SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

For the quarterly period ended ~~September~~June 30, ~~2017~~2021

Commission File Number: 001-32240

3460 Preston Ridge Road

~~Alpharetta, Georgia~~

~~30005~~

Alpharetta

Georgia

30005

(Address of principal executive ~~offices)~~

~~(Zip Code)~~offices, including zip code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	NP	New York Stock Exchange

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. Yes x☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x☒ No ¨☐

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

Large accelerated filerx

☒

Accelerated filer¨

☐

Non-accelerated filer¨

☐

Smaller reporting company¨

☐

(Do not check if a smaller reporting company)

Emerging growth company¨

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No x

☒

As of ~~November 2, 2017,~~August 3, 2021, there were ~~approximately 16,818,390~~16,862,597 shares of the Company’s ~~common stock~~Common Stock outstanding.

Table of Contents

TABLE OF CONTENTS



Part I — Financial Information

Item 1. Financial Statements			F-~~F-1~~1

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			F-~~F-15~~22

Item 3. Quantitative and Qualitative Disclosure About Market Risk			F-~~F-24~~32

Item 4. Controls and Procedures			F-~~F-24~~32


Part II — Other Information

Item 1. Legal Proceedings			F-~~F-24~~33

Item 1A. Risk Factors			F-~~F-24~~33

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			F-~~F-25~~33

Item 6. Exhibits			F-~~F-26~~34

Table of Contents

Part I—FINANCIAL INFORMATION

Item 1. Financial Statements

NEENAH, ~~PAPER,~~ INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)

(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
'[ 2017 2016 2017 2016
Net sales $ 245.1
$ 232.9
$ 735.9
$ 721.0
Cost of products sold 197.1
183.7
582.3
553.0
Gross profit 48.0
49.2
153.6
168.0
Selling, general and administrative expenses 21.4
21.0
70.9
71.8
Acquisition/integration/restructuring costs 0.9
1.2
0.9
3.7
Insurance settlement (3.2 ) —
(3.2 ) —
Other (income) expense - net (0.1 ) 0.1
(0.2 ) 0.3
Operating income 29.0
26.9
85.2
92.2
Interest expense - net 3.2
2.7
9.4
8.3
Income from continuing operations before income taxes 25.8
24.2
75.8
83.9
Provision for income taxes 7.0
7.8
14.4
26.9
Income from continuing operations 18.8
16.4
61.4
57.0
Loss from discontinued operations, net of income taxes —
—
—
(0.4 )
Net income $ 18.8
$ 16.4
$ 61.4
$ 56.6

Earnings Per Common Share

Basic

Continuing operations $ 1.11
$ 0.97
$ 3.63
$ 3.36
Discontinued operations —
—
—
(0.02 )
Basic $ 1.11
$ 0.97
$ 3.63
$ 3.34
Diluted

Continuing operations $ 1.10
$ 0.95
3.58
3.30
Discontinued operations —
—
—
(0.02 )
Diluted $ 1.10
$ 0.95
3.58
3.28

Weighted Average Common Shares Outstanding (in thousands)

Basic 16,811
16,771
16,794
16,774
Diluted 16,974
17,088
17,034
17,068

Cash Dividends Declared Per Share of Common Stock $ 0.37
$ 0.33
$ 1.11
$ 0.99


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net Sales	$	269.3	$	161.4	$	496.3	$	395.0
Cost of products sold	230.9		140.0		408.3		319.6
Gross Profit	38.4		21.4		88.0		75.4
Selling, general and administrative expenses	27.5		20.8		51.8		47.4
Impairment and asset restructuring costs (Note 11)	34.4		55.3		34.4		55.3
Acquisition and integration costs (Note 4)	0.1		0.1		12.1		1.1
Loss on debt extinguishment (Note 6)	7.2		1.9		7.2		1.9
Pension settlement losses (Note 7)	1.0		0		1.0		0
Other restructuring and non-routine costs	0.9		1.3		0.9		2.7
COVID-19 costs	0.2		0.4		0.7		1.5

Other (income) expense - net	(0.3)		0.1		(1.1)		0.4
Operating Loss	(32.6)		(58.5)		(19.0)		(34.9)
Interest expense - net	4.8		3.0		7.9		5.9
Loss Before Income Taxes	(37.4)		(61.5)		(26.9)		(40.8)
Benefit for income taxes	(7.7)		(11.4)		(5.5)		(7.1)


Net Loss	$	(29.7)	$	(50.1)	$	(21.4)	$	(33.7)

Loss Per Common Share



Basic	$	(1.76)	$	(2.98)	$	(1.27)	$	(2.01)




Diluted	$	(1.76)	$	(2.98)	$	(1.27)	$	(2.01)

Weighted Average Common Shares Outstanding (in thousands)
Basic	16,851		16,797		16,844		16,812
Diluted	16,851		16,797		16,844		16,812

Cash Dividends Declared Per Share of Common Stock	$	0.47	$	0.47	$	0.94	$	0.94

See Notes to Condensed Consolidated Financial Statements

F-1

Table of Contents

NEENAH, ~~PAPER,~~ INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)

(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net income $ 18.8
$ 16.4
$ 61.4
$ 56.6
Unrealized foreign currency translation gain 5.0
0.7
16.1
0.9
Reclassification of amortization of adjustments to pension and other postretirement benefit liabilities recognized in net periodic benefit cost (Note 5) 1.4
1.9
4.6
5.5
Net gain (loss) from pension and other postretirement benefit plans (Note 3) 0.2
—
(1.0 ) —
Unrealized gain on “available-for-sale” securities —
—
0.1
0.1
Income from other comprehensive income items 6.6
2.6
19.8
6.5
Provision for income taxes 0.5
0.7
1.4
2.1
Other comprehensive income 6.1
1.9
18.4
4.4
Comprehensive income $ 24.9
$ 18.3
$ 79.8
$ 61.0


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net Loss	$	(29.7)	$	(50.1)	$	(21.4)	$	(33.7)
Reclassification of amounts recognized in the condensed consolidated statements of operations:
Amortization of adjustments to pension and other postretirement benefit liabilities (Note 7)	1.3		1.5		3.0		3.1
Pension settlement and curtailment losses (Notes 7 and 11)	1.3		0		1.3		0
Amounts recognized in the condensed consolidated statements of operations	2.6		1.5		4.3		3.1
Unrealized foreign currency translation gain (loss)	4.6		3.6		(4.5)		(0.4)
Net gain from pension plans (Note 3)	16.0		0		16.0		0
Income From Other Comprehensive Income Items	23.2		5.1		15.8		2.7
Provision for income taxes	4.8		0.4		4.8		0.6
Other Comprehensive Income	18.4		4.7		11.0		2.1
Comprehensive Loss	$	(11.3)	$	(45.4)	$	(10.4)	$	(31.6)

See Notes to Condensed Consolidated Financial Statements

F-2

Table of Contents

NEENAH, ~~PAPER,~~ INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)


	September 30, 2017		December 31, 2016			June 30, 2021		December 31, 2020
ASSETS					ASSETS
Current Assets					Current Assets
Cash and cash equivalents	$	24.2	$	3.1	Cash and cash equivalents	$	36.7	$	37.1
Accounts receivable (less allowances of $1.7 million and $1.5 million)	122.7		96.5

Accounts receivable (less allowances of $1.8 million and $1.5 million)					Accounts receivable (less allowances of $1.8 million and $1.5 million)	155.6		100.2
Inventories	124.3		116.3		Inventories	136.0		108.9

Prepaid and other current assets	17.4		20.4		Prepaid and other current assets	32.4		25.1
Total Current Assets	288.6		236.3		Total Current Assets	360.7		271.3
Property, Plant and Equipment					Property, Plant and Equipment
Property, Plant and Equipment, at cost	800.1		755.6
Property, plant and equipment, at cost					Property, plant and equipment, at cost	835.0		812.8
Less accumulated depreciation	418.7		391.0		Less accumulated depreciation	526.4		483.4
Property, plant and equipment—net	381.4		364.6
Property, Plant and Equipment—net					Property, Plant and Equipment—net	308.6		329.4
Finance Lease Right-of-Use Assets (Note 1)					Finance Lease Right-of-Use Assets (Note 1)	22.3		0
Operating Lease Right-of-Use Assets (Note 1)					Operating Lease Right-of-Use Assets (Note 1)	18.9		20.2
Deferred Income Taxes	10.1		6.1		Deferred Income Taxes	25.1		18.3
Goodwill	74.3		70.4		Goodwill	204.8		87.4
Intangible Assets—net	73.5		74.0		Intangible Assets—net	164.0		62.6
Other Noncurrent Assets	18.9		14.2		Other Noncurrent Assets	13.1		17.4
TOTAL ASSETS	$	846.8	$	765.6	TOTAL ASSETS	$	1,117.5	$	806.6

LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities					Current Liabilities
Debt payable within one year	$	1.3	$	1.2
Debt payable within one year (Note 6)					Debt payable within one year (Note 6)	$	7.3	$	4.9
Finance lease liabilities payable within one year					Finance lease liabilities payable within one year	1.0		0
Operating lease liabilities payable within one year					Operating lease liabilities payable within one year	3.3		3.2
Accounts payable	60.9		55.6		Accounts payable	98.0		46.0
Accrued expenses	52.2		51.2		Accrued expenses	70.8		61.9
Total Current Liabilities	114.4		108.0		Total Current Liabilities	180.4		116.0
Long-term Debt	221.6		219.7
Long-term Debt (Note 6)					Long-term Debt (Note 6)	435.8		189.5
Finance Lease Liabilities, Noncurrent (Note 1)					Finance Lease Liabilities, Noncurrent (Note 1)	21.5		0
Operating Lease Liabilities, Noncurrent (Note 1)					Operating Lease Liabilities, Noncurrent (Note 1)	17.0		18.4
Noncurrent Employee Benefits					Noncurrent Employee Benefits	74.9		96.8
Deferred Income Taxes	20.8		10.1		Deferred Income Taxes	38.9		12.3
Noncurrent Employee Benefits	86.3		86.7
Other Noncurrent Obligations	6.8		2.8		Other Noncurrent Obligations	5.5		6.0
TOTAL LIABILITIES	449.9		427.3		TOTAL LIABILITIES	774.0		439.0
Contingencies and Legal Matters (Note 8)	—		—
Contingencies and Legal Matters (Note 10)					Contingencies and Legal Matters (Note 10)	0		0
TOTAL STOCKHOLDERS’ EQUITY	396.9		338.3		TOTAL STOCKHOLDERS’ EQUITY	343.5		367.6
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	846.8	$	765.6	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,117.5	$	806.6

NEENAH, ~~PAPER,~~INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In millions, shares in thousands)

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,
2017 2016
OPERATING ACTIVITIES

Net income $ 61.4
$ 56.6
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 24.3
24.0
Stock-based compensation 4.3
4.4
Deferred income tax provision 4.4
10.4
Non-cash effects of changes in liabilities for uncertain income tax positions 0.2
—
Loss on asset dispositions 0.2
0.1
(Increase) decrease in working capital (12.2 ) 4.7
Pension and other postretirement benefits (1.1 ) (2.3 )
Other 0.1
(0.2 )
NET CASH PROVIDED BY OPERATING ACTIVITIES 81.6
97.7

INVESTING ACTIVITIES

Capital expenditures (27.2 ) (49.4 )
Asset acquisition (8.0 ) —
Purchase of marketable securities —
(0.1 )
Other (0.3 ) —
NET CASH USED IN INVESTING ACTIVITIES (35.5 ) (49.5 )

FINANCING ACTIVITIES

Long-term borrowings (Note 4) 212.3
185.9
Repayments of long-term debt (Note 4) (212.1 ) (206.3 )
Cash dividends paid (18.9 ) (16.8 )
Shares purchased (Note 7) (7.0 ) (8.0 )
Proceeds from exercise of stock options 0.4
0.3
NET CASH USED IN FINANCING ACTIVITIES (25.3 ) (44.9 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 0.3
(0.2 )
NET INCREASE IN CASH AND CASH EQUIVALENTS 21.1
3.1
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3.1
4.2
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 24.2
$ 7.3

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during period for interest, net of interest expense capitalized $ 6.1
$ 5.2
Cash paid during period for income taxes $ 6.4
$ 14.1
Non-cash investing activities:

Liability for equipment acquired $ 3.0
$ 10.0

See Notes to Condensed Consolidated Financial Statements

NEENAH, ~~PAPER,~~ INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except as noted)

Neenah, ~~Paper,~~ Inc. ~~(“Neenah”~~("Neenah" or the ~~“Company”~~"Company"), is a Delaware corporation incorporated in April 2004. The Company has ~~two~~2 primary operations: its technical products business and its fine paper and packaging business. See Note ~~9, “Business~~12, "Business Segment Information.”"

