | $                  | 88   |   |                       | $ | 85   |                         |  | $                          |  |  | $            | 7  |   |  | $ | 180  |  
|                                                                                         |  |                    |      |   |                      
|CASH FLOWS FROM INVESTING ACTIVITIES                                                     |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  
|Proceeds from sales of assets                                                            |  |                    | 84   |   |                       |   | 145  |                         |  |                            |  |  |              |   |   |  |   | 229  |  
|Capital expenditures                                                                     |  |                    | (4   | ) |                       |   | (84  | )                       |  |                            |  |  |              |   |   |  |   | (88  | )
|Net cash flows from discontinued operations                                              |  |                    |     |   |                       |   | (1   | )                       |  |                            |  |  |              |   |   |  |   | (1   | )
|                                                                                         |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  
|Net cash provided by (used for) investing activities                                     |  |                    | 80   |   |                       |   | 60   |                         |  |                            |  |  |              |   |   |  |   | 140  |  
|                                                                                         |  |                    |      |   |                      
|CASH FLOWS FROM FINANCING ACTIVITIES                                                     |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  
|Payment of financing costs                                                               |  |                    | (1   | ) |                       |   |     |                         |  |                            |  |  |              |   |   |  |   | (1   | )
|Distributions from Rumford                                                               |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  
|Cogeneration to limited partners                                                         |  |                    |     |   |                       |   |     |                         |  |                            |  |  |              | (6 | ) |  |   | (6   | )
|Loans to parent companies                                                                |  |                    | (10  | ) |                       |   |     |                         |  |                            |  |  |              |   |   |  |   | (10  | )
|Intercompany transactions                                                                |  |                    | 145  |   |                       |   | (145 | )                       |  |                            |  |  |              |   |   |  |   |     |  
|Repayments of long-term debt                                                             |  |                    | (224 | ) |                       |   |     |                         |  |                            |  |  |              |   |   |  |   | (224 | )
|Net borrowings (payments) from revolving credit facility                                 |  |                    | (46  | ) |                       |   |     |                         |  |                            |  |  |              |   |   |  |   | (46  | )
|                                                                                         |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  
|Net cash provided by (used for)financing activities                                      |  |                    | (136 | ) |                       |   | (145 | )                       |  |                            |  |  |              | (6 | ) |  |   | (287 | )
|                                                                                         |  |                    |      |   |                      
|Increase in cash and cash equivalents from initial consolidation of Rumford Cogeneration |  |                    |     |   |                       |   |     |                         |  |                            |  |  |              | 10 |   |  |   | 10   |  
|                                                                                         |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  
|                                                                                         |  |                    |      |   |                      
|Net increase (decrease) in cash and cash equivalents                                     |  |                    | 32   |   |                       |   |     |                         |  |                            |  |  |              | 11 |   |  |   | 43   |  
|Cash and cash equivalents at beginning of period                                         |  |                    | 1    |   |                       |   |     |                         |  |                            |  |  |              |   |   |  |   | 1    |  
|                                                                                         |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  
|Cash and cash equivalents at end of period                                               |  | $                  | 33   |   |                       | $ |     |                         |  | $                          |  |  | $            | 11 |   |  | $ | 44   |  
|                                                                                         |  |                    |      |   |                       |   |      |                         |  |                            |   |  |              |    |   |  |   |      |  



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|V. | CONDENSED PARENT-ONLY FINANCIAL STATEMENTS
|-- | ------------------------------------------

NewPage Holding has no
independent assets or operations other than its investment in NewPage. The ability to repay the NewPage Holding PIK Notes will be dependent on the ability of NewPage to distribute funds to NewPage Holding or of NewPage Holding to raise sufficient
funds from issuing capital stock. Currently, NewPages existing indebtedness prevents it from making distributions to NewPage Holding.

The following
condensed parent-only financial statements of NewPage Holding reflect majority-owned subsidiaries using the equity basis of accounting.



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NEWPAGE HOLDING CORPORATIONPARENT ONLY

CONDENSED BALANCE SHEETS

DECEMBER
31, 2008 and 2007

Dollars in millions, except per share amounts



|                                                                                     |  |      |      |   |      |   |      |  
|------------------------------------------------------------------------------------ |  | ---- | ---- | - | ---- | - | ---- | -
|                                                                                     |  | 2008 |      |   | 2007 |  
|ASSETS                                                                               |  |      |      |   |      |   |      |  
|Investment in NewPage                                                                |  | $    | 157  |   |      | $ | 655  |  
|Other assets                                                                         |  |      | 1    |   |      |   | 20   |  
|                                                                                     |  |      |      |   |      |   |      |  
|TOTAL ASSETS                                                                         |  | $    | 158  |   |      | $ | 675  |  
|                                                                                     |  |      |      |   |      |   |      |  
|                                                                                     |  |     
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                       |  |      |      |   |      |   |      |  
|Long-term debtNewPage Holding PIK Notes                                             |  | $    | 182  |   |      | $ | 161  |  
|                                                                                     |  |     
|STOCKHOLDERS EQUITY (DEFICIT)                                                       |  |      |      |   |      |   |      |  
|Common stock10 shares authorized, issued and outstanding, $0.01 per share par value |  |      |     |   |      |   |     |  
|Additional paid-in capital                                                           |  |      | 661  |   |      |   | 632  |  
|Accumulated deficit                                                                  |  |      | (283 | ) |      |   | (141 | )
|Accumulated other comprehensive income (loss)                                        |  |      | (402 | ) |      |   | 23   |  
|                                                                                     |  |      |      |   |      |   |      |  
|Total stockholders equity (deficit)                                                 |  |      | (24  | ) |      |   | 514  |  
|                                                                                     |  |      |      |   |      |   |      |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                 |  | $    | 158  |   |      | $ | 675  |  
|                                                                                     |  |      |      |   |      |   |      |  

NEWPAGE HOLDING CORPORATIONPARENT ONLY

CONDENSED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

Dollars in millions



|                                             |  |      |      |   |      |   |     |      |  |   |     |  
|-------------------------------------------- |  | ---- | ---- | - | ---- | - | --- | ---- |  | - | --- | -
|                                             |  | 2008 |      |   | 2007 |   |     | 2006 | 
|Selling, general and administrative expenses |  | $    |     |   |      | $ | 3   |      |  | $ |    |  
|Interest expensenon-cash                    |  |      | 21   |   |      |   | 21  |      |  |   | 19  |  
|Equity in (earnings) loss of NewPage         |  |      | 117  |   |      |   | 8   |      |  |   | 32  |  
|                                             |  |      |      |   |      |   |     |      |  |   |     |  
|                                             |  |      |     
|Income (loss) before income taxes            |  |      | (138 | ) |      |   | (32 | )    |  |   | (51 | )
|Income tax expense (benefit)                 |  |      | 4    |   |      |   | (10 | )    |  |   | 1   |  
|                                             |  |      |      |   |      |   |     |      |  |   |     |  
|Net income (loss)                            |  | $    | (142 | ) |      | $ | (22 | )    |  | $ | (52 | )
|                                             |  |      |      |   |      |   |     |      |  |   |     |  



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NEWPAGE HOLDING CORPORATIONPARENT ONLY

CONDENSED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

Dollars in millions



|                                                                                                    |  |      |      |   |      |   |     |      |  |   |     |  
|--------------------------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- | - | --- | ---- |  | - | --- | -
|                                                                                                    |  | 2008 |      |   | 2007 |   |     | 2006 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                |  |      |      |   |      |   |     |      |  |   |     |  
|Net income (loss)                                                                                   |  | $    | (142 | ) |      | $ | (22 | )    |  | $ | (52 | )
|Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: |  |      |      |   |      |   |     |      |  |   |     |  
|Non-cash interest expense                                                                           |  |      | 21   |   |      |   | 21  |      |  |   | 19  |  
|Equity in (earnings) loss in NewPage                                                                |  |      | 117  |   |      |   | 8   |      |  |   | 32  |  
|Deferred income taxes                                                                               |  |      | 4    |   |      |   | (10 | )    |  |   |    |  
|Write-off of costs of withdrawn 2006 initial public offering                                        |  |      |     |   |      |   | 3   |      |  |   |    |  
|Change in accounts payable                                                                          |  |      |     |   |      |   | (1  | )    |  |   | 1   |  
|                                                                                                    |  |      |      |   |      |   |     |      |  |   |     |  
|Net cash provided by (used for) operating activities                                                |  |      |     |   |      |   | (1  | )    |  |   |    |  
|                                                                                                    |  |      |     
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                |  |      |      |   |      |   |     |      |  |   |     |  
|Loan from NewPage                                                                                   |  |      |     |   |      |   | 1   |      |  |   | 3   |  
|Payment of financing costs                                                                          |  |      |     |   |      |   |    |      |  |   | (3  | )
|                                                                                                    |  |      |      |   |      |   |     |      |  |   |     |  
|Net cash provided by financing activities                                                           |  |      |     |   |      |   | 1   |      |  |   |    |  
|                                                                                                    |  |      |      |   |      |   |     |      |  |   |     |  
|                                                                                                    |  |      |     
|Net increase in cash and cash equivalents and cash and cash equivalents at end of period            |  | $    |     |   |      | $ |    |      |  | $ |    |  
|                                                                                                    |  |      |      |   |      |   |     |      |  |   |     |  
|                                                                                                    |  |      |     
|SUPPLEMENTAL INFORMATION                                                                            |  |      |      |   |      |   |     |      |  |   |     |  
|Non-cash transaction                                                                               |  |      |      |   |      |   |     |      |  |   |     |  
|Issuance of securities by NewPage Group as acquisition consideration                                |  | $    |     |   |      | $ | 347 |      |  | $ |    |  
|                                                                                                    |  |      |      |   |      |   |     |      |  |   |     |  

* * * * *



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|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------

None.



|ITEM 9AT. | CONTROLS AND PROCEDURES
|--------- | -----------------------

Evaluation of NewPage Holdings
and NewPages disclosure controls and procedures

We maintain a system of internal accounting controls designed to provide reasonable assurance
that transactions are properly recorded and summarized so that reliable financial records and reports can be prepared and assets safeguarded. In addition, a system of disclosure controls is maintained to ensure that information required to be
disclosed is recorded, processed, summarized and reported in a timely manner to management responsible for the preparation and reporting of our financial information.

As of the end of the period covered by this Annual Report on Form 10-K, we evaluated the effectiveness of our disclosure controls and procedures. This evaluation was conducted under the supervision and
with the participation of management, including our chief executive officer (CEO) and chief financial officer (CFO). Based on the evaluation of disclosure controls and procedures, our CEO and CFO have concluded that the
disclosure controls and procedures were effective, as of December 31, 2008, to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 have been accumulated and
communicated to management, including our CEO and CFO, and other persons responsible for preparing these reports to allow timely decisions regarding required disclosure and that it is recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms.

Managements report on internal control over financial reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for each of NewPage Holding and NewPage. In order to
evaluate the effectiveness of internal control over financial reporting, management has conducted an assessment, including testing, using the criteria established in Internal Control  Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). NewPage Holdings and NewPages internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its
inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The audit committee of each of NewPage
Holdings and NewPages board of directors is composed solely of directors who are independent in accordance with the requirements of the New York Stock Exchange listing standards and the Exchange Act. The audit committee of each of
NewPage Holding and NewPage meets with the independent auditors, management and internal auditors periodically to discuss internal control over financial reporting and auditing and financial reporting matters. The committee reviews with the
independent auditors the scope and results of the audit effort. The committee also meets periodically with the independent auditors and the chief internal auditor without management present to ensure that the independent auditors and the chief
internal auditor have free access to the committee.



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Based on our assessment, under the criteria established in Internal Control  Integrated Framework, issued by
the COSO, management has concluded that NewPage Holding and NewPage maintained effective internal control over financial reporting as of December 31, 2008.

This annual report does not include an attestation report of our independent registered public accounting firm over managements assessment regarding internal control over financial controls due to a transition period established by
rules of the SEC for non-accelerated filers.



|ITEM 9B. | OTHER INFORMATION
|-------- | -----------------

None.

PART III



|ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|-------- | ------------------------------------------------------

The
following are the names, ages and a brief account of the business experience for at least the last five years of the directors and executive officers of NewPage Holding and NewPage as of February 20, 2009.



|                         |  |     |  |                                                                         
|------------------------ |  | --- |  | ------------------------------------------------------------------------
|Name                     |  | Age |  | Position                                                                
|Mark A. Suwyn            |  | 66  |  | Chairman of the Board and Chief Executive Officer                       
|                         |  |    
|Robert M. Armstrong      |  | 69  |  | Director                                                                
|                         |  |    
|Charles E. Long          |  | 69  |  | Director                                                                
|                         |  |    
|James R. Renna           |  | 38  |  | Director                                                                
|                         |  |    
|John W. Sheridan         |  | 54  |  | Director                                                                
|                         |  |    
|Lenard B. Tessler        |  | 56  |  | Director                                                                
|                         |  |    
|Michael S. Williams      |  | 59  |  | Director                                                                
|                         |  |    
|Alexander M. Wolf        |  | 34  |  | Director                                                                
|                         |  |    
|George J. Zahringer, III |  | 55  |  | Director                                                                
|                         |  |    
|Daniel A. Clark          |  | 50  |  | Senior Vice President, Business Excellence and Chief Information Officer
|                         |  |    
|Douglas K. Cooper        |  | 61  |  | Vice President, General Counsel and Secretary                           
|                         |  |    
|Michael T. Edicola       |  | 51  |  | Vice President, Human Resources                                         
|                         |  |    
|George F. Martin         |  | 52  |  | Senior Vice President, Operations                                       
|                         |  |    
|Michael L. Marziale      |  | 51  |  | Senior Vice President, Marketing, Strategy and General Management       
|                         |  |    
|Barry R. Nelson          |  | 44  |  | Senior Vice President, Sales                                            
|                         |  |    
|David J. Prystash        |  | 47  |  | Senior Vice President and Chief Financial Officer                       
|                         |  |    
|Richard D. Willett, Jr.  |  | 39  |  | President and Chief Operating Officer                                   



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Mark A. Suwynhas been chief executive officer since April 2006 and acted in that capacity on an interim
basis from March 2006 to April 2006. Mr. Suwyn has been the chairman of the board of directors of NewPage and NewPage Holding since May 2005 and has been the chairman of the board of directors of NewPage Group since October 2007. From November
2004 to May 2005, Mr. Suwyn served as a consultant for Cerberus Capital Management through Marsuw, LLP, a company for which he was the founder and president. Mr. Suwyn was chairman and chief executive officer of Louisiana-Pacific
Corporation from 1996 until October 2004. Mr. Suwyn serves as a board member of Ballard Power Systems Inc. and BlueLinx Holdings, Inc.

