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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Verso Corporation | NYSE:VRS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 26.99 | 0 | 01:00:00 |
þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2018
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from __________ to __________
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Delaware
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001-34056
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75-3217389
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(State of Incorporation
or Organization)
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(Commission File Number)
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(IRS Employer
Identification Number)
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Large accelerated filer
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o
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Accelerated filer
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þ
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Emerging growth company
|
o
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Page
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VERSO CORPORATION
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|||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||
|
|||||||
|
|
||||||
|
December 31,
|
|
September 30,
|
||||
(Dollars in millions)
|
2017
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
7
|
|
|
$
|
7
|
|
Accounts receivable, net
|
208
|
|
|
255
|
|
||
Inventories
|
385
|
|
|
377
|
|
||
Prepaid expenses and other assets
|
14
|
|
|
11
|
|
||
Total current assets
|
614
|
|
|
650
|
|
||
Property, plant and equipment, net
|
1,062
|
|
|
1,026
|
|
||
Intangibles and other assets, net
|
56
|
|
|
53
|
|
||
Total assets
|
$
|
1,732
|
|
|
$
|
1,729
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
176
|
|
|
$
|
210
|
|
Accrued liabilities
|
129
|
|
|
122
|
|
||
Current maturities of long-term debt
|
60
|
|
|
—
|
|
||
Total current liabilities
|
365
|
|
|
332
|
|
||
Long-term debt
|
130
|
|
|
108
|
|
||
Pension benefit obligation
|
457
|
|
|
417
|
|
||
Other liabilities
|
34
|
|
|
34
|
|
||
Total liabilities
|
986
|
|
|
891
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
Equity:
|
|
|
|
|
|
||
Preferred stock -- par value $0.01 (50,000,000 shares authorized, no shares issued)
|
—
|
|
|
—
|
|
||
Common stock -- par value $0.01 (210,000,000 Class A shares authorized with 34,173,571 shares issued and 34,164,434 outstanding on December 31, 2017 and 34,569,917 shares issued and 34,553,376 outstanding on September 30, 2018; 40,000,000 Class B shares authorized with 291,039 shares issued and outstanding on December 31, 2017 and no shares issued and outstanding on September 30, 2018)
|
—
|
|
|
—
|
|
||
Treasury stock -- at cost (9,137 shares on December 31, 2017 and 16,541 shares on September 30, 2018)
|
—
|
|
|
—
|
|
||
Paid-in-capital (including Warrants of $10 million)
|
676
|
|
|
682
|
|
||
Retained earnings (deficit)
|
(62
|
)
|
|
16
|
|
||
Accumulated other comprehensive income
|
132
|
|
|
140
|
|
||
Total equity
|
746
|
|
|
838
|
|
||
Total liabilities and equity
|
$
|
1,732
|
|
|
$
|
1,729
|
|
VERSO CORPORATION
|
|||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
||||||||
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
||||||||
(Dollars in millions, except per share amounts)
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
||||||||
Net sales
|
$
|
621
|
|
|
$
|
704
|
|
|
$
|
1,822
|
|
|
$
|
1,987
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of products sold (exclusive of depreciation and amortization)