Basis of Consolidation and Presentation

These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the ~~“SEC”~~"SEC") and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ~~(“GAAP”~~("GAAP"). Management believes that the disclosures made are adequate for a fair presentation of the Company’s results of operations, financial position and cash flows. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of operations, financial position and cash flows for the interim periods presented herein. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make extensive use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates.

Earnings per Share ~~(“EPS”~~("EPS")

The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Income from continuing operations $ 18.8
$ 16.4
$ 61.4
$ 57.0
Amounts attributable to participating securities (0.2 ) (0.2 ) (0.5 ) (0.6 )
Income from continuing operations available to common stockholders 18.6
16.2
60.9
56.4
Loss from discontinued operations, net of income taxes —
—
—
(0.4 )
Net income available to common stockholders $ 18.6
$ 16.2
$ 60.9
$ 56.0

Weighted-average basic shares outstanding 16,811
16,771
16,794
16,774

Continuing operations $ 1.11
$ 0.97
$ 3.63
$ 3.36
Discontinued operations —
—
—
(0.02 )
Basic earnings per share $ 1.11
$ 0.97
$ 3.63
$ 3.34


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Loss from continuing operations	$	(29.7)	$	(50.1)	$	(21.4)	$	(33.7)
Amounts attributable to participating securities	0		0		(0.1)		(0.1)


Net loss available to common stockholders	$	(29.7)	$	(50.1)	$	(21.5)	$	(33.8)

Weighted-average basic shares outstanding	16,851		16,797		16,844		16,812



Basic loss per share	$	(1.76)	$	(2.98)	$	(1.27)	$	(2.01)

Earnings (Loss) Per Diluted Common Share

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Income from continuing operations $ 18.8
$ 16.4
$ 61.4
$ 57.0
Amounts attributable to participating securities (0.2 ) (0.2 ) (0.5 ) (0.6 )
Income from continuing operations available to common stockholders 18.6
16.2
60.9
56.4
Loss from discontinued operations, net of income taxes —
—
—
(0.4 )
Net income available to common stockholders $ 18.6
$ 16.2
$ 60.9
$ 56.0

Weighted-average basic shares outstanding 16,811
16,771
16,794
16,774
Add: Assumed incremental shares under stock compensation plans (a) 163
317
240
294
Weighted-average diluted shares 16,974
17,088
17,034
17,068

Continuing operations $ 1.10
$ 0.95
$ 3.58
$ 3.30
Discontinued operations —
—
—
(0.02 )
Diluted earnings per share $ 1.10
$ 0.95
$ 3.58
$ 3.28


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Loss from continuing operations	$	(29.7)	$	(50.1)	$	(21.4)	$	(33.7)
Amounts attributable to participating securities	0		0		(0.1)		(0.1)


Net loss available to common stockholders	$	(29.7)	$	(50.1)	$	(21.5)	$	(33.8)

Weighted-average basic shares outstanding	16,851		16,797		16,844		16,812
Add: Assumed incremental shares under stock compensation plans (a)	0		0		0		0
Weighted-average diluted shares	16,851		16,797		16,844		16,812



Diluted loss per share	$	(1.76)	$	(2.98)	$	(1.27)	$	(2.01)

(a)For the three months ended ~~September~~June 30, ~~2017,~~2021 and 2020, there were 144,000 potentially dilutive options excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock. For the three months ended September 30, 2016, there were no antidilutive options. For the nine months ended September 30, 2017324,182 and ~~2016, there were 72,000 and 47,000~~338,690 potentially dilutive options, respectively, excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s Common Stock. For the six months ended June 30, 2021 and 2020, there were 324,189 and 340,886 potentially dilutive options, respectively, similarly excluded from the computation of dilutive common ~~stock.~~shares. In addition, as a result of the loss from continuing operations for the three and six months ended June 30, 2021, incremental shares of 51,000 and 49,000, respectively, resulting from the dilutive options and performance share units, were excluded from the diluted earnings per share calculation as the effect would have been anti-dilutive. Similarly, as a result of the loss from continuing operations for the three and six months ended June 30, 2020, incremental shares of 23,000 and 28,000, respectively, resulting from the dilutive options and performance share units, were excluded from the diluted earnings per share calculation as the effect would have been anti-dilutive.

Fair Value of Financial Instruments

The Company measures the fair value of financial instruments in accordance with Accounting Standards Codification ~~(“ASC”~~("ASC") Topic 820, Fair Value Measurements and Disclosures (“ ("ASC Topic ~~820”~~820") which establishes a framework for measuring fair value. ASC Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

September 30, 2017 December 31, 2016

Carrying
Value
Fair Value (a)(b)
Carrying
Value
Fair Value (a)(b)
2021 Senior Notes (5.25% fixed rate) $ 175.0
$ 171.0
$ 175.0
$ 169.5
Global Revolving Credit Facilities (variable rates) 43.9
43.9
42.9
42.9
German loan agreement (2.45% fixed rate) 7.0
7.0
6.8
6.8
Total debt $ 225.9
$ 221.9
$ 224.7
$ 219.2

~~(a)~~debt approximated fair value. The fair value for all debt instruments was estimated from Level 2 ~~measurements.~~

~~(b)The fair value of short and long-term debt is estimated~~measurements using rates currently available to the Company for debt of the same remaining maturities.

$0.8 million and ~~$1.1~~$1.4 million are classified as ~~“Prepaid~~"Prepaid and other current ~~assets”~~assets" and ~~“Other Assets”~~"Other Noncurrent Assets", respectively, on the ~~condensed consolidated balance sheet.~~Condensed Consolidated Balance Sheet. The cost of these investments approximated market.

~~Prior~~Revenue from Contracts with Customers

The Company recognizes sales revenue at a point in time following the transfer of control of the product to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. Sales are reported net of allowable discounts and estimated returns. Reserves for cash discounts, trade allowances and sales returns are estimated using historical experience. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated products. Accordingly, the Company records customer payments of shipping and handling costs as a component of net sales and classifies such costs as a component of cost of sales. The Company excludes tax amounts assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers from our measurement of transaction prices. Accordingly, such tax amounts are not included as a component of net sales or cost of sales.

Allowance for Uncollectible Accounts Receivable

Losses on receivables are estimated based on known troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written-off when it is expected that contractual payments due will not be collected in accordance with the terms of the agreement. The allowance for uncollectible accounts receivable was $1.8 million and $1.5 million as of June 30, 2021 and December 31, 2020, respectively. The Company recorded a $1.0 million provision for uncollectible accounts receivable from the impacts of COVID-19 for the six months ended June 30, 2020. There were no significant adjustments for the three and six months ended June 30, 2021.

As of June 30, 2021, the Company ~~had not asserted under ASC 740, Income Taxes, that unremitted earnings~~has $22.5 million of ~~our German~~finance leases, primarily for manufacturing facilities in Spain and Mexico as a result of the Itasa acquisition. The finance lease Right-of-Use ("ROU") assets acquired were valued at $22.1 million, with corresponding lease liabilities, with a weighted-average term of approximately 19.5 years and weighted-average discount rate of 4.3%. Finance leases with terms greater than 12 months are included in "Finance Lease Right-of-Use Assets", "Finance lease liabilities payable within one year" and "Noncurrent Finance Lease Liabilities" on the Condensed Consolidated Balance Sheets.

The Company has operating leases for corporate offices, warehouses, converting operations, ~~were indefinitely reinvested. Therefore, deferred U.S. income taxes were accrued~~and certain equipment, with remaining lease terms of up to 10 years, some of which include options to extend the leases for up to five years. The Company determines if an arrangement is a lease at inception. Operating leases with terms greater than 12 months are included in "Operating Lease Right-of-Use Assets", "Operating lease liabilities payable within one year" and "Noncurrent Operating Lease Liabilities" on ~~those earnings which we planned~~the Condensed Consolidated Balance Sheets.

The Company recorded incremental and direct costs of responding to ~~repatriate in~~ the ~~future. In~~novel coronavirus pandemic (“COVID-19”) of $0.2 million and $0.7 million for the three and six months ended June ~~2017, as part of our annual strategic plan review,~~30, 2021, respectively. For the three and six months ended June 30, 2020, the Company ~~reassessed its intentions regarding the indefinite reinvestment of undistributed earnings of our German operations~~recorded $0.4 million and ~~asserted its intent~~$1.5 million, respectively, related to indefinitely reinvest them. As a result, the Company is no longer providing deferred income taxes on the 2017 unremitted earnings of our German operations and such taxes provided in the first quarter of 2017 of $2.3 million were reversed in the second quarter of 2017. In addition, the $4.1 million deferred income tax liability on unremitted German earnings for 2016 was eliminated in the second quarter of 2017.COVID-19.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance specifies how and when an entity will recognize revenue arising from contracts with customers and requires entities to disclose information about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The Company has substantially completed its assessment of the new standards and does not believe there will be a material impact from adoption on its consolidated financial statements. The Company will adopt the new standards using the modified retrospective method as of January 1, 2018. The new standards also require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current lease accounting. The guidance also eliminates current real estate-specific provisions for all entities. The Company plans to implement ASU 2016-09 as of January 1, 2019. The Company is currently assessing the impact of the adoption of ASU 2016-02 on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). ASU 2017-07 requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only the service-cost component of net benefit cost is eligible for capitalization. This ASU will be implemented by the Company as of January 1, 2018. The Company does not expect the adoption of ASU 2017-07 to have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. The amendments in this ASU provide guidance in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The amendments are effective for the Company as of January 1, 2018, on a prospective basis. The Company early adopted ASU 2017-01 in the third quarter of 2017. There was no material impact on the consolidated financial statements as a result of the adoption.

As of ~~September~~June 30, ~~2017,~~2021, there were no ~~other~~ amendments to the ASC ~~have been issued~~ that will have or are reasonably likely to have a material effect on the Company’s financial position, results of operations or cash ~~flows.~~ flows upon adoption.


	June 30, 2021		December 31, 2020
Raw materials	$	46.7	$	28.9
Work in progress	26.5		20.1
Finished goods	70.8		61.0
Supplies and other	4.0		5.3
	148.0		115.3
Adjust FIFO inventories to LIFO cost	(12.0)		(6.4)
Total	$	136.0	$	108.9

September 30, 2017 December 31, 2016
Raw materials $ 32.5
$ 31.6
Work in progress 36.7
26.8
Finished goods 61.6
63.0
Supplies and other 3.6
3.1
134.4
124.5
Adjust FIFO inventories to LIFO cost (10.1 ) (8.2 )
Total $ 124.3
$ 116.3


	Net Unrealized Foreign Currency Translation Loss		Net Loss from Pension and Other Postretirement Liabilities		Accumulated Other Comprehensive Loss
AOCI — December 31, 2020	$	(1.7)	$	(102.0)	$	(103.7)
Other comprehensive income (loss) before reclassifications (a)	(4.5)		17.3		12.8
Amounts reclassified from AOCI	0		3.0		3.0
Income (loss) from other comprehensive income items	(4.5)		20.3		15.8
Provision (benefit) for income taxes	(0.2)		5.0		4.8
Other comprehensive income (loss)	(4.3)		15.3		11.0
AOCI — June 30, 2021	$	(6.0)	$	(86.7)	$	(92.7)

Net unrealized foreign
currency translation
gain (loss)

Net gain (loss) from
pension and other
postretirement
liabilities (a)

Unrealized gain (loss) on
“available-for-sale”
securities

Accumulated other
comprehensive income
(loss)
AOCI — December 31, 2016 $ (27.4 ) $ (64.5 ) $ (0.1 ) $ (92.0 )
Other comprehensive income (loss) before reclassifications 16.1
(1.0 ) 0.1
15.2
Amounts reclassified from AOCI —
4.6
—
4.6
Income from other comprehensive income items 16.1
3.6
0.1
19.8
Provision for income taxes 0.1
1.3
—
1.4
Other comprehensive income 16.0
2.3
0.1
18.4
AOCI — September 30, 2017 $ (11.4 ) $ (62.2 ) $ —
$ (73.6 )

(a) ~~For~~During the ~~nine~~three months ended ~~September~~June 30, ~~2017,~~2021, the Company recorded a ~~$1.2~~net $16.0 million ~~increase~~decrease in the ~~employee benefit obligation related~~pension plan obligations due to remeasurements in conjunction with a ~~pension remeasurement resulting from the~~ redistribution of active and inactive participants ~~into~~between the separate pension ~~plans. The Company also recorded a $0.2 million settlement loss in SERP for~~plans and the Appleton Mill closure. For the three months ended ~~September~~June 30, ~~2017.~~2021, a $0.3 million pension plan curtailment loss was recorded in conjunction with the mill closure (see Note 11, "Impairment and Asset Restructuring Costs"). In addition, the Company recorded a $1.0 million loss related to a SERP settlement.

