10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

OR

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                           to   

Commission File Number: 001-32240

NEENAH PAPER, INC.

(Exact name of registrant as specified in its charter)

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

3460 Preston Ridge Road Alpharetta, Georgia	30005
(Address of principal executive offices)	(Zip Code)

(678) 566-6500

(Registrant’s telephone number, including area code)

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 filer x	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 August 2, 2017, there were approximately 16,805,000 shares of the Company’s common stock outstanding.

TABLE OF CONTENTS

Part I — Financial Information
Item 1. Financial Statements	F-1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	F-14
Item 3. Quantitative and Qualitative Disclosure About Market Risk	F-22
Item 4. Controls and Procedures	F-22
Part II — Other Information
Item 1. Legal Proceedings	F-22
Item 1A. Risk Factors	F-22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	F-23
Item 6. Exhibits	F-24

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 June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net sales	$	248.7		$	246.0		$	490.8		$	488.1
Cost of products sold	195.1			186.0			385.2			369.3
Gross profit	53.6			60.0			105.6			118.8
Selling, general and administrative expenses	24.6			24.4			49.5			50.8
Integration/restructuring costs	—			1.4			—			2.5
Other (income) expense - net	(0.2		)	0.3			(0.1		)	0.2
Operating income	29.2			33.9			56.2			65.3
Interest expense - net	3.0			2.7			6.2			5.6
Income from continuing operations before income taxes	26.2			31.2			50.0			59.7
Provision for income taxes	1.2			9.8			7.4			19.1
Income from continuing operations	25.0			21.4			42.6			40.6
Loss from discontinued operations, net of income taxes	—			(0.4		)	—			(0.4		)
Net income	$	25.0		$	21.0		$	42.6		$	40.2
Earnings Per Common Share
Basic
Continuing operations	$	1.47		$	1.26		$	2.52		$	2.39
Discontinued operations	—			(0.02		)	—			(0.02		)
Basic	$	1.47		$	1.24		$	2.52		$	2.37
Diluted
Continuing operations	$	1.46		$	1.24		2.48			2.35
Discontinued operations	—			(0.02		)	—			(0.02		)
Diluted	$	1.46		$	1.22		2.48			2.33
Weighted Average Common Shares Outstanding (in thousands)
Basic	16,795			16,757			16,787			16,778
Diluted	16,960			17,048			17,028			17,058
Cash Dividends Declared Per Share of Common Stock	$	0.37		$	0.33		$	0.74		$	0.66

See Notes to Condensed Consolidated Financial Statements

F-1

NEENAH PAPER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net income	$	25.0		$	21.0		$	42.6		$	40.2
Unrealized foreign currency translation gain (loss)	9.4			(3.5		)	11.1			0.2
Reclassification of amortization of adjustments to pension and other postretirement benefit liabilities recognized in net periodic benefit cost (Note 5)	1.2			1.8			3.2			3.6
Net loss from pension and other postretirement benefit plans (Note 3)	(1.2		)	—			(1.2		)	—
Unrealized gain on “available-for-sale” securities	—			0.1			0.1			0.1
Income (loss) from other comprehensive income items	9.4			(1.6		)	13.2			3.9
Provision for income taxes	0.1			0.7			0.9			1.4
Other comprehensive income (loss)	9.3			(2.3		)	12.3			2.5
Comprehensive income	$	34.3		$	18.7		$	54.9		$	42.7

See Notes to Condensed Consolidated Financial Statements

F-2

NEENAH PAPER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

	June 30, 2017		December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents	$	9.2	$	3.1
Accounts receivable (less allowances of $1.7 million and $1.5 million)	121.3		96.5
Inventories	119.3		116.3
Prepaid and other current assets	18.7		20.4
Total Current Assets	268.5		236.3
Property, Plant and Equipment
Property, Plant and Equipment, at cost	779.7		755.6
Less accumulated depreciation	410.2		391.0
Property, plant and equipment—net	369.5		364.6
Deferred Income Taxes	9.8		6.1
Goodwill	73.1		70.4
Intangible Assets—net	73.2		74.0
Other Noncurrent Assets	18.3		14.2
TOTAL ASSETS	$	812.4	$	765.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Debt payable within one year	$	1.3	$	1.2
Accounts payable	55.6		55.6
Accrued expenses	48.2		51.2
Total Current Liabilities	105.1		108.0
Long-term Debt	219.5		219.7
Deferred Income Taxes	16.5		10.1
Noncurrent Employee Benefits	87.2		86.7
Other Noncurrent Obligations	6.5		2.8
TOTAL LIABILITIES	434.8		427.3
Contingencies and Legal Matters (Note 8)	—		—
TOTAL STOCKHOLDERS’ EQUITY	377.6		338.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	812.4	$	765.6

See Notes to Condensed Consolidated Financial Statements

F-3

NEENAH PAPER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Six Months Ended June 30,
	2017			2016
OPERATING ACTIVITIES
Net income	$	42.6		$	40.2
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15.9			16.2
Stock-based compensation	3.4			4.2
Deferred income tax provision	1.2			6.2
Non-cash effects of changes in liabilities for uncertain income tax positions	0.1			—
Increase in working capital	(17.5		)	(10.5		)
Pension and other postretirement benefits	(0.3		)	0.8
NET CASH PROVIDED BY OPERATING ACTIVITIES	45.4			57.1
INVESTING ACTIVITIES
Capital expenditures	(19.2		)	(28.6		)
Purchase of marketable securities	—			(0.1		)
Other	(0.1		)	—
NET CASH USED IN INVESTING ACTIVITIES	(19.3		)	(28.7		)
FINANCING ACTIVITIES
Long-term borrowings (Note 4)	138.4			133.3
Repayments of long-term debt (Note 4)	(139.7		)	(145.0		)
Cash dividends paid	(12.6		)	(11.1		)
Shares purchased (Note 7)	(6.8		)	(5.4		)
Proceeds from exercise of stock options	0.4			0.6
Other	—			(0.3		)
NET CASH USED IN FINANCING ACTIVITIES	(20.3		)	(27.9		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	0.3			(0.2		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	6.1			0.3
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	3.1			4.2
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	9.2		$	4.5
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period for interest, net of interest expense capitalized	$	5.6		$	5.1
Cash paid during period for income taxes	$	5.2		$	9.6
Non-cash investing activities:
Liability for equipment acquired	$	2.4		$	7.1

See Notes to Condensed Consolidated Financial Statements

F-4

NEENAH PAPER, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except as noted)

Note 1.  Background and Basis of Presentation

Background

Neenah Paper, Inc. (“Neenah” or the “Company”), is a Delaware corporation incorporated in April 2004. The Company has two primary operations: its technical products business and its fine paper and packaging business. See Note 9, “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”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“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.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated.

Earnings per Share (“EPS”)

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

Earnings Per Basic Common Share

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Income from continuing operations	$	25.0		$	21.4		$	42.6		$	40.6
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.3		)	(0.4		)
Income from continuing operations available to common stockholders	24.8			21.2			42.3			40.2
Loss from discontinued operations, net of income taxes	—			(0.4		)	—			(0.4		)
Net income available to common stockholders	$	24.8		$	20.8		$	42.3		$	39.8
Weighted-average basic shares outstanding	16,795			16,757			16,787			16,778
Continuing operations	$	1.47		$	1.26		$	2.52		$	2.39
Discontinued operations	—			(0.02		)	—			(0.02		)
Basic earnings per share	$	1.47		$	1.24		$	2.52		$	2.37

F-5

Earnings Per Diluted Common Share

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Income from continuing operations	$	25.0		$	21.4		$	42.6		$	40.6
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.3		)	(0.4		)
Income from continuing operations available to common stockholders	24.8			21.2			42.3			40.2
Loss from discontinued operations, net of income taxes	—			(0.4		)	—			(0.4		)
Net income available to common stockholders	$	24.8		$	20.8		$	42.3		$	39.8
Weighted-average basic shares outstanding	16,795			16,757			16,787			16,778
Add: Assumed incremental shares under stock compensation plans (a)	165			291			241			280
Weighted-average diluted shares	16,960			17,048			17,028			17,058
Continuing operations	$	1.46		$	1.24		$	2.48		$	2.35
Discontinued operations	—			(0.02		)	—			(0.02		)
Diluted earnings per share	$	1.46		$	1.22		$	2.48		$	2.33

(a) For the three months ended June 30, 2017, 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 June 30, 2016, there were no antidilutive options. For the six months ended June 30, 2017 and 2016, there were 72,000 and 111,000 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.

Fair Value of Financial Instruments

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

The following table presents the carrying value and the fair value of the Company’s debt. 

	June 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	$	171.5	$	175.0	$	169.5
Global Revolving Credit Facilities (variable rates)	42.4		42.4		42.9		42.9
German loan agreement (2.45% fixed rate)	6.7		6.7		6.8		6.8
Total debt	$	224.1	$	220.6	$	224.7	$	219.2

(a) 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 using rates currently available to the Company for debt of the same remaining maturities.

As of June 30, 2017, the Company had $3.5 million in marketable securities classified as “Other Assets” on the condensed consolidated balance sheet. The cost of such marketable securities was $3.4 million. Fair value for the Company’s marketable securities was estimated from Level 1 inputs. The Company’s marketable securities are designated for the payment of benefits under its supplemental employee retirement plan (“SERP”). As of June 30, 2017, Neenah Germany had investments of $1.7 million that were restricted to the payment of certain post-retirement employee benefits of which $0.6 million and $1.1 million are classified as “Prepaid and other current assets” and “Other Assets”, respectively, on the condensed consolidated balance sheet.

F-6

Income Taxes

Prior to the three months ended June 30, 2017, the Company had not asserted under ASC 740, Income Taxes, that unremitted earnings of our German operations were indefinitely reinvested. Therefore, deferred U.S. income taxes were accrued on those earnings which we planned to repatriate in the future. In June 2017, as part of our annual strategic plan review, the Company reassessed its intentions regarding the indefinite reinvestment of undistributed earnings of our German operations and asserted its intent 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 addition, the $4.1 million deferred income tax liability on unremitted German earnings for 2016 was eliminated.

Note 2.  Accounting Standard Changes

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 is currently assessing the impact of the adoption of ASU 2017-07 on its consolidated financial statements.

As of June 30, 2017, 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. 

Note 3.  Supplemental Balance Sheet Data

The following table presents inventories by major class:

	June 30, 2017			December 31, 2016
Raw materials	$	32.8		$	31.6
Work in progress	32.4			26.8
Finished goods	59.8			63.0
Supplies and other	3.5			3.1
	128.5			124.5
Adjust FIFO inventories to LIFO cost	(9.2		)	(8.2		)
Total	$	119.3		$	116.3

F-7

The FIFO values of inventories valued on the LIFO method were $111.1 million and $106.8 million as of June 30, 2017 and December 31, 2016, respectively. For the three and six months ended June 30, 2017, income from continuing operations before income taxes was increased by less than $0.1 million due to a decrease in certain LIFO inventory quantities.

The following table presents changes in accumulated other comprehensive income (loss) (“AOCI”) for the six months ended June 30, 2017:

	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	11.1			(1.2		)	0.1			10.0
Amounts reclassified from AOCI	—			3.2			—			3.2
Income from other comprehensive income items	11.1			2.0			0.1			13.2
Provision for income taxes	0.2			0.7			—			0.9
Other comprehensive income	10.9			1.3			0.1			12.3
AOCI — June 30, 2017	$	(16.5	)	$	(63.2	)	$	—		$	(79.7	)

(a) For the three months ended June 30, 2017, the Company recorded a $1.2 million increase in the employee benefit obligation related to a pension remeasurement resulting from the redistribution of active and inactive participants into separate pension plans.

For the six months ended June 30, 2017 and 2016, the Company reclassified $3.2 million and $3.6 million, respectively, of costs from accumulated other comprehensive income to cost of products sold and selling, general and administrative expenses on the condensed consolidated statements of operations. For the six months ended June 30, 2017 and 2016, the Company recognized an income tax benefit of $1.3 million and $1.4 million, related to such reclassifications classified as "Provision for income taxes" on the condensed consolidated statements of operations.

Note 4.  Debt

Long-term debt consisted of the following:

	June 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	42.4			42.9
German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022	6.7			6.8
Deferred financing costs	(3.3		)	(3.8		)
Total debt	220.8			220.9
Less: Debt payable within one year	1.3			1.2
Long-term debt	$	219.5		$	219.7

2021 Senior Notes

In May 2013, the Company completed an underwritten offering of eight-year senior unsecured notes (the “2021 Senior Notes”) at a face amount of $175 million. The 2021 Senior Notes contain terms, covenants and events of default with which the Company must comply, which the Company believes are ordinary and standard for notes of this nature. As of June 30, 2017, the Company was in compliance with all terms of the indenture for the 2021 Senior Notes.

F-8

Amended and Restated Secured Revolving Credit Facility

In December 2014, the Company amended and restated its existing credit facility by entering into the Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”). 

The Third Amended Credit Agreement contains covenants with which the Company and its subsidiaries must comply during the term of the agreement, which the Company believes are ordinary and standard for agreements of this nature. As of June 30, 2017, the Company was in compliance with all terms of the Third Amended Credit Agreement.

Availability under the Global Revolving Credit Facilities varies over time depending on the value of the Company’s inventory, receivables and various capital assets. As of June 30, 2017, the Company had $42.4 million of borrowings and $1.2 million in letters of credit outstanding under the Global Revolving Credit Facilities and $127.3 million of available credit (based on exchange rates at June 30, 2017). As of June 30, 2017, the weighted-average interest rate on outstanding Global Revolving Credit Facility borrowings was 3.3 percent per annum. As of December 31, 2016, the weighted-average interest rate under the Global Revolving Credit Facilities was 2.8 percent per annum.

Under the terms of the 2021 Senior Notes and the Third Amended Credit Agreement, the Company has limitations on its ability to repurchase shares of and pay dividends on its Common Stock. These limitations are triggered depending on the Company’s credit availability under the Third Amended Credit Agreement and leverage levels under the Senior Notes. As of June 30, 2017, none of these covenants were restrictive to the Company’s ability to repurchase shares of and pay dividends on its Common Stock.

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 six months ended June 30, 2017, the Company made scheduled debt repayments of $0.6 million and net long-term debt repayments of $0.7 million related to daily cash management activities. For the six months ended June 30, 2016, the Company made scheduled debt repayments of $0.6 million and net long-term debt repayments of $11.1 million related to daily cash management activities.

Note 5.  Pension and Other Postretirement Benefits

Pension Plans

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 designed to provide a monthly pension upon retirement 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”) which is a non-qualified, unfunded defined contribution plan. The Company provides benefits under the SERP and SRCP 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.

F-9

The following table presents the components of net periodic benefit cost for the Company’s defined benefit plans and postretirement plans other than pensions:

Components of Net Periodic Benefit Cost for Defined Benefit Plans

	Pension Benefits						Postretirement Benefits Other than Pensions
	Three Months Ended June 30,
	2017			2016			2017		2016
Service cost	$	1.4		$	1.2		$	0.3	$	0.3
Interest cost	3.7			4.0			0.4		0.4
Expected return on plan assets (a)	(5.0		)	(4.7		)	—		—
Recognized net actuarial loss	1.2			1.6			—		—
Amortization of prior service benefit	—			0.1			—		—
Net periodic benefit cost	$	1.3		$	2.2		$	0.7	$	0.7

	Pension Benefits						Postretirement Benefits Other than Pensions
	Six Months Ended June 30,
	2017			2016			2017			2016
Service cost	$	2.7		$	2.4		$	0.6		$	0.6
Interest cost	7.4			8.0			0.8			0.8
Expected return on plan assets (a)	(9.8		)	(9.5		)	—			—
Recognized net actuarial loss	3.1			3.3			0.1			0.1
Amortization of prior service benefit	0.1			0.1			(0.1		)	(0.1		)
Net periodic benefit cost	$	3.5		$	4.3		$	1.4		$	1.4

(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 Company expects to make aggregate contributions to qualified and nonqualified defined benefit pension trusts and to pay pension benefits for unfunded pension and other postretirement benefit plans of approximately $16 million in calendar 2017.  For the six months ended June 30, 2017, the Company made $5.7 million of such payments. The Company made similar payments of $3.4 million and $18.4 million for the six months ended June 30, 2016 and for the year ended December 31, 2016, respectively.