Robert
M. Armstronghas been a member of the board of directors of NewPage and NewPage Holding since April 2006 and a member of the board of directors of NewPage Group since October 2007. Mr. Armstrong serves on the board and audit committee
of the Quantitative Group of Mutual Funds. Mr. Armstrong has been a private consultant since 1998.

Charles E. Longhas been a member of
the board of directors of NewPage and NewPage Holding since March 2008 and a member of the board of directors of NewPage Group since December 2007. Mr. Long is a former vice chairman of Citicorp and its principal subsidiary, Citibank.
Mr. Long held various positions during his career with Citicorp, which began in 1972 and from which he retired in 1998. Mr. Long is also a director of The Drummond Company and Introgen Therapeutics, Inc.

James R. Rennahas been a member of the board of directors of NewPage, NewPage Holding and NewPage Group since April 2008. Mr. Renna has been a
financial executive with Cerberus Operations Inc. since May 2006. Prior to that he was a corporate vice president of MCI Communications from December 2002 to March 2006.

John W. Sheridanhas been a member of the board of directors of NewPage and NewPage Holding since August 2005 and a member of the board of directors of NewPage Group since October 2007. In February 2006,
Mr. Sheridan was appointed president and chief executive officer of Ballard Power Systems, Inc., a fuel cell manufacturer, after serving as interim chief executive officer since October 2005. Mr. Sheridan has served on the board of Ballard
Power Systems, Inc. since May 2001, serving as chairman of the board from June 2004 until February 2006.

Lenard B. Tesslerhas been a member
of the board of directors of NewPage and NewPage Holding since May 2005 and a member of the board of directors of NewPage Group since October 2007. Mr. Tessler has been a managing director of Cerberus Capital Management, L.P. since May 2001 to
the present. Mr. Tessler serves as a member of the board of directors of Chrysler LLC, LNR Property Corp. and GMAC LLC.

Michael S. Williamshas been a member of the board of directors of NewPage and NewPage Holding since August 2005 and a member of the board of directors of NewPage Group since October 2007. Mr. Williams has been chairman and chief executive officer of IAP
Worldwide Services Inc. since January 2008. Prior to that, he was an employee of Cerberus Capital Operations Inc. from January 2007 to January 2008. Prior to that he was president of Madoc LLC and served as a consultant for Cerberus Capital
Management, L.P. since October 2004. Mr. Williams was the president and chief executive officer of Netco Government Services Inc., an enterprise network integration solution provider, from February 2002 through October 2004.



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Alexander M. Wolfhas been a member of the board of directors of NewPage and NewPage Holding since May 2005
and a member of the board of directors of NewPage Group since October 2007. Mr. Wolf has been a managing director of Cerberus Capital Management, L.P. since March 2006, a senior vice president from April 2004 through February 2006 and a vice
president from December 2001 through March 2004.

George J. Zahringer, IIIhas been a member of the board of directors of NewPage and NewPage
Holding since May 2007 and a member of the board of directors of NewPage Group since October 2007. Since June 2008, Mr. Zahringer has been a managing director and client advisor at Deutsche Bank Securities Inc. Prior to that, Mr. Zahringer
was a senior managing director of Bear Stearns & Co., Inc. and served in its Private Client Services Division since 1979. Mr. Zahringer serves as a member of the board of directors of Remington Arms Company, Inc. and Chrysler LLC.

Daniel A. Clarkhas been senior vice president, business excellence and chief information officer since December 2007. Prior to that,
Mr. Clark was chief information officer and vice president of order management since May 2005. Prior to that, Mr. Clark was employed by MeadWestvaco Papers Group as vice president of order management from January 2002 to May 2005.

Douglas K. Cooperhas been vice president, general counsel and secretary since November 2005. Prior to that, Mr. Cooper was counsel
with Arent Fox PLLC, a law firm, from September 2004 through October 2005. Mr. Cooper was in private law practice from September 2003 to September 2004.

Michael T. Edicolahas been vice president, human resources since November 2007. Prior to that, Mr. Edicola served as vice president, human resources for Baxter International Corporation from July 2004 through December
2006. From September 1999 to April 2004, he served as vice president, human resources for Zebra Technologies Corporation.

George F. Martinhas been senior vice president, operations since December 2007. Prior to that Mr. Martin was vice president, operations since April 2006. Prior to that, Mr. Martin served as vice president, coated operations from May 2005 to March
2006. From February 2003 through April 2005, Mr. Martin was vice president of operations at the Escanaba mill of MeadWestvacos printing and writing papers group.

Michael L. Marzialehas been senior vice president, marketing strategy and general management since December 2007. Prior to that, Mr. Marziale was vice president of business development and chief
technology officer from August 2006 to December 2007. Mr. Marziale was vice president and general manager, carbonless systems and chief technology officer from May 2005 through July 2006. Prior to that, he was general manager, carbonless
systems of MeadWestvacos Papers Group since September 2002.

Barry R. Nelsonhas been senior vice president, sales since January 2008.
Prior to that, Mr. Nelson was vice president, printing sales since May 2005. Prior to that, Mr. Nelson was vice president, printing sales of MeadWestvaco Papers Group from August 2002 to May 2005.

David J. Prystash has been senior vice president and chief financial officer since September 2008. Prior to that, Mr. Prystash was controller, global
product development at Ford Motor Company from January 2005 to September 2008. From April 2006 until September 2008, he was a member of our board of directors. From June 2003 to December 2004, he was executive director, vehicle remarketing at Ford.

Richard D. Willett, Jr.has been president and chief operating officer since April 2006. Prior to that, Mr. Willett was executive vice
president and chief operating officer of Teleglobe International Holdings Ltd. since January 2005. Prior to that, he was chief financial officer and executive vice president since June 2004 and chief financial officer and vice president of
operations of Teleglobe Canada ULC and Teleglobe America Inc. since June 2003.



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Committees of the Board of Directors

The boards of directors of NewPage Holding and NewPage have established joint audit, compensation and compliance committees.

Our audit committee consists of Robert M. Armstrong, Charles E. Long and John W. Sheridan. As of December 31, 2008, all of the audit committee members were independent directors. Mr. Sheridan serves as the chairman of the audit
committee. Duties of the audit committee include:



| |  |  | appointing or replacing independent accountants
| | - |  | -----------------------------------------------



| |  |  | meeting with our independent accountants to discuss the planned scope of their examinations, the adequacy of our internal controls and our financial reporting
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | reviewing the results of the annual examination of our consolidated financial statements and periodic internal audit examinations
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | reviewing and approving the services and fees of our independent accountants
| | - |  | ----------------------------------------------------------------------------



| |  |  | monitoring and reviewing our compliance with applicable legal requirements
| | - |  | --------------------------------------------------------------------------



| |  |  | performing any other duties or functions deemed appropriate by our board of directors
| | - |  | -------------------------------------------------------------------------------------

Our board of directors has designated Mr. Armstrong as our audit committee financial expert.

Our compensation committee consists of Charles E. Long, Michael S. Williams and Alexander M. Wolf. Mr. Williams serves as the chairman of the compensation committee. Duties of the compensation committee include
administration of our stock option plans and approval of compensation arrangements for our executive officers.

Our compliance committee consists of James
R. Renna, Mark A. Suwyn and George J. Zahringer, III. Mr. Zahringer serves as the chairman of the compliance committee. Duties of the compliance committee include the oversight of our policies, programs and procedures to ensure compliance with
relevant laws.

Code of Ethics

We have adopted
a code of ethics for all associates, including our chief executive officer, chief financial officer, controller and treasurer, addressing business ethics and conflicts of interest. A copy of the code of ethics has been posted on our website at
www.newpagecorp.com.



|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

Compensation Discussion and Analysis

General Philosophy

The compensation committee
has responsibility for establishing, monitoring and implementing our compensation philosophy. We compensate our executive officers named in the Summary Compensation Table, who we refer to as the Executives, through a combination of base
salary, bonus plan awards, equity ownership, stock options and various other benefits, all designed to be competitive with comparable employers and to align each Executives compensation with the long-term interests of our stockholders.



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Base salary and bonus plan awards are determined and paid annually and are designed to reward current performance. Through various vesting and lock-up
restrictions, equity investments and stock options are designed to reward longer-term performance. We may also use discretionary executive bonus awards for special situations. Our process for setting annual Executive compensation consists of the
compensation committee establishing overall compensation targets for each Executive and allocating that compensation between base salary and annual bonus compensation. Executive bonus compensation is designed as at-risk pay to be earned
based on the achievement of company-wide performance objectives, personal performance objectives, the Executives demonstrated adherence to our core values and other factors deemed relevant by the compensation committee. The same compensation
policies apply to all Executives. Any differences in the level of compensation are as a result of the Executives position in the company, individual performance and external market considerations for the position.

Targeted Overall Cash Compensation

Under our compensation structure,
the mix of base salary and annual bonus compensation for each Executive varies depending upon his position with the company. The estimated allocation between base salary and bonus award at target levels is as follows:



|                                                                           |  |            |   |  |                  |  
|-------------------------------------------------------------------------- |  | ---------- | - |  | ---------------- | -
|                                                                           |  | BaseSalary |   |  | TargetBonusAward |  
|Chairman & Chief Executive Officer and President & Chief Operating Officer |  | 50         | % |  | 50               | %
|Other Executives                                                           |  | 55-60      | % |  | 40-45            | %

In allocating cash compensation between these elements, we believe that a significant portion of the compensation
of our Executivesthe level of management having the greatest ability to influence our performanceshould be performance-based and therefore at risk. In making this allocation, we relied in part upon the advice of Frederick W.
Cook & Co., which we refer to as Cook, and its survey findings and analysis, which validate this approach.

Compensation-Setting
Process

The compensation committee approves all compensation and awards to Executives, as well as the rest of our senior leadership team, and has
retained Cook as its compensation advisor. Generally, the compensation committee reviews data from Cook regarding compensation for our chief executive officer, his performance and then-current compensation and, following discussions with him,
establishes his compensation levels. For the remaining Executives, our chief executive officer makes recommendations to the compensation committee based on individual performance during the prior year and competitive data from surveys, available
public information and Cook.

Each year Cook prepares a study for the compensation committee that compares the compensation of individual Executives to the
compensation of similar positions at the following peer group companies, or Peer Group, in the forest products industry having market capitalizations comparable to what we believe our market capitalization would have been as a public company at the
beginning of that year, as presented in proxy statements filed during the prior year: Bemis Company, Inc., Crown Holdings Inc., Domtar Inc., Graphic Packaging Corporation, Greif Inc., MeadWestvaco Corporation, Packaging Corporation of America,
Pactiv Corporation, Rock-Tenn Company, Sealed Air Corporation, Smurfit-Stone Container Corp., Sonoco Products Company, Temple-Inland Inc. and Verso Paper, Inc. For 2008, the Cook study also compared the compensation of individual Executives to 2007
national survey data gathered by two independent compensation consultants; Hewitt and Towers Perrin. The Hewitt and Towers Perrin



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surveys each covered in excess of one hundred companies participating across all industries. The compensation committee did not review the individual surveys
used by Cook to prepare its study nor did it know the names of the companies included in the surveys. The Cook study was used by management and the compensation committee to help determine appropriate compensation levels for all Executives for 2008.
The compensation committee reviews total, short-term and long-term compensation annually with a view to aligning it with the 50thpercentile of the
selected Peer Group.

For purposes of setting 2008 base salary each Executive was reviewed against his contribution to key 2007 initiatives involving our
business as well as overall company performance (see the Compensation Discussion & Analysis section of Amendment No. 2 to the Form S-1 for NewPage Group Inc. filed with the SEC on August 20, 2008 for a description of 2007 key
initiatives and individual performance). Key initiatives during 2008 for all Executives included the following:



| |  |  | initiating and driving the integration of two similar-sized organizations in a manner that did not disrupt operations or customers, while also taking actions toward
achieving $265 million of value through realization of synergies from the combination
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | accelerating and achieving productivity initiatives and associated cost savings
| | - |  | -------------------------------------------------------------------------------



| |  |  | completely reviewing and changing market channels to reflect our broader product line and market presence
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | reacting to a major downturn in demand caused by the recession and doing so without a devastating effect on EBITDA
| | - |  | ------------------------------------------------------------------------------------------------------------------

The senior management of NewPage recommended to the compensation committee that no bonuses be granted to the Executives or other members of the senior leadership team for
2008. This recommendation was not based on individual performance, but as a result of company performance against targets and the desire to conserve cash and manage costs during the worst market downturn seen in many decades. The compensation
committee concurred with managements recommendation.

Despite the decision to not pay bonuses to Executives in 2008, the performance of each
Executive was reviewed for performance against company values, including safety, integrity, results, teamwork, communication, judgment and change. A summary of key individual achievements of the Executives in 2008 is discussed below.

MARK A. SUWYN The compensation committee discussed and assessed the performance of the chief executive officer. The
committee noted the successful integration of the acquired SENA facilities, people and businesses during the year. In addition the committee noted the swift response to a sudden and unprecedented market downturn, including facility shutdowns and
changes in market direction while keeping momentum positive for the company. The committee also noted the addition of several key talented executives to help manage through this critical phase.

