Cellu Tissue (CLU) DFAN14A Additional proxy materials by non-management

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. ___)

Filed by the Registrant¨

Filed by a Party other than the Registrantx

Check the appropriate box:

¨	Preliminary Proxy Statement	¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6 (e)(2))
¨	Definitive Proxy Statement
¨	Definitive Additional Materials
x	Soliciting Material Pursuant to § 240.14a-12

CELLU TISSUE HOLDINGS, INC.

(Name of Registrant as Specified In Its Charter)

CLEARWATER PAPER CORPORATION

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

x No fee required.

¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid

¨ Fee paid previously with preliminary materials.

¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

Clearwater Paper Corporation

Oppenheimer

5

th

Annual

Industrials

Conference

September 29, 2010

1

Forward-Looking Statements

This presentation contains, in addition to historical information, certain forward-looking statements within the meaning

of the Private Securities Litigation Reform Act of 1995, including statements regarding the proposed merger involving

Clearwater Paper and Cellu Tissue and the transactions related thereto (the “merger”), expected accretion to

earnings, the estimated amount of annual synergies resulting from the merger, expected annual revenues of

Clearwater Paper and Cellu Tissue as a combined company following the merger, the benefits of the merger to

Clearwater Paper stockholders, opportunities for growth with existing customers

and new customers in new channels,

tissue production facilities and the expected timing of closing.

Words such as “anticipate,”

“expect,”

“intend,”

“plan,”

“target,”

“project,”

“believe,”

“schedule,”

“estimate,”

“may,”

and similar expressions are intended to identify such

forward-looking statements. These forward looking statements are based on management’s current expectations,

estimates, assumptions and projections that are subject to change. Our actual results of operations may differ

materially from those expressed or implied by the forward-looking statements contained in this presentation. Important

factors that could cause or contribute to such differences include the risk factors described in Item 1A of Part I of our

Annual Report on Form 10-K for the year ended December 31, 2009, as well as the following: 

•

the closing of the merger may be delayed or may not occur

•

difficulties with the integration process or the realization of the benefits expected from the merger

•

Clearwater Paper's ability to obtain debt financing to fund the acquisition of Cellu Tissue

•

general economic conditions in the regions and industries in which Clearwater Paper and Cellu Tissue

operate

•

changes in the cost and availability of wood fiber used in the production of the companies’

products

•

litigation or regulatory matters involving antitrust or other matters that could affect the closing of the

transaction

Forward-looking statements contained in this presentation represent management’s views only as of the date of this

presentation. We undertake no obligation to publicly update forward-looking statements, whether as a result of new

information, future events or otherwise.

2

ADDITIONAL INFORMATION AND WHERE TO FIND IT

Cellu Tissue intends to file with the SEC a preliminary proxy statement and a definitive proxy statement and other

relevant material in connection the merger. The definitive proxy

statement will be sent or given to the stockholders of

Cellu Tissue. Before making any voting or investment decision with respect to the merger, investors and stockholders

of Cellu Tissue are urged to read the proxy statement and the other relevant material when they become available

because they will contain important information about the merger. The proxy statement and other relevant materials

(when they become available), and any other documents filed by Cellu Tissue with the SEC, may be obtained free of

charge at the SEC’s website at www.sec.gov, at Cellu Tissue’s Investor Relations website at cellutissue.com/investor

(click “SEC filings”) or from Cellu Tissue by contacting Investor Relations by mail at 1855 Lockeway Drive, Suite 501,

Alpharetta, Georgia 30004, Attention: Investor Relations, or by telephone at (707) 407-2164.

PARTICIPANTS IN THE SOLICITATION

Clearwater Paper and Cellu Tissue and their respective directors

and executive officers may be deemed to be

participants in the solicitation of proxies from Cellu Tissue stockholders in connection with the merger. Information

about Clearwater Paper’s directors and executive officers is set forth in Clearwater Paper’s proxy statement on

Schedule 14A filed with the SEC on March 29, 2010 and its Annual

Report on Form 10-K for the year ended

December 31, 2009 filed with the SEC on February 26, 2010. Information about Cellu Tissue’s directors and

executive officers is set forth in its proxy statement on Schedule 14A filed with the SEC on June 25, 2010. Additional

information regarding the interests of participants in the solicitation of proxies in connection the merger will be

included in the proxy statement that Cellu Tissue intends to file with the SEC.