Note 6.  Stock Compensation Plan

Stock Options and Stock Appreciation Rights (“Options”)

The following table presents information regarding Options awarded during the six months ended June 30, 2017:

Options granted	143,726
Per share weighted average exercise price	$	82.11
Per share weighted average grant date fair value	$	13.54

F-10

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

Expected term in years	5.7
Risk free interest rate	2.1	%
Volatility	22.9	%
Dividend yield	3.0	%

The following table presents information regarding Options that vested during the six months ended June 30, 2017:

Options vested	92,275
Aggregate grant date fair value of Options vested (in millions)	$	1.4

The following table presents information regarding outstanding Options:

	June 30, 2017		December 31, 2016
Options outstanding	522,573		530,462
Aggregate intrinsic value (in millions)	$	13.9	$	25.0
Per share weighted average exercise price	$	54.11	$	38.35
Exercisable Options	276,996		336,336
Aggregate intrinsic value (in millions)	$	11.7	$	19.3
Unvested Options	245,577		194,126
Per share weighted average grant date fair value	$	14.31	$	15.15

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

For the six months ended June 30, 2017, the Company granted target awards of 41,748 PSUs. The measurement period for three fourths of the PSUs is January 1, 2017 through December 31, 2017, and for the remaining fourth of the PSUs is January 1, 2017 through December 31, 2019. The PSUs vest on December 31, 2019. Common Stock equal to not less than 40 percent 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, adjusted EPS and total return to shareholders relative to the companies in the Russell 2000® Value small cap index. The market price on the date of grant for the PSUs was $82.15 per share.

For the three and six months ended June 30, 2017, the Company awarded 9,226 RSUs to non-employee members of the Board of Directors. The weighted average grant date fair value of such awards was $75.85 per share and the awards vest one year from the date of grant. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not have voting rights and are forfeited in the event the holder is no longer a member of the Board of Directors on the vesting date. 

Note 7.  Stockholders’ Equity

Common Stock

As of June 30, 2017 and December 31, 2016, the Company had 16,803,697 shares and 16,771,000 shares of Common Stock outstanding, respectively.

F-11

In May 2017, the Company’s Board of Directors authorized a program that would allow the Company to repurchase up to $25 million of its outstanding Common Stock over the next 12 months (the “2017 Stock Purchase Plan”). The Company also had $25 million repurchase programs in place during the preceding two years that expired in May 2017 (the “2016 Stock Purchase Plan”) and May 2016 (the “2015 Stock Purchase Plan”), respectively. The following table shows shares purchased under the respective stock purchase plans:

	Six Months Ended June 30,
	2017			2016
	Shares	$		Shares	$
2017 Stock Purchase Plan	—	$	—	—	$	—
2016 Stock Purchase Plan	85,354	6.8		1,642	0.1
2015 Stock Purchase Plan	—	—		93,593	5.3

Note 8.  Contingencies and Legal Matters

Litigation

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.

Income Taxes

The Company periodically undergoes examination by the Internal Revenue Service (the “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”).  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”). As of June 30, 2017, the Company had approximately 476 U.S. employees covered under collective bargaining agreements that will expire in the next 12 months. The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these agreements.

Contract Expiration Date	Location	Union	Number of Employees
January 2018	Whiting, WI (b)	USW	207
June 2018	Neenah, WI (b)	USW	269
July 2018	Munising, MI (b)	USW	217
February 2019	Neenah Germany	IG BCE	(a)
May 2019	Appleton, WI (b)	USW	93
August 2021	Brattleboro, VT	USW	81
November 2021	Lowville, NY	USW	112

(a) Under German law 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 cannot be determined.

(b) The Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW on pension matters. The current agreements will remain in effect until September 2019.

The Company’s United Kingdom salaried and hourly employees are eligible to participate in Unite the Union (“UNITE”) on an individual basis, but not under a collective bargaining agreement. 

Note 9.  Business Segment Information

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

• The Technical Products segment is an aggregation of the Company’s filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods and is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, and durable label and specialty substrate products.

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

F-12

• The Other segment is composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they are not managed as part of either the Fine Paper and Packaging or Technical Products segments.

Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs.

The following table summarizes the net sales and operating income for each of the Company’s business segments.

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Net sales
Technical Products	$	127.3	$	126.5	$	249.2	$	248.0
Fine Paper and Packaging	115.7		113.7		230.0		227.5
Other	5.7		5.8		11.6		12.6
Consolidated	$	248.7	$	246.0	$	490.8	$	488.1

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Operating income (loss)
Technical Products	$	16.0		$	20.1		$	28.5		$	39.3
Fine Paper and Packaging	17.5			18.4			37.8			35.9
Other	0.2			—			(0.1		)	—
Unallocated corporate costs	(4.5		)	(4.6		)	(10.0		)	(9.9		)
Consolidated	$	29.2		$	33.9		$	56.2		$	65.3

F-13

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis presents the factors that had a material effect on our financial position as of June 30, 2017 and our results of operations for the three and six months ended June 30, 2017 and 2016. 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” for a discussion of the uncertainties, risks and assumptions associated with these statements.

Executive Summary

For the three months ended June 30, 2017, consolidated net sales of $248.7 million increased $2.7 million from the prior year period, as a result of growth in both Fine Paper and Packaging and Technical Products due mostly to higher volumes and a more favorable mix, respectively. These gains were only partly offset by unfavorable currency effects.

Consolidated operating income of $29.2 million for the three months ended June 30, 2017 decreased $4.7 million from the prior year period. The decline was primarily due to higher manufacturing costs resulting from the U.S. filtration business start-up, higher input costs, unplanned downtime in Fine Paper and Packaging and unfavorable currency effects in Technical Products. These unfavorable variances were partially offset by higher volume in Fine Paper and Packaging, an improved mix and manufacturing efficiencies in Technical Products, and lower integration and restructuring costs in both segments. 

Cash provided by operating activities of $45.4 million for the six months ended June 30, 2017 was $11.7 million lower than cash generated of $57.1 million in the prior year period, primarily due to an increase in our investment in working capital, largely in accounts receivable, and lower operating earnings in 2017.

Results of Operations and Related Information

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

Analysis of Net Sales — three and six months endedJune 30, 2017 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,
	2017				2016				2017				2016
Net sales
Technical Products	$	127.3	51	%	$	126.5	52	%	$	249.2	51	%	$	248.0	51	%
Fine Paper and Packaging	115.7		47	%	113.7		46	%	230.0		47	%	227.5		47	%
Other	5.7		2	%	5.8		2	%	11.6		2	%	12.6		2	%
Consolidated	$	248.7	100	%	$	246.0	100	%	$	490.8	100	%	$	488.1	100	%

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Commentary:

The following table presents our net sales by segment for the three months ended June 30, 2017 and 2016:

	Three Months Ended June 30,				Change in Net Sales Compared to Prior Period
								Change Due To
	2017		2016		Total Change			Volume			Net Price			Currency
Technical Products	$	127.3	$	126.5	$	0.8		$	(1.5	)	$	4.2		$	(1.9	)
Fine Paper and Packaging	115.7		113.7		$	2.0		5.4			(3.4		)	—
Other	5.7		5.8		$	(0.1	)	(0.1		)	—			—
Consolidated	$	248.7	$	246.0	$	2.7		$	3.8		$	0.8		$	(1.9	)

Consolidated net sales of $248.7 million for the three months ended June 30, 2017 increased $2.7 million from the prior year period, as a result of growth in both Fine Paper and Packaging and Technical Products due mostly to higher volumes and a more favorable mix, respectively. These gains were only partly offset by unfavorable currency effects.

• Net sales in our technical products business increased $0.8 million from the prior period due to a higher priced sales mix, as well as growth in backings, label and certain filtration products. These items were partly offset by unfavorable currency exchange effects and lower volumes for transportation filtration, where capacity is temporarily constrained until products are qualified on the U.S. asset.

• Net sales in our fine paper and packaging business increased $2.0 million from the prior year period due to higher volumes and increased selling prices that were partly offset by a lower priced mix. Increased volumes reflected more direct sales of non-branded products as well as double digit growth in premium packaging.

The following table presents our net sales by segment for the six months ended June 30, 2017 and 2016:

	Six Months Ended June 30,				Change in Net Sales Compared to Prior Period
								Change Due To
	2017		2016		Total Change			Volume			Net Price			Currency
Technical Products	$	249.2	$	248.0	$	1.2		$	(0.2	)	$	5.6		$	(4.2	)
Fine Paper and Packaging	230.0		227.5		$	2.5		10.3			(7.8		)	—
Other	11.6		12.6		$	(1.0	)	(1.0		)	—			—
Consolidated	$	490.8	$	488.1	$	2.7		$	9.1		$	(2.2	)	$	(4.2	)

Consolidated net sales of $490.8 million for the six months ended June 30, 2017 increased $2.7 million from the prior year period, as growth in both Fine Paper and Packaging and Technical Products which was only partially offset by unfavorable currency effects and a decline in sales of Other products, primarily related to datebooks, diaries and yearbooks.

• Net sales in our technical products business increased $1.2 million from the prior period due to a higher priced sales mix, as well as growth in backings, label and certain filtration products. These items were partly offset by unfavorable currency exchange effects and lower volumes for transportation filtration, where capacity is temporarily constrained until products are qualified on the U.S. asset.

• Net sales in our fine paper and packaging business increased $2.5 million from the prior year period due to higher volumes and increased selling prices that were partly offset by a lower priced mix. Increased volumes reflected more direct sales of non-branded products as well as double digit growth in premium packaging.

F-15

Analysis of Operating Income — Three and six months endedJune 30, 2017 and 2016

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of products sold	78.4		75.6		78.5		75.7
Gross profit	21.6		24.4		21.5		24.3
Selling, general and administrative expenses	9.9		9.9		10.0		10.4
Integration/restructuring costs	—		0.6		—		0.5
Other (income) expense - net	—		0.1		—		—
Operating income	11.7		13.8		11.5		13.4
Interest expense - net	1.2		1.1		1.3		1.2
Income from continuing operations before income taxes	10.5		12.7		10.2		12.2
Provision for income taxes	0.5		4.0		1.5		3.9
Income from continuing operations	10.1	%	8.7	%	8.8	%	8.3	%

Commentary:

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

							Change in Operating Income Compared to Prior Period
	Three Months Ended June 30,									Change Due To
							Total						Net			Input
	2017			2016			Change			Volume			Price (a)			Costs (b)			Currency			Other (c)
Technical Products	$	16.0		$	20.1		$	(4.1	)	$	(0.3	)	$	1.2		$	(3.0	)	$	(0.4	)	$	(1.6	)
Fine Paper and Packaging	17.5			18.4			(0.9		)	1.5			(1.0		)	(0.8		)	—			(0.6		)
Other	0.2			—			0.2			0.5			—			—			—			(0.3		)
Unallocated corporate costs	(4.5		)	(4.6		)	0.1			—			—			—			—			0.1
Consolidated	$	29.2		$	33.9		$	(4.7	)	$	1.7		$	0.2		$	(3.8	)	$	(0.4	)	$	(2.4	)

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

(b)Includes price changes for raw materials, energy and acquisition-related purchasing synergies.

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

Consolidated operating income of $29.2 million for the three months ended June 30, 2017 decreased $4.7 million from the prior year period. The decline was primarily due to higher manufacturing costs resulting from the U.S. filtration business start-up, higher input costs, unplanned downtime in Fine Paper and Packaging and unfavorable currency effects in Technical Products. These unfavorable variances were partially offset by higher volume in Fine Paper and Packaging, an improved mix and manufacturing efficiencies in Technical Products, and lower integration and restructuring costs in both segments. Excluding integration and restructuring costs of $1.4 million for 2016, operating income decreased $6.1 million (17%).

• Operating income for our technical products business decreased $4.1 million from the prior year period primarily due to higher manufacturing costs, which included $3.3 million resulting from the U.S. filtration capacity start-up and $3.0 million due to higher material costs. These items were partially offset by benefits from improved manufacturing efficiencies, a higher value sales mix, and lower integration and restructuring costs. Excluding integration and restructuring costs of $0.2 million for 2016, operating income decreased $4.3 million from the prior year.

• Operating income for our fine paper and packaging business decreased $0.9 million from the prior year period as a result of higher manufacturing costs, which included $0.8 million of higher material costs and additional costs for

F-16

unplanned downtime. These items were partially offset by increased volumes, higher selling prices and lower integration costs. Excluding integration costs of $0.5 million for 2016, operating income decreased $1.4 million.

• Unallocated corporate expenses for the three months ended June 30, 2017 of $4.5 million was $0.1 million lower than the prior year period. The favorable comparison to the prior year period is primarily due to timing of certain expenses.

 The following table presents our operating income by segment for the six months ended June 30, 2017 and 2016:

							Change in Operating Income Compared to Prior Period
	Six Months Ended June 30,									Change Due To
							Total						Net			Input
	2017			2016			Change			Volume			Price (a)			Costs (b)			Currency			Other (c)
Technical Products	$	28.5		$	39.3		$	(10.8	)	$	0.5		$	0.3		$	(3.9	)	$	(0.7	)	$	(7.0	)
Fine Paper and Packaging	37.8			35.9			1.9			3.0			(3.3		)	(0.1		)	—			2.3
Other	(0.1		)	—			(0.1		)	(0.9		)	—			—			—			0.8
Unallocated corporate costs	(10.0		)	(9.9		)	(0.1		)	—			—			—			—			(0.1		)
Consolidated	$	56.2		$	65.3		$	(9.1	)	$	2.6		$	(3.0	)	$	(4.0	)	$	(0.7	)	$	(4.0	)

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

(b)Includes price changes for raw materials, energy and acquisition-related purchasing synergies.

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

Consolidated operating income of $56.2 million for the six months ended June 30, 2017 decreased $9.1 million from the prior year period.  The decline was primarily due to higher manufacturing costs resulting from the U.S. filtration business start-up, increases in input costs and unfavorable currency effects in Technical Products. These items were only partially offset by higher sales volume and selling prices, lower SG&A spending, and lower integration and restructuring costs.  Excluding integration and restructuring costs of $2.5 million for 2016, operating income decreased $11.6 million (17%).

• Operating income for our technical products business decreased $10.8 million from the prior year period primarily due to higher manufacturing costs, including $6.4 million resulting from the U.S. filtration capacity start-up and other unfavorable impacts from higher material costs and unplanned downtime in Germany and unfavorable currency effects. These items were partially offset by benefits from higher sales mix, manufacturing efficiencies, and lower integration and restructuring costs. Excluding integration and restructuring costs of $0.5 million for 2016, operating income decreased $11.3 million from the prior year.

• Operating income for our fine paper and packaging business increased $1.9 million from the prior year period as a result of higher sales volume, manufacturing efficiencies and lower integration costs, that were partially offset by lower priced product mix, unplanned downtime and higher material costs. Excluding integration costs of $0.8 million for 2016, operating income increased $1.1 million.

• Unallocated corporate expenses for the six months ended June 30, 2017 of $10.0 million was $0.1 million higher than the prior year period. The unfavorable comparison to the prior year period is primarily due to timing of certain expenses.

F-17

The following table sets forth our operating income by segment, adjusted for the effects of integration and restructuring costs, for the periods indicated: 

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Operating income
Technical Products	$	16.0		$	20.1		$	28.5		$	39.3
Fine Paper and Packaging	17.5			18.4			37.8			35.9
Other	0.2			—			(0.1		)	—
Unallocated corporate costs	(4.5		)	(4.6		)	(10.0		)	(9.9		)
Operating Income as Reported	$	29.2		$	33.9		$	56.2		$	65.3
Adjustments to Reported Operating Income
Technical Products
Integration/Restructuring costs	—			0.2			—			0.5
Fine Paper and Packaging
Integration costs	—			0.5			—			0.8
Other
Integration costs	—			0.4			—			0.6
Unallocated corporate costs
Restructuring costs	—			0.3			—			0.6
Total Adjustments to Reported Operating Income	—			1.4			—			2.5
Operating Income as Adjusted	$	29.2		$	35.3		$	56.2		$	67.8

In accordance with generally accepted accounting principles in the United States (“GAAP”), consolidated operating income includes the pre-tax effects of integration and restructuring costs. We believe that by adjusting reported operating income to exclude the effects of these items, the resulting adjusted operating income is on a basis that reflects the results of our ongoing 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 $24.6 million for the three months ended June 30, 2017 was $0.2 million higher than SG&A expense of $24.4 million in the prior year period due to timing of certain items. For the three months ended June 30, 2017, SG&A expense as a percent of sales remained consistent with the prior year period at 9.9 percent.