Acquisition of Itasa

On April 6, 2021, the Company completed the acquisition (the “Acquisition”) of all of the outstanding capital stock of Global Release Liners, S.L., a Spanish limited company (“Itasa”), from Magnum Capital and other minority shareholders for approximately $240.2 million in cash, net of cash on hand and debt extinguishment, and including a loss on foreign currency forward contracts. Itasa, through its subsidiaries, is a leading global coater and converter of release liners used in hygiene, tapes, industrial, labels, composites and various other end markets. The Acquisition was funded with available cash-on-hand and the net proceeds of the Term Loan B discussed in Note 6, "Debt." The Company incurred $12.1 million of costs related to the Acquisition, including a realized loss of $5.1 million related to the foreign currency forward contracts negotiated to fund the purchase price in euros. See Note 1, "Background and Basis of Presentation," for further discussion on these contracts. The Itasa business is now part of the Company's Technical Products segment.

The Company accounted for the transaction using the acquisition method in accordance with ASC Topic 805, Business Combinations ("ASC Topic 805"). The preliminary allocation of the purchase price was based on estimates of the fair value of assets acquired and liabilities assumed as of April 6, 2021, and certain inventory and income tax balances are subject to adjustment as additional information is obtained. We may further revise the preliminary allocation of the purchase price during the remainder of the measurement period, which will not exceed twelve months from the closing of the acquisition, and such revisions may be material.


	As of April 6, 2021
Assets Acquired
Cash and cash equivalents	$	34.0
Accounts receivable	20.7
Inventories	24.6
Prepaid and other current assets	2.1
Property, plant and equipment	19.6
Finance lease Right-of-Use assets	22.1
Operating lease Right-of-Use assets	0.1
Deferred income taxes	0.7
Non-amortizable intangible assets	4.1
Amortizable intangible assets	100.3
Other assets	0.3
Goodwill	119.1
Total assets acquired	347.7

Liabilities Assumed
Accounts payable	22.3
Accrued expenses	6.1
Long-term debt	26.4
Lease liabilities - Finance	22.1
Lease liabilities - Operating	0.1
Deferred income taxes	28.1
Total liabilities assumed	105.1

Net assets acquired	$	242.6


	Six Months Ended June 30,
	2021		2020
Net Sales	$	528.9	$	451.2
Operating Income (Loss)	8.5		(55.2)
Net Loss	(2.0)		(51.8)
Loss Per Common Share:
Basic	$	(0.12)	$	(3.09)
Diluted	$	(0.12)	$	(3.09)

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Income tax benefit represented (21)% and (19)% of pre-tax book loss for the three months ended June 30, 2021 and 2020, respectively, and (20)% and (17)% of pre-tax book loss for the six months ended June 30, 2021 and 2020, respectively. The effective income tax benefit rates in 2021 and 2020, were significantly impacted by the effects of the $32.4 million and $52.3 million, respectively, of impairment losses of the Appleton Mill (see Note 11, "Impairment and Asset Restructuring Costs") which resulted in consolidated pre-tax book losses in each period. During the three months ended June 30, 2021, the Company recorded $2.9 million of income tax expense to reflect the elimination of certain deferred tax benefits due to the mill closure. In addition, during this period, the Company recorded an income tax benefit of $1.4 million upon filing income tax returns to utilize the NOL carryback provisions of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). Combined with the estimated benefit recorded as of December 31, 2020, the Company has recorded an income tax benefit of $2.3 million and a corresponding tax receivable of $9.1 million for the tax refund.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
U.S. federal statutory income tax rate	(21)	%	(21)	%	(21)	%	(21)	%
U.S. state income taxes, net of federal income tax effect	(5)	%	(4)	%	(8)	%	(5)	%
Impact of Appleton Mill closure on deferred tax benefits	8	%	0	%	11	%	0	%
Benefit of CARES Act NOL carryback	(4)	%	0	%	(5)	%	0	%
Foreign tax rate differences and financing structure	1	%	0	%	3	%	0	%
U.S. taxes on foreign earnings	1	%	0	%	2	%	1	%

Research and development and other tax credits	(1)	%	2	%	(5)	%	(3)	%

Uncertain income tax positions	0	%	0	%	1	%	1	%
Valuation allowances	0	%	6	%	0	%	10	%
Other differences - net	0	%	(2)	%	2	%	0	%
Effective income tax rate	(21)	%	(19)	%	(20)	%	(17)	%

Long-term debt consisted of the following:


	June 30, 2021		December 31, 2020
2021 Term Loan B (variable rates) due April 2028	$	450.0	$	0
2020 Term Loan B (variable rates) extinguished April 2021	0		199.0
Global Revolving Credit Facility (variable rates) due December 2023	0		0
German loan agreement (2.45% fixed rate) due in quarterly installments ending September 2022	1.7		2.4
German loan agreement (1.45% fixed rate) due in quarterly installments ending September 2022	1.7		2.6
Debt discounts and deferred financing costs	(10.3)		(9.6)
Total debt	443.1		194.4
Less: Debt payable within one year	7.3		4.9
Long-term debt	$	435.8	$	189.5

Term Loan B Credit Facility

September 30, 2017 December 31, 2016
2021 Senior Notes (5.25% fixed rate) due May 2021 $ 175.0
$ 175.0
Global Revolving Credit Facilities (variable rates) due December 2019 43.9
42.9
German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022 7.0
6.8
Deferred financing costs (3.0 ) (3.8 )
Total debt 222.9
220.9
Less: Debt payable within one year 1.3
1.2
Long-term debt $ 221.6
$ 219.7

~~2021 Senior Notes~~

~~In May 2013,~~On June 30, 2020, the Company ~~completed an underwritten offering~~entered into a Term Loan Credit Agreement (the “2020 Term Loan Credit Agreement”) which provides a seven-year Term Loan B credit facility (the "Term B Facility") in the initial principal amount of ~~eight-year~~$200 million (the "2020 Term Loan B".) The 2020 Term Loan B was executed in a single $200 million draw on the closing date. Proceeds under the Term B Facility were used to redeem in full $175 million of senior unsecured notes due May 2021, repay borrowings under the Company’s senior secured revolving credit facility, pay fees and expenses of the transaction and for general corporate purposes. In connection with this transaction, the Company had restricted cash of $176.5 million as of June 30, 2020.

~~Amended and Restated Secured Revolving Credit Facility~~

~~In December 2014, the Company amended and restated its existing credit facility by entering into the Third Amended and Restated~~Term Loan Credit Agreement, ~~(the “Third Amended Credit Agreement”)~~borrowings under the Term Loan B will bear interest at a per annum rate equal to either (a) the reserve-adjusted LIBOR rate for interest periods of one, two or three months, plus an applicable rate of 3.00% per annum, or (b) the Alternate Base Rate, plus an applicable rate of 2.00% per annum. “Alternate Base Rate” will be equal to the greatest of (1) the prime rate as quoted from time to time in The Wall Street Journal or published by the Federal Reserve Board, (2) the overnight bank funding rate established by the Federal Reserve Bank of New York, plus 50 basis points, and (3) one-month reserve-adjusted LIBOR plus 100 basis points. The Alternate Base Rate is subject to a “floor” of 1.5%, and the adjusted LIBOR rate is subject to a “floor” of 0.5%. The applicable interest rate under the Term Loan B was 3.50% as of June 30, 2021.

Secured Revolving Credit Facility

In December 2018, the Company amended its existing global secured revolving credit facility (the “Global Revolving Credit Facility”) by entering into a Fourth Amended and Restated Credit Agreement, dated December 10, 2018 (the “ABL Credit Agreement”). The Global Revolving Credit Facility will mature on December 10, 2023.

~~For additional information about our debt agreements, see Note 7 of the Notes to Consolidated Financial Statements in our 2016 Form 10-K.~~

~~Borrowings and Repayments of Long-Term Debt~~

The condensed consolidated statements of cash flows present borrowings and repayments under the Global Revolving Credit Facilities using a gross approach. This approach presents not only discrete borrowings for transactions such as a business acquisition, but also reflects all borrowings and repayments that occur as part of daily management of cash receipts and disbursements. For the nine months ended September 30, 2017, the Company made scheduled debt repayments of $0.6 million, $8.0 million of borrowings for an asset acquisition, and the remaining amounts of borrowings and repayments related to daily cash management activities. For the nine months ended September 30, 2016, the Company made scheduled debt repayments of $0.9 million and net long-term debt repayments of $19.5 million related to daily cash management activities.

Substantially all active employees of the Company’s U.S. operations participate in defined benefit pension plans and/or defined contribution retirement plans. The Company has defined benefit plans for substantially all its employees in Germany and the United Kingdom. In addition, the Company maintains a SERP, which is a non-qualified defined benefit plan, and a supplemental retirement contribution plan (the ~~“SRCP”~~"SRCP"), which is a non-qualified, unfunded defined contribution plan. The Company provides benefits under the non-qualified SERP and SRCP plans to the extent necessary to fulfill the intent of its retirement plans without regard to the limitations set by the Internal Revenue Code on qualified ~~and non-qualified~~ retirement benefit plans.

Components of Net Periodic Benefit Cost for Defined Benefit Plans


	Pension Benefits				Postretirement Benefits Other than Pensions
	Three Months Ended June 30,
	2021		2020		2021		2020
Service cost	$	1.0	$	1.2	$	0.2	$	0.3
Interest cost	3.1		3.5		0.2		0.2
Expected return on plan assets (a)	(4.9)		(5.2)		0		0
Recognized net actuarial loss	1.0		1.3		0.3		0.1
Amortization of prior service benefit	0		0.1		0		0
Amount of settlement and curtailment losses recognized (b)	1.3		0		0		0
Net periodic benefit cost	$	1.5	$	0.9	$	0.7	$	0.6

Postretirement Benefits

Pension Benefits
Postretirement Benefits
Other than Pensions
Nine Months Ended September 30,
2017 2016 2017 2016
Service cost $ 4.0
$ 3.6
$ 0.9
$ 0.9
Interest cost 11.0
12.0
1.1
1.2
Expected return on plan assets (a) (14.8 ) (14.2 ) —
—
Recognized net actuarial loss 4.5
4.9
0.1
0.2
Amortization of prior service benefit 0.2
0.2
(0.1 ) (0.2 )
Net periodic benefit cost $ 4.9
$ 6.5
$ 2.0
$ 2.1

(a)The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return. The Dutch pension plan is funded through an insurance contract, and the expected return on plan assets is calculated based on the discount rate of the insured obligations.

(b) For the three months ended June 30, 2021, the Company recognized a settlement loss of $1.0 million related to the SERP and a curtailment loss of $0.3 million related to the Appleton Mill closure. See Note 11, "Impairment and Asset Restructuring Costs," for further discussion of the Appleton Mill closure.

Stock Options and Stock Appreciation Rights ~~(“Options”~~("Options")

~~The following table presents information regarding~~There were 0 Options awarded during the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2021.