3

Company Overview

4

Clearwater Paper Overview

Leading manufacturer of private-label consumer tissue and fully-bleached SBS paperboard, with

$1.3

billion

in

net

sales

and

$165.3

million

of

Adjusted

EBITDA

1

for

the

last twelve

months

(LTM)

ending June 30, 2010

Segment

Net

Sales

2

Segment

Adjusted

EBITDA

1

Segment

Adjusted

EBITDA

Margin

%

1,3

1 See

Appendix

A:

“Financial

Detail”

for

the

definitions

of

Adjusted

EBITDA

and

Segment

Adjusted

EBITDA

as

well

as

the

reconciliation

to

the

most

comparable

GAAP

measures.

2 Net sales excludes intersegment net sales and transfers.

3 Segment Adjusted EBITDA margin percentage calculated by dividing Segment Adjusted EBITDA by Segment Net Sales.

%

of

LTM

Net

Sales

2

($ in millions)

Pulp &

Paperboard

(PPD)

$759.3

$62.2

3

8.2%

$561.7

$122.9

21.9%

Consumer

Products

(CPD)

$445

$452

$504

$554

$562

$731

$751

$696

$759

$672

2006

2007

2008

2009

LTM 6/30/10

$41

$34

$53

$138

$123

$62

$51

$35

$80

$70

9.0%

8.8%

12.5%

6.0%

13.9%

2006

2007

2008

2009

LTM 6/30/10  

5

Financial Track Record

($ in millions)

Adjusted

EBITDA

2,3

Net Sales

1

1  Net sales excludes intersegment net sales and transfers.

2  See

Appendix

A:

“Financial

Detail”

for

the

definition

of

Adjusted

EBITDA

as

well

as

the

reconciliation

to

the

most

comparable

GAAP

measure.

3  Clearwater Paper’s total Adjusted EBITDA includes corporate and eliminations.

4  Adjusted EBITDA margin percentage calculated by dividing Adjusted EBITDA by Net Sales.

$1,117

$1,183

$1,255

$1,250

$101

$104

$75

4 Yr Average: $1,201mm

$174

CPD

PPD

Margin

4

4 Yr Average: $114mm

$1,321

$165

6

Consumer Products Segment Overview

•

Committed to maintaining high-quality

products that match the quality of leading

national brands

•

Only U.S. consumer tissue producer that

manufactures solely private label tissue

High-Quality, Premium Products ($ in millions)

Segment EBITDA

1

Net Sales

% Growth:

-

1.6%

11.6%

9.8%

-

$445

$452

$504

$554

$562

$0

$100

$200

$300

$400

$500

$600

2006

2007

2008

2009

LTM 6/30/10

1  See

Appendix

A:

“Financial

Detail”

for the definition of Segment EBITDA as well as the reconciliation to the most comparable GAAP measure.

2  Segment EBITDA margin percentage calculated by dividing Segment EBITDA by Segment Net Sales.

% Margin:

2

9.3%

7.5%

10.5%

24.9%

21.9%

$41

$34

$53

$138

$123

$0

$25

$50

$75

$100

$125

$150

2006

2007

2008

2009

LTM 6/30/10

7

Attractive Industry Characteristics -Tissue

30.5%

30.9%

17.8%

13.0%

14.4%

20.2%

Facial tissue

Bath tissue

Paper towels

2002

2009

Private label tissue market share continues to grow in key products

2

Attractive and stable segment of the paper market

1

Source:  RISI and IRI.