• For the three months ended June 30, 2017, we incurred net interest expense of $3.0 million which was higher than the $2.7 million for prior year period, primarily due to capitalization of interest of $0.2 million for the U.S. filtration project in 2016.

• In general, our effective tax rate differs 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. For the three months ended June 30, 2017 and 2016, we recorded an income tax provision of $1.2 million and $9.8 million, respectively. The effective income tax rate of 5 percent for the three months ended June 30, 2017 was lower than the tax rate of 31 percent for the three months ended June 30, 2016. Prior to the three months ended June 30, 2017, we had not asserted under ASC 740, Income Taxes, that unremitted earnings of our German operations were indefinitely reinvested. Therefore, deferred U.S. income taxes were accrued on those earnings which we planned to repatriate in the future. 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. Accordingly, we are 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 addition, the $4.1 million deferred income tax liability on unremitted German earnings for 2016 was eliminated.

F-18

Liquidity and Capital Resources

	Six Months Ended June 30,
	2017			2016
Net cash flow provided by (used in):
Operating activities	$	45.4		$	57.1
Investing activities:
Capital expenditures	(19.2		)	(28.6		)
Other investing activities	(0.1		)	(0.1		)
Total	(19.3		)	(28.7		)
Financing activities:
Net repayments of long-term debt	(1.3		)	(11.7		)
Other financing activities	(19.0		)	(16.2		)
Total	(20.3		)	(27.9		)
Effect of exchange rate changes on cash and cash equivalents	0.3			(0.2		)
Net increase in cash and cash equivalents	$	6.1		$	0.3

Operating Cash Flow Commentary

• Cash provided by operating activities of $45.4 million for the six months ended June 30, 2017 was $11.7 million lower than cash provided by operating activities of $57.1 million in the prior year period. The unfavorable comparison was primarily due to an increase in our investment in working capital, largely in accounts receivable, and lower operating earnings in 2017.

Investing Commentary:

• For the six months ended June 30, 2017 and 2016, cash used by investing activities was $19.3 million and $28.7 million, respectively, primarily consisting of capital expenditures. 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. For 2016, capital expenditures were out of our normal range due to the U.S. Filtration project, which was completed in 2016.

Financing Commentary:

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

• For the six months ended June 30, 2017 and 2016, cash used in financing activities was $20.3 million and $27.9 million, respectively. Cash used in financing activities consists primarily of dividends paid, share repurchases, and net repayments of long-term debt.

• Availability under our revolving credit facility varies over time depending on the value of our inventory, receivables and various capital assets. As of June 30, 2017, we had $42.4 million outstanding under our Global Revolving Credit Facilities and $127.3 million of available credit (based on exchange rates at June 30, 2017).

• We have required debt principal payments through June 30,2018 of $1.3 million for principal payments on the German loan agreement.

• For the six months ended June 30, 2017, cash and cash equivalents increased $6.1 million to $9.2 million at June 30, 2017 from $3.1 million at December 31, 2016. Total debt decreased $0.1 million to $220.8 million at June 30, 2017 from $220.9 million at December 31, 2016. Net debt (total debt minus cash and cash equivalents) decreased by $6.2 million.

• As of June 30, 2017, our cash balance of $9.2 million consists of $5.5 million in the U.S. and $3.7 million held at entities outside of the U.S. As of June 30, 2017, there were no restrictions regarding the repatriation of our non-U.S.

F-19

cash. However, the repatriation of these cash balances to the U.S. would increase our income tax provision since they are asserted to be indefinitely reinvested.

Transactions With Shareholders

• In November 2016, our Board of Directors approved a twelve percent increase in the annual dividend rate on our common stock to $1.48 per share. Beginning in March 2017, the dividend is being paid in four equal quarterly installments of $0.37 per share. For the six months ended June 30, 2017 and 2016, we paid cash dividends of $0.74 per common share or $12.6 million and $0.66 per common share or $11.1 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 does not require us to purchase any specific number of shares and may be suspended or discontinued at any time. For the six months ended June 30, 2017 and 2016, we repurchased approximately 85,400 shares of Common Stock at a cost of $6.8 million and 95,200 shares of Common Stock at a cost of $5.4 million, respectively. For further details on our Stock Purchase Plans refer to Note 7.

Other Items:

• As of June 30, 2017, we had $24.6 million of U.S. federal and state research and development ("R&D") Credits which, if not used, will expire between 2029 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 $3.2 million against a portion of the R&D Credits. In addition, as of June 30, 2017, we had $44.8 million of state net operating losses ("NOLs"). Our state NOLs may be used to offset approximately $2.1 million in state income taxes. If not used, substantially all of the state NOLs will expire in various amounts between 2017 and 2037.

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 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. We can give no assurance we will be able to successfully implement these items.

Critical Accounting Policies and Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” 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. Actual results could differ from these 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 have been no significant changes in these policies, or the estimates used in the application of the policies, since December 31, 2016.

F-20

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933 (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), or in releases made by the SEC, all as may be amended from time to time. Statements contained in this quarterly report that are not historical facts may be forward-looking statements within the meaning of the PSLRA 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 Note Regarding Forward-Looking Statements” and/or “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 with the intention of obtaining the benefits of the “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” or “continue,” or the negative of these, or similar terms. In evaluating these forward-looking statements, you should consider the following factors, as well as others contained in our public filings from time to time, which may cause our actual results to differ materially from any forward-looking statement:

• changes in market demand for our products due to global economic conditions;

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

• fluctuations in (i) exchange rates (in particular changes in the U.S. dollar/Euro currency exchange rates) and (ii) interest rates;

• increases in commodity prices, (particularly for pulp, energy and latex) due to constrained global supplies or unexpected supply disruptions;

• the availability of raw materials and energy;

• 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 to offset our tax liabilities; 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.

F-21

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.

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 June 30, 2017, 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 June 30, 2017.

Internal Controls 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 six months ended June 30, 2017. Based on that evaluation, we have concluded that there has been no change in our internal control over financial reporting during the six months ended June 30, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1.  Legal Proceedings

See Note 8, “Contingencies and Legal 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 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.

F-22

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 June 30, 2017.

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)
April	—	$	—	—	$	10,824,468
May	—	$	—	—	$	10,824,468
June	—	$	—	—	$	10,824,468

(a) As of June 30, 2017, the Company has purchased approximately 176,896 shares of Common Stock at an aggregate cost of $14.2 million under the 2017 Stock Purchase Plan and 2016 Stock Purchase Plan.  For further discussion on the share repurchase plans refer to Note 7.

F-23

Item 6.  Exhibits

Exhibit Number	Exhibit
10.1	Neenah Paper Supplemental Pension Plan, as amended and restated effective as of April 4, 2017
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).
101.SCH	XBRL Taxonomy Extension Schema Document (filed herewith).
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
101.LAB	XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

F-24

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
	By:	/s/ John P. O'Donnell
		John P. O’Donnell
		President, Chief Executive Officer and Director
		(Principal Executive Officer)
		/s/ Bonnie C. Lind
		Bonnie C. Lind
		Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
		/s/ Larry N. Brownlee
		Larry N. Brownlee
		Vice President — Controller (Principal Accounting Officer)
August 4, 2017

EX-10.1

NEENAH PAPER SUPPLEMENTAL PENSION PLAN

(As Amended and Restated Effective as of April 4, 2017)

NEENAH PAPER SUPPLEMENTAL PENSION PLAN

TABLE OF CONTENTS                                

Page

Article 1 INTRODUCTION		1
1.1	Restatement of the Plan	1
1.2	Type of Plan	1
1.3	Purpose	1
1.4	Effective Date	1
Article 2 DEFINITIONS & CONSTRUCTION		2
2.1	Affiliate	2
2.2	Beneficiary	2
2.3	Benefit	2
2.4	Board	2
2.5	Change of Control	2
2.6	Code	5
2.7	Company	5
2.8	Disability	5
2.9	Earnings	5
2.1	Employee	5
2.11	Employer	6
2.12	ERISA	6
2.13	Excess Benefit	6
2.14	Lump Sum Payment	6
2.15	Participant	6
2.16	Participating Employer	6
2.17	Pension Plan	7
2.18	Pension Plan Benefit	7
2.19	Pension Plan Terms	7
2.2	Plan	7
2.21	Plan Administrative Committee	7
2.22	Plan Year	7
2.23	Separation from Service	7
2.24	Specified Employee	7
2.25	Spouse	8
2.26	Supplemental Benefit	8
2.27	Surviving Minor Children	8
2.28	Transferred Participant	8
Article 3 BENEFITS		8
3.1	Eligibility	8
Article 4 PAYMENT OF BENEFITS		9
4.1	Election of Form of Payment	9
4.2	Automatic Lump Sum Payment Upon Change in Control	10
4.3	Timing of Benefit Payments to Participants	11
4.4	Change of Election of Form of Payment	11
4.5	Death Benefits	12
4.6	Recipients of Payments; Designation of Beneficiary	13
4.7	Postponement of Payment	14
4.8	Additional Accrual	14

4.9	Limited Cashouts	14
Article 5 PLAN ADMINISTRATIVE COMMITTEE		14
5.1	Plan Administrative Committee	14
5.2	Membership of Committee	15
5.3	Powers	15
5.4	Organization and Procedures	15
5.5	Rules and Decisions	16
5.6	Books and Records	16
5.7	Perpetuation of Plan Administrative Committee	16
5.8	Claims Procedure	16
5.9	Allocation or Reallocation of Fiduciary Responsibilities	18
5.1	Service of Process	18
Article 6 MISCELLANEOUS		18
6.1	Unfunded Obligation	18
6.2	Amendment and Termination	18
6.3	Termination of Pension Plan	19
6.4	Plan Sponsor	19
6.5	Effect of Plan	19
6.6	Offset	19
6.7	Amounts Payable	19
6.8	Rights and Obligations	19
6.9	Notice	19
6.1	Governing Law	19
6.11	Assignment of Rights	19
6.12	Liability	19

NP SUPPLEMENTAL PENSION PLAN    Page ii

NEENAH PAPER SUPPLEMENTAL PENSION PLAN

ARTICLE 1

INTRODUCTION

1.1 Restatement of the Plan. Neenah Paper, Inc. (the “Company”) hereby amends and restates

its supplemental benefits plan for its Employees, to be known as the Neenah Paper Supplemental Pension Plan (the “Plan”), as set forth in this document.

1.2 Type of Plan. This Plan is deemed to be two separate plans, consisting of (i) an “excess benefit plan” within the meaning of Section 3(36) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and, as such, exempt from all of the provisions of ERISA pursuant to Section 4(b)(5) thereof; and (ii) a nonqualified supplemental retirement plan, which is unfunded and maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees of the Company, pursuant to Sections 201, 301 and 401 of ERISA and, as such, exempt from the provisions of Parts II, III and IV of Title I of ERISA.

1.3 Purpose. As an unfunded excess benefit plan and an unfunded plan of deferred compensation, the purpose of this Plan is solely to provide benefits to (A) participants in the Neenah Employees Pension Plan (f/k/a the Neenah Paper Pension Plan) and (B) those participants in the Neenah Former Employees Pension Plan (f/k/a the FiberMark North America, Inc. Pension Plan) whose vested accrued benefit under the Neenah Employees Pension Plan was transferred to the Neenah Former Employees Pension Plan, each as amended and restated from time to time, which exceed the limitation on benefits imposed by Section 415 of the Internal Revenue Code of 1986, or any comparable provision of any future legislation which amends, supplements or supersedes that Section ("Section 415 of the Code"). Additionally, this Plan will provide such benefits in addition to the Pension Plan Benefit, which are necessary to fulfill the Pension Plan’s intent without regard to Code Section 401(a)(17) or any dollar limit imposed by the Code on the amount of compensation considered under the Pension Plan Terms.

1.4 Effective Date. The effective date of this amendment and restatement of the Plan is April 4, 2017. The original effective date of the Plan is December 1, 2004.

ARTICLE 2

DEFINITIONS & CONSTRUCTION

For purposes of this Plan, where the following words and phrases appear in this Plan they

shall have the respective meanings set forth below unless the context clearly indicates otherwise:

2.1 Affiliate. Any company, person or organization which, on the date of determination, (A) is a member of a controlled group of corporations (as defined in Code Section 414(b))

which includes the Company; (B) is a trade or business (whether or not incorporated) which controls, is controlled by or is under common control with (within the meaning of Code Section 414(c)) the Company; (C) is a member of an affiliated service group (as defined in Code Section 414(m)) which includes the Company; or (D) is otherwise required to be aggregated with the Company pursuant to Code Section 414(o) and regulations promulgated thereunder.

2.2 Beneficiary. The person or persons who, under this Plan, become entitled to receive a Participant’s interest in the event of the Participant’s death.

2.3. Benefit.Any benefit payable pursuant to, and determined in accordance with, the provisions of this Plan.

2.4. Board. The Board of Directors of Neenah Paper, Inc.

2.5. Change of Control. A Change of Control shall be deemed to have taken place if a “change in the ownership of the Company,” a “change in the effective control of the Company,” or a “change in the ownership of a substantial portion of the Company’s assets” (as such terms are defined below) occurs.

(A) A change in the ownership of the Company. A “change in ownership of the Company” shall occur on the date that any one person, or more than one person acting as a “Group” (as defined below), acquires ownership of stock of the Company that, together with stock held by such person or Group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company; provided, however, that, if any one person or more than one person acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the Company. In addition, the following shall not constitute a change in ownership of the Company: (i) any acquisition by any one person, or more than one person acting as a Group, who on January 1, 2009 was the “beneficial owner” (within the meaning of Rule 13d-3 of the Rules and Regulations under the Securities Exchange Act of 1934, as amended) (a “Beneficial Owner”) of thirty percent (30%) or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”), (ii) any acquisition directly from the Company, including without limitation, a public offering of securities, (iii) any acquisition by the Company, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its Affiliates, or (v) any transaction described in Section 2.5(D).

(B) A change in the effective control of the Company. A “change in the effective control of the Company” occurs on the date that:

i. Any one person, or more than one person acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the

Company possessing thirty-five percent (35%) or more of the total voting power of the stock of the Company; provided, however, if any one person, or more than one person acting as a group, is considered to own thirty-five percent (35%) or more of the total voting power of the stock of the Company, the acquisition of additional

stock by the same person or persons is not considered to cause a change in the effective control of the Company. Notwithstanding the foregoing, the following shall not constitute a change in the effective control of the Company: (i) any acquisition by any one person, or more than one person acting as a Group, who on January 1, 2009 was the Beneficial Owner of thirty percent (30%) or more of the Outstanding Company Voting Securities, (ii) any acquisition directly from the Company, including without limitation, a public offering of securities,

(iii) any acquisition by the Company, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its Affiliates, or (v) any transaction described in Section 2.5(D); or

ii. A majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; provided, however, that this subparagraph (2) shall apply only to the Company if no other corporation is a majority shareholder of the Company.

(C) A change in the ownership of a substantial portion of the Company’s assets. A “change in the ownership of a substantial portion of the Company’s assets” occurs on the date that any one person, or more than one person acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total “Gross Fair Market Value” (as defined below) equal to or more than 90% of the total Gross Fair Market Value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that, a transfer of assets by the Company is not treated as a change in the ownership of such assets if the assets are transferred to:

i. a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;

ii. an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company;

iii. a person, or more than one person acting as a Group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company;

iv. an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in subparagraph (C)(3) hereof); or

v. a Successor Entity pursuant to a transaction described in Section 2.5(D).

