21. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Presented below are Verso Holdings’ consolidating balance sheets, statements of operations, and statements of cash flows, as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. The consolidating financial statements have been prepared from Verso Holdings’ financial information on the same basis of accounting as the consolidated financial statements. Investments in our subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Verso Holdings’ subsidiaries that guaranteed the obligations under the debt securities described below are reflected in the Eliminations column.

Verso Holdings, the “Parent Issuer,” and its direct, 100% owned subsidiary, Verso Paper Inc., the “Subsidiary Issuer,” are the issuers of 11.5% senior secured fixed rate notes due 2014, 8.75% second priority senior secured notes due 2019, second priority senior secured floating rate notes due 2014, and 11.38% senior subordinated notes due 2016 (collectively, the “Notes”). The Notes are jointly and severally guaranteed on a full and unconditional basis by the Parent Issuer’s 100% owned subsidiaries, excluding the Subsidiary Issuer, Bucksport Leasing LLC, and Verso Quinnesec REP LLC, collectively, the “Guarantor Subsidiaries.” Chase NMTC Verso Investment Fund, LLC, a consolidated VIE of Verso Holdings, is a “Non-Guarantor Affiliate.

Verso Paper Holdings LLC
Condensed Consolidating Balance Sheet
December 31, 2011

									Non-		Non-
	Parent			Subsidiary		Guarantor			Guarantor		Guarantor
(Dollars in thousands)	Issuer			Issuer		Subsidiaries			Subsidiary		Affiliate			Eliminations			Consolidated
ASSETS
Current assets	$	-		$	-	$	393,041		$	-	$	81		$	-		$	393,122
Property, plant, and equipment, net		-			-		904,901			30,086		-			(288	)		934,699
Intercompany/affiliate receivable		1,249,306			-		-			340		31,153			(1,280,799	)		-
Investment in subsidiaries		(84,459	)		-		356			-		-			84,103			-
Non-current assets(1)		-			-		115,461			1,076		30			54			116,621
Total assets	$	1,164,847		$	-	$	1,413,759		$	31,502	$	31,264		$	(1,196,930	)	$	1,444,442
LIABILITIES AND MEMBER'S EQUITY
Current liabilities	$	48,259		$	-	$	201,814		$	-	$	205		$	(7	)	$	250,271
Intercompany/affiliate payable		-			-		1,249,646			31,146		-			(1,280,792	)		-
Long-term debt(2)		1,177,772			-		-			-		23,305			-			1,201,077
Other long-term liabilities		-			-		46,355			-		7,923			-			54,278
Member's equity (deficit)		(61,184	)		-		(84,056	)		356		(169	)		83,869			(61,184	)
Total liabilities and equity	$	1,164,847		$	-	$	1,413,759		$	31,502	$	31,264		$	(1,196,930	)	$	1,444,442
(1) Non-current assets of Guarantor Subsidiaries includes $23.3 million of a long-term note receivable from Verso Finance.
(2) Long-term debt of Non-Guarantor Affiliate is payable to Verso Finance.

Verso Paper Holdings LLC
Condensed Consolidating Balance Sheet
December 31, 2010

							Non-		Non-
	Parent		Subsidiary		Guarantor		Guarantor		Guarantor
(Dollars in thousands)	Issuer		Issuer		Subsidiaries		Subsidiary		Affiliate			Eliminations			Consolidated
ASSETS
Current assets	$	-	$	-	$	406,017	$	5	$	4		$	-		$	406,026
Property, plant, and equipment, net		-		-		962,857		9,854		-			-			972,711
Intercompany/affiliate receivable		1,222,061		-		3,843		-		31,021			(1,256,925	)		-
Investment in subsidiaries		47,383		-		-		-		-			(47,383	)		-
Non-current assets(1)		-		-		125,964		25,678		85			-			151,727
Total assets	$	1,269,444	$	-	$	1,498,681	$	35,537	$	31,110		$	(1,304,308	)	$	1,530,464
LIABILITIES AND MEMBER'S EQUITY
Current liabilities	$	48,596	$	-	$	195,097	$	-	$	4		$	-		$	243,697
Intercompany/affiliate payable		-		-		1,222,061		34,864		-			(1,256,925	)		-
Long-term debt(2)		1,149,431		-		-		-		23,305			-			1,172,736
Other long-term liabilities		-		-		34,793		-		7,821			-			42,614
Member's equity		71,417		-		46,730		673		(20	)		(47,383	)		71,417
Total liabilities and equity	$	1,269,444	$	-	$	1,498,681	$	35,537	$	31,110		$	(1,304,308	)	$	1,530,464
(1) Non-current assets of Guarantor Subsidiaries includes $23.3 million of a long-term note receivable from Verso Finance.
(2) Long-term debt of Non-Guarantor Affiliate is payable to Verso Finance.