|
554
|
|
|
580
|
|
|
1,690
|
|
|
1,742
|
|
||||
Depreciation and amortization
|
27
|
|
|
28
|
|
|
87
|
|
|
83
|
|
||||
Selling, general and administrative expenses
|
24
|
|
|
25
|
|
|
81
|
|
|
78
|
|
||||
Restructuring charges
|
4
|
|
|
—
|
|
|
8
|
|
|
2
|
|
||||
Other operating (income) expense
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Operating income (loss)
|
12
|
|
|
80
|
|
|
(44
|
)
|
|
89
|
|
||||
Interest expense
|
10
|
|
|
15
|
|
|
29
|
|
|
32
|
|
||||
Other (income) expense
|
(2
|
)
|
|
(21
|
)
|
|
(7
|
)
|
|
(28
|
)
|
||||
Income (loss) before income taxes
|
4
|
|
|
86
|
|
|
(66
|
)
|
|
85
|
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss)
|
$
|
4
|
|
|
$
|
86
|
|
|
$
|
(66
|
)
|
|
$
|
85
|
|
Income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.12
|
|
|
$
|
2.49
|
|
|
$
|
(1.92
|
)
|
|
$
|
2.46
|
|
Diluted
|
0.12
|
|
|
2.45
|
|
|
(1.92
|
)
|
|
2.44
|
|
||||
Weighted average common shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
34,456
|
|
|
34,562
|
|
|
34,421
|
|
|
34,511
|
|
||||
Diluted
|
34,460
|
|
|
35,051
|
|
|
34,421
|
|
|
34,868
|
|
VERSO CORPORATION
|
|||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
||||||||
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
||||||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
||||||||
Net income (loss)
|
$
|
4
|
|
|
$
|
86
|
|
|
$
|
(66
|
)
|
|
$
|
85
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||
Defined benefit pension/other postretirement plans:
|
|
|
|
|
|
|
|
||||||||
Pension/other postretirement liability adjustment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Comprehensive income (loss)
|
$
|
4
|
|
|
$
|
86
|
|
|
$
|
(66
|
)
|
|
$
|
86
|
|
VERSO CORPORATION
|
|||||||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Class A
|
Class B
|
|
|
|
Retained Earnings (Deficit)
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
Stockholders’
Equity (Deficit)
|
|||||||||||||||||||
(Dollars in millions, shares in thousands)
|
Common Shares
|
Common Stock
|
Common Shares
|
Common Stock
|
Treasury Shares
|
Treasury Stock
|
Paid-in-Capital
|
||||||||||||||||||||
Balance - December 31, 2016
|
33,367
|
|
$
|
—
|
|
1,024
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
$
|
675
|
|
$
|
(32
|
)
|
$
|
127
|
|
$
|
770
|
|
Net income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(66
|
)
|
—
|
|
(66
|
)
|
|||||||
Treasury shares acquired
|
—
|
|
—
|
|
—
|
|
—
|
|
(9
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Common stock issued for restricted stock, net
|
73
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Class B stock converted to Class A stock
|
655
|
|
—
|
|
(655
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Equity award expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||||
Balance - September 30, 2017
|
34,095
|
|
$
|
—
|
|
369
|
|
$
|
—
|
|
(9
|
)
|
$
|
—
|
|
$
|
676
|
|
$
|
(98
|
)
|
$
|
127
|
|
$
|
705
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance - December 31, 2017
|
34,173
|
|
$
|
—
|
|
291
|
|
$
|
—
|
|
(9
|
)
|
$
|
—
|
|
$
|
676
|
|
$
|
(62
|
)
|
$
|
132
|
|
$
|
746
|
|
Net income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
85
|
|
—
|
|
85
|
|
|||||||
Other comprehensive income (loss), net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
|||||||
Treasury shares acquired
|
—
|
|
—
|
|
—
|
|
—
|
|
(7
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Common stock issued for restricted stock
|
106
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Class B stock converted to Class A stock
|
291
|
|
—
|
|
(291
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Equity award expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6