(D) Consummation of a reorganization, merger, or consolidation to which the Company is a party, or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”) shall not constitute a change in ownership of the Company, a change in the effective control of the Company, or a change in the ownership of a substantial portion of the Company’s assets, if following such Business Combination: (i) all or substantially all the individuals or entities who were the Beneficial Owners of Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than sixty percent (60%) of the combined voting power of the outstanding voting securities entitled to vote generally in the election of the members of the board of directors of the company

resulting from the Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) (the “Successor Entity”) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Voting Securities; (ii) no person or Group (excluding any Successor Entity or any employee benefit plan, or related trust, of the Company or such Successor Entity) beneficially owns, directly or indirectly, thirty percent (30%) or more of the combined voting power of the then outstanding voting securities of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination; and (iii) at least a majority of the members of the board of directors of the Successor Entity were members of the incumbent Board (including members of the Board whose appointment or election is endorsed by a majority of the Board prior to the date of the appointment or election) at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination.

(E) For purposes of the definition of Change of Control:

(1) “Group” means persons acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase, or acquisition of stock of the Company or assets of the Company, or a similar business transaction with the Company (the “Transaction”); provided, however, that with respect to any person who owns stock of both the Company and the other corporation in a Transaction, such person will only be treated as acting as a group with respect to his or her interest in the other corporation prior to the Transaction;

(2) “Gross Fair Market Value” means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets; and

(3) Notwithstanding any other provision hereof, stock ownership shall be determined under Code Section 409A, and no Change of Control shall be deemed to have occurred hereunder unless such event constitutes a change in the ownership or effective control of the Company or in a substantial portion of the assets of the Company under Code Section 409A.

2.6. Code. The Internal Revenue Code of 1986, as amended from time to time, and as construed and interpreted by valid regulations or rulings issued thereunder.

2.7. Company. Neenah Paper, Inc., a Delaware corporation.

2.8. Disability. A permanent and total disability such that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than 12 months, or is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period not less than three months under an accident and health plan covering Employees of the Employer. A Participant will be deemed to be subject to a Disability if the Participant is determined to be disabled under a long-term disability plan of the Employer that uses a definition of “disability” that complies with one or both of the foregoing. In addition, a Participant will be deemed to be subject to a Disability if the Participant is determined to be totally disabled by the U.S. Social Security Administration.

2.9. Earnings. Earnings shall have the same meaning herein as under the Pension Plan Terms. For the purposes of this Plan, however, the Earnings paid to an Employee for a Plan Year in excess of $270,000 (or such limit as adjusted at the same time and in the same manner as under Section 401(a)(17)(B) of the Code for that Plan Year) shall be included in determining the Supplemental Benefit under this Plan.

2.10. Employee. An Employee as defined in the Pension Plan Terms; provided, notwithstanding any other provision in the Plan, a person whose only relationship to the Plan is that of a leased employee shall not be an Employee and shall not be entitled to benefit under the Plan. For purposes of the preceding sentence, the term “leased employee” means any person (other than an employee of recipient) who pursuant to an agreement between the recipient and any other person (a “leasing organization”) has performed services for the recipient (or for the recipient and related persons determined in accordance with Section 414(n) of the Code) on a substantially full-time basis for a period of at least one year, and such services are performed under the primary direction and control of the recipient.

2.11. Employer. The Company and each Affiliate that the Plan Administrative Committee shall from time to time designate as a Participating Employer for purposes of the Plan as shown in the Pension Plan.

2.12. ERISA. The Employee Retirement Income Security Act of 1974, as amended from time to time, and as construed and interpreted by valid regulations or rulings issued thereunder.

2.13. Excess Benefit. The excess of (A) the amount that would have been payable to a person under the Pension Plan, determined as of the date payment of Benefits under this Plan commence, without regard to the limitation on benefits imposed by Section 415 of the Code, over (B) the amount that was actually payable to such person under the Pension Plan.

2.14. Lump Sum Payment. A form of benefit payable as a lump sum cash payment, actuarially determined based on the rate of interest equivalent to the average monthly yield on a 20-

year Treasury Bond as published in the Federal Reserve Statistical Release for each month during the previous three-year period measured from the first business day of the month prior to the date such lump sum payment is payable under this Plan, or such other rate as determined pursuant to uniform Plan Administrative Committee rules, and the mortality table set forth for determining actuarial equivalent benefits under the Pension Plan Terms, and (i) in the case of a lump sum payment pursuant to Section 4.1(A) or 4.9 of this Plan, based on the Participant's Benefit payable from this Plan and his age at the date of such lump sum payment, and (ii) in the case of a lump sum payment pursuant to Section 4.2 of this Plan, based on the Participant's Benefit payable under this Plan, the earliest age at which his Pension Plan Benefit could commence if he terminated employment, and the early retirement reduction factor applicable at such age of commencement. Notwithstanding the foregoing, the 20-year Treasury Bond yield shall be used in determining a lump sum cash payment so long as such rate is published by the Federal Reserve. In the event that the Federal Reserve ceases to publish the 20-year Treasury Bond rate, a lump sum cash payment will be determined in the same manner described above using the longest term Treasury Bond published in the Federal Reserve Statistical Release which is no more than 20-years but not less than for a 10-year term.

2.15. Participant. A participant in this Plan is a Participant in the Pension Plan and

(A) is eligible to receive an Excess Benefit, pursuant to Section 3.1(A), upon his termination of employment; and/or

(B) is eligible to receive a Supplemental Benefit, pursuant to Section 3.1(B);

except, no individual shall be a Participant herein to the extent that such participation is precluded by an agreement between the Employer and such individual or such individual is subject to a separate agreement regarding deferred compensation which provides for similar benefits.

2.16. Participating Employer. An Employer that has been approved by the Plan Administrative Committee as an Employer participating in the Plan. The Pension Plan sets forth a list of Participating Employers and may be amended from time to time by the Plan Administrative Committee without Board action or approval.

2.17. Pension Plan. The Neenah Employees Pension Plan, and solely with regard to Transferred Participants, the relevant portions of the Neenah Former Employees Pension Plan applicable to the Transferred Participants’ Pension Plan Benefit.

2.18. Pension Plan Benefit. The total amount payable to a Participant under the Neenah Employees Pension Plan and, in the case of a Transferred Participant, the Neenah Former Employees Pension Plan.

2.19. Pension Plan Terms. The terms of the Pension Plan, and solely with regard to Transferred Participants, the terms of the Neenah Former Employees Pension Plan applicable to the Transferred Participants’ Pension Plan Benefit.

2.20. Plan. This Neenah Paper Supplemental Pension Plan, as amended from time to time.

2.21. Plan Administrative Committee. The committee appointed by the Board to administer and regulate the Plan as provided in Article V of this Plan.

2.22. Plan Year. The twelve calendar month period beginning on January 1 and ending on the following December 31.

2.23. Separation from Service.

(A) The Participant’s “separation from service” (within the meaning of Treasury Regulations Section 1.409A-1(h)) with the “employer” (within the meaning of Treasury Regulations Section 1.409A-1(h)(3)).

(B) The employment relationship of a Participant is considered to remain intact while the Participant is on military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six months, or, if longer, so long as the Participant retains a right to reemployment with the Employer or Affiliate under applicable statute or by contract. If the period of leave exceeds six months and the Participant does not retain a right to reemployment under applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.

2.24. Specified Employee. A Participant who is a key employee (as defined in Code Section 416(i) without regard to Code Section 416(i)(5)) of the Company (or an Affiliate) while the Company’s stock is publicly traded on an established securities market or otherwise. For this purpose, a Participant is

a key employee if the Participant meets the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code Section 416(i)(5)) at any time during the twelve (12) month period ending on December 31. Notwithstanding the foregoing, a Participant who is a key employee determined under the preceding sentence will be deemed to be a Specified Employee solely for the period of April 1 through March 31 following such December 31 or as otherwise required by the Code Section 409A.

2.25. Spouse. The Employee’s spouse pursuant to a legal marriage according to the laws of the State or other jurisdiction in which such marriage occurred.

2.26. Supplemental Benefit. The Supplemental Benefit shall be excess, determined as of the date payments of Benefits under this Plan commence, of:

(A) the Pension Plan Benefit, which amount shall be calculated (i) without regard to the provisions of the Pension Plan that reflect the limitations of Code Section 415 and

(ii) using the term Earnings defined as set forth in Section 2.9; over

(B) the sum of (i) the Pension Plan Benefit and (ii) the amount payable as an Excess Benefit under this Plan.

2.27. Surviving Minor Children. Natural and adopted children of a deceased Employee who have not attained the age of 21.

2.28. Transferred Participant. A participant in the Neenah Former Employees Pension Plan whose vested accrued benefit under the Neenah Former Employees Pension Plan was transferred from the Neenah Employees Pension Plan.

Construction. Where appearing in the Plan, the masculine shall include the feminine and the plural shall include the singular, unless the context clearly indicates otherwise. The words “hereof,” “herein,” “hereunder” and other similar compounds of the word “here” shall mean and refer to the entire Plan and not to any particular Section or subsection.

ARTICLE 3

BENEFITS

3.1 Eligibility.

(A) Excess Benefit. A Participant in the Pension Plan is eligible to receive an Excess Benefit under this Plan if such Participant:

(1) is entitled to receive a Pension Plan Benefit; and

(2) would have received a greater Pension Plan Benefit were it not for the limitation on benefits imposed by Section 415 of the Code.

(B) Supplemental Benefit.A Participant in the Pension Plan is eligible to receive a

Supplemental Benefit under this Plan if such Participant:

(3) is a managerial or highly compensated employee of an Employer within the meaning of Title I of ERISA; and

(4) has earnings in excess of the limit provided under Section 401(a)(17) of the Code for any calendar year in which the Participant participates in the Pension Plan; and

(5) would have received a greater Pension Plan Benefit were it not for the limitation on benefits imposed by Section 401(a)(17) of the Code.

ARTICLE 4

PAYMENT OF BENEFITS

4.1 Election of Form of Payment.

(A) A Participant may elect, at the time and in the manner specified by the Plan Administrative Committee on or before the January 31st immediately following the first year the Participant accrues a Benefit under the Plan (or such later date permitted by this Section), to receive payment of his or her Benefit in either (1) a Lump Sum Payment, or (2) in a life annuity option.

(B) If the Participant elects the life annuity option pursuant to Section 4.1(A), the Participant must elect, prior to the date the Participant is required to commence his or her Benefit under the Plan, to receive payment of his or her Benefit in one of the following life annuity options:

(1) a life annuity providing for monthly payments for the life of the Participant;

(2) a life annuity providing for monthly payments for the life of the Participant, which shall, if the Participant dies within a term of five (5), ten (10) or fifteen (15) years as specified by the Participant, continue to be paid to the Participant’s Beneficiary for the balance of the five (5), ten (10) or fifteen

(15) year term specified by the Participant;

(3) a 50% percent joint and survivor annuity, providing for monthly payments, which is an actuarially reduced pension payable to and during the lifetime of the Participant with the provision that, after his death, a pension equal to fifty percent (50%) of his reduced pension shall be payable to and during the lifetime of the joint annuitant selected by the Participant;

(4) a 62½ percent joint and survivor annuity, providing for monthly payments, which is an actuarially reduced pension payable to and during the lifetime of the Participant with the provision that, after his death, a pension equal to sixty-two and one-half percent (62-1/2%) of his reduced pension shall be payable to and during the lifetime of the joint annuitant selected by the Participant;

(5) a 75 percent joint and survivor annuity providing for monthly payments, which is an actuarially reduced pension payable to and during the lifetime of the Participant

with the provision that, after his death, a pension equal to seventy-five percent (75%) of his reduced pension shall be payable to and during the lifetime of the joint annuitant selected by the Participant; or

(6) a 100 percent joint and survivor annuity providing for monthly payments, which is an actuarially reduced pension payable to and during the lifetime of the Participant with the provision that after his death a pension at the rate of one hundred percent (100%) of his reduced pension shall be payable to and during the lifetime of the joint annuitant selected by the Participant.

The value of each alternative form of payment described in this Section 4.1(B) shall be the actuarial equivalent of the Participant’s Benefit, determined using the actuarial assumptions specified in the Pension Plan Terms as of the date on which the Participant is entitled to receive or commence payment of his or her Benefit under the Plan. The value of a Lump Sum Payment shall be determined in accordance with Section 2.14 of the Plan.

(C) In the event a Participant fails to elect a form of payment in a timely manner, the Participant’s form of payment shall be made:

(1) in the case of a Participant who does not have a Spouse on the date the Participant’s Benefit is payable under the Plan, in the form of payment described in Section 4.1(B)(1); or

(2) in the case of a Participant who has a Spouse on the date the Participant’s Benefit is payable under the Plan, in the form of payment described in Section 4.1(B)(3) (with the Participant’s Spouse as the joint annuitant).

(D) Notwithstanding the foregoing, an Eligible Employee who is or becomes a Participant prior to December 31, 2008 (other than a Participant who is or will commence receiving retirement benefits during 2008) may elect a form of payment pursuant to Section 4.1(A) above (without regard to Section 4.4) on or before December 31, 2008 subject only to the conditions that the election shall not defer the payment of any retirement benefits that otherwise would have been paid in 2008 but for the election permitted pursuant to this paragraph and shall not accelerate into 2008 the payment of any retirement benefits that otherwise could not have been paid in 2008 but for the election permitted pursuant to this paragraph. A Participant affected by either of the foregoing conditions shall have his form of payment under Section 4.1(A) honored to the maximum extent possible, subject to the limitations set forth in the immediately preceding sentence.

4.2 Automatic Lump Sum Payment Upon Change in Control. Notwithstanding any other provision of the Plan, if the Company experiences a Change in Control, a Participant (or surviving spouse or designated beneficiary, as the case may be) shall receive his Benefit payable under Article III as a Lump Sum Payment (subject to any applicable payroll or other taxes required to be withheld) within the time period specified in Section 4.3(D).

4.3 Timing of Benefit Payments to Participants.

(A) Except as otherwise provided in this Section, all amounts payable to a Participant as an Excess Benefit and Supplemental Benefit following his or her Separation from Service shall be paid as follows:

(1) If the Participant incurs a Separation from Service prior to attaining age 62 and 10 years of vesting service under the Pension Plan Terms, the Participant’s Benefit shall be paid or, if applicable, commence within ninety

(90) days following the later of (i) an age specified by the Participant that is not earlier than age 55 nor later than age 65, or (ii) the Participant’s Separation from Service, as elected by the Participant. In the event a Participant fails to elect specify an appropriate age in a timely manner, the Participant shall be to have elected age 65.

(2) If the Participant incurs a Separation from Service after attaining age 62 and 10 years of vesting service under the Pension Plan Terms, the Participant’s Benefit shall be paid or, if applicable, commence within ninety (90) days following the Participant’s Separation from Service.

(B) Notwithstanding any other provision of the Plan to the contrary, any payment of Benefits made on account of Separation from Service to, or on behalf of, a Participant who is a Specified Employee during the six-month period immediately following the Participant’s Separation from Service shall be suspended. During such six-month period, the Participant shall be entitled to interest on the delayed payment at rate equal to the interest rate described in Section 2.14 for Lump Sum Payments. Any payment which would have otherwise been made during that six- month period, including all accrued interest, shall be paid to the Participant in a lump sum as soon as practicable, but not more than ninety (90) days, following the expiration of such six-month period.

(C) Notwithstanding any other provision of the Plan to the contrary, if a Participant incurs a Disability while an Employee and has at least five years of vesting service under the Pension Plan Terms, then the Participant’s Benefit shall commence within ninety (90) days following the date the Participant is determined to have incurred a Disability.

(D) If a Participant is to receive a Lump Sum Payment pursuant to a Change of Control, then such Lump Sum Payment shall be paid to the Participant within thirty (30) days following the date of the Change of Control.

4.4 Change of Election of Form of Payment. A Participant may elect, in such manner specified by the Plan Administrative Committee, to change the time and form of payment that is in effect pursuant to Section 4.1 prior to the commencement of Benefits if:

(A) such subsequent election does not take effect until twelve (12) months following the date on which the subsequent election is made;

(B) in the case of an election not related to payments on account of Disability or death, the first payment with respect to which such subsequent election is made is deferred for at least five (5) years from the date the payment would otherwise have been made (or in the case of an annuity option, five years from the date the first amount was scheduled to be paid); and

(C) in the instance of an election for a payment to be made at a fixed time or pursuant to a fixed schedule, the subsequent election does not occur less than twelve (12) months before the date of the first scheduled payment.