1  Based on converted short tons.

2  Represents market share as a % of sales.

8

Premier U.S. Private Label Tissue Producer

•

Produced

approximately

56%

of

private

label

tissue

products

sold

in

grocery

stores in the U.S. in 2009

•

Well-positioned to benefit from value-oriented customers shifting to private

label products

•

Customers include top three national grocery chains

1  IRI Consumer Panel Projections, Consumer Insights Builder.

2  IRI Infoscan, U.S. grocery case sales.

Grocery

Stores

45%

Non-

Grocery

55%

Branded

73%

Private

Label

27%

Other

44%

U.S. Tissue

Market

2009 U.S. At-Home

Tissue Market

1

2009 Grocery Store

Product Mix

2

2009 U.S. Private Label

Grocery Tissue Supplier

2

Clearwater

Paper

56%

Away-

from

Home

33%

At Home

67%

Consumer Products Shelby, NC Expansion

•

Building a 70,000 ton TAD paper machine facility and tissue converting lines capable of

producing ultra grades of private label tissue products

•

Expanding Clearwater Paper’s geographic reach

•

Projected returns for this project are approximately twice Clearwater Paper’s cost of capital

•

The total cost for the new facilities is expected to be approximately $260-$280 million

•

The first two converting lines are expected to begin production during the second half of

2011

•

The paper machine is expected to begin production in the second half of 2012

9

10

Pulp and Paperboard Segment Overview

•

Focus on high-end paperboard products,

such as pharmaceuticals and cosmetics

packaging

–

Superior print surfaces and cleanliness for

discriminating domestic and international

markets

–

Valued industry consulting

–

Effective logistics to meet just-in-time

customer needs

High-Quality, Premium Products ($ in millions)

Segment Adjusted EBITDA

1,2

Net Sales

1

1  Includes Wood Products segment.

2  See

Appendix

A:

“Financial

Detail”

for the definition of Segment Adjusted EBITDA as well as the reconciliation to the most comparable GAAP measure.

3  Segment Adjusted EBITDA margin percentage calculated by dividing Segment Adjusted EBITDA by segment net sales.

% Margin:

3

10.5%

10.9%

4.7%

7.3%

8.2%

$70

$80

$35

$51

$62

$0

$25

$50

$75

$100

2006

2007

2008

2009

LTM 6/30/10

% Growth:

-

8.9%

2.6%

(7.3%)

-

$672

$731

$751

$696

$759

$0

$250

$500

$750

$1,000

2006

2007

2008

2009

LTM 6/30/10

11

Attractive Industry Characteristics –

Paperboard

71%

85%

0%

20%

40%

60%

80%

100%

1998

2009

Source:  RISI.

1  Top 5 manufacturers in 1998 were International Paper, Westvaco, Temple-Inland, Georgia-Pacific and Potlatch; Top 5 manufacturers in 2009 were International Paper, MeadWestvaco,

Georgia-Pacific, Clearwater Paper and Evergreen Packaging.

2  Based on tons produced.

3  Average price per short ton of 16 pt. SBS folding carton C1S.

2009 North American Bleached

Paperboard (SBS) Production

Pulp and Paperboard

Capacity

Top 5 Manufacturers

Stable demand for U.S. paperboard products

Georgia Pacific, 12%

Clearwater Paper, 12%

Evergreen Packaging,

12%

Rock-Tenn, 5%

Tembec Paperboard,

3%

Weyerhaeuser, 5%

MeadWestvaco, 24%

International Paper,

25%

Smurfit Stone, 2%

1

12

Strategically Positioned Pulp & Paperboard Facilities

Facilities positioned to provide broad geographic

reach and cost-efficient transportation points

•

Idaho Mill

–

Reduced transportation

costs to Asia versus East

Coast competitors

–

One of two bleached

paperboard mills in

Western U.S.

