Supplemental Guarantor Financial Information

All of our direct and indirect subsidiaries guarantee our $300 million aggregate principal amount of 5.375% senior notes issued in 2014 and due 2025, which we refer to as the 2014 Notes, and our $275 million aggregate principal amount of 4.5% senior notes issued in January 2013 and due 2023, which we refer to as the 2013 Notes, on a joint and several basis. There are no significant restrictions on the ability of the guarantor subsidiaries to make distributions to Clearwater Paper, the issuer of the 2014 Notes and 2013 Notes. The following tables present the results of operations, financial position and cash flows of Clearwater Paper and its subsidiaries, the guarantor and non-guarantor entities, and the eliminations necessary to arrive at the information for Clearwater Paper on a consolidated basis.

Clearwater Paper Corporation

Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended March 31, 2016



				Guarantor
(In thousands)	Issuer			Subsidiaries			Eliminations			Total
Net sales	$	419,046		$	77,625		$	(59,467	)	$	437,204
Cost and expenses:
Cost of sales	(356,714		)	(71,400		)	59,467			(368,647		)
Selling, general and administrative expenses	(26,837		)	(3,958		)	—			(30,795		)
Total operating costs and expenses	(383,551		)	(75,358		)	59,467			(399,442		)
Income from operations	35,495			2,267			—			37,762
Interest expense, net	(7,643		)	—			—			(7,643		)
Earnings before income taxes	27,852			2,267			—			30,119
Income tax provision	(10,470		)	(1,203		)	—			(11,673		)
Equity in income of subsidiary	1,064			—			(1,064		)	—
Net earnings	$	18,446		$	1,064		$	(1,064	)	$	18,446
Other comprehensive income, net of tax	655			—			—			655
Comprehensive income	$	19,101		$	1,064		$	(1,064	)	$	19,101

Clearwater Paper Corporation

Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended March 31, 2015



				Guarantor
(In thousands)	Issuer			Subsidiaries			Eliminations			Total
Net sales	$	395,387		$	73,328		$	(34,689	)	$	434,026
Cost and expenses:
Cost of sales	(351,046		)	(73,475		)	34,689			(389,832		)
Selling, general and administrative expenses	(24,788		)	(4,169		)	—			(28,957		)
Total operating costs and expenses	(375,834		)	(77,644		)	34,689			(418,789		)
Income (loss) from operations	19,553			(4,316		)	—			15,237
Interest expense, net	(7,767		)	(15		)	—			(7,782		)
Earnings (loss) before income taxes	11,786			(4,331		)	—			7,455
Income tax provision	(3,228		)	(342		)	1,872			(1,698		)
Equity in loss of subsidiary	(4,673		)	—			4,673			—
Net earnings (loss)	$	3,885		$	(4,673	)	$	6,545		$	5,757
Other comprehensive income, net of tax	1,557			—			—			1,557
Comprehensive income (loss)	$	5,442		$	(4,673	)	$	6,545		$	7,314

Clearwater Paper Corporation

Consolidating Balance Sheet

At March 31, 2016



(In thousands)	Issuer			Guarantor Subsidiaries			Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	2,228		$	—		$	—		$	2,228
Restricted cash	2,270			—			—			2,270
Receivables, net	119,319			15,556			—			134,875
Taxes receivable	646			33			—			679
Inventories	209,823			33,596			—			243,419
Other current assets	8,880			496			—			9,376
Total current assets	343,166			49,681			—			392,847
Property, plant and equipment, net	729,072			144,040			—			873,112
Goodwill	209,087			—			—			209,087
Intangible assets, net	3,918			14,835			—			18,753
Intercompany receivable (payable)	10,088			(10,088		)	—			—
Investment in subsidiary	140,822			—			(140,822		)	—
Pension assets	1,086			—			—			1,086
Other assets, net	4,680			977			(1,328		)	4,329
TOTAL ASSETS	$	1,441,919		$	199,445		$	(142,150	)	$	1,499,214
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Revolving credit facility borrowings	$	6,005		$	—		$	—		$	6,005
Accounts payable and accrued liabilities	173,306			19,514			—			192,820
Current liability for pensions and other postretirement employee benefits	7,559			—			—			7,559
Total current liabilities	186,870			19,514			—			206,384
Long-term debt	569,179			—			—			569,179
Liability for pensions and other postretirement employee benefits	87,609			—			—			87,609
Other long-term obligations	43,293			486			—			43,779
Accrued taxes	718			807			—			1,525
Deferred tax liabilities	86,544			37,816			(1,328		)	123,032
Accumulated other comprehensive loss, net of tax	(54,893		)	—			—			(54,893		)
Stockholders' equity excluding accumulated other comprehensive loss	522,599			140,822			(140,822		)	522,599
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,441,919		$	199,445		$	(142,150	)	$	1,499,214