At the time of such subsequent election, a Participant may elect to receive the distribution in one of the forms permitted under Section 4.1(A), to the extent otherwise permitted by the requirements of this Section. No election pursuant to this Section will be permitted that accelerates a payment or provides for a payment form that would cause the Participant’s Benefit to be included in the gross income of the Participant prior to the taxable year containing the date(s) selected under the subsequent election as a result of the requirements under the provisions of Code Section 409A and the regulatory guidance promulgated thereunder.

Notwithstanding the foregoing, a change in the form of payment before a life annuity payment has commenced under the Plan, from one type of life annuity to another type of life annuity with the same scheduled date for the first annuity payment, is not considered a change in the time and form of a payment, provided that the annuity options are actuarially equivalent applying reasonable actuarial methods and assumptions.

4.5 Death Benefits.

(A) Automatic Survivor’s Benefit.

(1) Survivor’s Benefit. If, at the time of the Participant’s death, the Participant was an Employee who either had at least five years of vesting service under the Pension Plan Terms or had attained the later of (i) age 65, or (ii) the fifth anniversary of the date the Participant commenced participation in the Pension Plan, then the Participant’s surviving Spouse shall be eligible for a Benefit under the Plan. Such Benefit shall be paid to the Participant’s surviving Spouse in the form of a life annuity providing for monthly payments for the life of the surviving Spouse, commencing as soon as administratively feasible, but not more than ninety (90) days, following the Participant’s death.

(2) Surviving Minor Children. If, at the time of the Participant’s death, the Participant had no Spouse or his Spouse died not later than 30 days following the date of his death and the Participant was an Employee who either had at least five years of vesting service under the Pension Plan Terms or had attained the later of (i) age 65, or (ii) the fifth anniversary of the date the Participant commenced participation in the Pension Plan, then the Participant’s Surviving Minor Children shall be eligible for a Benefit under the Plan. Such Benefit shall be paid in monthly payments apportioned equally among all Surviving Minor Children and, upon the attainment of age 21 or the death of a Surviving Minor Child, such amount shall be apportioned equally among the remaining Surviving Minor Children. Such Benefit shall commence as soon as administratively feasible, but not more than ninety (90) days, following the Participant’s death.

(B) Preretirement Survivor Benefit. A Benefit under the Plan will be paid to the surviving Spouse of a deceased Participant who at the time of death was a former Employee who at the date of termination of employment had at least five years of vesting service under the Pension Plan Terms, and died prior to the commencing Benefits under this Plan. Such Benefit shall be paid to the surviving Spouse in the form of a life annuity providing for monthly payments for the life of the surviving Spouse, commencing as soon as administratively feasible, but not more than ninety

(90) days, following the later of (i) the date the Participant would have attained age 55, or (ii) Participant’s death.

4.6 Recipients of Payments; Designation of Beneficiary. All payments to be made by the Employer under the Plan shall be made to the Participant during his lifetime, provided that

if the Participant dies prior to the completion of such payments, then all subsequent payments under the Plan shall be made by the Employer to the Beneficiary determined in accordance with this Section. The Participant may designate a Beneficiary by filing a written notice of such designation with the Plan Administrative Committee in such form as the Plan Administrative Committee requires and may include contingent Beneficiaries. The Participant may from time-to-time change the designated Beneficiary by filing a new designation in writing with the Plan Administrative Committee. If a married Participant designates a Beneficiary or Beneficiaries other than his Spouse at the time of such designation, such designation shall not be effective (and the Participant’s Spouse shall be the Beneficiary) unless:

(A) the Spouse consents in writing to such designation;

(B) the Spouse’s consent acknowledges the effect of such designation, which consent shall be irrevocable; and

(C) the Spouse executes the consent in the presence of either a Plan representative designated by the Plan Administrative Committee or a notary public.

Notwithstanding the foregoing, such consent shall not be required if the Participant establishes to the satisfaction of the Plan Administrative Committee that such consent cannot be obtained because (i) there is no Spouse; (ii) the Spouse cannot be located after reasonable efforts have been made; or (iii) other circumstances exist to excuse spousal consent as determined by the Plan Administrative Committee. If no designation is in effect at the time when any benefits payable under this Plan shall become due, the Beneficiary shall be the Spouse of the Participant, or if no Spouse is then living, the representatives of the Participant’s estate.

4.7 Postponement of Payment. Notwithstanding any other provisions of this Plan to the contrary, if the Employer reasonably anticipates that the Employer’s deduction with respect to any portion of the Lump Sum Payment due a Participant pursuant to this Article IV would be limited or eliminated by application of Section 162(m) of the Code, then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution from this Plan is deductible, the Employer may delay payment of any amount that would otherwise be distributed from this Plan. Any portion of the Lump Sum Payment postponed pursuant to this paragraph shall accrue interest for the period such Lump Sum Payment is postponed at a rate yielding interest equivalent to the per annum secondary market discount rate for six-month U.S. Treasury Bills as published by the Federal Reserve Board for the calendar week ending prior to January 1 (for interest to be credited for either of the two subsequent fiscal quarters ending March 31 or June 30) or prior to July 1 (for interest to be credited for either of the subsequent fiscal quarters ending on September 30 or December 31), or such other rate as determined pursuant to uniform Plan Administrative Committee rules. The delayed amounts (and any interest thereon) shall be distributed to the Participant (or his or her Beneficiary) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Section 162(m) of the Code.

4.8 Additional Accrual. If a Participant has received a Lump Sum Payment pursuant to this Article IV, such Participant may accrue an additional Benefit under this Plan after the date of such Lump Sum Payment, provided, however, that such future participation shall not result in duplication of benefits.

Accordingly, if he has received a distribution of a Benefit under the Plan by reason of prior participation, his Benefit shall be reduced by the actuarial equivalent (at the date of the later distribution) of the present value of the Benefit previously paid hereunder.

4.9 Limited Cashouts. The Employer may, at its discretion, require a mandatory Lump Sum Payment of Benefits under the Plan, provided that (i) the Lump Sum Payment is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), and (ii) at the time the payment is made, the amount constitutes the Participant’s entire interest under the Plan and all other plans that are aggregated with the Plan under Treasury Regulations Section 1.409A-1(c)(2). Any required exercise of the Employer’s discretion pursuant to this Section must be evidenced in writing no later than the date of such payment.

ARTICLE 5

PLAN ADMINISTRATIVE COMMITTEE

5.1 Plan Administrative Committee. The Company may designate one or more persons to serve on the Plan Administrative Committee to carry out its fiduciary responsibility and authority under the Plan (other than to manage and control Plan assets and investment of the assets) and its duties as the plan administrator. The members of the Plan Administrative for this Plan shall be the same as the members of the Plan Administrative Committee for the Pension Plan.

5.2 Membership of Committee.

(A) The Plan Administrative Committee shall consist of at least three (3) persons who shall be appointed by and serve at the pleasure of the Board.

(B) The Board shall have the right to remove any member of the Plan Administrative Committee at any time. A member may resign at any time by written resignation to the Board. If a vacancy in the Plan Administrative Committee should occur, a successor may be appointed by the Board.

5.3 Powers. The Plan Administrative Committee shall have all powers specified in the Plan in addition to all other powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the power to construe or interpret the Plan, to determine all questions of eligibility hereunder, to compute and determine the method of payment of Benefits hereunder, to adopt rules and regulations for the operation of the Plan consistent with the Plan’s provisions, and to perform such other duties as may be provided under the Plan or as may from time to time be delegated to it by the Board. The Plan Administrative Committee may take such voluntary correction action as it considers necessary or appropriate to remedy any inequity that results from incorrect information received or communicated in good faith or as a consequence of administrative or

operational error, including but not limited to reallocation of plan assets, adjustments in amounts of future payments to Participants or beneficiaries and institution of prosecution of actions to recover benefit payments made in error or on the basis of incorrect or incomplete information. The Plan Administrative Committee may prescribe such forms and systems and adopt such rules and actuarial methods and tables as it deems advisable. It may employ such agents, attorneys, accountants, actuaries, medical advisors, or clerical assistants (none of whom need be members of the Plan Administrative Committee) as it deems necessary for the effective exercise of its duties, and may delegate to such agents any power and duties, both ministerial and discretionary, as it may deem necessary and appropriate. The compensation of such agents who are not full-time employees of

an Employer shall be fixed by the Plan Administrative Committee within limits set by the Board and shall be paid by the Company as determined by the Plan Administrative Committee.

5.4 Organization and Procedures. The Plan Administrative Committee shall elect one of its members as chairman. Its members shall serve as such without compensation. A majority of the Plan Administrative Committee members shall constitute a quorum. The Plan Administrative Committee may take any action upon a majority vote at any meeting at which a quorum is present, and may take any action without a meeting upon the unanimous written consent of all members. All action by the Plan Administrative Committee shall be evidenced by a certificate signed by a member of the Plan Administrative Committee. The Plan Administrative Committee shall appoint a secretary to the Plan Administrative Committee who need not be a member of the Plan Administrative Committee, and all acts and determinations of the Plan Administrative Committee shall be recorded by the secretary, or under his supervision. All such records, together with such other documents as may be necessary for the administration of the Plan, shall be preserved in the custody of the secretary.

5.5 Rules and Decisions. The Plan Administrative Committee shall have absolute discretion in carrying out its duties under the Plan and its decisions shall be final and binding.

5.6 Books and Records. The records of the Employers shall be conclusive evidence as to all information contained therein with respect to the basis for participation in the Plan and for the calculation of the Benefits. The Plan Administrative Committee shall keep all individual and group records relating to Participants and beneficiaries and all other records necessary for the proper operation of the Plan. Such records shall be made available to the Employers and to each Participant and beneficiary for examination during normal business hours except that a Participant or beneficiary shall examine only such records as pertain exclusively to the examining Participant or beneficiary and the Plan. The Plan Administrative Committee shall prepare and shall file as required by law or regulation all reports, forms, documents and other items required by ERISA, the Code and every other relevant statute, each as amended, and all regulations thereunder. This provision shall not be construed as imposing upon the Plan Administrative Committee the responsibility or authority for the preparation, preservation, publication or filing of any document required to be prepared, preserved or filed by any other named fiduciary to whom such responsibilities are delegated by law or by the Plan.

5.7 Perpetuation of Plan Administrative Committee. In the event that the Company shall for any reason cease to exist, then, unless the Plan is adopted and continued by a successor, the members of the Plan Administrative Committee at that time shall remain in office until the final termination of the Plan, and any vacancies in the membership of the Plan Administrative Committee caused by death, resignation, disability or other cause, shall be filled by the remaining member or members of the Plan Administrative Committee.

5.8 Claims Procedure.

(A) Authorized Representative. A Participant or beneficiary under the Plan may name an authorized representative to act on his or her behalf under the claims procedures of the Plan, by providing written documentation of such authorization in such form as is acceptable to the Plan Administrative Committee.

(B) Procedure for Making Initial Claims. Claims for benefits under the Plan may be made by submitting forms to the Plan Administrative Committee pursuant to procedures established by the Plan Administrative Committee from time to time.

(C) Review of Claims for Benefits.

(1) Determination Regarding Initial Claims. If a claim for Plan benefits is denied, the Plan Administrative Committee shall provide a written notice within 90 days to the claimant that contains (i) specific reasons for the denial, (ii) specific references to Plan provisions on which the Plan Administrative Committee based its denial, (iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary and (iv) a description of the Plan’s review procedures and time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

The notice shall also contain a statement that the claimant may (i) request a review upon written application to the Plan Administrative Committee within 60 days, (ii) submit written comments, documents, records and other information relating to the claim, and (iii) request copies of all documents, records, and other information relevant to the claimant’s claim. If a claim is denied because of incomplete information, the notice shall also indicate what additional information is required.

If additional time is required to make a decision on the claim, the Plan Administrative Committee shall notify the claimant of the delay within the original 90 day period. This notice will also indicate the special circumstances requiring the extension and the date by which a decision is expected. This extension period may not exceed 90 days beyond the end of the first 90-day period.

(2) Appeals. The claimant may appeal a denied claim by submitting a written request for an appeal review to the Plan Administrative Committee. The appeal request must, however, be made within 60 days after the claimant’s receipt of notice of the denial of the claim. Pertinent documents may be reviewed in preparing an appeal, and issues and comments may be submitted in writing. The claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits (as determined under applicable regulations). An appeal shall be given a complete review by the Plan Administrative Committee, taking into account all comments, documents, records and other information submitted by the claimant without regard to whether such information was submitted or considered in the initial benefit determination.

The Plan Administrative Committee shall review an appeal of a denied claim no later than the date of the next Plan Administrative Committee meeting immediately following such request for review, unless the request for review is filed within 30 days preceding the date of such meeting. In such case, a benefit determination may be made by no later than the date of the second meeting following the Plan Administrative Committee’s receipt of a request for review. If special circumstances require a further extension of time for processing, a benefit determination shall be rendered no later than the third meeting of the Plan Administrative Committee following the Plan Administrative Committee’s receipt of the request for review. If such an extension of time for review is required because of special circumstances, the Plan Administrative Committee shall provide the claimant with written notice

of the extension, describing the special circumstances and the date as of which the benefit determination will be made, prior to the commencement of the extension. The Plan Administrative Committee shall notify the claimant of the benefit determination as soon as possible, but not later than five days after the benefit determination is made.

5.9 Allocation or Reallocation of Fiduciary Responsibilities. The Plan Administrative Committee may allocate and redelegate the powers and responsibilities specifically delegated to them by the Plan. Any such allocation, delegation or redelegation shall be in writing and shall be filed with and retained by the secretary of the Plan Administrative Committee with the records of the Plan Administrative Committee.

5.10 Service of Process. The Company shall be the designated recipient of service of process with respect to legal actions regarding the Plan.

ARTICLE 6

MISCELLANEOUS

6.1 Unfunded Obligation. The obligation to make payments hereunder shall constitute a contractual liability to the Participant of the Employer which employed the Participant (the “Applicable Employer”). Such payments shall be made from the general funds of the Applicable Employer, and the Applicable Employer shall not be required to establish or maintain any special or separate fund, or otherwise to segregate assets to assure the such payments shall be made, and the Participant shall not have any interest in any particular assets of the Applicable Employer by reason of its obligations hereunder. To the extent that any person acquires a right to receive payment from the Applicable Employer, such right shall be no greater than the right of an unsecured creditor of the Applicable Employer. The Company may establish a grantor trust as a source for the payment of benefit obligations under the Plan. If established, the grantor trust shall be unfunded for purposes of the Code and for purposes of Title I of ERISA and all assets of the grantor trust shall be held in the United States. The establishment of a grantor trust is not intended to cause Participants to realize current income on the amounts contributed thereto, and the grantor trust shall be so interpreted and administered. Nothing contained in the Plan constitutes a guarantee by any Applicable Employer that the assets of the Applicable Employer shall be sufficient to pay any benefit to any person.

6.2 Amendment and Termination. The Company, by action of the Board, shall have the right at any time to amend this Plan in any respect, or to terminate this Plan and may permit or require the acceleration of payment of Benefits in connection therewith to the extent permitted under Code Section 409A and the regulations thereunder, and the Plan Administrative Committee may amend the Plan, but may not amend the Plan in a manner that would materially affect the Company’s cost, the Company’s contributions to the Plan, or eligibility for participation in the Plan, or that would determine compensation for any executive officer; provided, however, that no such amendment or termination shall operate to reduce the benefit that has accrued for any Participant who is participating in the Plan nor the payment due to a terminated Participant at the time the amendment or termination is adopted. Continuance of the Plan is completely voluntary and is not assumed as a contractual obligation of the Company or any Participating Employer.

6.3 Termination of Pension Plan. Subject to the provisions of Section 6.2, this Plan shall terminate

when the Pension Plan terminates.

6.4 Plan Sponsor. The Company is the Plan Sponsor and Named Fiduciary of the Plan, within the meaning of ERISA.

6.5 Effect of Plan. Nothing contained herein (a) shall be deemed to exclude a Participant from any compensation, bonus, pension, insurance, termination pay or other benefit to which he otherwise is or might become entitled to as an Employee or (b) shall be construed as conferring upon an Employee the right to continue in the employ of the Company as an executive or in any other capacity.