–

418,000 tons of bleached

paperboard produced

in 2009

•

Arkansas Mill

–

Central location reduces freight

costs to Midwest and East Coast

–

Most recently built bleached

paperboard mill in North

America

–

317,000 tons of bleached

paperboard produced in 2009

2009 PPD Sales

North

America,

83%

Europe,

1%

Asia,

16%

13

Cellu Tissue Acquisition

14

Transaction Overview

•

On

September

16

th

Clearwater

Paper

announced

it

agreed

to

acquire

Cellu

Tissue

Holdings, Inc. in cash for approximately $502 million

•

Price per Cellu

Tissue share is $12.00

•

Approximately

$255

million

of

Cellu

Tissue

existing

net

debt

1

to be retired or

assumed,

including

the

tendering

or

calling

of

Cellu

Tissue’s

existing

Senior

Secured Notes

•

Concurrent with the merger agreement, Clearwater Paper entered into a

Commitment Letter relating to a $300 million Senior Unsecured Bridge Facility

•

Transaction

expected

to

be

ultimately

financed

with

$350

million

of new Senior

Unsecured Notes and approximately $210 million of cash on hand

•

Transaction expected to close in the fourth quarter of 2010

•

Customary

closing

conditions,

including

Cellu

Tissue

shareholder

approval and Hart-

Scott-Rodino

clearance

•

Significant

shareholder

and

CEO

of

Cellu

Tissue

have

executed

a

voting

agreement in support of transaction

1  See

Appendix

A:

“Financial

Detail”

for

the

definition

of

net

debt.

Cellu

Tissue net debt as of May 27, 2010.

15

Transaction Highlights

•

Strengthen position as one of the leading private label tissue manufacturers

•

National presence as a papermaker and converter of tissue products with 14 sites

throughout North America

•

Increased exposure to more stable tissue sector

•

Customer growth with existing and new customers

•

Immediately accretive to earnings per share before synergies

•

Expected annual net cost savings of $15-$20 million to be realized by end of 2012

•

Substantial

liquidity

and

conservative

leverage

profile

upon

the

closing

of

the

acquisition

•

Seasoned Clearwater Paper management and operational teams with experienced

employees

16

Strengthening Financial Performance

1  Last twelve months ended June 30, 2010.

2  Last twelve months ended May 27, 2010.

3  Expected net run-rate cost savings of approximately $15-$20 million per annum by end of 2012.

4  Net sales excludes intersegment net sales and transfers.

5  See

Appendix

A:

“Financial

Detail”

for

the

definition

of

Adjusted

EBITDA

as

well

as

the

reconciliation

to

the

most

comparable

GAAP

measure.

6  Adjusted EBITDA margin percentage calculated by dividing Adjusted EBITDA by sales.

($ in Millions)

Clearwater        

Paper

1

Cellu

Tissue

2

Combined     

Clearwater Paper &

Cellu

Tissue

Expected Annual           

Net Run-Rate             

Cost Savings

3

Combined         

Clearwater Paper &

Cellu

Tissue with

Expected Run-Rate

Cost Savings

LTM Net Sales

4

$1,320.9

$524.5

$1,845.4

-

$1,845.4

LTM Adj. EBITDA

5

$165.3

$73.7

$239.0

$15.0 -

$20.0

$254.0 -

$259.0

Adj. EBITDA Margin %

6

12.5%

14.1%

13.0%

-

13.8% -

14.0%

Capacity ('000 TPY):

Tissue Hardroll

225

247

472

-

472

Tissue Converted

213

182

395

-

395

Cost Savings Opportunities

•

Freight Cost Minimization

•

Pulp Optimization

•

SG&A

•

Hardroll Integration

•

Efficiency Improvements

•

Scale Benefits

17

Expected $15-$20 Million of Annual Net Cost Savings to Be

Realized by End of 2012

Consumer

Products

59%

Pulp &

Paperboard

41%

Tissue

76%

Machine-

Glazed

22%

Foam

2%

Consumer

Products

43%

Pulp &

Paperboard

57%

18

Pro Forma Sales Mix Change

Last Twelve Months (LTM)

1

1

Includes

the

results

of

Clearwater

Paper

for

the

last

twelve

months

ended

June

30,

2010

and

includes

the

results

of

Cellu

Tissue

for

the

last

twelve

months

ended

May

27,

2010.

Net

sales

excludes

intersegment net sales and transfers.

2

Preliminary

classification

assumes

Cellu

Tissue’s

total

net

sales

is

included

in

Clearwater

Paper’s

Consumer

Product’s

segment.

Acquisition Supports Strategy to Grow the Size and Scope of Consumer

Products Segment

Clearwater Paper

Stand Alone Sales Mix

Cellu

Tissue

Stand Alone Sales Mix

Pro Forma Sales Mix

$1,321 Million

$525 Million

$1,845 Million

2

1  Clearwater Paper capacities exclude tissue facility under construction in Shelby, NC expected to have 70,000 tons of annual capacity and

converting facility expected to be operational in FY 2012.