|
|
—
|
|
—
|
|
6
|
|
|||||||
Reclassification of stranded tax effects (ASU 2018-02)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(7
|
)
|
7
|
|
—
|
|
|||||||
Balance - September 30, 2018
|
34,570
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
(16
|
)
|
$
|
—
|
|
$
|
682
|
|
$
|
16
|
|
$
|
140
|
|
$
|
838
|
|
VERSO CORPORATION
|
|||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
|
|
|
|
||||
|
Nine Months
|
|
Nine Months
|
||||
|
Ended
|
|
Ended
|
||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(66
|
)
|
|
$
|
85
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
87
|
|
|
83
|
|
||
Net periodic pension cost (income)
|
5
|
|
|
(5
|
)
|
||
Pension plan contributions
|
(25
|
)
|
|
(35
|
)
|
||
Amortization of debt issuance cost and discount
|
6
|
|
|
19
|
|
||
Equity award expense
|
1
|
|
|
6
|
|
||
(Gain) loss on sale or disposal of assets
|
1
|
|
|
(8
|
)
|
||
Prepayment premium on Term Loan Facility
|
—
|
|
|
1
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(21
|
)
|
|
(44
|
)
|
||
Inventories
|
46
|
|
|
8
|
|
||
Prepaid expenses and other assets
|
5
|
|
|
3
|
|
||
Accounts payable
|
54
|
|
|
39
|
|
||
Accrued and other liabilities
|
(29
|
)
|
|
(6
|
)
|
||
Net cash provided by (used in) operating activities
|
64
|
|
|
146
|
|
||
Cash Flows From Investing Activities:
|
|
|
|
|
|||
Proceeds from sale of assets
|
—
|
|
|
17
|
|
||
Capital expenditures
|
(29
|
)
|
|
(61
|
)
|
||
Grant proceeds from Maine Technology Institute
|
—
|
|
|
1
|
|
||
Net cash provided by (used in) investing activities
|
(29
|
)
|
|
(43
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
|
|||
Borrowings on ABL Facility
|
156
|
|
|
379
|
|
||
Payments on ABL Facility
|
(151
|
)
|
|
(335
|
)
|
||
Payments on Term Loan Facility
|
(40
|
)
|
|
(146
|
)
|
||
Prepayment premium on Term Loan Facility
|
—
|
|
|
(1
|
)
|
||
Net cash provided by (used in) financing activities
|
(35
|
)
|
|
(103
|
)
|
||
Change in Cash and cash equivalents and restricted cash
|
—
|
|
|
—
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
9
|
|
|
9
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
9
|
|
|
$
|
9
|
|
|
Three Months Ended
|
|
|
||||||||
|
September 30, 2017
|
|
|
||||||||
(Dollars in millions)
|
Previously reported
|
|
As revised
|
|
Effect of change higher/(lower)
|
||||||
Cost of products sold (exclusive of depreciation and amortization)
|
$
|
552
|
|
|
$
|
554
|
|
|
$
|
2
|
|
Selling, general and administrative expenses
|
24
|
|
|
24
|
|
|
—
|
|
|||
Other (income) expense
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
|
|
|
|
|
|
||||||
|
Nine Months Ended
|
|
|
||||||||
|
September 30, 2017
|
|
|
||||||||
(Dollars in millions)
|
Previously reported
|
|
As revised
|
|
Effect of change higher/(lower)
|
||||||
Cost of products sold (exclusive of depreciation and amortization)
|
$
|
1,683
|
|
|
$
|
1,690
|
|
|
$
|
7
|
|
Selling, general and administrative expenses
|
81
|
|
|
81
|
|
|
—
|
|
|||
Other (income) expense
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
Standard
|
|
Effective Date
|
2017-09
|
Stock Compensation - Scope of Modification Accounting
|
January 1, 2018
|
2016-15
|
Classification of Certain Cash Receipts and Cash Payments
|
January 1, 2018
|
|
Three Months
|
|
Nine Months
|
||||
|
Ended
|
|
Ended
|
||||
(Dollars in millions)
|
September 30, 2018
|
|
September 30, 2018
|
||||
Printing paper
|
$
|
393
|
|
|
$
|
1,112
|
|
Coated groundwood
|
51
|
|
|
158
|
|
||
Specialty paper
|
173
|
|
|
490
|
|
||
Pulp
|
39
|
|
|
95
|
|
||
Supercalendared paper
|
48
|
|
|
132
|
|
||
Total Net sales
|
$
|
704
|
|
|
$
|
1,987
|
|
|
Three Months
|
|