In his role as chief executive officer, Mr. Suwyn led the assessment with the compensation committee of each other Executives individual performance against
company opportunities, our overall performance, and the specific responsibilities of the Executives position. The other Executives did not play a role in the determination of their own compensation, other than discussing with the chief
executive officer their individual performance.

RICHARD D. WILLETT, JR. Mr. Willett played the
lead role in preparing for and overseeing the integration activities of the SENA facilities with our existing operations. The integration task was enormous, adding eight mills to the companys five-mill system, rationalizing supply chains and
customer channels, eliminating over 1,000 positions, closing four paper machines and rationalizing



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over-lapping brands and products. Under his direction, a very aggressive plan was developed and implemented aimed at achieving $265 million of synergies.
Mr. Willett also continued to lead the implementation of our Lean Six Sigma effort that has taken significant costs out of our operations, in particular as we begin to bring that initiative to the new mills we added. During the year, demand for
coated products fell precipitously and Mr. Willett lead the combined effort of the senior leadership team to react by closing additional capacity and restructuring and refocusing marketing and sales efforts, and did so with far less effect on
EBITDA than might have been predicted.

DAVID J. PRYSTASH Mr. Prystash had been a director of the
company since April 2006. He was recruited from Ford Motor Company to become our chief financial officer, effective September 2008, at which time he resigned as a director. His extensive background in financial systems, treasury functions, managing
large organizations and hands-on business experience, in addition to his financial expertise, made him an ideal candidate for the company. The compensation committee did not evaluate Mr. Prystashs 2008 achievements since he did not join
the company until September 2008.

JASON W. BIXBY Mr. Bixby completed many of the efforts to
significantly enhance our ability to forecast key business elements, complete timely financial closings, and achieve compliance with Sarbanes-Oxley reporting requirements. Under Mr. Bixbys leadership, the finance organization also played
a key role in the integration of the acquired facilities and business by putting in place systems needed to manage our finance function as two different operating and financial reporting systems were integrated. In the fourth quarter of 2008,
Mr. Bixby returned to the Cerberus Capital Management organization.

MICHAEL L. MARZIALE
Mr. Marziale led the commercial group that planned and led the specific product, brand and channel strategies for the integration of the two companies. This included close cooperation with the operations, research and development and sales
organizations to design and implement plans that could be accomplished with our equipment, with our customers and on a tight timeline. He also established and led the general management group that has been critical in guiding paper machine uptime
and downtime decisions, product pricing and general market strategies to deal with the sudden downturn in demand. Mr. Marziale was also responsible for leading our research and development efforts and for the evaluation of other strategic
initiatives, including potential acquisitions and divestitures.

GEORGE F. MARTIN Mr. Martin was
responsible for all paper mill operations, purchasing, engineering and environment, health and safety. His organization was responsible for developing and implementing all the product and facilities rationalization steps in the mills. While managing
these changes, he also had responsibility for expanding our Lean Six Sigma efforts into the newly acquired mills. He also led the purchasing group as it dealt with rampant inflation in the prices of some of our raw materials in the first three
quarters of the year, and then drove deflation adjustments with our suppliers as oil and natural gas prices fell in the second half. The mills ran well despite continual change required by responses to price fluctuations in raw materials and
constant changes in product demand and line-up. Labor relations at the mills under Mr. Martin also were positive and showed improvement throughout the year. Furthermore, Mr. Martin initiated measures to add talented personnel in key
positions in his group.

Base Salaries

We have
established an annual base salary for each Executive that is designed to be competitive by position relative to the marketplace. Base salary compensates each Executive for the primary responsibilities of his position. Base salary is set at levels
that we believe enable us to attract and retain talent. Pursuant to each Executives employment agreement, his base salary may be increased periodically but may not be decreased. The compensation committee reviews each element of compensation
separately but also reviews the effect of any change in base salary on the target percentages relative to total annual compensation. Base salary differences among individual Executives reflect their differing roles in the company and the market pay
for those roles.



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Base salaries for Messrs. Suwyn, Bixby, Martin, Marziale and Willett were reviewed and increased effective
February 1, 2008 by 0%, 12.0%, 7.6%, 19.0%, and 7.5%, respectively. Increases were based on the compensation committees evaluation of each Executives individual performance in 2007 and his position relative to comparable executives
in Peer Group companies. Base levels were set taking into account our approach to the mix between base salary and bonus awards, as outlined in Targeted Overall Cash Compensation above.

Mr. Prystash joined our company in September 2008 and his base salary was determined by the compensation committee based principally on the competitive marketplace
for similar positions in Peer Group companies, the challenges of his new position with the company and his compensation package with his prior employer. He did not receive a base salary increase in 2008.

Annual Bonus Compensation

Annual bonus compensation for each
Executive is established by the compensation committee in its sole discretion. Our practice is to pay cash bonus awards based upon the achievement of our annual financial performance goals, our strategic performance initiatives and individual
performance objectives. Each Executives employment agreement designates an individual bonus target for that Executive, expressed as a percentage of base salary. The compensation committee reviews these bonus targets annually, and may increase
a bonus target in its discretion as part of its overall evaluation of compensation. Pursuant to each Executives employment agreement, his bonus target may be increased periodically but may not be decreased.

The companys bonus program consists of a profit sharing plan and a performance excellence plan, discussed below. This approach is intended to afford broad
participation in rewards through the profit sharing plan based on achievement of our financial performance goals, while making additional bonus compensation available through the performance excellence plan to a more limited group of senior managers
who can help determine and are responsible for implementing our overall business strategy.

The profit sharing plan includes all of the Executives and all
other exempt salaried employees. Each year the compensation committee establishes minimum, target and maximum percentages of salary to be awarded if the compensation committee determines that our financial performance objectives for the year are
met, along with any other criteria established at the discretion of the compensation committee. These financial performance objectives consisted of EBITDA, Debt Reduction and Synergy Achievement for 2008. We define EBITDA for these
purposes as net earnings plus interest, taxes, depreciation and amortization, as adjusted for non-cash items and other items that are allowed at the discretion of the compensation committee. We define Debt Reduction as the change in our
total indebtedness minus available cash balances. We define Synergy Achievement as savings realized from the SENA acquisition by optimizing paper production, reducing input costs and reducing selling, general and administrative expenses.
The compensation committee selected these objectives as guidelines because they were the primary financial metrics by which our Executives were evaluated by our principal stockholder. For 2008, EBITDA was weighted at 50%, Debt Reduction was weighted
at 25% and Synergy Achievement was weighted at 25%. The weightings were based on their relative importance to our company.



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Each objective is measured separately against a threshold, target and maximum goal. For 2008, these goals were as
follows:



|                    |  |           |     |        |   |         |  |  |  |   |    
|------------------- |  | --------- | --- | ------ | - | ------- |  |  |  | - | ---
|(in millions)       |  | Threshold |     | Target |   | Maximum
|EBITDA              |  | $         | 743 |        | $ | 825     |  |  |  | $ | 908
|Debt Reduction      |  |           | 136 |        |   | 151     |  |  |  |   | 177
|Synergy Achievement |  |           | 137 |        |   | 160     |  |  |  |   | 176

The actual results are used by the compensation committee as a general guideline to determine the funding for the
plan. If the compensation committee determines that the threshold goals are met or exceeded, funding will generally range from 50% to 150% of target for each objective, depending on results achieved. Generally, no funding will occur for any
objective as to which the threshold goal has not been met. After consideration of these factors, the compensation committee, at its discretion, determines the funding level to be used for the year. All participants receive the same percentage of
their base salary in any distribution under the plan. Applying these guidelines, the compensation committee evaluated our overall 2008 performance and did not award a bonus under the profit sharing plan because of the companys overall
financial performance against targets and the general effect of the current unprecedented economic decline.

Each of the Executives and a select group of
our salaried employees participated in the performance excellence plan in 2008. The compensation committee first determines the aggregate amount available under the plan. The committee then selects from the group of eligible participants those
individuals who will receive a bonus. Finally, the committee determines the amount of the bonus award for each of the individuals selected.

The targeted
annual bonus pool under this plan is based on the aggregate targets for the plan participants as a group, determined by reference to the participants base compensation. One half of the annual bonus pool is funded without regard to the
financial performance objectives. The other half of funding is then determined by the compensation committee in its discretion based on the achievement of the same financial objectives as under the profit sharing plan and using the same weighting
and the same threshold, target and maximum levels as in that plan.

The compensation committee in its discretion, after consulting with the chief executive
officer, selects Executives who will receive bonus awards and individual bonus awards for those Executives selected, based on the Executives individual performance goals and his adherence to our core values described above. There is no minimum
or maximum limit on any individual award. Due to the companys financial performance against targets and the general effect of the current economic conditions, the Executives were not awarded bonuses under the performance excellence plan for
2008.

For 2009, the compensation committee established financial performance objectives consisting of a combination of EBITDA (50%) and Debt
Reduction (50%). Due to a weaker economy and economic outlook, we believe that it will be a challenge to achieve the target financial goals in 2009 for funding of both the profit sharing and performance excellence plans at their target funding
levels. The maximum financial goals were designed to be difficult to achieve, and we believe that they will be.

Equity Ownership

We believe that it is a customary and competitive practice to include an equity-based element of compensation in the overall compensation package extended to executives
in similarly-situated companies.



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Equity ownership is intended to motivate Executives to make stronger business decisions, improve financial performance,
focus on both short-term and long-term objectives and encourage behaviors that protect and enhance the corporate interest. The amount of each individual stock option award is determined by the compensation committee based on a number of factors,
including the expected contribution of each Executive to the future success of our company, the other compensation, including options, being earned and held by that Executive and the amount of NewPage Group common stock owned by that Executive.

In 2008, the committee granted Mr. Prystash non-qualified options to purchase 800,000 shares of NewPage Group common stock as part of his agreement
to join the company as senior vice president and chief financial officer. The terms of the option award are disclosed in the Grants of Plan-Based Awards table.

Upon Mr. Bixbys termination of employment, all of his outstanding options were cancelled in accordance with his separation agreement.

Further information on equity ownership can be found in Equity Awards.

Severance and Change in Control Benefits

We may terminate an Executives employment without cause at any time, and an Executive may resign for good reason, each as defined in the
Executives employment agreement. We believe that in these situations we should provide reasonable severance benefits to assist the Executive with this transition, recognizing that it may take time for an Executive to find comparable employment
elsewhere.

Additionally, Mr. Marziales and Mr. Martins employment agreements provide for additional termination benefits in the
event of termination by us without cause or by the Executive for good reason within 12 months following the acquisition by NewPage Holding or its subsidiaries of the stock or assets of a business enterprise of at least substantially the same revenue
and total assets as NewPage Holding on a consolidated basis. This approach also helps align the interests of these Executives with the interests of our stockholders by providing additional compensation for completing a transaction that may be in the
best interests of our stockholders but might otherwise be detrimental to these Executives.

The amount and type of severance benefits available to our
Executives is described in Termination Benefits. Executive employment agreements were modified effective January 1, 2009 to comply with the requirements of Section 409A of the Internal Revenue Code.

Mr. Bixbys severance was determined in accordance with the terms of his employment agreement.

Other Benefits

Our Executives participate in a tax-qualified defined contribution plan, which includes individual
and employer matching contributions, as well as various health and welfare benefit plans, all on the same basis as other salaried employees. Our objective is to offer all salaried employees, including our Executives, a benefits package that is
competitive within our industry and labor markets.



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Compensation Committee Report

The compensation committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this annual report. Based on that review and discussion, the compensation committee recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in this annual report.



COMPENSATION COMMITTEEMichael S. WilliamsCharles E. LongAlexander M. Wolf




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Compensation Summary

The following table sets forth information concerning the compensation for our chief executive officer, our current and former chief financial officers, and our other three most highly compensated executive officers at the end of 2008.