2  Excludes

Cellu

Tissue

converting

capacity

greenfield

investment

at

Oklahoma

City,

Oklahoma.

3  Excludes foam capacity.

4  MG stands for machine-glazed paper.

19

Strong Geographic Fit

Clearwater Paper

Cellu

Tissue

Complementary Geographic Asset Bases

Bleached Paperboard

765,000 tons

Tissue Hardroll

225,000 tons

Tissue Converting

213,000 tons

Pulp

845,000 tons

Sawmill

205,000 mbf

Clearwater Paper Capacities¹

Clearwater Paper Pulp

Clearwater Paper Sawmill

Clearwater Paper SBS

Cellu

Tissue Tissue/MG Hardroll

4

Clearwater Paper Tissue Converting

Clearwater Paper Tissue Hardroll

Cellu

Tissue Headquarters

Cellu

Tissue

Tissue/MG

Converting

4

Clearwater Paper Headquarters

Spokane, WA

Corporate Headquarters

Lewiston, ID

Converting Capacity:

102,000 tons

Lewiston, ID (Sawmill)

Capacity: 205,000 mbf

Lewiston, ID (Pulp)

Capacity: 540,000 tons

Lewiston, ID (SBS)

Capacity:

435,000 tons

Lewiston, ID (Tissue)

Capacity: 189,000 tons

Las Vegas, NV (TAD)

Capacity: 36,000 tons

Las Vegas, NV

Converting Capacity:

50,000 tons

Cypress Bend, AR (Pulp)

Capacity: 305,000 tons

Cypress Bend, AR (SBS)

Capacity: 330,000 tons

Elwood, IL

Converting Capacity: 

61,000 tons

Wiggins, MS

Capacity: 54,000 tons

Neenah, WI

Capacity:  85,000 tons

Ladysmith, WI

Capacity: 55,000 tons

Oklahoma City, OK

Converting Capacity

East Hartford, CT

Capacity: 29,000 tons

Gouverneur, NY

Capacity: 32,000 tons

Alpharetta, GA

Corporate Headquarters

Thomaston, GA

Converting Capacity

Long Island, NY

Converting Capacity

Shelby, NC (TAD)

Announced Capacity: 70,000 tons

Converting Capacity

Neenah, WI

ConvertingCapacity

Menominee, MI

Capacity: 32,000 tons

St. Catharines, ON (TAD)

Capacity: 45,000 tons

Cellu

Tissue

Capacities

2,3

Tissue Hardroll

247,000 tons

Tissue Converting

182,000 tons

MG Hardroll

4

85,000 tons

MG Converting

4

13,000 tons

20

Complementary Customer Base

Consumer Products Segment

National

Grocery

Channel

Cellu Tissue

Customer

Opportunity

Add National

Grocery

Customers

Add Regional

Grocery

Customers

Add Value

Retailers

(mass, disc, dollar)

Broad

Broad

Customer

Customer

Base

Base

30%

17%

16%

7%

6%

5%

4%

2%

2%

2%

1%

1%

1%

1%

1%

1%

0%

0%

0%

4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

21

2009 North American Tissue Market by Producer

Remaining Manufacturing Base Highly Fragmented

Large Brand Manufacturers

Source:  Equity research.

1  Clearwater

Paper

tissue

hardroll

capacity

combined

with

Cellu

Tissue

tissue

hardroll

capacity.

1

The Combined Company Will Be the Sixth-Largest Manufacturer in the                 

North American Tissue Market

22

Conservative Pro Forma Capitalization

($ in millions)

1

As of June 30, 2010, Clearwater Paper is eligible to borrow under the credit facility at LIBOR plus 2.25%. Availability under the facility was reduced by $1.7 million of outstanding letters of

credit as of June 30, 2010.

2

$150.0 million face amount.

3

$234.5 million face amount.

4

See Appendix A: “Financial Detail”

for the definitions of Adjusted EBITDA and net debt as well as the reconciliation of Adjusted EBITDA to the most comparable GAAP measures.