Nine Months
|
||||
|
Ended
|
|
Ended
|
||||
(Dollars in millions)
|
September 30, 2018
|
|
September 30, 2018
|
||||
Direct sales
|
$
|
399
|
|
|
$
|
1,115
|
|
Merchant sales
|
248
|
|
|
735
|
|
||
Broker sales
|
57
|
|
|
137
|
|
||
Total Net sales
|
$
|
704
|
|
|
$
|
1,987
|
|
|
December 31,
|
|
September 30,
|
||||
(Dollars in millions)
|
2017
|
|
2018
|
||||
Raw materials
|
$
|
75
|
|
|
$
|
91
|
|
Work-in-process
|
54
|
|
|
57
|
|
||
Finished goods
|
228
|
|
|
201
|
|
||
Replacement parts and other supplies
|
28
|
|
|
28
|
|
||
Inventories
|
$
|
385
|
|
|
$
|
377
|
|
|
Original
|
December 31,
|
|
September 30,
|
||||
(Dollars in millions)
|
Maturity
|
2017
|
|
2018
|
||||
ABL Facility
|
7/14/2021
|
$
|
65
|
|
|
$
|
110
|
|
Term Loan Facility
|
10/14/2021
|
146
|
|
|
—
|
|
||
Unamortized (discount) and debt issuance costs, net
|
|
(21
|
)
|
|
(2
|
)
|
||
Less: Current portion
|
|
(60
|
)
|
|
—
|
|
||
Total long-term debt
|
|
$
|
130
|
|
|
$
|
108
|
|
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
||||||||
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
||||||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
||||||||
Interest expense
(1)
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
23
|
|
|
$
|
14
|
|
Cash interest paid
|
8
|
|
|
4
|
|
|
23
|
|
|
15
|
|
||||
Debt issuance cost and discount amortization
(2)
|
3
|
|
|
12
|
|
|
6
|
|
|
19
|
|
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
||||||||
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
||||||||
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
||||||||
Net income (loss) available to common shareholders (in millions)
|
$
|
4
|
|
|
$
|
86
|
|
|
$
|
(66
|
)
|
|
$
|
85
|
|
Weighted average common shares outstanding - basic (in thousands)
|
34,456
|
|
|
34,562
|
|
|
34,421
|
|
|
34,511
|
|
||||
Dilutive shares from stock awards (in thousands)
|
4
|
|
|
489
|
|
|
—
|
|
|
357
|
|
||||
Weighted average common shares outstanding - diluted (in thousands)
|
34,460
|
|
|
35,051
|
|
|
34,421
|
|
|
34,868
|
|
||||
Basic income (loss) per share
|
$
|
0.12
|
|
|
$
|
2.49
|
|
|
$
|
(1.92
|
)
|
|
$
|
2.46
|
|
Diluted income (loss) per share
|
$
|
0.12
|
|
|
$
|
2.45
|
|
|
$
|
(1.92
|
)
|
|
$
|
2.44
|
|
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
||||||||
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
||||||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
||||||||
Service cost
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
4
|
|
Interest cost
|
17
|
|
|
15
|
|
|
49
|
|
|
45
|
|
||||
Expected return on plan assets
|
(19
|
)
|
|
(18
|
)
|
|
(56
|
)
|
|
(54
|
)
|
||||
Net periodic pension cost (income)
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
5
|
|
|
$
|
(5
|
)
|
|
Restricted Stock
|
|
Weighted Average
|
|||
|
Units
|
|
Grant Date
|
|||
Shares (in thousands)
|
Outstanding
|
|
Fair Value
|
|||
Non-vested at December 31, 2017
|
583
|
|
|
$
|
6.89
|
|
Granted
|
190
|
|
|
16.87
|
|
|
Vested
|
(106
|
)
|
|
7.42
|
|
|
Forfeited
|
(3
|
)
|
|
14.08
|
|
|
Non-vested at September 30, 2018
|
664
|
|
|
9.64
|
|
|
Restricted Stock
|
|
Weighted Average
|
|||
|
Units
|
|
Grant Date
|
|||
Shares (in thousands)
|
Outstanding
|
|
Fair Value
|
|||
Non-vested at December 31, 2017
|
—
|
|
|
$
|
—
|
|
Granted
|
640
|
|
|
22.25
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(2
|
)
|
|
18.22
|
|
|
Non-vested at September 30, 2018
|
638
|
|
|
22.26
|
|
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
|
|
||||||||||
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Cumulative
|
||||||||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|
Incurred
|
||||||||||