SUMMARY COMPENSATION TABLE



|                                                                                     |      |      |  |           |         |          |         |                |  |                 |   |                                      |         |                         |  |         |   |  |         |         |  |           |          
|------------------------------------------------------------------------------------ | ---- | ---- |  | --------- | ------- | -------- | ------- | -------------- |  | --------------- | - | ------------------------------------ | ------- | ----------------------- |  | ------- | - |  | ------- | ------- |  | --------- | ---------
|Name and Principal Position                                                          |      | Year |  | Salary(1) |         | Bonus(2) |         | StockAwards(3) |  | OptionAwards(4) |   | Non-EquityIncentive PlanCompensation |         | All OtherCompesation(5) |  | Total  
|                                                                                     |      |      |  |           |         |          |         |               
|Mark A. SuwynChief Executive Officer                                                 |      | 2008 |  | $         | 775,000 |          | $       |               |  | $               |  |                                      | $       | 2,674,974               |  | $       |  |  | $       | 81,397  |  | $         | 3,531,371
|                                                                                     | 2007 |      |  | 772,916   |         |          |        |                |  | 3,480,532       |   |                                      | 82,352  |                         |  | 600,000 |   |  | 82,504  |         |  | 5,018,304
|                                                                                     | 2006 |      |  | 537,500   |         |          |        |                |  | 240,216         |   |                                      |        |                         |  | 223,000 |   |  | 205,724 |         |  | 1,206,440
|                                                                                     |      |      |  |           |         |          |         |               
|David J. PrystashSenior Vice President and Chief Financial Officer                   |      | 2008 |  |           | 114,754 |          |         | 85,000         |  |                 |  |                                      |         | 870,227                 |  |         |  |  |         | 60,666  |  |           | 1,130,647
|                                                                                     |      |      |  |           |         |          |         |                |  |                 |   |                                      |         |                         |  |         |   |  |         |         |  |          
|                                                                                     |      |      |  |           |         |          |         |               
|Jason W. BixbyFormer Senior Vice President and Chief Financial Officer               |      | 2008 |  |           | 280,000 |          |         |               |  |                 |  |                                      |         | 2,785,020               |  |         |  |  |         | 748,378 |  |           | 3,813,398
|                                                                                     | 2007 |      |  | 300,000   |         |          |        |                |  | 406,699         |   |                                      | 79,204  |                         |  | 300,000 |   |  | 47,270  |         |  | 1,133,173
|                                                                                     | 2006 |      |  | 11,905    |         |          |        |                |  |                |   |                                      |        |                         |  |        |   |  | 476     |         |  | 12,381   
|                                                                                     |      |      |  |           |         |          |         |               
|Richard D. Willett, Jr.President and Chief Operating Officer                         |      | 2008 |  |           | 500,000 |          |         |               |  |                 |  |                                      |         | 6,394,078               |  |         |  |  |         | 23,857  |  |           | 6,917,935
|                                                                                     | 2007 |      |  | 463,750   |         |          |        |                |  | 1,886,926       |   |                                      | 196,849 |                         |  | 800,000 |   |  | 40,061  |         |  | 3,387,586
|                                                                                     | 2006 |      |  | 322,500   |         |          |        |                |  | 1,095,620       |   |                                      |        |                         |  | 135,000 |   |  | 39,612  |         |  | 1,592,732
|                                                                                     |      |      |  |           |         |          |         |               
|Michael L. MarzialeSenior Vice President, Marketing, Strategy and General Management |      | 2008 |  |           | 288,000 |          |         |               |  |                 |  |                                      |         | 736,271                 |  |         |  |  |         | 38,663  |  |           | 1,062,934
|                                                                                     | 2007 |      |  | 241,618   |         |          | 50,000  |                |  | 812,792         |   |                                      | 22,667  |                         |  | 400,000 |   |  | 52,512  |         |  | 1,579,589
|                                                                                     | 2006 |      |  | 233,960   |         |          | 237,420 |                |  | 56,050          |   |                                      |        |                         |  | 68,000  |   |  | 25,546  |         |  | 620,976  
|                                                                                     |      |      |  |           |         |          |         |               
|George F. MartinSenior Vice President, Operations                                    |      | 2008 |  |           | 296,000 |          |         |               |  |                 |  |                                      |         | 736,271                 |  |         |  |  |         | 28,440  |  |           | 1,060,711
|                                                                                     | 2007 |      |  | 272,253   |         |          |        |                |  | 812,792         |   |                                      | 22,667  |                         |  | 300,000 |   |  | 32,142  |         |  | 1,439,854
|                                                                                     | 2006 |      |  | 241,453   |         |          |        |                |  | 56,050          |   |                                      |        |                         |  | 83,000  |   |  | 27,665  |         |  | 408,168  



|(1) | Represents base salary actually earned during the year.
|--- | -------------------------------------------------------

|(2) | For Mr. Prystash, the amount for 2008 represents a bonus paid upon his commencing employment as senior vice president and chief financial officer. For Mr. Marziale, the
amount for 2007 represents a bonus paid for his efforts in connection with the acquisition of SENA and other strategic initiatives, and the amount for 2006 represents a bonus paid upon completion of the sale of our carbonless paper business.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Represents the amount of equity compensation expensed during the year in accordance with SFAS No. 123R. See Equity Awards for more information.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Represents the amount of equity compensation expensed during the year in accordance with SFAS No. 123R, based on the fair values of stock options granted under the NewPage
Group Equity Incentive Plan. See the notes to the financial statements for the assumptions used in the valuation of the options. See Equity Awards for more information.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | See the following table, which provides further details about All Other Compensation.
|--- | -------------------------------------------------------------------------------------



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ALL OTHER COMPENSATION



|                        |  |      |  |                                               |        |                |   |               |  |           |         |                            |   |         |  |   |        
|----------------------- |  | ---- |  | --------------------------------------------- | ------ | -------------- | - | ------------- |  | --------- | ------- | -------------------------- | - | ------- |  | - | -------
|Name                    |  | Year |  | CompanyContributionsto RetirementSavings Plan |        | Relocation (1) |   | Severance (2) |  | Other (3) |         | Total AllOtherCompensation
|                        |  |      |  |                                               |        |               
|Mark A. Suwyn           |  | 2008 |  | $                                             | 15,757 |                | $ |              |  | $         |        |                            | $ | 65,640  |  | $ | 81,397 
|                        |  | 2007 |  |                                               | 11,250 |                |   |              |  |           |        |                            |   | 71,254  |  |   | 82,504 
|                        |  | 2006 |  |                                               | 8,800  |                |   |              |  |           |        |                            |   | 196,924 |  |   | 205,724
|                        |  |      |  |                                               |        |               
|David J. Prystash       |  | 2008 |  |                                               | 6,916  |                |   |              |  |           |        |                            |   | 53,750  |  |   | 60,666 
|                        |  |      |  |                                               |        |               
|Jason W. Bixby          |  | 2008 |  |                                               | 9,200  |                |   | 7,500         |  |           | 731,678 |                            |   |        |  |   | 748,378
|                        |  | 2007 |  |                                               | 20,250 |                |   | 23,270        |  |           |        |                            |   | 3,750   |  |   | 47,270 
|                        |  | 2006 |  |                                               | 476    |                |   |              |  |           |        |                            |   |        |  |   | 476    
|                        |  |      |  |                                               |        |               
|Richard D. Willett, Jr. |  | 2008 |  |                                               | 15,757 |                |   |              |  |           |        |                            |   | 8,100   |  |   | 23,857 
|                        |  | 2007 |  |                                               | 11,250 |                |   | 16,873        |  |           |        |                            |   | 11,938  |  |   | 40,061 
|                        |  | 2006 |  |                                               | 8,800  |                |   | 26,023        |  |           |        |                            |   | 4,789   |  |   | 39,612 
|                        |  |      |  |                                               |        |               
|Michael L. Marziale     |  | 2008 |  |                                               | 24,150 |                |   | 10,743        |  |           |        |                            |   | 3,770   |  |   | 38,663 
|                        |  | 2007 |  |                                               | 26,070 |                |   | 25,030        |  |           |        |                            |   | 1,412   |  |   | 52,512 
|                        |  | 2006 |  |                                               | 23,759 |                |   |              |  |           |        |                            |   | 1,787   |  |   | 25,546 
|                        |  |      |  |                                               |        |               
|George F. Martin        |  | 2008 |  |                                               | 24,150 |                |   |              |  |           |        |                            |   | 4,290   |  |   | 28,440 
|                        |  | 2007 |  |                                               | 28,125 |                |   |              |  |           |        |                            |   | 4,017   |  |   | 32,142 
|                        |  | 2006 |  |                                               | 25,300 |                |   |              |  |           |        |                            |   | 2,365   |  |   | 27,665 



|(1) | Relocation expense includes tax gross-ups of $900 for Mr. Marziale in 2008, $10,279, $7,472 and $7,150 for Mr. Bixby, Mr. Marziale and Mr. Willett in 2007 and
$5,343 for Mr. Willett in 2006.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For Mr. Bixby, Severance consists of cash severance of $682,500 (which includes payment of $10,500 in lieu of outplacement services), accrued vacation of $25,847
and continued welfare benefits for 24 months after termination of approximately $23,331. See Severance Benefits for Former Chief Financial Officer for more information.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | For all Executives, Other consists of cash compensation for contributions calculated under the tax-qualified defined contribution plan that would be in excess of
allowable IRS contribution limits for the plan. Other for Mr. Suwyn in 2008 also consists of (i) $45,290 paid to him in reimbursement of personal travel expenses to and from our Dayton headquarters and temporary living expenses
in Dayton, as negotiated in conjunction with Mr. Suwyns acceptance of employment as our chief executive officer and (ii) $4,000 for financial planning. Other for Mr. Suwyn in 2007 also consists of $43,858 paid to him
in reimbursement of personal travel expenses. Other for Mr. Suwyn in 2006 also includes (i) directors fees of $141,667 paid to him for his service as chairman prior to his employment as chief executive officer and
(ii) $33,944 paid to him in reimbursement of personal travel expenses. Other for Mr. Prystash includes directors fees of $53,750 paid to him prior to his employment as senior vice president and chief financial officer.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Employment Agreements

Pursuant
to Mr. Suwyns employment agreement, he began serving a three year term as our chairman and chief executive officer on April 13, 2006. His current annual base salary is $775,000 and his bonus target is equal to 100% of his base
salary, each subject to increase by the compensation committee from time to time. At any time prior to the end of the term of his employment agreement, our board of directors may request that Mr. Suwyn retire as chief executive officer but
remain as chairman of the board, in which case Mr. Suwyn will receive an annual consulting fee of $500,000.

Each of Messrs. Martin, Marziale,
Prystash and Willett is party to an employment agreement under which each is entitled to a minimum annual base salary and each is assigned a minimum bonus target, expressed as a percentage of base salary. For 2008, bonus targets for Messrs. Martin,
Marziale, Prystash and Willett were 65%, 65%, 75% and 100%, respectively. See Termination Benefits for information concerning the severance benefits provided under our Executive employment agreements and other terms applicable in
connection with the termination of an Executives employment with us.



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Equity Awards

GRANTS OF PLAN-BASED AWARDS



|                        |  |              |  |                                                                     |           |     |                                                             |            |                                                               |     |                                           |   |                                         |     |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|----------------------- |  | ------------ |  | ------------------------------------------------------------------- | --------- | --- | ----------------------------------------------------------- | ---------- | ------------------------------------------------------------- | --- | ----------------------------------------- | - | --------------------------------------- | --- | ---------- | - |  | ------- |  | ------- |  | ------- |  | - | ----- |  | - | ---------
|Name                    |  | Grant Date   |  | Estimated Future Payments UnderNon-Equity Incentive Plan Awards (1) |           |     | Estimated Future Payments UnderEquity Incentive Plan Awards |            | All OtherOptionAwards:Number ofSecuritiesUnderlyingOptions(#) |     | Exerciseor BasePrice ofOptionAwards($/sh) |   | Grant DateFair Valueof OptionAwards (2)
|                        |  | Threshold($) |  |                                                                     | Target($) |     |                                                             | Maximum($) |                                                               |     | Threshold(#)                              |   | Target(#)                               |     | Maximum(#) |   |  |        
|Mark A. Suwyn           |  |              |  | $                                                                   | 27,125    | (3) |                                                             | $          | 54,250                                                        | (3) |                                           | $ | 81,375                                  | (3) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  |              |  |                                                                     |          |     |                                                             |            | 720,750                                                       | (4) |                                           |   | None                                    | (5) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  | 03/24/2008   |  |                                                                     |           |     |                                                             |            |                                                               |     |                                           |   |                                         |     |            |  |  | 121,382 |  | 121,382 |  |        |  | $ | 21.22 |  | $ | 1,562,186
|                        |  |              |  |                                                                     |           |     |                                                             |            |                                                               |    
|David J. Prystash       |  |              |  |                                                                     | 14,525    | (3) |                                                             |            | 29,050                                                        | (3) |                                           |   | 43,575                                  | (3) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  |              |  |                                                                     |          |     |                                                             |            | 282,200                                                       | (4) |                                           |   | None                                    | (5) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  | 09/22/2008   |  |                                                                     |           |     |                                                             |            |                                                               |     |                                           |   |                                         |     |            |   |  |         |  |         |  | 400,000 |  |   | 21.22 |  |   | 6,208,000
|                        |  |              |  |                                                                     |           |     |                                                             |            |                                                               |    
|Jason W. Bixby          |  |              |  |                                                                     | 11,760    | (3) |                                                             |            | 23,520                                                        | (3) |                                           |   | 35,280                                  | (3) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  |              |  |                                                                     |          |     |                                                             |            | 194,880                                                       | (4) |                                           |   | None                                    | (5) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  | 03/24/2008   |  |                                                                     |           |     |                                                             |            |                                                               |     |                                           |   |                                         |     |            |  |  | 116,743 |  | 116,743 |  |        |  |   | 21.22 |  |   | 1,502,482
|                        |  | 09/08/2008   |  |                                                                     |           |     |                                                             |            |                                                               |     |                                           |   |                                         |     |            |   |  |         |  |         |  | 233,486 |  |   | 21.22 |  |   | 1,336,712
|                        |  |              |  |                                                                     |           |     |                                                             |            |                                                               |    
|Richard D. Willett, Jr. |  |              |  |                                                                     | 17,500    | (3) |                                                             |            | 35,000                                                        | (3) |                                           |   | 52,500                                  | (3) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  |              |  |                                                                     |          |     |                                                             |            | 465,000                                                       | (4) |                                           |   | None                                    | (5) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  | 03/24/2008   |  |                                                                     |           |     |                                                             |            |                                                               |     |                                           |   |                                         |     |            |  |  | 290,143 |  | 290,143 |  |        |  |   | 21.22 |  |   | 3,734,140
|                        |  |              |  |                                                                     |           |     |                                                             |            |                                                               |    
|Michael D. Marziale     |  |              |  |                                                                     | 10,080    | (3) |                                                             |            | 20,160                                                        | (3) |                                           |   | 30,240                                  | (3) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  |              |  |                                                                     |          |     |                                                             |            | 167,040                                                       | (4) |                                           |   | None                                    | (5) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  | 03/24/2008   |  |                                                                     |           |     |                                                             |            |                                                               |     |                                           |   |                                         |     |            |  |  | 33,410  |  | 33,410  |  |        |  |   | 21.22 |  |   | 429,987  
|                        |  |              |  |                                                                     |           |     |                                                             |            |                                                               |    
|George F. Martin        |  |              |  |                                                                     | 10,360    | (3) |                                                             |            | 20,720                                                        | (3) |                                           |   | 31,080                                  | (3) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  |              |  |                                                                     |          |     |                                                             |            | 171,680                                                       | (4) |                                           |   | None                                    | (5) |            |   |  |         |  |         |  |         |  |   |       |  |   |          
|                        |  | 03/24/2008   |  |                                                                     |           |     |                                                             |            |                                                               |     |                                           |   |                                         |     |            |  |  | 33,410  |  | 33,410  |  |        |  |   | 21.22 |  |   | 429,987  