Verso Paper Holdings LLC
Condensed Consolidating Statements of Operations
Year Ended December 31, 2011

									Non-			Non-
	Parent			Subsidiary		Guarantor			Guarantor			Guarantor
(Dollars in thousands)	Issuer			Issuer		Subsidiaries			Subsidiary			Affiliate			Eliminations			Consolidated
Net sales	$	-		$	-	$	1,722,489		$	-		$	-		$	-		$	1,722,489
Cost of products sold (exclusive of
depreciation, amortization, and depletion)		-			-		1,460,290			-			-			-			1,460,290
Depreciation, amortization, and depletion		-			-		125,121			174			55			(55	)		125,295
Selling, general, and administrative expenses		-			-		78,038			(156	)		125			-			78,007
Goodwill impairment		-			-		10,551			-			-			-			10,551
Restructuring and other charges		-			-		24,464			-			-			-			24,464
Interest income		(124,366	)		-		(1,560	)		(54	)		(1,546	)		125,912			(1,614	)
Interest expense		124,366			-		121,883			361			1,515			(125,912	)		122,213
Other, net		26,091			-		(279	)		-			-			-			25,812
Equity in net loss of subsidiaries		(96,438	)		-		-			-			-			96,438			-
Net loss	$	(122,529	)	$	-	$	(96,019	)	$	(325	)	$	(149	)	$	96,493		$	(122,529	)

Verso Paper Holdings LLC
Condensed Consolidating Statements of Operations
Year Ended December 31, 2010

									Non-			Non-
	Parent			Subsidiary		Guarantor			Guarantor			Guarantor
(Dollars in thousands)	Issuer			Issuer		Subsidiaries			Subsidiary			Affiliate			Eliminations			Consolidated
Net sales	$	-		$	-	$	1,605,316		$	-		$	-		$	-		$	1,605,316
Cost of products sold (exclusive of
depreciation, amortization, and depletion)		-			-		1,410,770			-			-			-			1,410,770
Depreciation, amortization, and depletion		-			-		127,367			-			-			-			127,367
Selling, general, and administrative expenses		-			-		70,948			21			20			-			70,989
Interest income		(123,710	)		-		(123	)		(1	)		(4	)		123,714			(124	)
Interest expense		123,710			-		122,524			4			4			(123,714	)		122,528
Other, net		(255	)		-		(734	)		-			-			255			(734	)
Equity in net loss of subsidiaries		(125,480	)		-		-			-			-			125,480			-
Net loss	$	(125,225	)	$	-	$	(125,436	)	$	(24	)	$	(20	)	$	125,225		$	(125,480	)

Verso Paper Holdings LLC
Condensed Consolidating Statements of Operations
Year Ended December 31, 2009

									Non-		Non-
	Parent			Subsidiary		Guarantor			Guarantor		Guarantor
(Dollars in thousands)	Issuer			Issuer		Subsidiaries			Subsidiary		Affiliate		Eliminations			Consolidated
Net sales	$	-		$	-	$	1,360,854		$	-	$	-	$	-		$	1,360,854
Cost of products sold (exclusive of
depreciation, amortization, and depletion)		-			-		1,242,743			-		-		-			1,242,743
Depreciation, amortization, and depletion		-			-		132,682			-		-		-			132,682
Selling, general, and administrative expenses		-			-		61,655			-		-		-			61,655
Restructuring and other charges		-			-		979			-		-		-			979
Interest income		(112,797	)		-		(241	)		-		-		112,797			(241	)
Interest expense		112,797			-		116,130			-		-		(112,797	)		116,130
Other, net		(31,266	)		-		(273,796	)		-		-		31,266			(273,796	)
Equity in net income of subsidiaries		80,702			-		-			-		-		(80,702	)		-
Net income	$	111,968		$	-	$	80,702		$	-	$	-	$	(111,968	)	$	80,702

Verso Paper Holdings LLC
Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2011