Options granted 144,089
Per share weighted average exercise price $ 82.11
Per share weighted average grant date fair value $ 13.54

The weighted-average grant date fair value for Options granted during the nine months ended September 30, 2017 was estimated using the Black-Scholes option valuation model with the following assumptions:



~~Expected term in years~~	~~5.8~~
~~Risk free interest rate~~	~~2.1~~	%
~~Volatility~~	~~22.9~~	%
~~Dividend yield~~	~~3.0~~	%


Options vested	15,869
Aggregate grant date fair value of Options vested (in millions)	$	0.2

Options vested 113,581
Aggregate grant date fair value of Options vested (in millions) $ 1.6

Performance Share Units ~~(“PSUs”~~("PSUs") and Restricted Share Units ~~(“RSUs”~~("RSUs")

For the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, the Company granted target awards of ~~41,883~~86,278 PSUs. The measurement period for ~~three fourths of~~ the PSUs is January 1, ~~2017~~2021 through December 31, ~~2017, and for the remaining fourth of the PSUs is January 1, 2017 through December 31, 2019.~~2023. The PSUs vest on ~~December 31, 2019.~~the third anniversary from the date of grant. Common Stock ~~equal to not less than 40 percent~~of an amount between 0 and ~~not more than~~ 200 percent of the PSUs target will be awarded based on the Company’s return on invested capital, consolidated revenue growth, ~~EPS~~free cash flow as a percentage of net sales, and total return to shareholders relative to the companies in the Russell 2000® Value small cap index. The Company’s return on invested capital, consolidated revenue growth, and ~~EPS~~free cash flow as a percentage of net sales are adjusted for certain items as further described in the Performance Share Award Agreement. The ~~market~~average price on the ~~date~~dates of grant for the PSUs was ~~$82.12~~$54.35 per share.

However, under specific circumstances, vesting may be accelerated or reflect pro-rata vesting.

As of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, the Company had ~~16,818,005~~16,862,000 shares and ~~16,771,000~~16,829,000 shares of Common Stock outstanding, respectively.

Nine Months Ended September 30,
2017 2016
Shares $ Shares $
2017 Stock Purchase Plan —
$ —
—
$ —
2016 Stock Purchase Plan 85,354
6.8
33,800
2.6
2015 Stock Purchase Plan —
—
93,600
5.2


	Six Months Ended June 30,
	2021			2020
	Shares	Amount		Shares	Amount
Stock Purchase Plan	0	$	0	0	$	0
2020 Stock Purchase Plan	0	0		59,577	3.6

The Company is involved in certain legal actions and claims arising in the ordinary course of business. While the outcome of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not have a material effect on the consolidated financial condition, results of operations or cash flows of the Company.

The Company periodically undergoes examination by the ~~Internal Revenue Service (the “IRS”)~~IRS, as well as various state and foreign jurisdictions. These tax authorities routinely challenge certain deductions and credits reported by the Company on its income tax returns. No significant tax audit findings are being contested at this time with either the IRS or any state or foreign tax authority.

Employees and Labor Relations

The Company’s U.S. union employees are represented by the ~~United Steelworkers Union (the “USW”).~~USW. Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the ~~“IG BCE”~~"IG BCE"). In Spain and Mexico, most of our employees are eligible to be represented by the local workers' unions: Confederacion Sindical de Comisiones Obreras ("CCOO") and Langile Abertzaalen Batzordeak ("LAB") in Spain; and Federacion de Trabajadores del Estado de Queretaro ("CTM") in Mexico. In the Netherlands, most of our employees are eligible to be represented by the Christelijke Nationale Vakbond ("CNV") and the Federatie Nederlandse Vakvereniging ("FNV"). As of ~~September~~June 30, ~~2017,~~2021, the Company had ~~approximately 653~~554 U.S. employees covered under collective bargaining agreements that will expire in the next 12 months.

Contract Expiration

Date

Location

Union

Number of

Employees

~~January 2018~~April 2021

~~Whiting, WI (b)~~Eerbeek, Netherlands

~~USW~~CNV, FNV

~~199~~

(a)

~~June 2018~~November 2021

~~Neenah, WI (b)~~Lowville, NY

USW

~~251~~85

~~July 2018~~December 2021

~~Munising, MI (b)~~Andoain, Spain

~~USW~~CCOO, LAB

~~203~~

(a)

~~February 2019~~January 2022

~~Neenah Germany~~Whiting, WI

~~IG BCE~~USW

~~(a)~~192

May ~~2019~~2022 (b)

Appleton, WI ~~(b)~~

USW

9683

~~August 2021~~June 2022

~~Brattleboro, VT~~Neenah, WI

USW

90194

~~November 2021~~July 2022

~~Lowville, NY~~Munising, MI

USW

~~111~~191

September 2022

Neenah Germany

IG BCE

(a)

March 2023

Queretaro, Mexico

CTM

(a)

(a)Under ~~German law~~the local laws of international subsidiaries, union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE, CCOO and LAB, CTM, and the CNV and FNV cannot be determined. The Company is currently in negotiations with the CNV and FNV. Until new contracts are signed, the terms of the previous contracts still apply.

(b) ~~The Whiting, Neenah, Munising and~~On June 28, 2021, the Company's Board of Directors approved the permanent closure of the Appleton ~~mills have bargained jointly with the USW on pension matters. The current agreements will remain in effect until September 2019.~~Mill.

Note 11. Impairment and Asset Restructuring Costs

2021 Appleton Mill Closure

On June 28, 2021, the Company's Board of Directors approved the permanent closure of the manufacturing facility in Appleton, Wisconsin (the “Appleton Mill”) used in the Technical Products segment. The closure of the facility is expected to be substantially complete by the end of the third quarter of 2021. In connection with the closure, the Company reduced the carrying value of these assets from the net book value of $43.0 million to an estimated salvage value of $10.6 million, which resulted in a non-cash impairment loss of $32.4 million ($24.3 million, net of tax). The salvage value was determined using third-party appraisal estimates based on observable market inputs (Level 2). In addition, the Company recorded $5.0 million of other restructuring charges, including reserves for obsolescence of inventory and environmental exposure, severance costs and a curtailment loss on the pension obligations of the terminated workers. Further, the Company incurred a charge of $2.9 million relating to the loss of certain deferred income tax benefits.

The Company updated the qualitative review of goodwill and other indefinite-lived intangibles, noting that there were 0 impairment indicators triggered as of June 30, 2021.

2020 Impairment and Asset Restructuring Costs

During the three months ended June 30, 2020, due to the adverse impacts of COVID-19, the Company recorded non-cash impairment and asset restructuring costs of $55.3 million, of which $52.3 million related to a non-cash impairment loss for long-lived assets of the Appleton Mill. The Company determined the fair value of the long-lived assets principally on a probability-weighting of the discounted cash flows expected under multiple operating scenarios, based in part on the Company's current and future evaluation of economic conditions, as well as current and future plans (Level 3). The Company used a credit-adjusted risk-free rate of 9.5% based on the expected rate of return from the highest and best use of similar assets by a market participant. The other charges of $3.0 million arose from accelerated depreciation due to the idling of assets and related employee termination benefits for a workforce reduction in the Fine Paper and Packaging segment.

The Company also tested its indefinite-lived intangible assets (brand names) for impairment using the applicable accounting guidance and as a result recorded an impairment loss of $0.9 million and $0.4 million in the Fine Paper and Packaging and Technical Products segments, respectively. The Company updated the qualitative review of goodwill and other indefinite-lived intangibles, noting that there were 0 impairment indicators triggered as of June 30, 2020.

A summary of the asset restructuring and impairment costs incurred during the three and six months ended June 30, 2021 and 2020, is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Impairment loss	$	32.4	$	52.3	$	32.4	$	52.3
Inventory obsolescence charge (recorded in Cost of Products Sold)	3.0		0		3.0		0
Restructuring charges from idled assets	0		2.6		0		2.6
Other restructuring charges	2.0		0.4		2.0		0.4
Total	$	37.4	$	55.3	$	37.4	$	55.3

The Company’s reportable operating segments consist of Technical Products and Fine Paper and Packaging.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Filtration	38	%	45	%	44	%	45	%
Industrial solutions	33	%	45	%	35	%	43	%
Specialty coatings	29	%	10	%	21	%	12	%
Total	100	%	100	%	100	%	100	%

The Fine Paper and Packaging segment is a leading supplier of premium printing and other high-end specialty papers and premium packaging, ~~and specialty office papers,~~ primarily in North America.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Commercial	52	%	47	%	53	%	54	%
Consumer and packaging	48	%	53	%	47	%	46	%

Total	100	%	100	%	100	%	100	%

The following ~~table summarizes~~tables summarize the net sales, ~~and~~ operating income (loss), and total assets for each of the Company’s business ~~segments.~~segments:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net sales
Technical Products	$	179.6	$	100.6	$	324.8	$	232.9
Fine Paper and Packaging	89.7		60.8		171.5		162.1
Consolidated	$	269.3	$	161.4	$	496.3	$	395.0


	Three Months Ended June 30,				Six Months Ended June 30,
	2021 (a)		2020 (c)		2021 (b)		2020 (d)
Operating income (loss)
Technical Products	$	(28.3)	$	(46.2)	$	(9.1)	$	(30.9)
Fine Paper and Packaging	9.9		(5.2)		22.6		10.5
Unallocated corporate costs	(14.2)		(7.1)		(32.5)		(14.5)
Consolidated	$	(32.6)	$	(58.5)	$	(19.0)	$	(34.9)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net sales

Technical Products $ 125.9
$ 114.1
$ 375.1
$ 362.1
Fine Paper and Packaging 113.3
112.9
343.3
340.4
Other 5.9
5.9
17.5
18.5
Consolidated $ 245.1
$ 232.9
$ 735.9
$ 721.0

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Operating income (loss)

Technical Products $ 15.6
$ 14.1
$ 44.1
$ 53.4
Fine Paper and Packaging 17.8
17.3
55.6
53.2
Other 0.2
0.1
0.1
0.1
Unallocated corporate costs (4.6 ) (4.6 ) (14.6 ) (14.5 )
Consolidated $ 29.0
$ 26.9
$ 85.2
$ 92.2

~~Note 10. Subsequent Event~~

~~On November 1, 2017,~~(a) Operating loss for the ~~Company purchased all~~three months ended June 30, 2021 included (1) $37.4 million of non-cash impairment and asset restructuring costs related to the Appleton Mill closure within Technical Products; (2) $5.2 million of acquisition related costs for Itasa ($5.1 million within Technical Products and $0.1 million within Unallocated corporate costs); (3) $7.2 million of loss on debt extinguishment due to upsizing of the ~~outstanding equity of W.A. Sanders Coldenhove Holding B.V. ("Coldenhove") for approximately $45 million. The payment was funded with $14~~Term Loan B within Unallocated corporate costs; (4) a $1.0 million SERP settlement loss within Unallocated corporate costs; (5) $0.9 million of ~~cash~~other restructuring and non-routine costs ($0.4 million within Technical Products, $0.1 million within Fine Paper and Packaging, and $0.4 million within Unallocated corporate costs); and (6) $0.2 million of incremental and direct costs of responding to COVID-19 ($0.1 million within Technical Products and $0.1 million within Unallocated corporate costs). Refer to Note 11, "Impairment and Asset Restructuring Costs", Note 4, "Acquisition", Note 6, "Debt", Note 7, "Pension and Other Postretirement Benefits", and Note 1, "Background and Basis of Presentation" for further discussion.

(b) Operating income for the six months ended June 30, 2021 included (1) $37.4 million of non-cash impairment and asset restructuring costs related to the Appleton Mill closure within Technical Products; (2) $17.2 million of acquisition related costs for Itasa, $5.1 million within Technical Products and $12.1 million within Unallocated corporate costs; (3) $7.2 million of loss on ~~hand~~debt extinguishment due to upsizing of the Term Loan B within Unallocated corporate costs; (4) a $1.0 million SERP settlement loss within Unallocated corporate costs; (5) $0.9 million of other restructuring and ~~borrowings~~non-routine costs ($0.4 million within Technical Products, $0.1 million within Fine Paper and Packaging, and $0.4 million within Unallocated corporate costs); and (6) $0.7 million of ~~$31~~incremental and direct costs of responding to COVID-19 ($0.2 million ~~from~~within Technical Products, $0.3 million within Fine Paper and Packaging, and $0.2 million within Unallocated corporate costs). Refer to Note 11, "Impairment and Asset Restructuring Costs", Note 4, "Acquisition", Note 6, "Debt", Note 7, "Pension and Other Postretirement Benefits", and Note 1, "Background and Basis of Presentation" for further discussion.