|(1) | The amounts shown represent the estimated possible payment at the time of grant. No payouts to the Executives will be made for 2008.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(2) | The grant date fair value of the options was determined in accordance with SFAS No. 123R and will be recognized over the three-year vesting period. See the notes to
the financial statements for information on the material terms of the awards and the assumptions used in determining the grant date fair value.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Amounts represent the estimated range of payout under the profit sharing plan. See Compensation Discussion and AnalysisAnnual Bonus Compensation for more
information about the plan.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Amounts represent the estimated range of payout under the performance excellence plan. See Compensation Discussion and AnalysisAnnual Bonus Compensation for more
information about the plan.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | There is no limit on the maximum amount that could be awarded to any one Executive, subject to the aggregate amount approved under the plan for all participants. See
Compensation Discussion and AnalysisAnnual Bonus Compensation for more information about the plan.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END



|                        |  |                                                                    |  |                                                                      |  |                                                                                       |  |                         |       |                    |           
|----------------------- |  | ------------------------------------------------------------------ |  | -------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ----------------------- | ----- | ------------------ | ----------
|Name                    |  | Number ofSecuritiesUnderlyingUnexercisedOptions (#)Exercisable (1) |  | Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable (1) |  | EquityIncentivePlanAwards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions (#) |  | OptionExercisePrice ($) |       | OptionExerciseDate
|Mark A. Suwyn           |  | 121,382                                                            |  | 242,764                                                              |  | 121,382                                                                               |  | $                       | 21.22 |                    | 12/21/2017
|David J. Prystash       |  |                                                                   |  | 400,000                                                              |  |                                                                                      |  |                         | 21.22 |                    | 09/22/2018
|Jason W. Bixby          |  |                                                                   |  |                                                                     |  |                                                                                      |  |                         |       |                    |           
|Richard D. Willett, Jr. |  | 290,143                                                            |  | 580,287                                                              |  | 290,143                                                                               |  |                         | 21.22 |                    | 12/21/2017
|Michael L. Marziale     |  | 33,410                                                             |  | 66,819                                                               |  | 33,410                                                                                |  |                         | 21.22 |                    | 12/21/2017
|George F. Martin        |  | 33,410                                                             |  | 66,819                                                               |  | 33,410                                                                                |  |                         | 21.22 |                    | 12/21/2017



|(1) | Represents options to acquire common stock that vest in three equal annual installments beginning on December 21, 2008, except that Mr. Prystashs options vest in
three equal annual installments beginning on December 31, 2009.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NewPage Group Equity Incentive Plan

On December 21, 2007, each Executive then employed by us was granted non-qualified options to purchase NewPage Group common stock under the NewPage Group Equity
Incentive Plan. Vesting of one-half of these stock options is time-based in three equal annual installments commencing December 31, 2008. The other half of the stock options have performance-based vesting and will vest in three equal annual
installments commencing December 31, 2008, but only if annual EBITDA, ROIC and Debt Reduction performance targets, as established by the compensation committee, are met. However, upon a change of control or if we complete an initial public
offering, a portion of the stock options will vest upon the change of control or the completion of the initial public offering, as applicable. Finally, the stock options will vest on each vesting date only if the Executive remains employed by us on
that vesting date. Because the performance targets are determined annually by the compensation committee, we have only considered the performance-based stock options as granted when the compensation committee sets the performance targets for the
applicable year.

Upon Mr. Prystashs commencement of employment, he was granted non-qualified options to purchase NewPage Group common stock
under the NewPage Group Equity Incentive Plan upon the same terms as the other Executives, except that the vesting of the options is over three equal annual installments commencing December 31, 2009. Following his commencement of employment,
Mr. Prystashs stock options received as a director on December 21, 2007 expired.

Upon Mr. Bixbys termination of employment, all
of his outstanding stock options were cancelled in accordance with his separation agreement and were replaced by a right to receive the difference between the option exercise price and fair market value of the underlying common stock, which resulted
in a payment of zero.

Each Executive is subject to a five-year lock-up agreement with NewPage Group with respect to his vested options and the underlying
shares of NewPage Group common stock, subject to certain limited exceptions.



114



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Termination Benefits

Severance Benefits

Severance benefits are specified in each Executives employment agreement. If we terminate an Executives
employment without cause or if the Executive resigns for good reason, the Executive will continue to receive base salary and benefits to the date of termination and will receive the following additional benefits after
executing, and not revoking, a general release:



| |  |  | For Mr. Suwyn, a cash amount equal to his base salary and for Messrs. Prystash and Willett, a cash amount equal to two times their base salary. For Messrs.
Martin and Marziale, a cash amount equal to (a) twice their base salary less the initial purchase price of their NewPage Group common stock, or (b) three times their base salary less the initial purchase price of their common stock if the
termination of employment occurs within 12 months after an acquisition by NewPage Holding or its subsidiaries of the stock or assets of a business enterprise of at least substantially the same revenue and total assets as NewPage Holding on a
consolidated basis. In addition, for Messrs. Martin and Marziale, if at the time of termination the fair market value of their NewPage Group common stock is less than the purchase price they paid for that common stock, they will also receive a
payment equal to that difference.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The pro rata portion of his annual bonus award for the year of termination. This would be paid at the time of termination based on (a) the bonus award from the
prior year if the date of termination is prior to June 1, or (b) what his bonus award would have been had he not been terminated if the date of termination is on or after June 1.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Continuation of health and welfare benefits for 24 months after the termination date.
| | - |  | -------------------------------------------------------------------------------------



| |  |  | Payment for unused accrued vacation time for the year in which termination occurs.
| | - |  | ----------------------------------------------------------------------------------



| |  |  | Outplacement services for 12 months, except for Mr. Suwyn.
| | - |  | ----------------------------------------------------------

As defined in the employment agreements, cause includes commission of a felony, willful and fraudulent conduct, dishonesty resulting in personal gain, and other serious misconduct, and good
reason includes reduction of base salary or bonus target, required relocation farther than 50 miles and other significant adverse employer actions.

If an Executives termination is caused by death or disability, the Executive or his estate will receive the pro rata portion of his annual bonus award and payment of unused accrued vacation time. If an Executive termination is
initiated by us for cause or by the Executive without good reason, the Executive will not be entitled to any severance payments other than salary and benefits accrued through the termination date.

If the board requests that Mr. Suwyn resign as our chief executive officer and remain as chairman of the board, Mr. Suwyn will be entitled to receive a
prorated bonus award for the year of termination based on the number of days worked during that year, but not less than half of the annual bonus award amount.

Mr. Bixby ceased serving as an executive officer in September 2008. A summary of his compensation and severance arrangement is included in the Summary Compensation Table and under Severance Benefits for Former Chief Financial
Officer.



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Non-Competition and Non-Solicitation Provisions

Each Executive is subject to certain non-competition and non-solicitation restrictions following termination of employment for any reason. For Messrs. Bixby, Prystash and Willett these restrictions run for two years
and for the remaining Executives these restrictions run for one year following termination.

Equity Ownership Implications upon Termination

If Mr. Suwyn is terminated as our chairman without cause or resigns as our chairman for good reason (each as defined in his employment agreement
and summarized above), NewPage Group or NewPage Investments LLC must, upon request, purchase his common stock for fair market value, subject to certain exceptions. If Mr. Suwyn dies, is terminated as our chairman with cause or as a result of
disability, or resigns as our chairman without good reason, NewPage Group or NewPage Investments LLC may, but are not required to, repurchase his NewPage Group common stock at fair market value unless we have then completed an initial public
offering.

If Messrs. Martin, Marziale or Willett is terminated without cause or resigns for good reason (each as defined in his employment agreement and
summarized above), NewPage Group or NewPage Investments LLC must, upon request, purchase his common stock for fair market value, subject to certain exceptions. If Messrs. Martin, Marziale or Willett dies, is terminated with cause or as a result of
disability or resigns without good reason, NewPage Group or NewPage Investments LLC may, but are not required to, repurchase his NewPage Group common stock at fair market value unless we have then completed an initial public offering.



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##### Table of Contents

Termination Benefits Summary

Below is the summary of the estimated termination benefits that would have been paid to each current Executive as of December 31, 2008 in the various circumstances listed:

TERMINATION BENEFITS



|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|--------------------------- |  | ------------------------ | --------- | --------------------------- | - | ---------------------- |  | ------------------------- | --------- |  | - | ---------
|Name                        |  | TerminationWithCause (1) |           | TerminationWithoutCause (2) |   | Death orDisability (3) |  | SignificantAcquisition(4)
|Mark A. Suwyn(5)            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Cash severance(6)           |  | $                        | 59,615    |                             | $ | 834,615                |  | $                         | 59,615    |  | $ | 834,615  
|Health and welfare benefits |  |                          |          |                             |   | 4,499                  |  |                           |          |  |   | 4,499    
|Purchase of stock           |  |                          | 4,197,381 |                             |   | 4,197,381              |  |                           | 4,197,381 |  |   | 4,197,381
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Total                       |  | $                        | 4,256,996 |                             | $ | 5,036,495              |  | $                         | 4,256,996 |  | $ | 5,036,495
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|David J. Prystash           |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Cash severance(6)           |  | $                        | 31,923    |                             | $ | 861,923                |  | $                         | 31,923    |  | $ | 861,923  
|Health and welfare benefits |  |                          |          |                             |   | 24,783                 |  |                           |          |  |   | 24,783   
|Outplacement benefits       |  |                          |          |                             |   | 10,500                 |  |                           |          |  |   | 10,500   
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Total                       |  | $                        | 31,923    |                             | $ | 897,206                |  | $                         | 31,923    |  | $ | 897,206  
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Richard D. Willett, Jr.     |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Cash severance(6)           |  | $                        | 38,462    |                             | $ | 1,038,462              |  | $                         | 38,462    |  | $ | 1,038,462
|Health and welfare benefits |  |                          |          |                             |   | 25,273                 |  |                           |          |  |   | 25,273   
|Outplacement benefits       |  |                          |          |                             |   | 10,500                 |  |                           |          |  |   | 10,500   
|Purchase of stock           |  |                          | 1,288,104 |                             |   | 1,288,104              |  |                           | 1,288,104 |  |   | 1,288,104
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Total                       |  | $                        | 1,326,566 |                             | $ | 2,362,339              |  | $                         | 1,326,566 |  | $ | 2,362,339
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Michael L. Marziale         |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Cash severance(6)           |  | $                        | 33,231    |                             | $ | 481,479                |  | $                         | 33,231    |  | $ | 769,479  
|Health and welfare benefits |  |                          |          |                             |   | 17,284                 |  |                           |          |  |   | 17,284   
|Outplacement benefits       |  |                          |          |                             |   | 10,500                 |  |                           |          |  |   | 10,500   
|Purchase of stock           |  |                          | 980,187   |                             |   | 980,187                |  |                           | 980,187   |  |   | 980,187  
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Total                       |  | $                        | 1,013,418 |                             | $ | 1,489,450              |  | $                         | 1,013,418 |  | $ | 1,777,450
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|George F. Martin            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Cash severance(6)           |  | $                        | 34,154    |                             | $ | 498,402                |  | $                         | 34,154    |  | $ | 794,402  
|Health and welfare benefits |  |                          |          |                             |   | 23,100                 |  |                           |          |  |   | 23,100   
|Outplacement benefits       |  |                          |          |                             |   | 10,500                 |  |                           |          |  |   | 10,500   
|Purchase of stock           |  |                          | 980,187   |                             |   | 980,187                |  |                           | 980,187   |  |   | 980,187  
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          
|Total                       |  | $                        | 1,014,341 |                             | $ | 1,512,189              |  | $                         | 1,014,341 |  | $ | 1,808,189
|                            |  |                          |           |                             |   |                        |  |                           |           |  |   |          



|(1) | Includes termination by us for cause and resignation by the Executive without good reason. For purposes of this column, we have assumed that NewPage Group would elect to repurchase
the common stock, which is valued at fair value at December 31, 2008.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes termination by us without cause and resignation by the Executive with good reason. For purposes of this column, we have assumed that the Executive would elect to require
NewPage Group to repurchase the common stock, which is valued at fair value at December 31, 2008.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | For purposes of this column, we have assumed that NewPage Group would elect to repurchase the common stock, which is valued at fair value at December 31, 2008.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes termination by us for cause and resignation by the Executive without good reason, in each case within 12 months following the acquisition by NewPage Holding or its
subsidiaries of the stock or assets of a business enterprise of at least substantially the same revenue and total assets as NewPage Holding on a consolidated basis. For purposes of this column, we have assumed that the Executive would elect to
require NewPage Group to repurchase the common stock, which is valued at fair value at December 31, 2008.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Amounts shown for Mr. Suwyn assume that a termination includes the termination of his position as our chairman. If the board requests that Mr. Suwyn resign as our chief
executive officer, but remain as our chairman, he would be entitled to payment for unused accrued vacation time and his annual bonus award for the year of termination, totaling $834,615.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Cash severance includes payment for unused accrued vacation time and the annual bonus award for the year of termination. For purposes of this table, we have assumed that each
Executive would receive a full year of his annual vacation pay.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Severance Benefits for Former Chief Financial Officer

Mr. Bixbys employment with us terminated on October 31, 2008. Under Mr. Bixbys separation agreement and in accordance with his employment
agreement, he received a severance payment equal to $682,500 (which includes payment of $10,500 in lieu of outplacement services), payment for accrued but unused vacation in 2008 equal to $25,847 and continued health and welfare benefits through
October 31, 2010 (comprised of medical, dental, life insurance and accidental death and dismemberment insurance benefits) with a total aggregate cost to us of approximately $23,331. Under his separation agreement and a related repurchase
agreement between NewPage Group and Mr. Bixby, NewPage Group is expected to pay Mr. Bixbys $1,497,334 in March 2009 in respect of Mr. Bixbys NewPage Group common stock. Mr. Bixby remains subject to certain
non-competition and non-solicitation restrictions through October 31, 2010.