5

Clearwater Paper liquidity defined as Cash & Cash equivalents plus availability under the Revolving Credit Facility, which was $113.3 million as of June 30, 2010. Clearwater Paper’s Revolving

Credit Facility of $125 million excludes $50 million accordion feature.

Clearwater

6/30/2010

Cellu

Tissue

5/27/2010

Pro Forma

Cash and Short-Term Investments

$333.0

$3.2

$ 126.5

Clearwater

Paper

Revolving

Credit

Facility

1

-

-

-

Clearwater

Paper

Senior

Unsecured

Notes

due

2016

2

148.4

-

148.4

Cellu

Tissue Revolving Credit Facility

-

8.0

-

Cellu

Tissue

Senior

Secured

Notes

due

2014

3

-

227.3

-

Cellu

Tissue Industrial Revenue Bonds

-

16.0

16.0

Clearwater New Senior Unsecured Notes

-

-

350.0

Total Debt

$148.4

$251.3 

$514.4  

LTM Adjusted EBITDA

4

$165.3

$73.7

$239.0 

Liquidity and Credit Statistics

Cash and Short-Term Investments

$333.0

$126.5

Available

Revolver

Amount

1

113.3

113.3

Total Liquidity

5

$446.3

$239.8

Total Debt / LTM Adjusted EBITDA

4

0.9x

2.2x

Net Debt / LTM Adjusted EBITDA

4

N/A

1.6x

23

Appendix A: Financial Detail

24

Reconciliation of GAAP to Non-GAAP:

Clearwater Paper EBITDA and Adjusted EBITDA

1  See page 27 for definitions of EBITDA and Adjusted EBITDA.

2006

2007

2008

2009

LTM 6/30/10

Net Earnings

$20.9 

$25.3 

$9.7 

$182.5 

$114.3 

Income Tax Provision

12.4 

14.1 

5.6 

93.2 

80.7 

Interest Expense, Net

13.1 

13.0 

13.1 

15.5 

16.9 

Depreciation & Amortization

54.3 

51.3 

47.0 

47.4 

47.7 

EBITDA

$100.6 

$103.7 

$75.4 

$338.6 

$259.6 

Debt Retirement Costs

-

-

-

6.3 

-

Alternative Fuel Mixture Tax Credit

--

--

--

(170.6)

(94.3)

Adjusted EBITDA

$100.6 

$103.7 

$75.4 

$174.2 

$165.3 

($ in millions)

1

1

25

Reconciliation of GAAP to Non-GAAP:

Clearwater Paper Segment EBITDA and Segment Adjusted EBITDA

($ in millions)

2006 

2007 

2008 

2009 

LTM 6/30/10

Consumer Products

Operating Income

$25.7 

$17.6 

$37.3 

$122.1 

$106.5 

Depreciation

15.8 

16.3 

15.7 

16.0 

16.4 

Segment EBITDA

$41.5 

$33.9 

$53.0 

$138.1 

$122.9 

Pulp & Paperboard

Operating Income

$32.2 

$45.0 

$4.4 

$191.9 

$127.1

Depreciation

38.0 

34.6 

30.8 

29.9 

29.4

Segment EBITDA

$70.2 

$79.5 

$35.3 

$221.8 

$156.5 

Alternative Fuel Mixture Tax Credit

--

--

--

(170.6)

(94.3)

Segment Adjusted EBITDA

$70.2 

$79.5 

$35.3 

$51.1 

$62.2 

1  See page 27 for definitions of Segment EBITDA and Segment Adjusted EBITDA.

1

1

1

1

26

Reconciliation of GAAP to Non-GAAP:

Cellu

Tissue EBITDA and Adjusted EBITDA

($ in millions)

2008

2009

2010

LTM 5/27/10

Net Earnings

$3.7

$6.6

$3.8

$0.1

Interest Expense

19.9

24.7

39.6

40.6

Income Tax Provision (Benefit)

(3.9)

(0.6)