(c) Operating loss for the three months ended June 30, 2020 included (1) $55.3 million of asset restructuring and impairment costs ($51.6 million within Technical Products and $3.7 million within Fine Paper and Packaging) related to the impairment of certain long-lived assets, as well as the idling of a paper machine and other smaller assets and related severance costs; (2) $1.9 million of loss on debt extinguishment ($0.1 million within Technical Products and $1.8 million within Unallocated corporate costs) related to the redemption of the 2021 Senior Notes and resizing of the Global Revolving Credit ~~Facilities. Coldenhove is~~Facility; (3) $0.4 million of incremental and direct costs of responding to COVID-19 ($0.1 million within Technical Products, $0.1 million within Fine Paper and Packaging and $0.2 million within Unallocated corporate costs); (4) $1.3 million of other restructuring and non-routine costs ($0.2 million within Technical Products, $0.8 million within Fine Paper and Packaging, and $0.3 million within Unallocated corporate costs); and (5) $0.1 million of due diligence and transaction costs of a ~~specialty materials manufacturer based~~terminated acquisition attempt within Unallocated corporate costs. Refer to Note 11, "Impairment and Asset Restructuring Costs", Note 6, "Debt", and Note 1, "Background and Basis of Presentation" for further discussion.

(d) Operating income for the six months ended June 30, 2020 included (1) $55.3 million of impairment and asset restructuring costs ($51.6 million within Technical Products and $3.7 million within Fine Paper and Packaging) related to the impairment of certain long-lived assets, as well as the idling of a paper machine and other smaller assets and related severance costs; (2) $1.9 million of loss on debt extinguishment ($0.1 million within Technical Products and $1.8 million within Unallocated corporate costs) related to the redemption of the Company's eight-year senior unsecured notes in the ~~Netherlands, with a leading position in digital transfer media~~face amount of $175 million (the "2021 Senior Notes") and other technical products. The Company assumed all rights, obligations and liabilities of Coldenhove, subject to certain representations, warranties, terms, conditions and indemnities typical in this type of transaction. The Company will account for this acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the dateresizing of the ~~acquisition.~~ Global Revolving Credit Facility; (3) $1.5 million of incremental and direct costs of responding to COVID-19 ($0.7 million within Technical Products and $0.6 million within Fine Paper and Packaging and $0.2 million within Unallocated corporate costs); (4) $2.7 million of other restructuring and non-routine costs ($0.4 million within Technical Products, $1.7 million within Fine Paper and Packaging, and $0.6 million within Unallocated corporate costs); and (5) $1.1 million of due diligence and transaction costs of a terminated acquisition attempt within Unallocated corporate costs. Refer to Note 11, "Impairment and Asset Restructuring Costs", Note 6, "Debt", and Note 1, "Background and Basis of Presentation" for further discussion.


	June 30, 2021		December 31, 2020
Total Assets (a)
Technical Products	$	836.2	$	531.0
Fine Paper and Packaging	223.6		213.4
Corporate and other (b)	57.7		62.2
Consolidated	$	1,117.5	$	806.6

(a) Segment identifiable assets are those that are directly used in the segments operations.

(b) Corporate assets are primarily deferred income taxes, lease ROU assets, and cash.

The ~~Company has not included~~following table represents a disaggregation of revenue from contracts with customers by location of the ~~unaudited pro forma information in this filing, as~~selling entities for the ~~Company has not yet finalized the acquisition accounting.~~three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
United States	58	%	70	%	61	%	72	%
Germany	23	%	24	%	26	%	21	%
Rest of the world	19	%	6	%	13	%	7	%
Total	100	%	100	%	100	%	100	%

The following discussion and analysis presents the factors that had a material effect on our financial position as of ~~September~~June 30, ~~2017~~2021 and our results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016.~~2020. You should read this discussion in conjunction with our consolidated financial statements and the notes to those consolidated financial statements included in our most recent Annual Report on Form 10-K. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See ~~“Forward-Looking Statements”~~"Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements.

For the three months ended ~~September~~June 30, ~~2017,~~2021, consolidated net sales of ~~$245.1~~$269.3 million increased ~~$12.2~~$107.9 million (67%) from the prior year period, ~~as a result of~~which was heavily impacted by COVID-19. The increase includes strong volume growth in ~~Technical Products due to higher volumes and~~both segments, with the impact from lower value sales mix mostly offset by favorable currency ~~effects, and modest growth in Fine Paper and Packaging due mostly to higher priced mix.~~effects.

In this section, we discuss and analyze our net sales, earnings before interest and taxes (which we refer to as ~~“operating income”~~"operating income") and other information relevant to an understanding of our results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016.~~2020.

Analysis of Net Sales — ~~three~~Three and ~~nine months ended September~~Six Months Ended June 30, ~~2017~~2021 and ~~2016~~

The following table presents net sales by segment, expressed as a percentage of total net sales:


	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
Net sales
Technical Products	$	179.6	67	%	$	100.6	62	%	$	324.8	65	%	$	232.9	59	%
Fine Paper and Packaging	89.7		33	%	60.8		38	%	171.5		35	%	162.1		41	%
Consolidated	$	269.3	100	%	$	161.4	100	%	$	496.3	100	%	$	395.0	100	%

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net sales

Technical Products $ 125.9
52 % $ 114.1
49 % $ 375.1
51 % $ 362.1
50 %
Fine Paper and Packaging 113.3
46 % 112.9
48 % 343.3
47 % 340.4
47 %
Other 5.9
2 % 5.9
3 % 17.5
2 % 18.5
3 %
Consolidated $ 245.1
100 % $ 232.9
100 % $ 735.9
100 % $ 721.0
100 %


	Three Months Ended June 30,				Change in Net Sales Compared to Prior Period
							Change Due To
	2021		2020		Total Change		Volume		Net Price (a)		Currency
Technical Products	$	179.6	$	100.6	$	79.0	$	79.6	$	(7.5)	$	6.9
Fine Paper and Packaging	89.7		60.8		28.9		26.9		2.0		—
Consolidated	$	269.3	$	161.4	$	107.9	$	106.5	$	(5.5)	$	6.9

Three Months Ended September 30, Change in Net Sales Compared to Prior Period
Change Due To
2017 2016 Total Change Volume Net Price (a) Currency
Technical Products $ 125.9
$ 114.1
$ 11.8
$ 8.3
$ 0.7
$ 2.8
Fine Paper and Packaging 113.3
112.9
$ 0.4
(1.8 ) 2.2
—
Other 5.9
5.9
$ —
—
—
—
Consolidated $ 245.1
$ 232.9
$ 12.2
$ 6.5
$ 2.9
$ 2.8

(a)Includes changes in selling price and product mix.

Analysis of Operating Income — Three and ~~nine months ended September~~Six Months Ended June 30, ~~2017~~2021 and ~~2016~~

The following table sets forth line items from our ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~operations~~Operations as a percentage of net sales for the periods indicated and is intended to provide a perspective of trends in our historical results:

~~Commentary:~~

F-24

The following table presents our operating income by segment for the three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016:~~2020:


					Change in Operating Income Compared to Prior Period
	Three Months Ended June 30,						Change Due To
					Total				Net		Input
	2021		2020		Change		Volume		Price (a)		Costs (b)		Currency		Other (c)
Technical Products	$	(28.3)	$	(46.2)	$	17.9	$	16.1	$	(6.5)	$	(4.6)	$	0.9	$	11.9
Fine Paper and Packaging	9.9		(5.2)		15.1		8.3		2.7		(0.9)		—		5.1
Unallocated corporate costs	(14.2)		(7.1)		(7.1)		—		—		—		—		(7.1)
Consolidated	$	(32.6)	$	(58.5)	$	25.9	$	24.4	$	(3.8)	$	(5.5)	$	0.9	$	9.9

Change in Operating Income Compared to Prior Period
Three Months Ended September 30, Change Due To
Total Net Input
2017 2016 Change Volume Price (a) Costs (b) Currency Other (c)
Technical Products $ 15.6
$ 14.1
$ 1.5
$ 2.3
$ 0.5
$ (1.0 ) $ 0.4
$ (0.7 )
Fine Paper and Packaging 17.8
17.3
0.5
(0.1 ) 0.1
(1.1 ) —
1.6
Other 0.2
0.1
0.1
—
—
—
—
0.1
Unallocated corporate costs (4.6 ) (4.6 ) —
—
—
—
—
—
Consolidated $ 29.0
$ 26.9
$ 2.1
$ 2.2
$ 0.6
$ (2.1 ) $ 0.4
$ 1.0

(a)Includes changes in selling price and product mix.

(b)Includes price changes for raw materials and energy.

(c) Includes the net favorable effects of other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses. In addition, these amounts include the net change in non-GAAP adjustments of $9.0 million, $4.5 million, and $(6.4) million in Technical Products, Fine Paper and Packaging, and Unallocated corporate costs, respectively. See the reconciliation table on F-27 for further detail by segment and type of cost.

•Operating loss for our technical products business decreased $17.9 million from the prior year period to $28.3 million. Excluding adjusting items discussed above and shown on the reconciliation table on F-27, adjusted operating income increased $8.9 million from $5.8 million to $14.7 million, primarily as a result of increased volume, including the acquisition of Itasa, higher operating efficiencies due to increased production volume, and favorable foreign currency, partly offset by lower value sales mix and higher input costs.

•Operating income for our fine paper and packaging business increased $15.1 million from the prior year period to $9.9 million, primarily as a result of higher sales and production volume and more favorable sales mix, partly offset by higher input costs. The prior year period also had $4.5 million of higher costs related to impairment and asset restructuring costs, and other restructuring and non-routine costs. Excluding unfavorable adjusting items of $0.1 million in 2021 and $4.6 million in 2020 shown on the reconciliation table on F-27, adjusted operating income of $10.0 million in 2021 increased $10.6 million from a loss of $0.6 million in the prior year.

•Unallocated corporate expenses of $14.2 million increased $7.1 million from the prior year. Excluding unfavorable adjustments in 2021 and 2020 of $8.8 million and $2.4 million, respectively, shown on the reconciliation table on F-27, adjusted unallocated corporate expenses of $5.4 million increased $0.7 million from prior year due to timing of certain expenses. The adjustments for both years related primarily to loss on debt extinguishment.



					Change in Operating Income Compared to Prior Period
	Six Months Ended June 30,						Change Due To
					Total				Net		Input
	2021		2020		Change		Volume		Price (a)		Costs (b)		Currency		Other (c)
Technical Products	$	(9.1)	$	(30.9)	$	21.8	$	18.3	$	(10.9)	$	(5.1)	$	2.2	$	17.2
Fine Paper and Packaging	22.6		10.5		12.1		3.2		0.7		(0.1)		—		8.4
Unallocated corporate costs	(32.5)		(14.5)		(18.0)		—		—		—		—		(18.0)
Consolidated	$	(19.0)	$	(34.9)	$	15.9	$	21.5	$	(10.2)	$	(5.2)	$	2.2	$	7.6

(a) Includes changes in selling price and product mix.

(b) Includes price changes for raw materials and energy.

(c) Includes other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A ~~expenses, start-up~~expenses. In addition, these amounts include the net change in non-GAAP adjustments of $9.4 million, $5.9 million, and ~~other~~$(17.2) million in Technical Products, Fine Paper and Packaging, and Unallocated corporate costs, respectively. See the reconciliation table on F-27 for ~~the U.S. filtration business, insurance settlement,~~further detail by segment and ~~acquisition/integration/restructuring costs.~~type of cost.

•Operating loss for our technical products business decreased $21.8 million from the prior ~~year.~~year period loss of $30.9 million to a loss of $9.1 million. Excluding unfavorable adjusting items discussed above and shown on the reconciliation table on F-27, adjusted operating income increased $12.4 million (57%) from $21.8 million to $34.2 million, primarily as a result of higher sales and production volumes, including the Itasa acquisition, and related manufacturing cost efficiencies, and favorable foreign currency, partly offset by lower value sales mix and higher input costs.