Compensation of Directors

Our directors who are not employees of NewPage Holding, NewPage, Cerberus or a Cerberus affiliate receive an annual retainer of $50,000 plus $1,250 for attending each
board or committee meeting and $10,000 per year for serving as a member and $20,000 per year for serving as a chairman of a committee. In addition, on December 21, 2007, these directors and Mr. Williams each received an award of
non-qualified options to purchase 46,259 shares of NewPage Group common stock on the same terms as the Executives. Mr. Long received an award of non-qualified options to purchase 46,259 shares during 2008 on the same terms as the Executives.
See Equity AwardsNewPage Group Equity Incentive Plan. Except as set forth in the table below, no director received compensation for their services as our director.

2008 DIRECTOR COMPENSATION



|                         |  |                          |         |                  |   |         |                       |  |       |   |  |   |        
|------------------------ |  | ------------------------ | ------- | ---------------- | - | ------- | --------------------- |  | ----- | - |  | - | -------
|Name                     |  | FeesEarned orPaid inCash |         | OptionAwards (1) |   |         | All OtherCompensation |  | Total
|Robert M. Armstrong      |  | $                        | 71,250  |                  | $ | 269,139 |                       |  | $     |  |  | $ | 340,389
|Charles E. Long          |  |                          | 71,250  |                  |   | 50,503  |                       |  |       |  |  |   | 121,753
|David J. Prystash(2)     |  |                          | 53,750  |                  |   | (5,231  | )                     |  |       |  |  |   | 48,519 
|John W. Sheridan         |  |                          | 91,250  |                  |   | 269,139 |                       |  |       |  |  |   | 360,389
|Robert S. Silberman(3)   |  |                          | 300,000 |                  |   | (5,231  | )                     |  |       |  |  |   | 294,769
|Michael S. Williams      |  |                          | 68,750  |                  |   | 269,139 |                       |  |       |  |  |   | 337,889
|George J. Zahringer, III |  |                          | 83,750  |                  |   | 269,139 |                       |  |       |  |  |   | 352,889



|(1) | Of the 46,259 option granted to each director listed above, options to purchase 23,130 shares and 7,710 shares were deemed granted for accounting purposes pursuant to SFAS 123R in
2007 and 2008. Because the performance targets are determined annually by the compensation committee, we have only considered the performance-based stock options as granted when the compensation committee sets the performance targets for the
applicable year. As of December 31, 2008, outstanding options were exercisable by each of the directors, other than Mr. Silberman and Mr. Prystash.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Mr. Prystash received director fees prior to the time he became our chief financial officer on September 22, 2008. This amount is also included in the Summary Compensation
Table under All Other Compensation. Mr. Prystash resigned as a director in September 2008 upon his beginning employment with us and his options subsequently expired.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Mr. Silberman resigned as a director in March 2008 and his options subsequently expired.
|--- | ----------------------------------------------------------------------------------------

Compensation Committee Interlocks and Insider Participation

As of December 31, 2008, our compensation
committee consisted of Michael S. Williams, Charles E. Long and Alexander M. Wolf. None of our executive officers has a relationship that would constitute an interlocking relationship with executive officers or directors of another entity or insider
participation in compensation decisions.



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|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------------------------------

NewPage is a wholly-owned subsidiary of NewPage Holding, which is a wholly-owned subsidiary of NewPage Group.

The
following table sets forth information with respect to the beneficial ownership of NewPage Group as of February 20, 2009 by:



| |  |  | each person who is known by us to beneficially own 5% or more of the NewPage Group common stock;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | each member of the board of directors of NewPage Group, NewPage Holding and NewPage;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | each of the Executives; and
| | - |  | ---------------------------



| |  |  | all directors of NewPage Group, NewPage Holding and NewPage and executive officers of NewPage and NewPage Holding as a group.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

Beneficial ownership is determined in accordance with the rules of the SEC. To our knowledge, each of the holders listed below has sole voting and investment power as to
the NewPage Group common stock owned unless otherwise noted.



|                                                         |  |                                          |  |     
|-------------------------------------------------------- |  | ---------------------------------------- |  | ----
|                                                         |  | Shares of NewPageGroupBeneficially
Owned
|                                                         |  | Number                                   |  | %   
|Stephen Feinberg(1)(2)                                   |  | 42,861,029                               |  | 76.6
|Stora Enso Oyj(3)                                        |  | 11,251,326                               |  | 20.1
|Jason W. Bixby                                           |  |                                         |  |    
|George F. Martin                                         |  | 156,968                                  |  | *   
|Michael L. Marziale                                      |  | 156,968                                  |  | *   
|David J. Prystash                                        |  |                                         |  |    
|Mark A. Suwyn                                            |  | 672,172                                  |  | 1.2 
|Richard D. Willett, Jr.                                  |  | 206,278                                  |  | *   
|Robert M. Armstrong                                      |  |                                         |  |    
|Charles E. Long                                          |  |                                         |  |    
|James R. Renna                                           |  |                                         |  |    
|John W. Sheridan                                         |  |                                         |  |    
|Lenard B. Tessler                                        |  |                                         |  |    
|Michael S. Williams                                      |  |                                         |  |    
|Alexander M. Wolf                                        |  |                                         |  |    
|George J. Zahringer, III                                 |  |                                         |  |    
|Directors and executive officers as a group (18 persons) |  | 1,427,838                                |  | 2.6 



|* | Denotes beneficial ownership of less than 1%.
|- | ---------------------------------------------

|(1) | One or more affiliates of Cerberus own 76.6% of the common stock of NewPage Group. Stephen Feinberg exercises sole voting and investment authority over all of NewPage Group common
stock owned by the affiliates of Cerberus. Thus, pursuant to Rule 13d-3 under the Exchange Act, Stephen Feinberg is deemed to beneficially own 76.6% of the common stock of NewPage Group.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The address for Mr. Feinberg is c/o Cerberus Capital Management, L.P., 299 Park Avenue, New York, New York 10171.
|--- | -----------------------------------------------------------------------------------------------------------------

|(3) | The address for SEO is Kanavaranta 1 Fl-00160, Helsinki, Finland.
|--- | -----------------------------------------------------------------



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|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|-------- | -------------------------------------------------------------------------

Policies and Procedures

We and our audit committee have adopted written procedures regarding related party transactions. Pursuant to
those procedures, any related party transaction that would be required to be reported in accordance with the rules of the SEC in this annual report, and any material amendment to such a related party transaction, must first be presented to and
approved by our chief executive officer, our chief financial officer and our general counsel and then by the audit committee before we make a binding commitment to the related party. For each related party transaction presented for approval, we will
consider all relevant factors, including whether the proposed transaction would be entered into in the ordinary course of our business on customary business terms, whether any related party has been or will be involved in the negotiation or
administration of the proposed transaction on our behalf, and whether the proposed transaction appears to have been negotiated on an arms-length basis without interference or influence on us by any related party. We may condition our approval on any
restrictions we deem appropriate, including receiving assurances from any related party that he or she will refrain from participating in the negotiation of the proposed transaction on our behalf and in the ongoing management of the business
relationship on our behalf should the proposed transaction be approved. If after a transaction has been completed we discover that it is a related party transaction, we will promptly advise management and our audit committee. In that case, we may
honor the contractual commitment if entered into in good faith by an authorized representative of ours, but we may impose appropriate restrictions on the continued maintenance of the business relationship similar to those described above. If our
chief executive officer, chief financial officer, general counsel or any member of our audit committee has a direct or indirect interest in a proposed transaction, that individual must disclose his interest in the proposed transaction and refrain
from participating in the approval process.

Related Party Transactions

Consulting Arrangements with Rapid Change Technologies

M. Daniel Suwyn, the son of Mark Suwyn, our chairman and
chief executive officer, is the principal owner of Rapid Change Technologies. We paid Rapid Change Technologies $816,000 for consulting and training services in 2008. Rapid Change Technologies developed a training program and a process to improve
communication skills, consensus building and problem-solving abilities. Rapid Change Technologies also facilitated the training of our employees on improving communication skills, resolving conflict and developing a process to improve
productivity/operations through greater collaboration between hourly employees and supervisors/management. The terms of this arrangement were determined on an arms-length basis, and we believe that they are comparable to terms that would have
been obtained from an unaffiliated third party.

Cerberus Arrangements

Cerberus retains consultants that specialize in operations management and support and who provide Cerberus with consulting advice concerning portfolio companies in which funds and accounts managed by Cerberus or its
affiliates have invested. From time to time, Cerberus makes the services of these consultants available to Cerberus portfolio companies. We reimbursed Cerberus $839,000 for these services in 2008. These services were provided at rates not greater
than the fees that Cerberus paid to the applicable consultant, together with reimbursement of out-of-pocket expenses incurred by the consultant in providing those services. We believe that the terms of these consulting arrangements are comparable to
terms that would have been obtained from an unaffiliated third party. Depending upon the nature of the assignment, consultants retained by us also provided services for Cerberus and other entities



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affiliated with Cerberus, including other Cerberus portfolio companies, at the same time as they performed consulting services to us, but the
consultants duty of loyalty in their performance of their consulting services for us was solely to us. Any future consulting services of Cerberus consultants will be subject to the review and approval procedures described above.

Affiliates of Cerberus

During 2008, we maintained commercial
arrangements with entities that are or at the time were owned or controlled by Cerberus. These include the following:



| |  |  | Commercial Finance LLC, an affiliate of GMAC LLC, is one of the lenders under our senior secured revolving credit facility that we entered into on December 21,
2007. They have committed $70 million, of which a portion is currently used to support letters of credit. We paid a total of $450,000 in commitment fees to Commercial Finance LLC in 2008. As of December 31, 2008, there were no balances
outstanding under the senior secured revolving credit facility.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Acquisition included a capital lease obligation, in which Chrysler Capital is a participant, for the lease of a paper machine. Chrysler Capital may receive
proceeds of approximately $57 million in 2014 if the purchase option under the lease agreement is triggered. The lease was originally entered into between Chrysler Capital and SENA prior to the acquisition of Chrysler by Cerberus and prior to our
acquisition of SENA.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

These transactions were entered into in the ordinary course of our business. We believe that these transactions
were negotiated on an arms-length basis, on substantially the same terms that could have been obtained from an unrelated party, and are not material to our results of operations or financial position.

SEO Arrangements

We and our affiliates issued equity and debt
securities to and entered into several agreements with SEO in connection with the Acquisition. We believe that these transactions were negotiated on an arms-length basis, on substantially the same terms that could have been obtained from an
unrelated party.

For a description of these transactions see below and Managements Discussion and Analysis of Financial Condition and Results
of OperationsOverviewThe SENA Acquisition and Related Transactions.

Corenso Arrangements. Prior to the closing of the
Acquisition, Stora Enso North America Corp., now called NewPage Wisconsin System Inc. (NewPage Wisconsin) and Corenso North America Corp., a wholly-owned subsidiary of SEO that was not part of the Acquisition, which we refer to as
Corenso, entered into the arrangements described below. Corenso manufactures core boards, cores and tubes for use by manufacturers of paper and board, textile yarn, plastic film, flexible packaging and metal foil.



| |  |  | Corenso acquired from NewPage Wisconsin certain assets currently used by Corenso in NewPage Wisconsins Wisconsin Rapids mill, and Corenso granted NewPage
Wisconsin a right of first offer in respect of any future sale or transfer of those assets
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | NewPage Wisconsin and Corenso entered into real estate lease agreements with respect to the portion of the Wisconsin Rapids mill currently used in Corensos
operations and NewPage Wisconsin is providing steam, process water and process water effluent treatment to Corenso operations at the leased facility
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | NewPage Wisconsin and Corenso entered into a transition services agreement whereby NewPage Wisconsin provided information technology and other transition services
to Corenso for up to one year from the closing of the Acquisition
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | NewPage Wisconsin was required to use commercially reasonable efforts to make available directly or through a specified third party certain logistics services
currently being used by both NewPage Wisconsin and Corenso in respect of the Wisconsin Rapids mill
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | NewPage Wisconsin and Corenso entered into a supply agreement pursuant to which Corenso will continue to supply cores to NewPage Wisconsin on mutually agreed terms
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

NewPage Group PIK Notes. In connection with the Acquisition, NewPage Group issued $200 million in aggregate principal amount of
NewPage Group PIK Notes to SEO. The following is a summary of the material terms of the NewPage Group PIK Notes:



| |  |  | Maturity and Interest. The NewPage Group PIK Notes will mature on the eighth anniversary of issuance. Interest on the NewPage Group PIK Notes accrues at a
rate per annum, reset semi-annually, equal to LIBOR plus 7.0%, from December 21, 2007 until maturity. Interest on the NewPage Group PIK Notes compounds semi-annually and is payable by the issuance of additional NewPage Group PIK Notes. Interest
will be paid semi-annually in arrears on May 1 and November 1 of each year.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Optional Redemption. During the first year following issuance, the NewPage Group PIK Notes could not be redeemed at NewPage Groups option, except in
the case of a Change in Control as described below under Mandatory Redemption. After the first year following issuance, NewPage Group may redeem some or all of the NewPage Group PIK Notes at specified redemption prices plus all accrued
and unpaid interest to the date of redemption.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Mandatory Redemption. Upon a Change in Control, as defined below, each holder of the NewPage Group PIK Notes will have the right to require NewPage Group to
repurchase all of the outstanding NewPage Group PIK Notes (including NewPage Group PIK Notes issued in payment of PIK interest) at a purchase price equal to the principal amount of the NewPage Group PIK Notes plus accrued but unpaid interest to the
date of purchase. NewPage Group will have the option to redeem any NewPage Group PIK Notes that are not tendered pursuant to the offer to purchase at a redemption price equal to the principal amount of the NewPage Group PIK Notes plus accrued but
unpaid interest to the date of purchase.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Under the NewPage Group PIK Notes indenture, Change of Control means the occurrence of any of the following:
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | the sale or transfer, (other than by way of merger or consolidation of NewPage Group or NewPage Holding) of all or substantially all of the properties or assets of
NewPage Group or NewPage Holding and its subsidiaries taken as a whole to any person other than Cerberus or its affiliates
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the adoption of a plan relating to the liquidation or dissolution of NewPage Group or NewPage Holding
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | the consummation of any transaction, the result of which is that any person other than Cerberus or its affiliates becomes the beneficial owner of more than 50% of
the voting stock of NewPage Group or NewPage Holding, measured by voting power rather than number of shares
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | after an initial public offering of NewPage Group or NewPage Holding, the first day on which a majority of the members of the board of directors of NewPage Group or
NewPage Holding are not members who were members as of the date of the NewPage PIK notes indenture or nominated with the approval of a majority of members who were members as of the date of the NewPage PIK notes indenture
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | NewPage Holding ceases to directly own all outstanding equity interests of NewPage
| | - |  | ----------------------------------------------------------------------------------



| |  |  | NewPage Group ceases to directly own all outstanding equity interests of NewPage Holding
| | - |  | ----------------------------------------------------------------------------------------

In the case of any public equity offering by NewPage Group or one of its subsidiaries, NewPage Group must first use the net proceeds of the offering to
repay in full the outstanding NewPage Holding PIK Notes, and then NewPage Group must use any remaining net proceeds to redeem NewPage Group PIK Notes (including NewPage Group PIK Notes issued in payment of PIK interest) at a redemption price of 100%
of their principal amount plus accrued but unpaid interest to the date of redemption.



| |  |  | Events of Default. The NewPage PIK notes indenture contains customary events of default.
| | - |  | ----------------------------------------------------------------------------------------

Loans to NewPage Group

In connection with the separation from
NewPage of James C. Tyrone, our former senior vice president, sales, we loaned $5.5 million to NewPage Group in January 2008 to enable NewPage Group to satisfy its repurchase obligations. In connection with the separation from NewPage of Jason W.
Bixby, our former senior vice president and chief financial officer, we loaned $1.5 million to NewPage Group in February 2009 to enable NewPage Group to satisfy its repurchase obligations.