6.6 Offset. If, at the time payments are to be made hereunder, the Participant or the beneficiary is indebted or obligated to the Employer, then the payments remaining to be made to the Participant or the beneficiary may, at the discretion of the Employer, be reduced by the amount of such indebtedness or obligation, provided, however, that an election by the

Employer not to reduce any such payment or payments shall not constitute a waiver of its claim for such indebtedness or obligation.

6.7 Amounts Payable. Any amounts payable by the Employer hereunder shall not be deemed salary or other compensation to a Participant for the purposes of computing benefits to which the Participant may be entitled under any other arrangement established by the Employer for the benefit of its Employees.

6.8 Rights and Obligations. The rights and obligations created hereunder shall be binding on a Participant’s heirs, executors and administrators and on the successors and assigns of the Employer.

6.9 Notice. Any notice required or permitted to be given under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, and if given to the Company, delivered to the principal office of the Company, directed to the attention of the Plan Administrative Committee. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification.

6.10 Governing Law. The Plan shall be construed and governed by the laws of the State of Georgia.

6.11 Assignment of Rights. The rights of any Participant under this Plan are personal and may not be assigned, transferred, pledged or encumbered. Any attempt to do so shall be void.

6.12 Liability. Neither the Employer, its Employees, agents, any member of the Board, the plan administrator nor the Plan Administrative Committee shall be responsible or liable in any manner to any Participant, beneficiary, or any person claiming through them for any benefit or action taken or omitted in connection with the granting of benefits, the continuation of benefits or the interpretation and administration of this Plan.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized officer.

NEENAH PAPER, INC.

By:

Name: /s/Matthew L. Duncan

Matthew L. Duncan

Title:__SVP & Chief Human Resources Officer

Date: 6/21/2017

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, John P. O’Donnell, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Neenah Paper, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2017
	/s/ John P. O’Donnell
	John P. O’Donnell
	President, Chief Executive Officer, and Director (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Bonnie C. Lind, certify that:

1.          I have reviewed this quarterly report on Form 10-Q of Neenah Paper, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2017
	/s/ Bonnie C. Lind
	Bonnie C. Lind
	Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Neenah Paper, Inc. (the “Company”) on Form 10-Q for the period ended June 30,2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. O’Donnell, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(a)         The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John P. O’Donnell

John P. O’Donnell

President, Chief Executive Officer and Director

(Principal Executive Officer)

Date: August 4, 2017

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Neenah Paper, Inc. (the “Company”) on Form 10-Q for the period ended June 30,2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bonnie C. Lind, Senior Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(a)         The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Bonnie C. Lind

Bonnie C. Lind

Senior Vice President, Chief Financial Officer and Treasurer

(Principal Financial Officer)

Date: August 4, 2017

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 02, 2017
Document and Entity Information
Entity Registrant Name	Neenah Paper Inc
Entity Central Index Key	0001296435
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		16,805,000
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Net sales	$ 248.7	$ 246.0	$ 490.8	$ 488.1
Cost of products sold	195.1	186.0	385.2	369.3
Gross profit	53.6	60.0	105.6	118.8
Selling, general and administrative expenses	24.6	24.4	49.5	50.8
Integration/restructuring costs	0.0	1.4	0.0	2.5
Other (income) expense - net	(0.2)	0.3	(0.1)	0.2
Operating income	29.2	33.9	56.2	65.3
Interest expense - net	3.0	2.7	6.2	5.6
Income from continuing operations before income taxes	26.2	31.2	50.0	59.7
Provision for income taxes	1.2	9.8	7.4	19.1
Income from continuing operations	25.0	21.4	42.6	40.6
Loss from discontinued operations, net of income taxes	0.0	(0.4)	0.0	(0.4)
Net income	$ 25.0	$ 21.0	$ 42.6	$ 40.2
Basic
Continuing operations (in dollars per share)	$ 1.47	$ 1.26	$ 2.52	$ 2.39
Discontinued operations (in dollars per share)	0.00	(0.02)	0.00	(0.02)
Basic earnings per share (in dollars per share)	1.47	1.24	2.52	2.37
Diluted
Continuing operations (in dollars per share)	1.46	1.24	2.48	2.35
Discontinued operations (in dollars per share)	0.00	(0.02)	0.00	(0.02)
Diluted (in dollars per share)	$ 1.46	$ 1.22	$ 2.48	$ 2.33
Weighted Average Common Shares Outstanding (in thousands)
Basic (in shares)	16,795	16,757	16,787	16,778
Diluted (in shares)	16,960	17,048	17,028	17,058
Cash dividends declared per share of common stock (in usd per share)	$ 0.37	$ 0.33	$ 0.74	$ 0.66

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 25.0	$ 21.0	$ 42.6	$ 40.2
Unrealized foreign currency translation gain (loss)	9.4	(3.5)	11.1	0.2
Reclassification of amortization of adjustments to pension and other postretirement benefit liabilities recognized in net periodic benefit cost (Note 5)	1.2	1.8	3.2	3.6
Net loss from pension and other postretirement benefit plans (Note 3)	(1.2)	0.0	(1.2)	0.0
Unrealized gain on “available-for-sale” securities	0.0	0.1	0.1	0.1
Income (loss) from other comprehensive income items	9.4	(1.6)	13.2	3.9
Provision for income taxes	0.1	0.7	0.9	1.4
Other comprehensive income (loss)	9.3	(2.3)	12.3	2.5
Comprehensive income	$ 34.3	$ 18.7	$ 54.9	$ 42.7

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 9.2	$ 3.1
Accounts receivable (less allowances of $1.7 million and $1.5 million)	121.3	96.5
Inventories	119.3	116.3
Prepaid and other current assets	18.7	20.4
Total Current Assets	268.5	236.3
Property, Plant and Equipment
Property, Plant and Equipment, at cost	779.7	755.6
Less accumulated depreciation	410.2	391.0
Property, plant and equipment—net	369.5	364.6
Deferred Income Taxes	9.8	6.1
Goodwill	73.1	70.4
Intangible Assets—net	73.2	74.0
Other Noncurrent Assets	18.3	14.2
TOTAL ASSETS	812.4	765.6
Current Liabilities
Debt payable within one year	1.3	1.2
Accounts payable	55.6	55.6
Accrued expenses	48.2	51.2
Total Current Liabilities	105.1	108.0
Long-term Debt	219.5	219.7
Deferred Income Taxes	16.5	10.1
Noncurrent Employee Benefits	87.2	86.7
Other Noncurrent Obligations	6.5	2.8
TOTAL LIABILITIES	434.8	427.3
Contingencies and Legal Matters	0.0	0.0
TOTAL STOCKHOLDERS’ EQUITY	377.6	338.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 812.4	$ 765.6

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 1.7	$ 1.5

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
OPERATING ACTIVITIES
Net income	$ 42.6	$ 40.2
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15.9	16.2
Stock-based compensation	3.4	4.2
Deferred income tax provision	1.2	6.2
Non-cash effects of changes in liabilities for uncertain income tax positions	0.1	0.0
Increase in working capital	(17.5)	(10.5)
Pension and other postretirement benefits	(0.3)	0.8
NET CASH PROVIDED BY OPERATING ACTIVITIES	45.4	57.1
INVESTING ACTIVITIES
Capital expenditures	(19.2)	(28.6)
Purchase of marketable securities	0.0	(0.1)
Other	(0.1)	0.0
NET CASH USED IN INVESTING ACTIVITIES	(19.3)	(28.7)
FINANCING ACTIVITIES
Long-term borrowings (Note 4)	138.4	133.3
Repayments of long-term debt (Note 4)	(139.7)	(145.0)
Cash dividends paid	(12.6)	(11.1)
Shares purchased (Note 7)	(6.8)	(5.4)
Proceeds from exercise of stock options	0.4	0.6
Other	0.0	(0.3)
NET CASH USED IN FINANCING ACTIVITIES	(20.3)	(27.9)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	0.3	(0.2)
NET INCREASE IN CASH AND CASH EQUIVALENTS	6.1	0.3
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	3.1	4.2
CASH AND CASH EQUIVALENTS, END OF PERIOD	9.2	4.5
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period for interest, net of interest expense capitalized	5.6	5.1
Cash paid during period for income taxes	5.2	9.6
Non-cash investing activities:
Liability for equipment acquired	$ 2.4	$ 7.1

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Background and Basis of Presentation

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

Background and Basis of Presentation

Background

Neenah Paper, Inc. (“Neenah” or the “Company”), is a Delaware corporation incorporated in April 2004. The Company has two primary operations: its technical products business and its fine paper and packaging business. See Note 9, “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”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“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.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated.

Earnings per Share (“EPS”)

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

Earnings Per Basic Common Share

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Income from continuing operations	$	25.0		$	21.4		$	42.6		$	40.6
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.3		)	(0.4		)
Income from continuing operations available to common stockholders	24.8			21.2			42.3			40.2
Loss from discontinued operations, net of income taxes	—			(0.4		)	—			(0.4		)
Net income available to common stockholders	$	24.8		$	20.8		$	42.3		$	39.8
Weighted-average basic shares outstanding	16,795			16,757			16,787			16,778
Continuing operations	$	1.47		$	1.26		$	2.52		$	2.39
Discontinued operations	—			(0.02		)	—			(0.02		)
Basic earnings per share	$	1.47		$	1.24		$	2.52		$	2.37

Earnings Per Diluted Common Share

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Income from continuing operations	$	25.0		$	21.4		$	42.6		$	40.6
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.3		)	(0.4		)
Income from continuing operations available to common stockholders	24.8			21.2			42.3			40.2
Loss from discontinued operations, net of income taxes	—			(0.4		)	—			(0.4		)
Net income available to common stockholders	$	24.8		$	20.8		$	42.3		$	39.8
Weighted-average basic shares outstanding	16,795			16,757			16,787			16,778
Add: Assumed incremental shares under stock compensation plans (a)	165			291			241			280
Weighted-average diluted shares	16,960			17,048			17,028			17,058
Continuing operations	$	1.46		$	1.24		$	2.48		$	2.35
Discontinued operations	—			(0.02		)	—			(0.02		)
Diluted earnings per share	$	1.46		$	1.22		$	2.48		$	2.33

(a) For the three months ended June 30, 2017, 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 June 30, 2016, there were no antidilutive options. For the six months ended June 30, 2017 and 2016, there were 72,000 and 111,000 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.

Fair Value of Financial Instruments

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

The following table presents the carrying value and the fair value of the Company’s debt. 

	June 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	$	171.5	$	175.0	$	169.5
Global Revolving Credit Facilities (variable rates)	42.4		42.4		42.9		42.9
German loan agreement (2.45% fixed rate)	6.7		6.7		6.8		6.8
Total debt	$	224.1	$	220.6	$	224.7	$	219.2

(a) 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 using rates currently available to the Company for debt of the same remaining maturities.

As of June 30, 2017, the Company had $3.5 million in marketable securities classified as “Other Assets” on the condensed consolidated balance sheet. The cost of such marketable securities was $3.4 million. Fair value for the Company’s marketable securities was estimated from Level 1 inputs. The Company’s marketable securities are designated for the payment of benefits under its supplemental employee retirement plan (“SERP”). As of June 30, 2017, Neenah Germany had investments of $1.7 million that were restricted to the payment of certain post-retirement employee benefits of which $0.6 million and $1.1 million are classified as “Prepaid and other current assets” and “Other Assets”, respectively, on the condensed consolidated balance sheet.

Income Taxes

Prior to the three months ended June 30, 2017, the Company had not asserted under ASC 740, Income Taxes, that unremitted earnings of our German operations were indefinitely reinvested. Therefore, deferred U.S. income taxes were accrued on those earnings which we planned to repatriate in the future. In June 2017, as part of our annual strategic plan review, the Company reassessed its intentions regarding the indefinite reinvestment of undistributed earnings of our German operations and asserted its intent 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 addition, the $4.1 million deferred income tax liability on unremitted German earnings for 2016 was eliminated.

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Accounting Standard Changes

6 Months Ended

Jun. 30, 2017

Accounting Changes and Error Corrections [Abstract]

Accounting Standard Changes

Accounting Standard Changes

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 is currently assessing the impact of the adoption of ASU 2017-07 on its consolidated financial statements.

As of June 30, 2017, 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.

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Supplemental Balance Sheet Data

6 Months Ended

Jun. 30, 2017

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Data

Supplemental Balance Sheet Data

The following table presents inventories by major class:

	June 30, 2017			December 31, 2016
Raw materials	$	32.8		$	31.6
Work in progress	32.4			26.8
Finished goods	59.8			63.0
Supplies and other	3.5			3.1
	128.5			124.5
Adjust FIFO inventories to LIFO cost	(9.2		)	(8.2		)
Total	$	119.3		$	116.3

The FIFO values of inventories valued on the LIFO method were $111.1 million and $106.8 million as of June 30, 2017 and December 31, 2016, respectively. For the three and six months ended June 30, 2017, income from continuing operations before income taxes was increased by less than $0.1 million due to a decrease in certain LIFO inventory quantities.

The following table presents changes in accumulated other comprehensive income (loss) (“AOCI”) for the six months ended June 30, 2017:

	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	11.1			(1.2		)	0.1			10.0
Amounts reclassified from AOCI	—			3.2			—			3.2
Income from other comprehensive income items	11.1			2.0			0.1			13.2
Provision for income taxes	0.2			0.7			—			0.9
Other comprehensive income	10.9			1.3			0.1			12.3
AOCI — June 30, 2017	$	(16.5	)	$	(63.2	)	$	—		$	(79.7	)

(a) For the three months ended June 30, 2017, the Company recorded a $1.2 million increase in the employee benefit obligation related to a pension remeasurement resulting from the redistribution of active and inactive participants into separate pension plans.

For the six months ended June 30, 2017 and 2016, the Company reclassified $3.2 million and $3.6 million, respectively, of costs from accumulated other comprehensive income to cost of products sold and selling, general and administrative expenses on the condensed consolidated statements of operations. For the six months ended June 30, 2017 and 2016, the Company recognized an income tax benefit of $1.3 million and $1.4 million, related to such reclassifications classified as "Provision for income taxes" on the condensed consolidated statements of operations.

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Debt

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Debt

Debt

Long-term debt consisted of the following:

	June 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	42.4			42.9
German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022	6.7			6.8
Deferred financing costs	(3.3		)	(3.8		)
Total debt	220.8			220.9
Less: Debt payable within one year	1.3			1.2
Long-term debt	$	219.5		$	219.7

2021 Senior Notes

In May 2013, the Company completed an underwritten offering of eight-year senior unsecured notes (the “2021 Senior Notes”) at a face amount of $175 million. The 2021 Senior Notes contain terms, covenants and events of default with which the Company must comply, which the Company believes are ordinary and standard for notes of this nature. As of June 30, 2017, the Company was in compliance with all terms of the indenture for the 2021 Senior Notes.

Amended and Restated Secured Revolving Credit Facility

In December 2014, the Company amended and restated its existing credit facility by entering into the Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”). 

The Third Amended Credit Agreement contains covenants with which the Company and its subsidiaries must comply during the term of the agreement, which the Company believes are ordinary and standard for agreements of this nature. As of June 30, 2017, the Company was in compliance with all terms of the Third Amended Credit Agreement.

Availability under the Global Revolving Credit Facilities varies over time depending on the value of the Company’s inventory, receivables and various capital assets. As of June 30, 2017, the Company had $42.4 million of borrowings and $1.2 million in letters of credit outstanding under the Global Revolving Credit Facilities and $131.3 million of available credit (based on exchange rates at June 30, 2017). As of June 30, 2017, the weighted-average interest rate on outstanding Global Revolving Credit Facility borrowings was 3.3 percent per annum. As of December 31, 2016, the weighted-average interest rate under the Global Revolving Credit Facilities was 2.8 percent per annum.

Under the terms of the 2021 Senior Notes and the Third Amended Credit Agreement, the Company has limitations on its ability to repurchase shares of and pay dividends on its Common Stock. These limitations are triggered depending on the Company’s credit availability under the Third Amended Credit Agreement and leverage levels under the Senior Notes. As of June 30, 2017, none of these covenants were restrictive to the Company’s ability to repurchase shares of and pay dividends on its Common Stock.