~~The following table presents our operating income by segment for the nine months ended September 30, 2017 and 2016:~~

Change in Operating Income Compared to Prior Period
Nine Months Ended September 30, Change Due To
Total Net Input
2017 2016 Change Volume Price (a) Costs (b) Currency Other (c)
Technical Products $ 44.1
$ 53.4
$ (9.3 ) $ 2.8
$ 0.8
$ (4.9 ) $ (0.3 ) $ (7.7 )
Fine Paper and Packaging 55.6
53.2
2.4
2.9
(3.2 ) (1.2 ) —
3.9
Other 0.1
0.1
—
(1.0 ) —
—
—
1.0
Unallocated corporate costs (14.6 ) (14.5 ) (0.1 ) —
—
—
—
(0.1 )
Consolidated $ 85.2
$ 92.2
$ (7.0 ) $ 4.7
$ (2.4 ) $ (6.1 ) $ (0.3 ) $ (2.9 )

~~(a)Includes changes in selling price and product mix.~~

~~(b)Includes price changes for raw materials and energy.~~

~~(c)~~Includes other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses, start-up and other costs for the U.S. filtration business, insurance settlement, and integration/restructuring costs.

Consolidated operating income of $85.2 million for the nine months ended September 30, 2017 decreased $7.0 million from the prior year period. The decline was primarily due to higher losses resulting from the U.S. filtration business start-up phase, as well as increased input and transportation costs, and a lower value mix in Fine Paper & Packaging. These items were only partially offset by higher volumes and selling prices, proceeds from an insurance settlement, improved operational efficiencies and lower SG&A spending. Excluding an insurance settlement of $3.2 million and integration and restructuring costs of $0.9 million and $3.7 million for 2017 and 2016, respectively, operating income decreased $13.0 million.

The following table sets forth our operating income (loss) by segment, adjusted for the effects of ~~integration and restructuring~~non-routine certain costs, for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Technical Products
GAAP operating loss	$	(28.3)	$	(46.2)	$	(9.1)	$	(30.9)
Impairment and asset restructuring costs	37.4		51.6		37.4		51.6
Acquisition and integration costs	5.1		—		5.1		—
Loss on debt extinguishment	—		0.1		—		0.1
Other restructuring and non-routine	0.4		0.2		0.6		0.3
COVID-19 costs	0.1		0.1		0.2		0.7

Adjusted operating income	14.7		5.8		34.2		21.8

Fine Paper and Packaging
GAAP operating income (loss)	9.9		(5.2)		22.6		10.5
Asset restructuring costs	—		3.7		—		3.7
Other restructuring and non-routine	0.1		0.8		(0.1)		1.8

COVID-19 costs	—		0.1		0.3		0.6
Adjusted operating income (loss)	10.0		(0.6)		22.8		16.6

Unallocated Corporate Costs
GAAP operating loss	(14.2)		(7.1)		(32.5)		(14.5)
Acquisition and integration costs	0.1		0.1		12.1		1.1
Loss on debt extinguishment	7.2		1.8		7.2		1.8
Pension settlement costs	1.0		—		1.0		—
Other restructuring and non-routine	0.4		0.3		0.4		0.6
COVID-19 costs	0.1		0.2		0.2		0.2
Adjusted operating loss	(5.4)		(4.7)		(11.6)		(10.8)

Consolidated
GAAP operating loss	(32.6)		(58.5)		(19.0)		(34.9)
Impairment and asset restructuring costs (a)	37.4		55.3		37.4		55.3
Acquisition and integration costs (a)	5.2		0.1		17.2		1.1
Loss on debt extinguishment	7.2		1.9		7.2		1.9
Pension settlement costs	1.0		—		1.0		—
Other restructuring and non-routine	0.9		1.3		0.9		2.7
COVID-19 costs	0.2		0.4		0.7		1.5
Adjusted operating income	$	19.3	$	0.5	$	45.4	$	27.6

(a) Each of these non-routine items is reflected on the Condensed Consolidated Statements of Operations as a separate line, with the exception of $3.0 million of "Impairment and asset restructuring costs" and $5.1 million of "Acquisition and integration costs" which are reflected in "Cost of products sold".

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Operating income

Technical Products $ 15.6
$ 14.1
$ 44.1
$ 53.4
Fine Paper and Packaging 17.8
17.3
55.6
53.2
Other 0.2
0.1
0.1
0.1
Unallocated corporate costs (4.6 ) (4.6 ) (14.6 ) (14.5 )
Operating Income as Reported $ 29.0
$ 26.9
$ 85.2
$ 92.2
Adjustments to Reported Operating Income

Technical Products

Integration/Restructuring costs —
0.1
—
0.6
Fine Paper and Packaging

Insurance settlement (2.9 ) —
(2.9 ) —
Integration/Restructuring costs —
0.3
—
1.1
Other

Insurance settlement (0.3 ) —
(0.3 ) —
Integration/Restructuring costs —
—
—
0.6
Unallocated corporate costs

Acquisition/Restructuring costs 0.9
0.8
0.9
1.4
Total Adjustments to Reported Operating Income (2.3 ) 1.2
(2.3 ) 3.7
Operating Income as Adjusted $ 26.7
$ 28.1
$ 82.9
$ 95.9

Table of Contents

In accordance with generally accepted accounting principles in the United States ~~(“GAAP”~~("GAAP"), consolidated operating income (loss) includes the pre-tax effects of ~~insurance~~impairment and asset restructuring costs, acquisition and integration costs, loss on debt extinguishment, pension settlement ~~acquisition, integration,~~losses, other restructuring and ~~restructuring~~non-routine costs, and COVID-19 costs. We believe that by adjusting reported operating income to exclude the effects of ~~these~~such items, the resulting adjusted operating income is on a basis that reflects the results of our ongoing operations. In assessing COVID-19 impacts, we excluded only costs which were unusual, incremental and directly attributable to mitigating the effects COVID-19 on our operations. We believe that providing adjusted operating results will help investors gain an additional perspective of underlying business trends and results. Adjusted operating income is not a recognized term under GAAP and should not be considered in isolation or as a substitute for operating income derived in accordance with GAAP. Other companies may use different methodologies for calculating their non-GAAP financial measures and, accordingly, our non-GAAP financial measures may not be comparable to their measures.

Additional Statement of Operations Commentary:

•SG&A expense of ~~$21.4~~$27.5 million for the three months ended ~~September~~June 30, ~~2017~~2021 was ~~$0.4~~$6.7 million higher than SG&A expense of ~~$21.0~~$20.8 million in the prior year period. ~~For~~The majority of the ~~three months ended September 30, 2017,~~increase was due to additional SG&A ~~expense~~from the Itasa acquisition. Costs in 2020 were lower due to the significant actions taken to manage spending and temporarily reduce costs in areas such as ~~a percent of sales decreased to 8.7 percent from 9.0 percent in the prior year period.~~

marketing, travel and payroll.

SG&A expense of ~~$70.9~~$51.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 was ~~$0.9~~$4.4 million ~~lower~~higher than SG&A expense of ~~$71.8~~$47.4 million in the prior year period. ~~For~~Most of the ~~nine months ended September 30, 2017,~~increase was due to additional SG&A ~~expense as a percent of sales decreased to 9.6 percent~~ from ~~10.0 percent in~~ the ~~prior year period.~~Itasa acquisition.

•For the three months ended ~~September~~June 30, ~~2017, we incurred~~2021, net interest expense of ~~$3.2~~$4.8 million ~~which~~ was higher than the ~~$2.7~~$3.0 million in the second quarter of 2020, due to the higher borrowing under the upsized Term Loan B and amortization of the associated deferred financing costs.

For the six months ended June 30, 2021, net interest expense of $7.9 million increased compared to $5.9 million for prior year period, ~~primarily~~likewise due to ~~capitalization of interest of $0.3 million for the U.S. filtration project in 2016~~higher Term Loan B borrowing and ~~higher interest rates.~~associated deferred financing cost amortization.

For the nine months ended September 30, 2017, we incurred net interest expense of $9.4 million which was higher than the $8.3 million for prior year period, primarily due to capitalization of interest of $0.7 million for the U.S. filtration project in 2016 and higher interest rates.

•Historically, our effective tax rate has differed from the U.S. statutory tax rate ~~of 35 percent~~ primarily due to the proportion of pre-tax income in jurisdictions with marginal tax rates that differ from the U.S. statutory tax rate, research and development and other tax credits and excess tax benefits from stock compensation. ~~In June 2017, as part of our annual strategic plan review, we reassessed our intentions regarding the indefinite reinvestment of undistributed~~

earnings of our German operations and asserted our intent to indefinitely reinvest them under ASC 740, Income Taxes. Accordingly, we are no longer providing deferred income taxes on the 2017 unremitted earnings of our German operations. For the three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, we recorded an income tax ~~provision~~benefit of ~~$7.0~~$7.7 million and ~~$7.8~~$11.4 million, respectively. The effective income tax rate was (21)% and (19)% for those periods, respectively. For the six months ended June 30, 2021 and 2020, we recorded an income tax benefit of ~~27 percent~~$5.5 million and $7.1 million, respectively. The effective income tax rate was (20)% and (17)% for those periods, respectively. See Note 5, "Income Taxes" of Notes to Condensed Consolidated Financial Statements for a reconciliation of the effective income tax (benefit) rate to the U.S. federal statutory income tax (benefit) rate. The effective income tax benefit rates in 2021 and 2020, were significantly impacted by the effects of the $32.4 million and $52.3 million, respectively, of impairment losses of the Appleton Mill (see Note 11, "Impairment and Asset Restructuring Costs") which resulted in consolidated pre-tax book losses in each period. During the three months ended ~~September~~June 30, ~~2017 was lower than~~2021, the Company recorded $2.9 million of income tax ~~rate~~expense to reflect the elimination of ~~32 percent for the three months ended September 30, 2016~~certain deferred tax assets due to the ~~indefinite reinvestment assertion. For further detail refer~~mill closure. In addition, during this period, the Company recorded an income tax benefit of $1.4 million upon filing income tax returns to ~~Note 1, "Background~~utilize the NOL carryback provisions of the Coronavirus Aid, Relief and ~~Basis~~Economic Security Act ("CARES Act"). Combined with the estimated benefit recorded as of ~~Presentation - Income Taxes".~~December 31, 2020, the Company has recorded an income tax benefit of $2.3 million and a corresponding tax receivable of $9.1 million for the tax refund.

In addition, as of June 30, 2020, we evaluated our ability to utilize our deferred tax assets, including research and development and other tax credits and NOLs, before they expire. As a result of the impacts of COVID-19 and other factors, a $4.0 million tax expense was recorded to increase the valuation allowance against our state tax credits and NOLs.

Liquidity and Capital Resources

We believe that our financial position and liquidity remain strong, considering as of June 30, 2021, we had:

•no near-term debt maturities, as the Global Revolving Credit Facility matures in December 2023 and the Term Loan B matures in April 2028;

•significant remaining availability of $159.6 million on our Global Revolving Credit Facility, with no outstanding borrowings;

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•$36.7 million of cash and cash equivalents on hand;

•On April 6, 2021, in connection with the acquisition of Itasa, we successfully completed the upsizing of our Term Loan B facility from $200 million to $450 million and lowered the initial interest rate by 150 basis points. See Note 6, "Debt" of Notes to Condensed Consolidated Financial Statements, for further discussion.