Director Independence

Although each of NewPage Holding and
NewPage do not currently have securities listed on a national securities exchange or on an inter-dealer quotation system, we have selected the definition promulgated by the New York Stock Exchange, or NYSE, to determine which of NewPage
Holdings and NewPages directors qualifies as independent. Using the independence tests promulgated by the NYSE, the boards of directors of NewPage Holding and NewPage have determined that Robert M. Armstrong, Charles E. Long, John W.
Sheridan and Michael S. Williams are independent directors. In making its determination regarding Mr. Sheridan, the board of directors considered that our chief executive officer, Mr. Suwyn, currently serves as a member of the board of
directors of a company in which Mr. Sheridan currently serves as an executive officer. Examining all of the relevant facts and circumstances, the board of directors of each of NewPage Holding and NewPage determined that this relationship did
not and would not impair Mr. Sheridans independence.

Under the NYSE rules, NewPage Holding and NewPage are each considered a controlled
company because more than 50% of their respective voting power is held by a single person. Accordingly, even if NewPage Holding and NewPage were a listed company, they would not be required by NYSE rules to maintain a majority of independent
directors on their respective board of directors, nor would they be required to maintain a compensation committee or a nominating committee comprised entirely of independent directors. As a result, NewPage Holding and NewPage do not maintain a
nominating committee and their joint compensation committee includes one independent director, Mr. Long.



|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- | --------------------------------------

Fees

The audit committee of NewPage Holding and NewPage has selected PricewaterhouseCoopers LLP as independent auditor of NewPage Holding and NewPage.
The following table presents fees for professional services rendered by PricewaterhouseCoopers LLP for the years ended December 31, 2008 and 2007.



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|                   |  |                   |       |         |   |       |  |      |       |  |   |      
|------------------ |  | ----------------- | ----- | ------- | - | ----- |  | ---- | ----- |  | - | -----
|                   |  | NewPageHolding(1) |       | NewPage
|(in thousands)     |  | 2008              |       | 2007    |   | 2008  |  | 2007
|Audit fees         |  | $                 | 1,734 |         | $ | 1,806 |  | $    | 1,734 |  | $ | 1,736
|Audit-related fees |  |                   | 571   |         |   | 1,242 |  |      | 571   |  |   | 1,242
|Tax fees           |  |                   | 85    |         |   |      |  |      | 85    |  |   |     
|All other fees     |  |                   |      |         |   | 1     |  |      |      |  |   | 1    
|                   |  |                   |       |         |   |       |  |      |       |  |   |      
|Total              |  | $                 | 2,390 |         | $ | 3,049 |  | $    | 2,390 |  | $ | 2,979
|                   |  |                   |       |         |   |       |  |      |       |  |   |      



|(1) | NewPage Holding includes fees paid by NewPage.
|--- | ----------------------------------------------

Audit fees consist of
fees billed or agreed to be billed for services related to the audit of NewPage Holdings and NewPages consolidated annual financial statements and reviews of the interim consolidated financial statements and services that are normally
provided by PricewaterhouseCoopers LLP in connection with regulatory filings.

Audit-related fees consist of fees billed for assurance and
related services that are reasonably related to the performance of the audit and not reported under Audit fees. In 2008, this category includes services in respect of the debt issued in conjunction with the Acquisition and audits of
NewPage subsidiaries that have separate reporting requirements. In 2007, this category includes services in respect of the debt issued in conjunction with the Acquisition and for financial due diligence in conjunction with the Acquisition.

Tax fees consist of fees billed for tax compliance services for our Canadian subsidiary.

Policy on Pre-Approval of Services of the Independent Auditor

The policy of the audit committee of NewPage and NewPage Holding is to pre-approve all audit and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and
other permitted non-audit services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services. Any general, pre-approved category of service with fees in excess of
$100,000 or other permitted non-audit services requires specific approval of the audit committee or its designee. The audit committee has delegated pre-approval authority to the chairman of the audit committee when expedition of services is
necessary, with follow-up with the audit committee at its next meeting. The audit committee pre-approved all of the services for us performed by the independent auditor in 2008.

Part IV



|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|-------- | ------------------------------------------

(a)(1) Financial
Statements

The following consolidated financial statements of NewPage Holding and NewPage and its subsidiaries are incorporated by reference as
part of this Report at Item 8 hereof.

Reports of Independent Registered Public Accounting Firm



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NewPage Holding

Consolidated Balance Sheets as of December 31, 2008 and 2007

Consolidated Statements of Operations for
the years ended December 31, 2008, 2007 and 2006

Consolidated Statements of Stockholders Equity (Deficit) for the years ended
December 31, 2008, 2007 and 2006

Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006

NewPage

Consolidated
Balance Sheets as of December 31, 2008 and 2007

Consolidated Statements of Operations for the years ended December 31, 2008, 2007
and 2006

Consolidated Statements of Stockholders Equity for the years ended December 31, 2008, 2007 and 2006

Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006

NewPage Holding and NewPage

Notes to
Consolidated Financial Statements

(a)(2) Financial Statement Schedules

The information required to be submitted in the Financial Statement Schedules for NewPage Holding and NewPage and consolidated subsidiaries has either been shown in the financial statements or notes, or is not
applicable or required under Regulation S-X; therefore, those schedules have been omitted.

(a)(3) Exhibits



|              |  |                                                                                                                                                                                                                                                                                                                                                      
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                          
|3.1           |  | Amended and Restated Certificate of Incorporation of NewPage Holding Corporation (incorporated by reference from Exhibit 3.1 to the Annual Report on Form 10-K for the year ended December 31,
2007)                                                                                                                                                 
|              | 
|3.2           |  | Amended and Restated Bylaws of NewPage Holding Corporation (incorporated by reference from Exhibit 3.2 to the Quarterly Report on Form 10-Q for the quarter ended September 30,
2006)                                                                                                                                                                
|              | 
|3.3           |  | Certificate of Incorporation of NewPage Corporation (incorporated by reference from Exhibit 3.1 to the Registration Statement on Form S-4 (Reg. No. 333-125952) of NewPage Corporation, filed on
June 20, 2005)                                                                                                                                      
|              | 
|3.4           |  | Amended and Restated Bylaws of NewPage Corporation (incorporated by reference from Exhibit 3.2 to the Quarterly Report on Form 10-Q of NewPage Corporation for the quarter ended June 30, 2006)                                                                                                                                                      
|              | 
|4.1           |  | Indenture for the Floating Rate Senior PIK Notes due 2013 dated as of May 2, 2005 by and among NewPage Holding Corporation and HSBC Bank USA, National Association, as Trustee (incorporated by
reference from Exhibit 4.1 to the Registration Statement on Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on October 31, 2005)
|              | 
|4.2           |  | Form of Floating Rate Senior PIK Notes due 2013 (included in Exhibit 4.1)                                                                                                                                                                                                                                                                            



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|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|4.3  |  | Intercreditor Agreement, dated as of May 2, 2005, by and among NewPage Corporation, NewPage Holding Corporation, certain subsidiaries of NewPage Corporation, JPMorgan Chase Bank. N.A., as
revolving loan collateral agent and The Bank of New York, as collateral trustee (incorporated by reference from Exhibit 4.4 to the Registration Statement on Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on October 31,
2005)                                                   
|     | 
|4.4  |  | Form of Specimen of Common Stock certificate (incorporated by reference from Exhibit 4.5 to the Amendment No. 2 to the Registration Statement on Form S-1 (Reg. No. 333- 133367) of NewPage
Holding Corporation, filed on June 14, 2006)                                                                                                                                                                                                                                                             
|     | 
|4.5  |  | Indenture for the Floating Rate Senior Secured Notes due 2012 dated as of May 2, 2005 by and among NewPage Corporation, the guarantors named herein and HSBC Bank USA, National Association, as
Trustee (incorporated by reference from Exhibit 4.1 to the Registration Statement on Form S-4 (Reg. No. 333-125952) of NewPage Corporation, filed on June 20, 2005), as supplemented dated December 21, 2007 (incorporated by reference from Exhibit 10.7
to the Form 8-K filed on December 28, 2007)
|     | 
|4.6  |  | Indenture for the 10% Senior Secured Notes due 2012 dated as of May 2, 2005 among NewPage Corporation, as Issuer, the guarantors named herein, HSBC Bank USA, National Association, as Trustee
(incorporated by reference from Exhibit 4.2 to the Registration Statement on Form S-4 (Reg. No. 333-125952) of NewPage Corporation, filed on June 20, 2005), as supplemented dated December 21, 2007 (incorporated by reference from Exhibit 10.5 to the
Form 8-K filed on December 28, 2007)         
|     | 
|4.7  |  | Indenture for the 12% Senior Subordinated Notes due 2013 dated as of May 2, 2005 among NewPage Corporation, the guarantors named herein and HSBC Bank USA, National Association, as Trustee
(incorporated by reference from Exhibit 4.3 to the Registration Statement on Form S-4 (Reg. No. 333-125952) of NewPage Corporation, filed on June 20, 2005), as supplemented dated December 21, 2007 (incorporated by reference from Exhibit 10.8 to the
Form 8-K filed on December 28, 2007)            
|     | 
|4.8  |  | Form of Floating Rate Senior Notes due 2012 (included in Exhibit 4.6)                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | 
|4.9  |  | Form of 10% Senior Secured Notes due 2012 (included in Exhibit 4.7)                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | 
|4.10 |  | Form of 12% Senior Subordinated Notes due 2013 (included in Exhibit 4.8)                                                                                                                                                                                                                                                                                                                                                                                                                             
|     | 
|4.11 |  | Form of Guarantee for each of the Floating Rate Senior Notes due 2012, the 10% Senior Secured Notes due 2012, and the 12% Senior Subordinated Notes due 2013 (included in Exhibit
4.6)                                                                                                                                                                                                                                                                                                               
|     | 
|4.12 |  | Intercreditor Agreement, dated as of May 2, 2005 among NewPage Corporation, NewPage Holding Corporation, certain subsidiaries of NewPage Corporation, JPMorgan Chase Bank, N.A., as revolving loan
collateral agent and The Bank of New York, as collateral trustee (incorporated by reference from Exhibit 4.9 to the Registration Statement on Form S-4 (Reg. No. 333-125952) of NewPage Corporation, filed on June 20, 2005)                                                                      
|     | 
|4.13 |  | Collateral Trust Agreement dated as of May 2, 2005 among NewPage Corporation, the Pledgors from time to time party thereto, Goldman Sachs Credit Partners L.P., HSBC Bank USA, National
Association, and The Bank of New York (incorporated by reference from Exhibit 4.10 to the Registration Statement on Form S-4 (Reg. No. 333-125952) of NewPage Corporation, filed on June 20, 2005)                                                                                                           



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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.14  |  | Priority Lien Debt Pledge and Security Agreement, dated December 21, 2007, among NewPage Corporation and certain of its affiliates and The Bank of New York (incorporated by reference from
Exhibit 10.3 to the Form 8-K of NewPage Corporation filed on December 28, 2007)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      | 
|10.1  |  | Equity and Asset Purchase Agreement, dated as of January 14, 2005, among MeadWestvaco Corporation and Maple Acquisition LLC (n/k/a Escanaba Timber LLC) (incorporated by reference from Exhibit
10.1 to the Registration Statement on Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on October 31, 2005) as amended by the First Amendment, dated as of April 22, 2005 (incorporated by reference from Exhibit 10.2 to the
Registration Statement on Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on October 31, 2005) and the Second Amendment, dated as of April 30, 2005 (incorporated by reference from Exhibit 10.3 to the Registration Statement on
Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on October 31, 2005)
|      | 
|10.2+ |  | Employment Letter Agreement dated May 2, 2005, by and between NewPage Corporation and Daniel A. Clark (incorporated by reference from Exhibit 10.12 to the Registration Statement on Form S-4
(Reg. No. 333-129343) of NewPage Holding Corporation, filed on October 31, 2005), as amended by Amendment No. 1 dated as of January 28, 2007 (incorporated by reference from Exhibit 10.12 to the Annual Report on Form 10-K for the year ended December
31, 2006), Amendment No. 2 dated as of December 21, 2007 (incorporated by reference from Exhibit 10.9 to the Form 8-K filed on December 28, 2007) and Amendment No. 3 dated as of January 1, 2009                                                                                                                                          
|      | 
|10.3+ |  | Employment Letter Agreement dated October 6, 2005, by and between NewPage Corporation and Douglas K. Cooper (incorporated by reference from Exhibit 10.20 to the Registration Statement on Form
S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on October 31, 2005), as amended by Amendment No. 1 dated as of January 28, 2007 (incorporated by reference from Exhibit 10.20 to the Annual Report on Form 10-K for the year ended
December 31, 2006), Amendment No. 2 dated as of December 21, 2007 (incorporated by reference from Exhibit 10.10 to the Form 8-K filed on December 28, 2007) and Amendment No. 3 dated as of January 1, 2009                                                                                                                                   
|      | 
|10.4  |  | Asset Purchase Agreement dated January 6, 2006, among Brascan Power Inc., Rumford Falls Power Company and Rumford Paper Company (incorporated by reference from Exhibit 10.25 to the Amendment No.
2 to the Registration Statement on Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on January 18, 2006), as amended by Amendment No. 1 to the Asset Purchase Agreement dated as of June 7, 2006 (incorporated by reference from
Exhibit 10.37 to the Amendment No. 2 to the Registration Statement on Form S-1 (Reg. No. 333-133367) of NewPage Holding Corporation, filed on June 14, 2006)                                                                                                                                                                              
|      | 
|10.5  |  | Asset Purchase Agreement among NewPage Corporation, Chillicothe Paper Inc. and P. H. Glatfelter Company dated February 21, 2006 (incorporated by reference from Exhibit 10.26 to the Amendment No.
3 to the Registration Statement on Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on April 17, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