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 six months ended June 30, 2017, the Company made scheduled debt repayments of $0.6 million and net long-term debt repayments of $0.7 million related to daily cash management activities. For the six months ended June 30, 2016, the Company made scheduled debt repayments of $0.6 million and net long-term debt repayments of $11.1 million related to daily cash management activities.

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Pension and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2017

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

Pension Plans

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 designed to provide a monthly pension upon retirement 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”) which is a non-qualified, unfunded defined contribution plan. The Company provides benefits under the SERP and SRCP 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.

The following table presents the components of net periodic benefit cost for the Company’s defined benefit plans and postretirement plans other than pensions:

Components of Net Periodic Benefit Cost for Defined Benefit Plans

	Pension Benefits						Postretirement Benefits Other than Pensions
	Three Months Ended June 30,
	2017			2016			2017		2016
Service cost	$	1.4		$	1.2		$	0.3	$	0.3
Interest cost	3.7			4.0			0.4		0.4
Expected return on plan assets (a)	(5.0		)	(4.7		)	—		—
Recognized net actuarial loss	1.2			1.6			—		—
Amortization of prior service benefit	—			0.1			—		—
Net periodic benefit cost	$	1.3		$	2.2		$	0.7	$	0.7

	Pension Benefits						Postretirement Benefits Other than Pensions
	Six Months Ended June 30,
	2017			2016			2017			2016
Service cost	$	2.7		$	2.4		$	0.6		$	0.6
Interest cost	7.4			8.0			0.8			0.8
Expected return on plan assets (a)	(9.8		)	(9.5		)	—			—
Recognized net actuarial loss	3.1			3.3			0.1			0.1
Amortization of prior service benefit	0.1			0.1			(0.1		)	(0.1		)
Net periodic benefit cost	$	3.5		$	4.3		$	1.4		$	1.4

(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 Company expects to make aggregate contributions to qualified and nonqualified defined benefit pension trusts and to pay pension benefits for unfunded pension and other postretirement benefit plans of approximately $16 million in calendar 2017.  For the six months ended June 30, 2017, the Company made $5.7 million of such payments. The Company made similar payments of $3.4 million and $18.4 million for the six months ended June 30, 2016 and for the year ended December 31, 2016, respectively.

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Stock Compensation Plan

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Compensation Plan

Stock Compensation Plan

Stock Options and Stock Appreciation Rights (“Options”)

The following table presents information regarding Options awarded during the six months ended June 30, 2017:

Options granted	143,726
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 six months ended June 30, 2017 was estimated using the Black-Scholes option valuation model with the following assumptions:

Expected term in years	5.7
Risk free interest rate	2.1	%
Volatility	22.9	%
Dividend yield	3.0	%

The following table presents information regarding Options that vested during the six months ended June 30, 2017:

Options vested	92,275
Aggregate grant date fair value of Options vested (in millions)	$	1.4

The following table presents information regarding outstanding Options:

	June 30, 2017		December 31, 2016
Options outstanding	522,573		530,462
Aggregate intrinsic value (in millions)	$	13.9	$	25.0
Per share weighted average exercise price	$	54.11	$	38.35
Exercisable Options	276,996		336,336
Aggregate intrinsic value (in millions)	$	11.7	$	19.3
Unvested Options	245,577		194,126
Per share weighted average grant date fair value	$	14.31	$	15.15

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

For the six months ended June 30, 2017, the Company granted target awards of 41,748 PSUs. The measurement period for three fourths of the PSUs is January 1, 2017 through December 31, 2017, and for the remaining fourth of the PSUs is January 1, 2017 through December 31, 2019. The PSUs vest on December 31, 2019. Common Stock equal to not less than 40 percent 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, adjusted EPS and total return to shareholders relative to the companies in the Russell 2000® Value small cap index. The market price on the date of grant for the PSUs was $82.15 per share.

For the three and six months ended June 30, 2017, the Company awarded 9,226 RSUs to non-employee members of the Board of Directors. The weighted average grant date fair value of such awards was $75.85 per share and the awards vest one year from the date of grant. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not have voting rights and are forfeited in the event the holder is no longer a member of the Board of Directors on the vesting date.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

As of June 30, 2017 and December 31, 2016, the Company had 16,803,697 shares and 16,771,000 shares of Common Stock outstanding, respectively.

In May 2017, the Company’s Board of Directors authorized a program that would allow the Company to repurchase up to $25 million of its outstanding Common Stock over the next 12 months (the “2017 Stock Purchase Plan”). The Company also had $25 million repurchase programs in place during the preceding two years that expired in May 2017 (the “2016 Stock Purchase Plan”) and May 2016 (the “2015 Stock Purchase Plan”), respectively. The following table shows shares purchased under the respective stock purchase plans:

	Six Months Ended June 30,
	2017			2016
	Shares	$		Shares	$
2017 Stock Purchase Plan	—	$	—	—	$	—
2016 Stock Purchase Plan	85,354	6.8		1,642	0.1
2015 Stock Purchase Plan	—	—		93,593	5.3

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Contingencies and Legal Matters

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Legal Matters

Contingencies and Legal Matters

Litigation

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.

Income Taxes

The Company periodically undergoes examination by the Internal Revenue Service (the “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”).  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”). As of June 30, 2017, the Company had approximately 476 U.S. employees covered under collective bargaining agreements that will expire in the next 12 months. The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these agreements.

Contract Expiration Date	Location	Union	Number of Employees
January 2018	Whiting, WI (b)	USW	207
June 2018	Neenah, WI (b)	USW	269
July 2018	Munising, MI (b)	USW	217
February 2019	Neenah Germany	IG BCE	(a)
May 2019	Appleton, WI (b)	USW	93
August 2021	Brattleboro, VT	USW	81
November 2021	Lowville, NY	USW	112

(a) Under German law 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 cannot be determined.

(b) The Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW on pension matters. The current agreements will remain in effect until September 2019.

The Company’s United Kingdom salaried and hourly employees are eligible to participate in Unite the Union (“UNITE”) on an individual basis, but not under a collective bargaining agreement.

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Business Segment Information

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

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

• The Technical Products segment is an aggregation of the Company’s filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods and is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, and durable label and specialty substrate products.

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

• The Other segment is composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they are not managed as part of either the Fine Paper and Packaging or Technical Products segments.

Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs.

The following table summarizes the net sales and operating income for each of the Company’s business segments.

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Net sales
Technical Products	$	127.3	$	126.5	$	249.2	$	248.0
Fine Paper and Packaging	115.7		113.7		230.0		227.5
Other	5.7		5.8		11.6		12.6
Consolidated	$	248.7	$	246.0	$	490.8	$	488.1

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Operating income (loss)
Technical Products	$	16.0		$	20.1		$	28.5		$	39.3
Fine Paper and Packaging	17.5			18.4			37.8			35.9
Other	0.2			—			(0.1		)	—
Unallocated corporate costs	(4.5		)	(4.6		)	(10.0		)	(9.9		)
Consolidated	$	29.2		$	33.9		$	56.2		$	65.3

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Background and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Consolidation and Presentation

Basis of Consolidation and Presentation

These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“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.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated.

Earnings per Share (“EPS”)

Earnings per Share (“EPS”)

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

Earnings Per Basic Common Share

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Income from continuing operations	$	25.0		$	21.4		$	42.6		$	40.6
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.3		)	(0.4		)
Income from continuing operations available to common stockholders	24.8			21.2			42.3			40.2
Loss from discontinued operations, net of income taxes	—			(0.4		)	—			(0.4		)
Net income available to common stockholders	$	24.8		$	20.8		$	42.3		$	39.8
Weighted-average basic shares outstanding	16,795			16,757			16,787			16,778
Continuing operations	$	1.47		$	1.26		$	2.52		$	2.39
Discontinued operations	—			(0.02		)	—			(0.02		)
Basic earnings per share	$	1.47		$	1.24		$	2.52		$	2.37

Earnings Per Diluted Common Share

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Income from continuing operations	$	25.0		$	21.4		$	42.6		$	40.6
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.3		)	(0.4		)
Income from continuing operations available to common stockholders	24.8			21.2			42.3			40.2
Loss from discontinued operations, net of income taxes	—			(0.4		)	—			(0.4		)
Net income available to common stockholders	$	24.8		$	20.8		$	42.3		$	39.8
Weighted-average basic shares outstanding	16,795			16,757			16,787			16,778
Add: Assumed incremental shares under stock compensation plans (a)	165			291			241			280
Weighted-average diluted shares	16,960			17,048			17,028			17,058
Continuing operations	$	1.46		$	1.24		$	2.48		$	2.35
Discontinued operations	—			(0.02		)	—			(0.02		)
Diluted earnings per share	$	1.46		$	1.22		$	2.48		$	2.33

(a) For the three months ended June 30, 2017, 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 June 30, 2016, there were no antidilutive options. For the six months ended June 30, 2017 and 2016, there were 72,000 and 111,000 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.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

Income Taxes

Income Taxes

Prior to the three months ended June 30, 2017, the Company had not asserted under ASC 740, Income Taxes, that unremitted earnings of our German operations were indefinitely reinvested. Therefore, deferred U.S. income taxes were accrued on those earnings which we planned to repatriate in the future. In June 2017, as part of our annual strategic plan review, the Company reassessed its intentions regarding the indefinite reinvestment of undistributed earnings of our German operations and asserted its intent to indefinitely reinvest them.

Accounting Standard Changes

Accounting Standard Changes

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 is currently assessing the impact of the adoption of ASU 2017-07 on its consolidated financial statements.

As of June 30, 2017, 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.

Business Segment Information

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

• The Technical Products segment is an aggregation of the Company’s filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods and is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, and durable label and specialty substrate products.

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

• The Other segment is composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they are not managed as part of either the Fine Paper and Packaging or Technical Products segments.

Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs.

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Background and Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of computation of basic and diluted EPS

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

Earnings Per Basic Common Share

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Income from continuing operations	$	25.0		$	21.4		$	42.6		$	40.6
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.3		)	(0.4		)
Income from continuing operations available to common stockholders	24.8			21.2			42.3			40.2
Loss from discontinued operations, net of income taxes	—			(0.4		)	—			(0.4		)
Net income available to common stockholders	$	24.8		$	20.8		$	42.3		$	39.8
Weighted-average basic shares outstanding	16,795			16,757			16,787			16,778
Continuing operations	$	1.47		$	1.26		$	2.52		$	2.39
Discontinued operations	—			(0.02		)	—			(0.02		)
Basic earnings per share	$	1.47		$	1.24		$	2.52		$	2.37

Earnings Per Diluted Common Share

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Income from continuing operations	$	25.0		$	21.4		$	42.6		$	40.6
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.3		)	(0.4		)
Income from continuing operations available to common stockholders	24.8			21.2			42.3			40.2
Loss from discontinued operations, net of income taxes	—			(0.4		)	—			(0.4		)
Net income available to common stockholders	$	24.8		$	20.8		$	42.3		$	39.8
Weighted-average basic shares outstanding	16,795			16,757			16,787			16,778
Add: Assumed incremental shares under stock compensation plans (a)	165			291			241			280
Weighted-average diluted shares	16,960			17,048			17,028			17,058
Continuing operations	$	1.46		$	1.24		$	2.48		$	2.35
Discontinued operations	—			(0.02		)	—			(0.02		)
Diluted earnings per share	$	1.46		$	1.22		$	2.48		$	2.33

(a) For the three months ended June 30, 2017, 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.

Schedule of the carrying value and fair value of the Company's debt

The following table presents the carrying value and the fair value of the Company’s debt. 

	June 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	$	171.5	$	175.0	$	169.5
Global Revolving Credit Facilities (variable rates)	42.4		42.4		42.9		42.9
German loan agreement (2.45% fixed rate)	6.7		6.7		6.8		6.8
Total debt	$	224.1	$	220.6	$	224.7	$	219.2

(a) 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 using rates currently available to the Company for debt of the same remaining maturities.

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Supplemental Balance Sheet Data (Tables)

6 Months Ended

Jun. 30, 2017

Balance Sheet Related Disclosures [Abstract]

Schedule of inventories by major class

The following table presents inventories by major class:

	June 30, 2017			December 31, 2016
Raw materials	$	32.8		$	31.6
Work in progress	32.4			26.8
Finished goods	59.8			63.0
Supplies and other	3.5			3.1
	128.5			124.5
Adjust FIFO inventories to LIFO cost	(9.2		)	(8.2		)
Total	$	119.3		$	116.3

Schedule of changes in accumulated other comprehensive income

The following table presents changes in accumulated other comprehensive income (loss) (“AOCI”) for the six months ended June 30, 2017:

	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	11.1			(1.2		)	0.1			10.0
Amounts reclassified from AOCI	—			3.2			—			3.2
Income from other comprehensive income items	11.1			2.0			0.1			13.2
Provision for income taxes	0.2			0.7			—			0.9
Other comprehensive income	10.9			1.3			0.1			12.3
AOCI — June 30, 2017	$	(16.5	)	$	(63.2	)	$	—		$	(79.7	)

^[1]

[1] (a) For the three months ended June 30, 2017, the Company recorded a $1.2 million increase in the employee benefit obligation related to a pension remeasurement resulting from the redistribution of active and inactive participants into separate pension plans.

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Debt (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Schedule of long-term debt

Long-term debt consisted of the following:

	June 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	42.4			42.9
German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022	6.7			6.8
Deferred financing costs	(3.3		)	(3.8		)
Total debt	220.8			220.9
Less: Debt payable within one year	1.3			1.2
Long-term debt	$	219.5		$	219.7

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Pension and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2017

Retirement Benefits [Abstract]

Schedule of components of net periodic benefit cost for defined benefit plans and postretirement plans other than pensions

Components of Net Periodic Benefit Cost for Defined Benefit Plans

	Pension Benefits						Postretirement Benefits Other than Pensions
	Three Months Ended June 30,
	2017			2016			2017		2016
Service cost	$	1.4		$	1.2		$	0.3	$	0.3
Interest cost	3.7			4.0			0.4		0.4
Expected return on plan assets (a)	(5.0		)	(4.7		)	—		—
Recognized net actuarial loss	1.2			1.6			—		—
Amortization of prior service benefit	—			0.1			—		—
Net periodic benefit cost	$	1.3		$	2.2		$	0.7	$	0.7

	Pension Benefits						Postretirement Benefits Other than Pensions
	Six Months Ended June 30,
	2017			2016			2017			2016
Service cost	$	2.7		$	2.4		$	0.6		$	0.6
Interest cost	7.4			8.0			0.8			0.8
Expected return on plan assets (a)	(9.8		)	(9.5		)	—			—
Recognized net actuarial loss	3.1			3.3			0.1			0.1
Amortization of prior service benefit	0.1			0.1			(0.1		)	(0.1		)
Net periodic benefit cost	$	3.5		$	4.3		$	1.4		$	1.4

(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.

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Stock Compensation Plan (Tables)

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of stock options awarded

The following table presents information regarding Options awarded during the six months ended June 30, 2017:

Options granted	143,726
Per share weighted average exercise price	$	82.11
Per share weighted average grant date fair value	$	13.54

Schedule of assumptions used to determine the grant date fair value of options granted

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

Expected term in years	5.7
Risk free interest rate	2.1	%
Volatility	22.9	%
Dividend yield	3.0	%

Schedule of stock options vested during the period

The following table presents information regarding Options that vested during the six months ended June 30, 2017:

Options vested	92,275
Aggregate grant date fair value of Options vested (in millions)	$	1.4

Schedule of outstanding stock options

The following table presents information regarding outstanding Options:

	June 30, 2017		December 31, 2016
Options outstanding	522,573		530,462
Aggregate intrinsic value (in millions)	$	13.9	$	25.0
Per share weighted average exercise price	$	54.11	$	38.35
Exercisable Options	276,996		336,336
Aggregate intrinsic value (in millions)	$	11.7	$	19.3
Unvested Options	245,577		194,126
Per share weighted average grant date fair value	$	14.31	$	15.15

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

Schedule of shares purchased under the respective stock purchase plans

The following table shows shares purchased under the respective stock purchase plans:

	Six Months Ended June 30,
	2017			2016
	Shares	$		Shares	$
2017 Stock Purchase Plan	—	$	—	—	$	—
2016 Stock Purchase Plan	85,354	6.8		1,642	0.1
2015 Stock Purchase Plan	—	—		93,593	5.3

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Contingencies and Legal Matters (Tables)

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of bargaining agreements

The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these agreements.