	Six Months Ended June 30,
	2021		2020
Net cash flow provided by (used in):
Operating activities	$	23.4	$	43.6

Investing activities:
Capital expenditures	(11.3)		(8.0)
Acquisition of Itasa	(240.2)		—
Other investing activities	3.9		(0.3)
Total	(247.6)		(8.3)

Financing activities:
Net borrowings (repayments) of long-term debt	249.6		183.5
Cash dividends paid	(15.9)		(16.0)
Shares purchased	(0.5)		(3.8)
Other financing activities	(9.2)		(5.2)
Total	224.0		158.5
Effect of exchange rate changes on cash and cash equivalents	(0.2)		(0.1)
Net increase in cash and cash equivalents and restricted cash	$	(0.4)	$	193.7

Nine Months Ended September 30,
2017 2016
Net cash flow provided by (used in):

Operating activities $ 81.6
$ 97.7

Investing activities:

Capital expenditures (27.2 ) (49.4 )
Asset acquisition (8.0 ) —
Other investing activities (0.3 ) (0.1 )
Total (35.5 ) (49.5 )

Financing activities:
Net repayments of long-term debt 0.2
(20.4 )
Other financing activities (25.5 ) (24.5 )
Total (25.3 ) (44.9 )
Effect of exchange rate changes on cash and cash equivalents 0.3
(0.2 )
Net increase in cash and cash equivalents $ 21.1
$ 3.1

Operating Cash Flow Commentary

•Cash provided by operating activities of ~~$81.6~~$23.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 was ~~$16.1~~$20.2 million lower than cash provided by operating activities of ~~$97.7~~$43.6 million in the prior year period. The ~~unfavorable comparison was primarily~~decrease resulted from higher working capital due to ~~an increased investment in working capital, largely~~higher sales and production volumes, and to a lesser extent from higher payments for pensions. The significant increases in accounts ~~receivable.~~

receivable, accounts payable and inventory during the six months ended June 30, 2021 resulted from the robust growth in business activity.

Investing Commentary:

•We acquired Itasa on April 6, 2021, for $240.2 million, net of cash on hand and repayment of existing debt, and including a loss on foreign currency forward contracts.

•For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021, and ~~2016, cash used by investing activities was $35.5~~2020, capital expenditures were $11.3 million and ~~$49.5~~$8.0 million, ~~respectively, primarily due~~respectively. We expect aggregate annual capital expenditures to return to a range of approximately 2 to 4 percent of net sales. We believe that this level of capital spending can be funded from cash provided from operating activities and allows us to maintain the ~~U.S. Filtration project, which was completed~~efficiency and cost effectiveness of our assets while also investing in ~~2016. We acquired a laminating asset for $8.0~~expanded capabilities to successfully pursue strategic initiatives and deliver attractive returns.

Financing Commentary:

•For the six months ended June 30, 2021, cash and cash equivalents decreased slightly to $36.7 million from $37.1 million at December 31, 2020. As of June 30, 2021, our cash balance consisted of $4.8 million in the ~~third quarter~~U.S. and $31.9 million held at entities outside of ~~2017 to support continued growth in~~the U.S. As of June 30, 2021, there were no restrictions regarding the repatriation of our ~~premium packaging business.~~ non-U.S. cash.

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•For the ~~full year 2017, we expect capital expenditures of approximately $45 million, which is within our normal range of approximately 3 to 5 percent of net sales.~~

~~Financing Commentary:~~

~~Our liquidity requirements are provided by cash generated from operations and short and long-term borrowings.~~

~~For the nine~~six months ended ~~September~~June 30, ~~2017 and 2016,~~2021, cash ~~used~~provided in financing activities was ~~$25.3 million and $44.9 million, respectively.~~$224.0 million. Cash ~~used in~~flows related to financing activities ~~consists primarily~~consisted of net borrowings of long-term debt, dividends paid, debt issuance costs, and share ~~repurchases,~~repurchases. We made net borrowings of $249.6 million by upsizing our Term Loan B from $200 million to $450 million as the source of financing the Itasa acquisition.

•In the prior year period, we made net borrowings of $183.5 million due to the timing of the 2020 Term Loan B and the redemption of the 2021 Senior Notes. On June 30, 2020, we entered into the 2020 Term Loan Credit Agreement for the 2020 Term Loan B for $200 million. Also on June 30, 2020, using the proceeds from the 2020 Term Loan B, we deposited $176.5 million of principal and accrued interest on the 2021 Senior Notes with the trustee and initiated the process to redeem in full the 2021 Senior Notes. As a result, for the six months ended June 30, 2020, cash and cash equivalents and restricted cash increased $193.7 million to $202.7 million from $9.0 million at December 31, 2019. The 2020 Term Loan B proceeds of $200 million, offset by transaction costs and net repayments ~~of long-term debt.~~under the Global Revolving Credit Facility, led to increase in total debt by $180.6 million to $381.4 million at June 30, 2020 from $200.8 million at December 31, 2019.

•Availability under our ~~revolving credit facility~~Global Revolving Credit Facility varies over time depending on the value of our inventory, receivables and various capital assets. As of ~~September~~June 30, ~~2017,~~2021, we had ~~$43.9 million~~no outstanding borrowings under our Global Revolving Credit ~~Facilities~~Facility and ~~$125.9~~$159.6 million of available credit (based on exchange rates at ~~September~~June 30, ~~2017)~~2021).

~~We have~~•As of June 30, 2021, we had required debt principal payments through ~~September~~June 30, ~~2018~~2022 of ~~$1.3~~$2.8 million for principal payments on the two German loan ~~agreement.~~agreements and $4.5 million for the Term Loan B payable in equal quarterly installments.

For the nine months ended September 30, 2017, cash and cash equivalents increased $21.1 million to $24.2 million at September 30, 2017 from $3.1 million at December 31, 2016. Total debt increased $2.0 million to $222.9 million at September 30, 2017 from $220.9 million at December 31, 2016. Net debt (total debt minus cash and cash equivalents) decreased by $19.1 million.

As of September 30, 2017, our cash balance of $24.2 million consists of $4.8 million in the U.S. and $19.4 million held at entities outside of the U.S. As of September 30, 2017, there were no restrictions regarding the repatriation of our non-U.S. cash. However, the repatriation of these cash balances to the U.S. would increase our income tax provision since the earnings are asserted to be indefinitely reinvested.

Transactions With Shareholders

~~In November 2016, our Board of Directors approved a 12 percent increase in the quarterly dividend rate on our common stock, to $0.37 per share, effective with the March 2017 dividend payment.~~ •For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, we paid cash dividends of ~~$1.11~~$15.9 million and $16.0 million ($0.94 per common ~~share or $18.9~~share).

•In November 2020, the Board of Directors authorized an evergreen program for the repurchase of up to $25 million ~~and $0.99 per common share or $16.8 million, respectively.~~

~~Purchases under the 2017 Stock Purchase Plan will be made from time to time in the open market or in privately negotiated transactions in accordance with the requirements~~ of ~~applicable law. The timing and amount of any purchases will depend on share price, market conditions and other factors. The 2017 Stock Purchase Plan~~outstanding Common Stock. This plan does not require us to purchase any specific number of shares and may be suspended or discontinued at any time. For the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016,~~2021, we did not purchase any shares. For the six months ended June 30, 2020, we repurchased ~~approximately 85,400~~59,577 shares of Common Stock at a cost of ~~$6.8 million and 127,400 shares of Common Stock at a cost of $7.8 million, respectively. We did not repurchase shares during the three months ended September 30, 2017.~~$3.6 million. For further details on our Stock Purchase Plans, refer to Note 7.9, "Stockholders' Equity" of Notes to Condensed Consolidated Financial Statements.

Other Items:

•As of ~~September~~June 30, ~~2017,~~2021, we had $25.0 million of U.S. federal and state research and development ("R&D") Credits which, if not used, will expire between 2030 and 2037 for the U.S. federal R&D Credits and between 2017 and 2032 for the state R&D Credits. We reflected a valuation allowance of $3.4 million against a portion of the R&D Credits. In addition, as of September 30, 2017, we had $43.6$71.6 million of state ~~net operating losses ("NOLs").~~NOLs. Our state NOLs may be used to offset ~~approximately $2.1~~$4.4 million in state income taxes. If not used, substantially all of the state NOLs will expire in various amounts between ~~2017~~2021 and ~~2037.~~2041. In addition, as of June 30, 2021, we had $29.3 million of U.S. federal and $7.5 million of U.S. state research and development tax credits ("R&D Credits") which, if not used, will expire between 2029 and 2041 for the U.S. federal R&D Credits and between 2021 and 2036 for the state R&D Credits.

Management believes that our ability to generate cash from operations and our borrowing capacity are adequate to fund working capital, capital spending and other cash needs for the next 12 months. Our ability to generate adequate cash from operations beyond ~~2017~~2021 will depend on, among other things, our ability to successfully implement our business strategies, control costs in line with market conditions, and manage the impact of changes in input prices and ~~currencies.~~the impact and duration of COVID-19. We can give no assurance we will be able to successfully implement these items.

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Critical Accounting Policies and Use of Estimates

The preparation of financial statements in conformity with ~~accounting principles generally accepted in the United States~~GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. We believe that the estimates, assumptions and judgments described in ~~“Management’s~~"Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting ~~Policies”~~Policies and Use of Estimates" of our most recent Annual Report on Form 10-K have the greatest potential impact on our financial statements, so we consider these to be our critical accounting policies. The critical accounting policies used in the preparation of the consolidated financial statements are those that are important both to the presentation of financial condition and results of operations and require significant judgments with regard to estimates used. These critical judgments relate to the timing of recognizing sales revenue, the recoverability of deferred income tax assets, pension benefits, ~~and~~ future cash flows associated with impairment testing of long-lived ~~assets.~~assets and acquisition accounting which requires companies to record assets acquired and liabilities assumed at their respective fair value at the date of acquisition. Actual results could differ from these fair value measurements and estimates and changes in these estimates are recorded when known. We believe that the consistent application of these policies enables us to provide readers of our financial statements with useful and reliable information about our operating results and financial condition. ~~There~~Other than the acquisition accounting related to Itasa, there have been no significant changes in these policies or the estimates used in the application of the policies since December 31, ~~2016.~~2020.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute ~~“forward-looking”~~"forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), or in releases made by the SEC, all as may be amended from time to time.under federal securities laws. Statements contained in this quarterly report that are not historical facts may be forward-looking statements within the meaning ~~of the PSLRA~~under federal securities laws and we caution investors that any forward-looking statements we make are not guarantees or indicative of future performance. These forward-looking statements rely on a number of assumptions concerning future events and are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties and other factors include, but are not necessarily limited to, those set forth under the captions ~~“Cautionary~~"Cautionary Note Regarding Forward-Looking ~~Statements”~~Statements" and/or ~~“Risk Factors”~~"Risk Factors" of our latest Form 10-K filed with the SEC as periodically updated by subsequently filed Form 10-Qs (these securities filings can be located on our website at www.neenah.com). Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances. These cautionary statements are being made pursuant to ~~the Securities Act, the Exchange Act and the PSLRA~~federal securities laws with the intention of obtaining the benefits of the ~~“safe harbor”~~"safe harbor" provisions of such laws.

You can identify forward-looking statements as those that are not historical in nature, particularly those that use terminology such as ~~“may,” “will,” “should,” “expect,” “anticipate,” “contemplate,” “estimate,” “believe,” “plan,” “project,” “predict,” “potential”~~"may," "will," "should," "expect," "anticipate," "contemplate," "estimate," "believe," "plan," "project," "predict," "potential" or ~~“continue,”~~"continue," or the negative of these, or similar terms. In evaluating these forward-looking statements, you should consider the following factors, as well as others contained in our public filings from time to time, which may cause our actual results to differ materially from any forward-looking statement:

• changes in market demand for our products due to global economic ~~conditions;~~and political conditions or our inability to execute product innovation strategies;

•the impact of competition, both domestic and international, changes in industry production capacity, including the construction of new mills or new machines, the closing of mills and incremental changes due to capital expenditures or productivity increases;

•the loss of current customers or the inability to obtain new customers;

•increases in commodity prices (particularly for pulp, energy and latex);

•our ability to control costs, including transportation, and implement measures designed to enhance operating efficiencies;

•the availability of raw materials and energy;

•the impact of cybersecurity risks related to breaches of security pertaining to sensitive Company, customer or vendor information, as well as breaches in the technology that manages operations and other business processes;

•loss and replacement of key personnel;

•our ability to identify attractive acquisition targets and to successfully integrate acquired businesses into our existing operations;

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•changes in asset valuations, including write-downs of assets including property, plant and equipment; inventory, accounts receivable, deferred tax assets or other assets for impairment or other reasons;

•the enactment of adverse federal, state ~~federal~~ or foreign tax or other legislation or changes in government policy or regulation;

•the impact of increased trade protectionism and tariffs on our business, results of operations and financial condition;

•unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations;

•fluctuations in ~~(i)~~foreign currency exchange rates (in particular, changes in the U.S. dollar/Euro currency exchange rates) and ~~(ii)~~ interest ~~rates;~~rates on long-term debt;

•increases in ~~commodity prices, (particularly~~the funding requirements for ~~pulp, energy~~our pension and ~~latex) due to constrained global supplies or unexpected supply disruptions;~~postretirement liabilities;

~~the availability of raw materials and energy;~~

•strikes, labor stoppages and changes in our collective bargaining agreements and relations with our employees and unions;

•capital and credit market volatility and fluctuations in global equity and fixed-income markets;

~~unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations;~~

~~our ability to control costs and implement measures designed to enhance operating efficiencies;~~

~~the loss of current customers or the inability to obtain new customers;~~

~~loss of key personnel;~~

~~increases in the funding requirements for our pension and postretirement liabilities;~~

changes in asset valuations including write-downs of assets including property, plant and equipment, inventory, accounts receivable, deferred tax assets or other assets for impairment or other reasons;

•our existing and future indebtedness;

~~our ability to successfully integrate acquired businesses into our existing operations;~~

•our NOLs may ~~expire before we are able~~not be available to offset our tax ~~liabilities;~~liabilities and other tax planning strategies may not be effective; and

•other risks that are detailed from time to time in reports we file with the SEC.