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|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.6+  |  | Employment Letter Agreement dated May 2, 2005, by and between NewPage Corporation and George F. Martin (incorporated by reference from Exhibit 10.31 to the Amendment No. 3 to the
Registration Statement on Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on April 17, 2006), as amended by Amendment No. 1 dated as of January 28, 2007 (incorporated by reference from Exhibit 10.31 to the Annual
Report on Form 10-K for the year ended December 31, 2006), Amendment No. 2 dated as of December 21, 2007 (incorporated by reference from Exhibit 10.11 to the Form 8-K filed on December 28, 2007) and Amendment No. 3 dated as of
January 1, 2009
|       | 
|10.7+  |  | Employment Agreement dated as of April 17, 2006 by and between NewPage Corporation and Mark A. Suwyn (incorporated by reference from Exhibit 10.33 to the Amendment No. 3 to the Registration
Statement on Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on April 17, 2006), as amended by Amendment No. 1 dated as of December 21, 2007 (incorporated by reference from Exhibit 10.13 to the Form 8-K filed on December 28,
2007) and Amendment No. 2 dated as of January 1, 2009                                                                                                                                                                      
|       | 
|10.8+  |  | Employment Agreement dated as of April 17, 2006 by and between NewPage Corporation and Richard D. Willett, Jr. (incorporated by reference from Exhibit 10.34 to the Amendment No. 3 to the
Registration Statement on Form S-4 (Reg. No. 333-129343) of NewPage Holding Corporation, filed on April 17, 2006) as amended by Amendment No. 1 dated as of January 1, 2009                                                                                                                                                                                                                                                                                                         
|       | 
|10.9   |  | Form of Indemnification Agreement (incorporated by reference from Exhibit 10.35 to the Amendment No. 4 to the Registration Statement on Form S-1 (Reg. No. 333-133367) of NewPage Holding
Corporation, filed on July 12, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | 
|10.10  |  | Form of Independent Director Agreement (incorporated by reference from Exhibit 10.36 to the Amendment No. 4 to the Registration Statement on Form S-1 (Reg. No. 333- 133367) of NewPage Holding
Corporation, filed on July 12, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | 
|10.11+ |  | Form of NewPage Holding Corporation 2006 Incentive Plan (incorporated by reference from Exhibit 10.38 to the Amendment No. 2 to the Registration Statement on Form S-1 (Reg. No. 333-133367) of
NewPage Holding Corporation, filed on June 14, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | 
|10.12+ |  | Form of Management Lock-up Agreement (incorporated by reference from Exhibit 10.39 to the Amendment No. 4 to the Registration Statement on Form S-1 (Reg. No. 333- 133367) of NewPage Holding
Corporation, filed on July 12, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       | 
|10.13+ |  | Employment Agreement dated as of May 2, 2005 by and between NewPage Corporation and Michael L. Marziale, as amended by letter agreement dated as of June 30, 2006, and by Amendment No. 2 dated as
of January 28, 2007 (incorporated by reference from Exhibit 10.40 to the Annual Report on Form 10-K for the year ended December 31, 2006), Amendment No. 3 dated as of December 21, 2007 (incorporated by reference from Exhibit 10.12 to the Form 8-K
filed on December 28, 2007) and Amendment No. 4 dated as of January 1, 2009                                                                                                                                          
|       | 
|10.14+ |  | Employment Agreement dated as of December 18, 2006 by and between NewPage Corporation and Jason W. Bixby (incorporated by reference from Exhibit 10.41 to the Annual Report on Form 10-K for the
year ended December 31, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                                                 



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|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.15  |  | Term Loan Credit and Guaranty Agreement, dated December 21, 2007, among NewPage Corporation, NewPage Holding Corporation and certain of its affiliates, the lenders party thereto, Goldman
Sachs Credit Partners L.P., as Administrative Agent, and the other parties thereto (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on December 28, 2007)                                                                         
|       | 
|10.16  |  | Revolving Credit and Guaranty Agreement, dated December 21, 2007, among NewPage Corporation, NewPage Holding Corporation, certain subsidiaries of NewPage Corporation, lenders party thereto,
Goldman Sachs Credit Partners L.P., as Administrative Agent, JPMorgan Chase Bank, N.A., as Collateral Agent, and the other parties thereto (incorporated by reference from Exhibit 10.2 to the Form 8-K filed on December 28, 2007)              
|       | 
|10.17  |  | Priority Lien Debt Pledge and Security Agreement, dated December 21, 2007, among NewPage Corporation and certain of its affiliates and The Bank of New York (incorporated by reference from
Exhibit 10.3 to the Form 8-K filed on December 28, 2007)                                                                                                                                                                                           
|       | 
|10.18  |  | Revolving Credit Pledge and Security Agreement, dated December 21, 2007, among NewPage Corporation and certain of its affiliates and JPMorgan Chase Bank, N.A. (incorporated by reference from
Exhibit 10.4 to the Form 8-K filed on December 28, 2007)                                                                                                                                                                                        
|       | 
|10.19  |  | Stock Purchase Agreement by and among Stora Enso Oyj, Stora Enso North America, Inc. and NewPage Holding Corporation, dated as of September 20, 2007 (incorporated by reference from Exhibit 10.1
to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2007), as amended by the First Amendment, dated as of on December 21, 2007 (incorporated by reference from Exhibit 10.15 to the Form 8-K filed on December 28,
2007)
|       | 
|10.20+ |  | Employment Agreement dated as of November 1, 2007 by and between NewPage Corporation and Michael T. Edicola (incorporated by reference from Exhibit 10.27 to the Annual Report on Form 10-K for
the year ended December 31, 2007), as amended by Amendment No. 1 dated as of January 1, 2009                                                                                                                                                   
|       | 
|10.21+ |  | Employment Agreement dated as of September 8, 2008 by and between NewPage Corporation and David J. Prystash (incorporated by reference from Exhibit 10.2 to the Quarterly Report on Form 10-Q for
the quarter ended September 30, 2008), as amended by Amendment No. 1 dated as of January 1, 2009                                                                                                                                             
|       | 
|10.22+ |  | Separation Agreement dated September 8, 2008, by and between NewPage Corporation, NewPage Group Inc. and Jason W. Bixby (incorporated by reference from Exhibit 10.1 to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 2008)                                                                                                                                                                                            
|       | 
|21.1   |  | Subsidiaries of the registrant                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | 
|24.1   |  | Power of Attorney  Robert M. Armstrong                                                                                                                                                                                                                                                                                                                                                                                                        
|       | 
|24.2   |  | Power of Attorney  Charles E. Long                                                                                                                                                                                                                                                                                                                                                                                                            
|       | 
|24.3   |  | Power of Attorney  James R. Renna                                                                                                                                                                                                                                                                                                                                                                                                             



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|     |  |                                                                                                                                                   
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|24.4 |  | Power of Attorney  John W. Sheridan                                                                                                              
|     | 
|24.5 |  | Power of Attorney  Lenard B. Tessler                                                                                                             
|     | 
|24.6 |  | Power of Attorney  Michael S. Williams                                                                                                           
|     | 
|24.7 |  | Power of Attorney  Alexander M. Wolf                                                                                                             
|     | 
|24.8 |  | Power of Attorney  George J. Zahringer, III                                                                                                      
|     | 
|31.1 |  | Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|     | 
|31.2 |  | Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|     | 
|32.1 |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 
|     | 
|32.2 |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 



|+ | Management contract or compensatory plan or arrangement.
|- | --------------------------------------------------------



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SIGNATURES

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.



|                                                                                                                                                                                                              |  |                                                   |  |     |  |                        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------- |  | --- |  | -----------------------
|NEWPAGE HOLDING CORPORATION                                                                                                                                                                                   |  | NEWPAGE CORPORATION                              
|                                                                                                                                                                                                              |  |                                                   | 
|By:                                                                                                                                                                                                           |  | /s/ Mark A. Suwyn                                 |  | By: |  | /s/ Mark A. Suwyn      
|                                                                                                                                                                                                              |  | Mark A. Suwyn                                     |  |     |  | Mark A. Suwyn          
|                                                                                                                                                                                                              |  | Chief Executive Officer                           |  |     |  | Chief Executive Officer
|                                                                                                                                                                                                              | 
|Date: March 2, 2009                                                                                                                                                                                           |  | Date: March 2, 2009                              
|                                                                                                                                                                                                             
|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.
|                                                                                                                                                                                                              | 
|NEWPAGE HOLDING CORPORATION                                                                                                                                                                                   |  | NEWPAGE CORPORATION                              
|                                                                                                                                                                                                              | 
|/s/ Mark A. Suwyn                                                                                                                                                                                             |  | /s/ Mark A. Suwyn                                
|Mark A. Suwyn                                                                                                                                                                                                 |  | Mark A. Suwyn                                    
|Chief Executive Officer and Director                                                                                                                                                                          |  | Chief Executive Officer and Director             
|(Principal Executive Officer)                                                                                                                                                                                 |  | (Principal Executive Officer)                    
|Date: March 2, 2009                                                                                                                                                                                           |  | Date: March 2, 2009                              
|                                                                                                                                                                                                              | 
|/s/ David J. Prystash                                                                                                                                                                                         |  | /s/ David J. Prystash                            
|David J. Prystash                                                                                                                                                                                             |  | David J. Prystash                                
|Senior Vice President and Chief Financial Officer                                                                                                                                                             |  | Senior Vice President and Chief Financial Officer
|(Principal Financial Officer)                                                                                                                                                                                 |  | (Principal Financial Officer)                    
|Date: March 2, 2009                                                                                                                                                                                           |  | Date: March 2, 2009                              
|                                                                                                                                                                                                              | 
|/s/ Stephen A. DeLong                                                                                                                                                                                         |  | /s/ Stephen A. DeLong                            
|Stephen A. DeLong                                                                                                                                                                                             |  | Stephen A. DeLong                                
|Controller and Chief Accounting Officer                                                                                                                                                                       |  | Controller and Chief Accounting Officer          
|(Principal Accounting Officer)                                                                                                                                                                                |  | (Principal Accounting Officer)                   
|Date: March 2, 2009                                                                                                                                                                                           |  | Date: March 2, 2009                              
|                                                                                                                                                                                                              | 
|*                                                                                                                                                                                                             |  | *                                                
|Robert M. Armstrong                                                                                                                                                                                           |  | Robert M. Armstrong                              
|Director                                                                                                                                                                                                      |  | Director                                         
|Date: March 2, 2009                                                                                                                                                                                           |  | Date: March 2, 2009                              
|                                                                                                                                                                                                              | 
|*                                                                                                                                                                                                             |  | *                                                
|Charles E. Long                                                                                                                                                                                               |  | Charles E. Long                                  
|Director                                                                                                                                                                                                      |  | Director                                         
|Date: March 2, 2009                                                                                                                                                                                           |  | Date: March 2, 2009                              



131



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|                         |  |                          |  |  |  | 
|------------------------ |  | ------------------------ |  |  |  | 
|*                        |  | *                       
|James R. Renna           |  | James R. Renna          
|Director                 |  | Director                
|Date: March 2, 2009      |  | Date: March 2, 2009     
|                         | 
|*                        |  | *                       
|John W. Sheridan         |  | John W. Sheridan        
|Director                 |  | Director                
|Date: March 2, 2009      |  | Date: March 2, 2009     
|                         | 
|*                        |  | *                       
|Lenard B. Tessler        |  | Lenard B. Tessler       
|Director                 |  | Director                 |  | 
|Date: March 2, 2009      |  | Date: March 2, 2009     
|                         | 
|*                        |  | *                       
|Michael S. Williams      |  | Michael S. Williams     
|Director                 |  | Director                
|Date: March 2, 2009      |  | Date: March 2, 2009     
|                         | 
|*                        |  | *                       
|Alexander M. Wolf        |  | Alexander M. Wolf       
|Director                 |  | Director                
|Date: March 2, 2009      |  | Date: March 2, 2009     
|                         | 
|*                        |  | *                       
|George J. Zahringer, III |  | George J. Zahringer, III
|Director                 |  | Director                
|Date: March 2, 2009      |  | Date: March 2, 2009     
|                         |  |                         
|* By:                    |  | /s/ Douglas K. Cooper    |  | 
|                         |  | Douglas K. Cooper        |  | 
|                         |  | Attorney-in-fact         |  | 

Supplemental Information to Be Furnished With Reports Filed Pursuant to Section 15(d) of
the Act

by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act

No annual report or proxy material will be provided to our security holder.



132