									Non-			Non-
	Parent			Subsidiary		Guarantor			Guarantor			Guarantor
(Dollars in thousands)	Issuer			Issuer		Subsidiaries			Subsidiary			Affiliate		Eliminations		Consolidated
Net cash provided by operating activities	$	-		$	-	$	18,815		$	(4,322	)	$	69	$	-	$	14,562
Cash flows from investing activities:
Proceeds from sale of fixed assets		-			-		228			-			-		-		228
Transfers to (from) restricted cash		-			-		(975	)		24,814			-		-		23,839
Capital expenditures		-			-		(69,866	)		(20,406	)		-		-		(90,272	)
Return of investment in subsidiaries		88			-		(88	)		-			-		-		-
Net cash used in investing activities		88			-		(70,701	)		4,408			-		-		(66,205	)
Cash flows from financing activities:
Proceeds from long-term debt		394,618			-		-			-			-		-		394,618
Repayments of long-term debt		(389,998	)		-		-			-			-		-		(389,998	)
Debt issuance costs		(10,715	)		-		1			(86	)		-		-		(10,800	)
Cash distributions		(88	)		-		-			-			-		-		(88	)
Repayment of advances to subsidiaries		389,998			-		(389,998	)		-			-		-		-
Advances to subsidiaries		(383,903	)		-		383,903			-			-		-		-
Net cash used in financing activities		(88	)		-		(6,094	)		(86	)		-		-		(6,268	)
Change in cash and cash equivalents		-			-		(57,980	)		-			69		-		(57,911	)
Cash and cash equivalents at beginning of period		-			-		152,702			-			4		-		152,706
Cash and cash equivalents at end of period	$	-		$	-	$	94,722		$	-		$	73	$	-	$	94,795

Verso Paper Holdings LLC
Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2010

									Non-			Non-
	Parent			Subsidiary		Guarantor			Guarantor			Guarantor
(Dollars in thousands)	Issuer			Issuer		Subsidiaries			Subsidiary			Affiliate			Eliminations			Consolidated
Net cash provided by operating activities	$	-		$	-	$	64,287		$	3,818		$	7,716		$	-		$	75,821
Cash flows from investing activities:
Proceeds from sale of fixed assets		-			-		453			-			-			-			453
Loan to affiliate		-			-		(23,305	)		-			(31,017	)		54,322			-
Transfers to restricted cash		-			-		-			(25,073	)		-			-			(25,073	)
Capital expenditures		-			-		(64,490	)		(9,156	)		-			-			(73,646	)
Return of investment in subsidiaries		78			-		(78	)		-			-			-			-
Net cash used in investing activities		78			-		(87,420	)		(34,229	)		(31,017	)		54,322			(98,266	)
Cash flows from financing activities:
Proceeds from long-term debt		27,438			-		-			-			-			-			27,438
Loan from affiliate		-			-		-			31,017			23,305			(54,322	)		-
Debt issuance costs		(1,205	)		-		(160	)		(606	)		-			-			(1,971	)
Cash distributions		(78	)		-		-			-			-			-			(78	)
Advances to subsidiaries		(26,233	)		-		26,233			-			-			-			-
Net cash provided by financing activities		(78	)		-		26,073			30,411			23,305			(54,322	)		25,389
Change in cash and cash equivalents		-			-		2,940			-			4			-			2,944
Cash and cash equivalents at beginning of period		-			-		149,762			-			-			-			149,762
Cash and cash equivalents at end of period	$	-		$	-	$	152,702		$	-		$	4		$	-		$	152,706

Verso Paper Holdings LLC
Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2009

									Non-		Non-
	Parent			Subsidiary		Guarantor			Guarantor		Guarantor
(Dollars in thousands)	Issuer			Issuer		Subsidiaries			Subsidiary		Affiliate		Eliminations		Consolidated
Net cash provided by operating activities	$	-		$	-	$	180,135		$	-	$	-	$	-	$	180,135
Cash flows from investing activities:
Proceeds from sale of fixed assets		-			-		83			-		-		-		83
Capital expenditures		-			-		(34,216	)		-		-		-		(34,216	)
Investment in subsidiaries		(39,449	)		-		39,449			-		-		-		-
Return of investment in subsidiaries		15,459			-		(15,459	)		-		-		-		-
Net cash used in investing activities		(23,990	)		-		(10,143	)		-		-		-		(34,133	)
Cash flows from financing activities:
Debt issuance costs		(10,270	)		-		-			-		-		-		(10,270	)
Cash distributions		(15,459	)		-		-			-		-		-		(15,459	)
Advances to subsidiaries		(342,567	)		-		342,567			-		-		-		-
Repayment of advances to subsidiaries		482,317			-		(482,317	)		-		-		-		-
Proceeds from long-term debt		352,837			-		-			-		-		-		352,837
Payment on long-term debt		(442,868	)		-		-			-		-		-		(442,868	)
Net cash used in financing activities		23,990			-		(139,750	)		-		-		-		(115,760	)
Change in cash and cash equivalents		-			-		30,242			-		-		-		30,242
Cash and cash equivalents at beginning of period		-			-		119,520			-		-		-		119,520
Cash and cash equivalents at end of period	$	-		$	-	$	149,762		$	-	$	-	$	-	$	149,762