7.5

2.8

Depreciation & Amortization

24.1

26.5

29.2

29.7

EBITDA

$43.8

$57.2

$80.1

$73.2

Accelerated Stock-based Compensation

--

--

1.1

1.1

Mississippi Sales Tax Audit

--

0.3

--

--

Terminated Acquisition Costs

2.1

0.1

--

--

Natural Dam Fire

--

--

0.3

--

Insurance Claim for Wrapper Damage

--

--

(0.5)

(0.5)

APF Transition and Related Costs

--

0.9

0.4

--

Restatement –

Legal / Accounting Fees

--

0.8

--

--

Mill Restructuring

0.2

--

--

--

Whistleblower Investigation

0.4

--

--

--

Adjusted EBITDA

$46.6

$59.3

$81.3

$73.7

1  See page 27 for definitions of EBITDA and Adjusted EBITDA.

1

1

27

Definitions of Non-GAAP Measures

Clearwater Paper Definitions of Non-GAAP Measures

EBITDA

is a non-GAAP measure that Clearwater Paper management uses to evaluate the cash generating capacity of Clearwater Paper. The

most directly comparable GAAP measure is net earnings.  EBITDA, as defined by Clearwater Paper management, is net earnings adjusted for net

interest

expense,

income

taxes,

and

depreciation

and

amortization.

It

should

not

be

considered

as

an

alternative

to

net

earnings

computed

under

GAAP.

Adjusted EBITDA

is a non-GAAP measure that Clearwater Paper management defines as EBITDA adjusted for nonrecurring expenses or income,

including debt retirement costs and alternative fuel tax credits.  The most directly comparable GAAP measure is net earnings.  It should not be

considered as an alternative to net earnings computed under GAAP.

Segment EBITDA

is a non-GAAP measure used by Clearwater Paper management. The most directly comparable GAAP measure is segment

operating

income.

Segment

EBITDA,

as

defined

by

Clearwater

Paper

management,

is

segment

operating

income

adjusted

for

segment

depreciation

and

amortization.

It

should

not

be

considered

as

an

alternative

to

segment

operating

income

computed

under

GAAP.

Segment

Adjusted

EBITDA

is

a

non-GAAP

measure

that

Clearwater

Paper

management

defines

as

Segment

EBITDA

adjusted

for

nonrecurring

expenses

or

income,

including

alternative

fuel

tax

credits.

The

most

directly

comparable

GAAP

measure

is

segment

operating

income.

It

should

not be considered as an alternative to segment operating income computed under GAAP.

Net debt

is a non-GAAP measure that Clearwater Paper management defines as total debt less cash and cash equivalents.

Cellu

Tissue Definitions of Non-GAAP Measures

EBITDA

is a non-GAAP measure.  Cellu

Tissue management defines EBITDA as earnings before interest expense, income taxes and depreciation

and

amortization.

EBITDA

is

a

supplemental

measure

of

operating

performance

that

does

not

represent

and

should

not

be

considered

as

an

alternative

to

net

income

or

cash

flow

from

operations,

as

determined

under

GAAP,

and

Cellu

Tissue’s

calculation

thereof

may

not

be

comparable

to that reported by other companies. EBITDA has limitations as an analytical tool and should not be considered in isolation, or as substitutes for

analysis of Cellu

Tissue’s results as reported under GAAP.

Adjusted

EBITDA

is

a

non-GAAP

measure.

Cellu

Tissue

management

defines

Adjusted

EBITDA

as

EBITDA

adjusted

to

reflect

the

additions

and

eliminations of specifically identified items.  EBITDA is a supplemental measure of operating performance that does not represent and should not

be

considered

as

an

alternative

to

net

income

or

cash

flow

from

operations,

as

determined

under

GAAP,

and

Cellu

Tissue’s

calculation

thereof

may

not

be

comparable

to

that

reported

by

other

companies.

EBITDA

has

limitations

as

an

analytical

tool

and

should

not

be

considered

in

isolation,

or

as

substitutes

for

analysis

of

Cellu

Tissue’s

results

as

reported

under

GAAP.

Segment EBITDA

is a non-GAAP measure. The most directly comparable GAAP measure is segment income (loss) from operations. Segment

EBITDA is defined as segment income (loss) from operations adjusted for segment depreciation. It should not be considered as an alternative to

segment operating income computed under GAAP.