1296435--3/13/2006--Neenah_Paper

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Risks Related to Our Business and Industry Our pulp business operates in a cyclical industry which can have an impact on our operating results. Pulp Price Trends Northern Bleached Softwood Kraft Pulp If we are unable to effectively respond to the significant challenges faced by our pulp business, which has experienced losses in recent periods, our financial condition and results of operations will be materially and adversely affected. Fluctuations in currency exchange rates could adversely affect our results. U.S. $/Canadian $ Exchange Rate History The availability of and prices for raw materials and energy will significantly impact our business. Our mills may experience unexpected or prolonged shutdowns, which would adversely affect our financial position and results of operations. The results of our pulp business will depend on our pulp supply agreement with Kimberly-Clark and our ability to supply other customers. Our business will suffer if we are unable to effectively respond to decreased demand for some of our products. The terms of our pulp supply agreement with Kimberly-Clark may require us, at times, to sell pulp at prices that are lower than the prices at which we may be able to sell pulp to other customers. Our activities are subject to extensive government regulation, which could increase our costs, cause us to incur liabilities and adversely affect the manufacturing and marketing of our products. The outcome of legal actions and claims may adversely affect us. We have significant pension liabilities. Labor interruptions would adversely affect our business. Our operating results are likely to fluctuate. We face many competitors, several of which have greater financial and other resources. Risks Relating to Our Indebtedness We incurred significant indebtedness in connection with the Spin-Off, which subjected us to restrictive covenants relating to the operation of our business. Our revolving credit agreement is secured by substantially all of our assets. Our failure to comply with the covenants contained in our revolving credit facility or the indenture governing the notes could result in an event of default that could cause acceleration of our indebtedness. Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more indebtedness, which may increase the risks created by our substantial indebtedness. We may not be able to generate a sufficient amount of cash flow to meet our debt obligations, including the notes. We depend on our subsidiaries to generate cash flow to meet our debt service obligations, including payments on the notes. Risks Related to the Spin-Off and Our Separation from Kimberly-Clark Our historical financial data, prior to the Spin-Off, is not representative of our results as a separate company and, therefore, will not be reliable as an indicator of our future performance. We could incur significant tax liabilities if the Spin-Off becomes a taxable event. We may not realize potential benefits from our separation from Kimberly-Clark. We may not be able to fund our future capital requirements internally or obtain third-party financing. We may experience increased costs resulting from decreased purchasing power, which could decrease our overall profitability.

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1296435--3/13/2006--Neenah_Paper_Inc