Any subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth or referred to above, as well as the risk factors contained in our most recent Annual Report on Form 10-K. Except as required by law, we disclaim any obligation to update such statements or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the disclosure on this matter made in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management in a timely manner.

As of ~~September~~June 30, ~~2017,~~2021, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2017.~~2021.

Internal ~~Controls~~Control over Financial Reporting

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2021. Based on that evaluation, we have concluded that there has been no change in our internal control over financial reporting during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

F-32

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See Note ~~8, “Contingencies~~10, "Contingencies and Legal ~~Matters”~~Matters" of Notes to Condensed Consolidated Financial ~~Statements of Item 1 — Financial~~ Statements.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, ~~“Item 1A. Risk Factors” in~~"Item 1A, "Risk Factors" of our most recent Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities:

The following table contains information about our purchases of our equity securities for the three months ended ~~September~~June 30, ~~2017.~~2021:


		Shares Purchased as Part of Publicly Announced Plans or Programs in 2021 (b)
Month	Total Number of Shares Purchased (a)	Average Price Paid Per Share	Total Number of Shares Purchased	Approximate Dollar Value of Shares that May Yet Be Purchased
April	323	$—	—	$25,000,000
May	1,562	$—	—	$25,000,000
June	—	$—	—	$25,000,000

(a) Transactions include the purchase of vested restricted shares from employees to satisfy minimum tax withholding requirements upon vesting of stock-based awards. See Note 9, "Stockholders' Equity" of Notes to Condensed Consolidated Financial Statements.

Months in 2017
Total Number of
Shares Purchased

Average Price Paid
Per Share

Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs

Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
Publicly Announced
Plans or Programs (a)
July —
$ —
—
$ 25,000,000
August 492
$ 80.25
—
$ 25,000,000
September 2,583
$ 77.25
—
$ 25,000,000

~~(a)~~As(b) In November 2020, our Board of ~~September 30, 2017,~~Directors authorized a program for the purchase of up to $25 million of outstanding common stock effective January 1, 2021. The program does not require the Company ~~has purchased approximately 176,896~~to purchase any specific number of shares ~~of Common Stock~~and may be suspended or discontinued at ~~an aggregate cost of $14.2 million~~any time. For the six months ended June 30, 2021, there were no purchases under ~~the 2017 Stock Purchase Plan and 2016 Stock Purchase Plan. For further discussion on the share repurchase plans refer to Note 7.~~this program.

F-33

Item 6. Exhibits



Exhibit Number		Exhibit
31.1
~~10.1~~	Third Amendment, dated as of August 30, 2017, to the Third Amended and Restated Credit Agreement dated December 18, 2014 by and among Neenah Paper, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders.
~~31.1~~	Certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of CEO 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 CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS			XBRL Instance Document ~~(filed herewith).~~- The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH			Inline XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

F-34

SIGNATURES

Pursuant to the requirements 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.



			NEENAH, ~~PAPER, INC~~INC.

		By:	/s/ ~~John P. O'Donnell~~Julie A. Schertell
			~~John P. O’Donnell~~Julie A. Schertell
			President, Chief Executive Officer and Director
	(Principal Executive Officer)

			/s/ ~~Bonnie C. Lind~~Paul F. DeSantis
			~~Bonnie C. Lind~~Paul F. DeSantis
			~~Senior~~Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

			/s/ Larry N. Brownlee
			Larry N. Brownlee
			Vice President, — Controller ~~(Principal~~ (Principal Accounting Officer)

~~November 8, 2017~~
August 5, 2021

	~~20-1308307~~
Delaware		20-1308307
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


	September 30, 2017		December 31, 2016			June 30, 2021		December 31, 2020
Options outstanding	502,595		530,462		Options outstanding	373,068		380,844
Aggregate intrinsic value (in millions)	$	15.7	$	25.0	Aggregate intrinsic value (in millions)	$	0.7	$	1.2
Per share weighted average exercise price	$	54.36	$	38.35	Per share weighted average exercise price	$	71.75	$	70.99
Exercisable Options	279,581		336,336		Exercisable Options	372,053		362,651
Aggregate intrinsic value (in millions)	$	12.6	$	19.3	Aggregate intrinsic value (in millions)	$	0.7	$	1.2
Unvested Options	223,014		194,126		Unvested Options	1,015		18,193
Per share weighted average grant date fair value	$	14.65	$	15.15	Per share weighted average grant date fair value	$	10.32	$	14.48



	Three Months Ended September 30,					Nine Months Ended September 30,
'[	2017			2016		2017			2016
Net sales	$	245.1		$	232.9	$	735.9		$	721.0
Cost of products sold	197.1			183.7		582.3			553.0
Gross profit	48.0			49.2		153.6			168.0
Selling, general and administrative expenses	21.4			21.0		70.9			71.8
Acquisition/integration/restructuring costs	0.9			1.2		0.9			3.7
Insurance settlement	(3.2		)	—		(3.2		)	—
Other (income) expense - net	(0.1		)	0.1		(0.2		)	0.3
Operating income	29.0			26.9		85.2			92.2
Interest expense - net	3.2			2.7		9.4			8.3
Income from continuing operations before income taxes	25.8			24.2		75.8			83.9
Provision for income taxes	7.0			7.8		14.4			26.9
Income from continuing operations	18.8			16.4		61.4			57.0
Loss from discontinued operations, net of income taxes	—			—		—			(0.4		)
Net income	$	18.8		$	16.4	$	61.4		$	56.6

Earnings Per Common Share
Basic
Continuing operations	$	1.11		$	0.97	$	3.63		$	3.36
Discontinued operations	—			—		—			(0.02		)
Basic	$	1.11		$	0.97	$	3.63		$	3.34
Diluted
Continuing operations	$	1.10		$	0.95	3.58			3.30
Discontinued operations	—			—		—			(0.02		)
Diluted	$	1.10		$	0.95	3.58			3.28

Weighted Average Common Shares Outstanding (in thousands)
Basic	16,811			16,771		16,794			16,774
Diluted	16,974			17,088		17,034			17,068

Cash Dividends Declared Per Share of Common Stock	$	0.37		$	0.33	$	1.11		$	0.99


	2021 Activity
	Common Stock
	Shares	Amount		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2020	18,746	$	0.2	$	(87.6)	$	338.3	$	220.4	$	(103.7)	$	367.6
Net income	—	—		—		—		8.3		—		8.3
Other comprehensive loss, including income taxes	—	—		—		—		—		(7.4)		(7.4)
Dividends declared	—	—		—		—		(8.0)		—		(8.0)

Stock options exercised	3	—		—		—		—		—		—
Restricted stock vesting (Note 9)	16	—		(0.4)		—		—		—		(0.4)
Stock-based compensation	—	—		—		1.5		—		—		1.5

Balance, March 31, 2021	18,765	0.2		(88.0)		339.8		220.7		(111.1)		361.6
Net loss	—	—		—		—		(29.7)		—		(29.7)
Other comprehensive income, net of income taxes	—	—		—		—		—		18.4		18.4
Dividends declared	—	—		—		—		(8.1)		—		(8.1)

Stock options exercised	1	—		—		—		—		—		—
Restricted stock vesting (Note 9)	22	—		(0.1)		—		—		—		(0.1)
Stock-based compensation	—	—		—		1.3		—		—		1.3
Other	—	—		—		0.1		—		—		0.1
Balance, June 30, 2021	18,788	$	0.2	$	(88.1)	$	341.2	$	182.9	$	(92.7)	$	343.5


	2020 Activity
	Common Stock
	Shares	Amount		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2019	18,678	$	0.2	$	(82.8)	$	334.1	$	268.1	$	(113.3)	$	406.3
Net income	—	—		—		—		16.4		—		16.4
Other comprehensive loss, including income taxes	—	—		—		—		—		(2.6)		(2.6)
Dividends declared	—	—		—		—		(8.0)		—		(8.0)
Shares purchased (Note 9)	—	—		(3.6)		—		—		—		(3.6)
Stock options exercised	3	—		—		—		—		—		—
Restricted stock vesting (Note 9)	8	—		(0.2)		—		—		—		(0.2)
Stock-based compensation	—	—		—		1.5		—		—		1.5

Balance, March 31, 2020	18,689	0.2		(86.6)		335.6		276.5		(115.9)		409.8
Net loss	—	—		—		—		(50.1)		—		(50.1)
Other comprehensive income, net of income taxes	—	—		—		—		—		4.7		4.7
Dividends declared	—	—		—		—		(8.0)		—		(8.0)

Stock options exercised	2	—		—		—		—		—		—
Restricted stock vesting (Note 9)	9	—		—		—		—		—		—
Stock-based compensation	—	—		—		1.6		—		—		1.6

Balance, June 30, 2020	18,700	$	0.2	$	(86.6)	$	337.2	$	218.4	$	(111.2)	$	358.0



	September 30, 2017				December 31, 2016
	Carrying Value		Fair Value (a)(b)		Carrying Value		Fair Value (a)(b)
2021 Senior Notes (5.25% fixed rate)	$	175.0	$	171.0	$	175.0	$	169.5
Global Revolving Credit Facilities (variable rates)	43.9		43.9		42.9		42.9
German loan agreement (2.45% fixed rate)	7.0		7.0		6.8		6.8
Total debt	$	225.9	$	221.9	$	224.7	$	219.2



	Net unrealized foreign currency translation gain (loss)			Net gain (loss) from pension and other postretirement liabilities (a)			Unrealized gain (loss) on “available-for-sale” securities			Accumulated other comprehensive income (loss)
AOCI — December 31, 2016	$	(27.4	)	$	(64.5	)	$	(0.1	)	$	(92.0	)
Other comprehensive income (loss) before reclassifications	16.1			(1.0		)	0.1			15.2
Amounts reclassified from AOCI	—			4.6			—			4.6
Income from other comprehensive income items	16.1			3.6			0.1			19.8
Provision for income taxes	0.1			1.3			—			1.4
Other comprehensive income	16.0			2.3			0.1			18.4
AOCI — September 30, 2017	$	(11.4	)	$	(62.2	)	$	—		$	(73.6	)



	September 30, 2017			December 31, 2016
2021 Senior Notes (5.25% fixed rate) due May 2021	$	175.0		$	175.0
Global Revolving Credit Facilities (variable rates) due December 2019	43.9			42.9
German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022	7.0			6.8
Deferred financing costs	(3.0		)	(3.8		)
Total debt	222.9			220.9
Less: Debt payable within one year	1.3			1.2
Long-term debt	$	221.6		$	219.7



Options granted	144,089
Per share weighted average exercise price	$	82.11
Per share weighted average grant date fair value	$	13.54



Options vested	113,581
Aggregate grant date fair value of Options vested (in millions)	$	1.6



Months in 2017	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs (a)
July	—	$	—	—	$	25,000,000
August	492	$	80.25	—	$	25,000,000
September	2,583	$	77.25	—	$	25,000,000



~~Delaware~~