Severance and benefit costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Write-off of purchase obligations
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Other costs
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Total restructuring costs
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
Nine Months
|
|
Nine Months
|
||||
|
Ended
|
|
Ended
|
||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
||||
Beginning balance of reserve
|
$
|
3
|
|
|
$
|
2
|
|
Severance and benefit costs
|
1
|
|
|
—
|
|
||
Severance and benefit payments
|
(4
|
)
|
|
—
|
|
||
Purchase obligations
|
2
|
|
|
—
|
|
||
Other costs
|
1
|
|
|
—
|
|
||
Payments on other costs
|
(1
|
)
|
|
—
|
|
||
Ending balance of reserve
|
$
|
2
|
|
|
$
|
2
|
|
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
|
|
||||||||||
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Cumulative
|
||||||||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|
Incurred
|
||||||||||
Severance and benefit costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Write-off of purchase obligations and commitments
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|||||
Other costs
|
2
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
8
|
|
|||||
Total restructuring costs
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
16
|
|
|
Nine Months
|
|
Nine Months
|
||||
|
Ended
|
|
Ended
|
||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
||||
Beginning balance of reserve
|
$
|
6
|
|
|
$
|
1
|
|
Severance and benefit payments
|
(5
|
)
|
|
(1
|
)
|
||
Purchase obligations
|
1
|
|
|
—
|
|
||
Payments on purchase obligations
|
(1
|
)
|
|
—
|
|
||
Other costs
|
3
|
|
|
2
|
|
||
Payments on other costs
|
(3
|
)
|
|
(2
|
)
|
||
Ending balance of reserve
|
$
|
1
|
|
|
$
|
—
|
|
|
Three Months
|
|
Three Months
|
|
|
||||||
|
Ended
|
|
Ended
|
|
Three Month
|
||||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
|
$ Change
|
||||||
Net sales
|
$
|
621
|
|
|
$
|
704
|
|
|
$
|
83
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||
Cost of products sold (exclusive of depreciation and amortization)
|
554
|
|
|
580
|
|
|
26
|
|
|||
Depreciation and amortization
|
27
|
|
|
28
|
|
|
1
|
|
|||
Selling, general and administrative expenses
|
24
|
|
|
25
|
|
|
1
|
|
|||
Restructuring charges
|
4
|
|
|
—
|
|
|
(4
|
)
|
|||
Other operating (income) expense
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||
Operating income (loss)
|
12
|
|
|
80
|
|
|
68
|
|
|||
Interest expense
|
10
|
|
|
15
|
|
|
5
|
|
|||
Other (income) expense
|
(2
|
)
|
|
(21
|
)
|
|
(19
|
)
|
|||
Income (loss) before income taxes
|
4
|
|
|
86
|
|
|
82
|
|
|||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss)
|
$
|
4
|
|
|
$
|
86
|
|
|
$
|
82
|
|
|
Nine Months
|
|
Nine Months
|
|
|
||||||
|
Ended
|
|
Ended
|
|
Nine Month
|
||||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
|
$ Change
|
||||||
Net sales
|
$
|
1,822
|
|
|
$
|
1,987
|
|
|
$
|
165
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||
Cost of products sold (exclusive of depreciation and amortization)
|
1,690
|
|
|
1,742
|
|
|
52
|
|
|||
Depreciation and amortization
|
87
|
|
|
83
|
|
|
(4
|
)
|
|||
Selling, general and administrative expenses
|
81
|
|
|
78
|
|
|
(3
|
)
|
|||
Restructuring charges
|
8
|
|
|
2
|
|
|
(6
|
)
|
|||
Other operating (income) expense
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||
Operating income (loss)
|
(44
|
)
|
|
89
|
|
|
133
|
|
|||
Interest expense
|
29
|
|
|
32
|
|
|
3
|
|
|||
Other (income) expense
|
(7
|
)
|
|
(28
|
)
|
|
(21
|
)
|
|||
Income (loss) before income taxes
|
(66
|
)
|
|
85
|
|
|
151
|
|
|||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss)
|
$
|
(66
|
)
|
|
$
|
85
|
|
|
$