Contract Expiration Date	Location	Union	Number of Employees
January 2018	Whiting, WI (b)	USW	207
June 2018	Neenah, WI (b)	USW	269
July 2018	Munising, MI (b)	USW	217
February 2019	Neenah Germany	IG BCE	(a)
May 2019	Appleton, WI (b)	USW	93
August 2021	Brattleboro, VT	USW	81
November 2021	Lowville, NY	USW	112

(a) Under German law 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 cannot be determined.

(b) The Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW on pension matters. The current agreements will remain in effect until September 2019.

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Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Schedule of net sales and operating income for each of the Company's business segment

The following table summarizes the net sales and operating income for each of the Company’s business segments.

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Net sales
Technical Products	$	127.3	$	126.5	$	249.2	$	248.0
Fine Paper and Packaging	115.7		113.7		230.0		227.5
Other	5.7		5.8		11.6		12.6
Consolidated	$	248.7	$	246.0	$	490.8	$	488.1

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Operating income (loss)
Technical Products	$	16.0		$	20.1		$	28.5		$	39.3
Fine Paper and Packaging	17.5			18.4			37.8			35.9
Other	0.2			—			(0.1		)	—
Unallocated corporate costs	(4.5		)	(4.6		)	(10.0		)	(9.9		)
Consolidated	$	29.2		$	33.9		$	56.2		$	65.3

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Background and Basis of Presentation - EPS (Details) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2016 USD ($) $ / shares shares	Jun. 30, 2017 USD ($) segment $ / shares shares	Jun. 30, 2016 USD ($) $ / shares shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of primary operations | segment			2
Earnings (Loss) Per Basic Common Share
Income from continuing operations	$ 25.0	$ 21.4	$ 42.6	$ 40.6
Amounts attributable to participating securities	(0.2)	(0.2)	(0.3)	(0.4)
Income from continuing operations available to common stockholders	24.8	21.2	42.3	40.2
Loss from discontinued operations, net of income taxes	0.0	(0.4)	0.0	(0.4)
Net income available to common stockholders	$ 24.8	$ 20.8	$ 42.3	$ 39.8
Weighted-average basic shares outstanding (in shares) | shares	16,795,000	16,757,000	16,787,000	16,778,000
Basic earnings (loss) per share
Continuing operations (in dollars per share) | $ / shares	$ 1.47	$ 1.26	$ 2.52	$ 2.39
Discontinued operations (in dollars per share) | $ / shares	0.00	(0.02)	0.00	(0.02)
Basic earnings per share (in dollars per share) | $ / shares	$ 1.47	$ 1.24	$ 2.52	$ 2.37
Earnings (Loss) Per Diluted Common Share
Income from continuing operations	$ 25.0	$ 21.4	$ 42.6	$ 40.6
Amounts attributable to participating securities	(0.2)	(0.2)	(0.3)	(0.4)
Income from continuing operations available to common stockholders	24.8	21.2	42.3	40.2
Loss from discontinued operations, net of income taxes	0.0	(0.4)	0.0	(0.4)
Net income available to common stockholders	$ 24.8	$ 20.8	$ 42.3	$ 39.8
Weighted-average basic shares outstanding (in shares) | shares	16,795,000	16,757,000	16,787,000	16,778,000
Add: Assumed incremental shares under stock compensation plans (in shares) | shares	165,000	291,000	241,000	280,000
Weighted-average diluted shares (in shares) | shares	16,960,000	17,048,000	17,028,000	17,058,000
Diluted earnings (loss) per share
Continuing operations (in dollars per share) | $ / shares	$ 1.46	$ 1.24	$ 2.48	$ 2.35
Discontinued operations (in dollars per share) | $ / shares	0.00	(0.02)	0.00	(0.02)
Diluted (in dollars per share) | $ / shares	$ 1.46	$ 1.22	$ 2.48	$ 2.33
Potentially dilutive stock-based compensation awards excluded from computation of dilutive common shares | shares	144,000	0	72,000	111,000

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Background and Basis of Presentation - Fair Value (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Senior notes | 2021 Senior Notes (5.25% fixed rate)
Fair Value of Financial Instruments
Fixed rate of interest (as a percent)	5.25%
Secured debt | German loan agreement (2.45% fixed rate)
Fair Value of Financial Instruments
Fixed rate of interest (as a percent)	2.45%
Carrying Value
Fair Value of Financial Instruments
Total debt	$ 224.1	$ 224.7
Carrying Value | Senior notes | 2021 Senior Notes (5.25% fixed rate)
Fair Value of Financial Instruments
Total debt	175.0	175.0
Carrying Value | Secured debt | Global Revolving Credit Facilities (variable rates)
Fair Value of Financial Instruments
Total debt	42.4	42.9
Carrying Value | Secured debt | German loan agreement (2.45% fixed rate)
Fair Value of Financial Instruments
Total debt	6.7	6.8
Level 2 | Fair Value
Fair Value of Financial Instruments
Total debt	220.6	219.2
Level 2 | Fair Value | Senior notes | 2021 Senior Notes (5.25% fixed rate)
Fair Value of Financial Instruments
Total debt	171.5	169.5
Level 2 | Fair Value | Secured debt | Global Revolving Credit Facilities (variable rates)
Fair Value of Financial Instruments
Total debt	42.4	42.9
Level 2 | Fair Value | Secured debt | German loan agreement (2.45% fixed rate)
Fair Value of Financial Instruments
Total debt	$ 6.7	$ 6.8

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Background and Basis of Presentation - Marketable Securities (Details) $ in Millions	Jun. 30, 2017 USD ($)
Marketable securities
Cost of marketable securities	$ 3.4
Pension Benefits
Held to maturity
Investments restricted to the payment of post-retirement employee benefits	1.7
Other Assets | Pension Benefits
Held to maturity
Investments restricted to the payment of post-retirement employee benefits	1.1
Prepaid Expenses and Other Current Assets | Pension Benefits
Held to maturity
Investments restricted to the payment of post-retirement employee benefits	0.6
Fair Value | Level 1 | Other Assets
Marketable securities
Fair value of marketable securities	$ 3.5

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Background and Basis of Presentation - Income Tax (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Increase (decrease) in deferred income taxes	$ (2.3)
Deferred tax liabilities eliminated, undistributed foreign earnings	$ 4.1

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Supplemental Balance Sheet Data - Inventories (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Inventories by major class:
Raw materials	$ 32.8	$ 32.8	$ 31.6
Work in progress	32.4	32.4	26.8
Finished goods	59.8	59.8	63.0
Supplies and other	3.5	3.5	3.1
Inventories, gross	128.5	128.5	124.5
Adjust FIFO inventories to LIFO cost	(9.2)	(9.2)	(8.2)
Total	119.3	119.3	116.3
FIFO values of inventories valued on the LIFO method	111.1	111.1	$ 106.8
Maximum
Inventories by major class:
Decrease in LIFO inventory (less than)	$ 0.1	$ 0.1

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Supplemental Balance Sheet Data - AOCI (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			$ 338.3
Amounts reclassified from AOCI			3.2	$ 3.6
Income (loss) from other comprehensive income items	$ 9.4	$ (1.6)	13.2	3.9
Provision for income taxes	0.1	0.7	0.9	1.4
Other comprehensive income (loss)	9.3	(2.3)	12.3	2.5
AOCI, Balance at the end of the period	377.6		377.6
Income tax benefit	(1.2)	$ (9.8)	(7.4)	(19.1)
Accumulated other comprehensive income (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Income tax benefit			1.3	$ 1.4
Net unrealized foreign currency translation gain (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			(27.4)
Other comprehensive income (loss) before reclassifications			11.1
Amounts reclassified from AOCI			0.0
Income (loss) from other comprehensive income items			11.1
Provision for income taxes			0.2
Other comprehensive income (loss)			10.9
AOCI, Balance at the end of the period	(16.5)		(16.5)
Net gain (loss) from pension and other postretirement liabilities (a)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			(64.5)
Other comprehensive income (loss) before reclassifications			(1.2)
Amounts reclassified from AOCI			3.2
Income (loss) from other comprehensive income items			2.0
Provision for income taxes			0.7
Other comprehensive income (loss)			1.3
AOCI, Balance at the end of the period	(63.2)		(63.2)
Unrealized gain (loss) on “available-for-sale” securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			(0.1)
Other comprehensive income (loss) before reclassifications			0.1
Amounts reclassified from AOCI			0.0
Income (loss) from other comprehensive income items			0.1
Provision for income taxes			0.0
Other comprehensive income (loss)			0.1
AOCI, Balance at the end of the period	0.0		0.0
Accumulated other comprehensive income (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			(92.0)
Other comprehensive income (loss) before reclassifications			10.0
Amounts reclassified from AOCI			3.2
Income (loss) from other comprehensive income items			13.2
Provision for income taxes			0.9
Other comprehensive income (loss)			12.3
AOCI, Balance at the end of the period	$ (79.7)		$ (79.7)

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Debt (Details)	1 Months Ended	6 Months Ended
	May 31, 2013 USD ($)	Jun. 30, 2017 USD ($) installment	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Principal Payments
Total debt		$ 220,800,000		$ 220,900,000
Deferred financing costs		(3,300,000)		(3,800,000)
Less: Debt payable within one year		1,300,000		1,200,000
Long-term debt		219,500,000		$ 219,700,000
Scheduled debt repayment		600,000	$ 600,000
Repayment of daily cash management activities		700,000
Long-term debt borrowings			$ 11,100,000
Global Revolving Credit Facilities (variable rates) due December 2019
Principal Payments
Letters of credit outstanding		1,200,000
Available credit		$ 131,300,000
Weighted-average interest rate (as a percent)		3.30%		2.80%
Senior notes | 2021 Senior Notes (5.25% fixed rate) due May 2021
Principal Payments
Total debt		$ 175,000,000		$ 175,000,000
Debt instrument, interest rate, stated percentage		5.25%
Total term of notes	8 years
Face amount	$ 175,000,000
Line of credit | Global Revolving Credit Facilities (variable rates) due December 2019
Principal Payments
Total debt		$ 42,400,000		42,900,000
Secured debt | German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022
Principal Payments
Total debt		$ 6,700,000		$ 6,800,000
Debt instrument, interest rate, stated percentage		2.45%
Debt instrument, due number of equal quarterly installments | installment		32

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Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Pension and other postretirement benefits
Aggregate contributions to qualified and non-qualified pension trusts and payments of pension benefits for unfunded pension plans			$ 5.7	$ 3.4	$ 18.4
Pension Benefits
Pension and other postretirement benefits
Service cost	$ 1.4	$ 1.2	2.7	2.4
Interest cost	3.7	4.0	7.4	8.0
Expected return on plan assets	(5.0)	(4.7)	(9.8)	(9.5)
Recognized net actuarial loss	1.2	1.6	3.1	3.3
Amortization of prior service benefit	0.0	0.1	0.1	0.1
Net periodic benefit cost	1.3	2.2	3.5	4.3
Expected 2017 aggregate contributions to qualified and non-qualified pension trusts and payments of pension benefits for unfunded pension plans	16.0		16.0
Postretirement Benefits Other than Pensions
Pension and other postretirement benefits
Service cost	0.3	0.3	0.6	0.6
Interest cost	0.4	0.4	0.8	0.8
Expected return on plan assets	0.0	0.0	0.0	0.0
Recognized net actuarial loss	0.0	0.0	0.1	0.1
Amortization of prior service benefit	0.0	0.0	(0.1)	(0.1)
Net periodic benefit cost	$ 0.7	$ 0.7	$ 1.4	$ 1.4

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Stock Compensation Plan (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Options
Stock options awarded
Options granted (in shares)		143,726
Per share weighted average exercise price (in dollars per share)		$ 82.11
Per share weighted average grant date fair value (in dollars per share)		$ 13.54
Fair value assumptions
Expected term in years		5 years 8 months 12 days
Risk free interest rate (as a percent)		2.10%
Volatility (as a percent)		22.90%
Dividend yield (as a percent)		3.00%
Stock options and Stock Appreciation Rights vested
Options vested (in shares)		92,275
Aggregate grant date fair value of Options vested		$ 1.4
Outstanding Stock Options and Stock Appreciation Rights
Options outstanding (in shares)	522,573	522,573	530,462
Aggregate intrinsic value (in dollars)	$ 13.9	$ 13.9	$ 25.0
Per share weighted average exercise price (in dollars per share)	$ 54.11	$ 54.11	$ 38.35
Exercisable Options (in shares)	276,996	276,996	336,336
Aggregate intrinsic value (in dollars)	$ 11.7	$ 11.7	$ 19.3
Unvested Options (in shares)	245,577	245,577	194,126
Per share weighted average grant date fair value (in dollars per share)	$ 14.31	$ 14.31	$ 15.15
Performance Share Units ("PSUs")
Additional disclosures
Granted (in shares)		41,748
Percentage of target to be awarded, low end of range (not less than)		40.00%
Percentage of target to be awarded, high end of range (not more than)		200.00%
Market price at grant date of performance units (in dollars per share)	$ 82.15	$ 82.15
Restricted Stock Units (RSUs)
Additional disclosures
Granted (in shares)	9,226	9,226
Equity instruments other than options, weighted average grant date fair value (USD per share)		$ 75.85
Equity instruments other than options, vesting period		1 year

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Stockholders' Equity (Details) - USD ($)	1 Months Ended	6 Months Ended
	May 31, 2017	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	May 31, 2016	May 31, 2015
Stockholders' equity
Common stock, outstanding shares (in shares)		16,803,697		16,771,000
2017 Stock Purchase Plan
Stockholders' equity
Period over which repurchases allowed under the plan	12 months
Common stock purchased under the stock purchase plan (in shares)		0	0
Cost of shares of common stock acquired		$ 0	$ 0
2017 Stock Purchase Plan | Maximum
Stockholders' equity
Authorized amount of repurchase under the stock purchase plan (up to)	$ 25,000,000
2016 Stock Purchase Plan
Stockholders' equity
Authorized amount of repurchase under the stock purchase plan (up to)					$ 25,000,000
Common stock purchased under the stock purchase plan (in shares)		85,354	1,642
Cost of shares of common stock acquired		$ 6,800,000	$ 100,000
2015 Stock Purchase Plan
Stockholders' equity
Common stock purchased under the stock purchase plan (in shares)		0	93,593
Cost of shares of common stock acquired		$ 0	$ 5,300,000
2015 Stock Purchase Plan | Maximum
Stockholders' equity
Authorized amount of repurchase under the stock purchase plan (up to)						$ 25,000,000

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Contingencies and Legal Matters (Details)	6 Months Ended
	Jun. 30, 2017 employee
Workforce Subject to Collective Bargaining Arrangements Expiring within One Year
Concentrations
Number of Employees	476
IG BCE | Germany | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Percentage of salaried employees eligible to be represented by Mining, Chemicals and Energy Trade Union (IG BCE)	50.00%
Percentage of hourly employees eligible to be represented by Mining, Chemicals and Energy Trade Union (IG BCE)	80.00%
USW | Whiting, WI | January 2018 | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Number of Employees	207
USW | Neenah, WI | June 2018 | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Number of Employees	269
USW | Munising, MI | July 2018 | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Number of Employees	217
USW | Appleton, WI | May 2019 | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Number of Employees	93
USW | Brattleboro, VT | August 2021
Concentrations
Number of Employees	81
USW | Lowville, NY | November 2021
Concentrations
Number of Employees	112

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Business Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Business segment
Net sales	$ 248.7	$ 246.0	$ 490.8	$ 488.1
Operating income (loss)	29.2	33.9	56.2	65.3
Unallocated corporate costs
Business segment
Operating income (loss)	(4.5)	(4.6)	(10.0)	(9.9)
Technical Products | Operating segments
Business segment
Net sales	127.3	126.5	249.2	248.0
Operating income (loss)	16.0	20.1	28.5	39.3
Fine Paper and Packaging | Operating segments
Business segment
Net sales	115.7	113.7	230.0	227.5
Operating income (loss)	17.5	18.4	37.8	35.9
Other | Operating segments
Business segment
Net sales	5.7	5.8	11.6	12.6
Operating income (loss)	$ 0.2	$ 0.0	$ (0.1)	$ 0.0