Clearwater Paper Corporation

Consolidating Balance Sheet

At December 31, 2015



(In thousands)	Issuer			Guarantor Subsidiaries			Eliminations			Total
ASSETS
Current assets:
Cash	$	5,610		$	—		$	—		$	5,610
Restricted cash	2,270			—			—			2,270
Short-term investments	250			—			—			250
Receivables, net	123,131			15,921			—			139,052
Taxes receivable	16,221			(1,370		)	—			14,851
Inventories	219,130			36,443			—			255,573
Other current assets	8,838			493			—			9,331
Total current assets	375,450			51,487			—			426,937
Property, plant and equipment, net	719,436			147,102			—			866,538
Goodwill	209,087			—			—			209,087
Intangible assets, net	4,180			15,810			—			19,990
Intercompany receivable (payable)	14,013			(15,151		)	1,138			—
Investment in subsidiary	139,758			—			(139,758		)	—
Pension assets	596			—			—			596
Other assets, net	4,142			79			—			4,221
TOTAL ASSETS	$	1,466,662		$	199,327		$	(138,620	)	$	1,527,369
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	196,891		$	23,477		$	—		$	220,368
Current liability for pensions and other postretirement employee benefits	7,559			—			—			7,559
Total current liabilities	204,450			23,477			—			227,927
Long-term debt	568,987			—			—			568,987
Liability for pensions and other postretirement employee benefits	89,057			—			—			89,057
Other long-term obligations	46,182			556			—			46,738
Accrued taxes	874			802			—			1,676
Deferred tax liabilities	82,246			34,734			1,138			118,118
Accumulated other comprehensive loss, net of tax	(55,548		)	—			—			(55,548		)
Stockholders’ equity excluding accumulated other comprehensive loss	530,414			139,758			(139,758		)	530,414
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,466,662		$	199,327		$	(138,620	)	$	1,527,369

Clearwater Paper Corporation

Consolidating Statement of Cash Flows

Three Months Ended March 31, 2016



(In thousands)	Issuer			Guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	18,446		$	1,064		$	(1,064	)	$	18,446
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization	16,061			5,089			—			21,150
Equity-based compensation expense	2,172			—			—			2,172
Deferred tax provision	3,329			2,174			(1,138		)	4,365
Employee benefit plans	(1,389		)	—			—			(1,389		)
Deferred issuance costs on long-term debt	213			—			—			213
Non-cash adjustments to unrecognized taxes	(156		)	5			—			(151		)
Changes in working capital, net	(11,062		)	1,514			—			(9,548		)
Changes in taxes receivable, net	15,575			(1,403		)	—			14,172
Other, net	(338		)	(70		)	—			(408		)
Net cash flows from operating activities	42,851			8,373			(2,202		)	49,022
CASH FLOWS FROM INVESTING ACTIVITIES
Changes in short-term investments, net	250			—			—			250
Additions to plant and equipment	(27,475		)	(3,480		)	—			(30,955		)
Net cash flows from investing activities	(27,225		)	(3,480		)	—			(30,705		)
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock	(27,661		)	—			—			(27,661		)
Investment from (to) parent	2,691			(4,893		)	2,202			—
Borrowings on revolving credit facility	123,287			—			—			123,287
Repayments of revolving credit facility borrowings	(117,282		)	—			—			(117,282		)
Payment of tax withholdings on equity-based payment arrangements	(43		)	—			—			(43		)
Net cash flows from financing activities	(19,008		)	(4,893		)	2,202			(21,699		)
Decrease in cash and cash equivalents	(3,382		)	—			—			(3,382		)
Cash and cash equivalents at beginning of period	5,610			—			—			5,610
Cash and cash equivalents at end of period	$	2,228		$	—		$	—		$	2,228

Clearwater Paper Corporation

Consolidating Statement of Cash Flows

Three Months Ended March 31, 2015



(In thousands)	Issuer			Guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss)	$	3,885		$	(4,673	)	$	6,545		$	5,757
Adjustments to reconcile net earnings (loss) to net cash flows from operating activities:
Depreciation and amortization	16,114			4,894			—			21,008
Equity-based compensation expense	1,169			—			—			1,169
Deferred tax (benefit) provision	(3,231		)	44			1,857			(1,330		)
Employee benefit plans	809			—			—			809
Deferred issuance costs on long-term debt	178			—			—			178
Disposal of plant and equipment, net	—			(30		)	—			(30		)
Non-cash adjustments to unrecognized taxes	(983		)	(7		)	—			(990		)
Changes in working capital, net	1,537			1,920			—			3,457
Changes in taxes receivable, net	6,760			(15,758		)	10,253			1,255
Excess tax benefits from equity-based payment arrangements	(343		)	—			—			(343		)
Funding of qualified pension plans	(1,561		)	—			—			(1,561		)
Other, net	(1,261		)	(66		)	—			(1,327		)
Net cash flows from operating activities	23,073			(13,676		)	18,655			28,052
CASH FLOWS FROM INVESTING ACTIVITIES
Changes in short-term investments, net	39,000			—			—			39,000
Additions to plant and equipment	(23,262		)	(1,978		)	—			(25,240		)
Proceeds from sale of assets	—			506			—			506
Net cash flows from investing activities	15,738			(1,472		)	—			14,266
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock	(37,148		)	—			—			(37,148		)
Investment from parent	3,507			15,148			(18,655		)	—
Payment of tax withholdings on equity-based payment arrangements	(3,048		)	—			—			(3,048		)
Excess tax benefits from equity-based payment arrangements	343			—			—			343
Net cash flows from financing activities	(36,346		)	15,148			(18,655		)	(39,853		)
Decrease in cash	2,465			—			—			2,465
Cash at beginning of period	27,331			—			—			27,331
Cash at end of period	$	29,796		$	—		$	—		$	29,796