|
151
|
|
|
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
||||||||
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
||||||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|||||||||
Net income (loss)
|
$
|
4
|
|
|
$
|
86
|
|
|
$
|
(66
|
)
|
|
$
|
85
|
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense
|
10
|
|
|
15
|
|
|
29
|
|
|
32
|
|
|||||
Depreciation and amortization
|
27
|
|
|
28
|
|
|
87
|
|
|
83
|
|
|||||
EBITDA
|
$
|
41
|
|
|
$
|
129
|
|
|
$
|
50
|
|
|
$
|
200
|
|
|
Adjustments to EBITDA:
|
|
|
|
|
|
|
|
|||||||||
|
Restructuring charges
(1)
|
4
|
|
|
—
|
|
|
8
|
|
|
2
|
|
||||
|
Non-cash equity award compensation
(2)
|
—
|
|
|
2
|
|
|
1
|
|
|
6
|
|
||||
|
Androscoggin PM No. 3 startup costs
(3)
|
—
|
|
|
3
|
|
|
—
|
|
|
10
|
|
||||
|
Countervailing duty settlement
(4)
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
||||
|
(Gain) loss on sale or disposal of assets
(5)
|
—
|
|
|
(8
|
)
|
|
1
|
|
|
(8
|
)
|
||||
|
Post-reorganization
(6)
|
1
|
|
|
1
|
|
|
1
|
|
|
3
|
|
||||
|
Strategic initiatives
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
|
Other severance costs
(8)
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
|
Other items, net
(9)
|
1
|
|
|
1
|
|
|
3
|
|
|
2
|
|
||||
Adjusted EBITDA
|
$
|
47
|
|
|
$
|
108
|
|
|
$
|
69
|
|
|
$
|
200
|
|
|
Nine Months
|
|
Nine Months
|
||||
|
Ended
|
|
Ended
|
||||
(Dollars in millions)
|
September 30, 2017
|
|
September 30, 2018
|
||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
64
|
|
|
$
|
146
|
|
Investing activities
|
(29
|
)
|
|
(43
|
)
|
||
Financing activities
|
(35
|
)
|
|
(103
|
)
|
||
Change in Cash and cash equivalents and restricted cash
|
$
|
—
|
|
|
$
|
—
|
|
Exhibit
Number
|
Description of Exhibit
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase.
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(1)
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Incorporated herein by reference to Exhibit 3.1 to Verso Corporation’s Registration Statement on Form 8-A filed with the SEC on July 15, 2016.
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(2)
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Incorporated herein by reference to Exhibit 3.2 to Verso Corporation’s Registration Statement on Form 8-A filed with the SEC on July 15, 2016.
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(3)
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Incorporated herein by reference to Exhibit 4.1 to Verso Corporation’s Current Report on Form 8‑K filed with the SEC on July 19, 2016.
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(4)
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Incorporated herein by reference to Exhibit 10.4 to Verso Corporation’s Current Report on Form 8‑K filed with the SEC on July 19, 2016.
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(5)
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Furnished herewith.
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Date: November 7, 2018
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VERSO CORPORATION
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By:
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/s/ B. Christopher DiSantis
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B. Christopher DiSantis
President, Chief Executive Officer and Director
(Principal Executive Officer)
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By:
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/s/ Allen J. Campbell
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Allen J. Campbell
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
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