10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: June 30, 2013

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 numbers: 333-82084-01

                                           333-82084

PAPERWEIGHT DEVELOPMENT CORP.	APPVION, INC.
(Exact Name of Registrant as Specified in Its Charter)	(Exact Name of Registrant as Specified in Its Charter)
Wisconsin	Delaware
(State or Other Jurisdiction of Incorporation or Organization)	(State or Other Jurisdiction of Incorporation or Organization)
39-2014992	36-2556469
(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)
825 East Wisconsin Avenue, P.O. Box 359, Appleton, Wisconsin	54912-0359
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (920) 734-9841

Indicate by check mark whether each 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 each 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 either of the registrants is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

Large Accelerated filer  ¨    Accelerated filer  ¨    Non-accelerated filer  x    Smaller reporting company  (Do not check if a smaller reporting company)

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 1, 2013, 8,299,610 shares of Paperweight Development Corp. common stock, $.01 par value, were outstanding. There is no trading market for the common stock of Paperweight Development Corp. As of August 1, 2013, 100 shares of Appvion, Inc.’s common stock, $100.00 par value, were outstanding. There is no trading market for the common stock of Appvion, Inc. No shares of Paperweight Development Corp. or Appvion, Inc. were held by non-affiliates.

Documents incorporated by reference: None.

Appvion, Inc. meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.

1

INDEX

	INDEX		Page Number
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)
	a)	Condensed Consolidated Balance Sheets
		Paperweight Development Corp. and Subsidiaries	3
		Appvion, Inc. and Subsidiaries	4
	b)	Condensed Consolidated Statements of Comprehensive Loss
		Paperweight Development Corp. and Subsidiaries	5
		Appvion, Inc. and Subsidiaries	6
	c)	Condensed Consolidated Statements of Cash Flows
		Paperweight Development Corp. and Subsidiaries	7
		Appvion, Inc. and Subsidiaries	8
	d)	Condensed Consolidated Statements of Redeemable Common Stock, Accumulated Deficit and Accumulated Other Comprehensive Income
		Paperweight Development Corp. and Subsidiaries	9
	e)	Condensed Consolidated Statements of Equity
		Appvion, Inc. and Subsidiaries	10
	f)	Notes to Condensed Consolidated Financial Statements	11
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		36
Item 3	Quantitative and Qualitative Disclosures About Market Risk		44
Item 4	Controls and Procedures		44
PART II	OTHER INFORMATION
Item 1	Legal Proceedings		45
Item 1A	Risk Factors		45
Item 6	Exhibits		48
Signatures			49

2

PART 1 – FINANCIAL INFORMATION

Item 1 – Financial Statements (unaudited)

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars in thousands, except share data)
	June 30, 2013			December 29, 2012
ASSETS
Current assets
Cash and cash equivalents	$	6,553		$	1,851
Accounts receivable, less allowance for doubtful accounts of $1,069 and $1,077, respectively		90,997			92,680
Inventories		103,150			94,349
Other current assets		69,676			70,620
Total current assets		270,376			259,500
Property, plant and equipment, net of accumulated depreciation of $620,347 and $607,006, respectively		242,126			243,265
Intangible assets, net		42,697			43,839
Other assets		17,213			14,486
Total assets	$	572,412		$	561,090
LIABILITIES, REDEEMABLE COMMON STOCK, ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Current liabilities
Current portion of long-term debt	$	61,935		$	3,975
Accounts payable		65,807			68,600
Accrued interest		1,169			2,467
Other accrued liabilities		102,491			119,635
Total current liabilities		231,402			194,677
Long-term debt		518,040			511,624
Postretirement benefits other than pension		38,479			38,440
Accrued pension		127,824			137,081
Other long-term liabilities		33,721			32,165
Commitments and contingencies (Note 12)		-			-
Redeemable common stock, $0.01 par value,   shares authorized: 30,000,000,   shares issued and outstanding:  8,299,834 and   8,730,118, respectively		71,940			81,704
Accumulated deficit		(454,533	)		(439,923	)
Accumulated other comprehensive income		5,539			5,322
Total liabilities, redeemable common stock, accumulated       deficit and accumulated other comprehensive income	$	572,412		$	561,090

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

APPVION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars in thousands, except share data)
	June 30, 2013			December 29, 2012
ASSETS
Current assets
Cash and cash equivalents	$	6,553		$	1,851
Accounts receivable, less allowance for doubtful accounts of $1,069 and $1,077, respectively		90,997			92,680
Inventories		103,150			94,349
Other current assets		69,676			70,620
Total current assets		270,376			259,500
Property, plant and equipment, net of accumulated depreciation of $620,347 and $607,006, respectively		242,126			243,265
Intangible assets, net		42,697			43,839
Other assets		17,201			14,474
Total assets	$	572,400		$	561,078
LIABILITIES AND TOTAL EQUITY
Current liabilities
Current portion of long-term debt	$	61,935		$	3,975
Accounts payable		65,807			68,600
Accrued interest		1,169			2,467
Other accrued liabilities		102,491			119,635
Total current liabilities		231,402			194,677
Long-term debt		518,040			511,624
Postretirement benefits other than pension		38,479			38,440
Accrued pension		127,824			137,081
Other long-term liabilities		33,721			32,165
Total liabilities		949,466			913,987
Commitments and contingencies (Note 12)		-			-
Common stock, $100.00 par value,   130,000 shares authorized,   100 shares issued and outstanding		10,500			10,500
Paid-in capital		623,305			623,305
Due from parent		(244,879	)		(237,257	)
Accumulated deficit		(771,531	)		(754,779	)
Accumulated other comprehensive income		5,539			5,322
Total equity		(377,066	)		(352,909	)
Total liabilities and equity	$	572,400		$	561,078

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
(dollars in thousands)
	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Net sales	$	201,500		$	213,901		$	412,334		$	433,531
Cost of sales		148,717			201,257			311,313			411,432
Gross profit		52,783			12,644			101,021			22,099
Selling, general and administrative expenses		32,344			42,176			62,700			76,176
Restructuring		-			1,036			-			26,472
Operating income (loss)		20,439			(30,568	)		38,321			(80,549	)
Other expense (income)
Interest expense		14,788			15,086			29,749			30,093
Debt extinguishment expense		24,767			-			24,767			-
Interest income		-			-			-			(12	)
Foreign exchange (gain) loss		(331	)		1,261			380			994
Other (income) expense		-			(40	)		-			72
Loss before income taxes		(18,785	)		(46,875	)		(16,575	)		(111,696	)
Provision for income taxes		110			75			177			140
Net loss		(18,895	)		(46,950	)		(16,752	)		(111,836	)
Other comprehensive (loss) income
Change in retiree plans		(398	)		(4,254	)		(795	)		(4,782	)
Realized and unrealized (losses) gains on derivatives		(282	)		536			1,012			(769	)
Total other comprehensive (loss) income		(680	)		(3,718	)		217			(5,551	)
Comprehensive loss	$	(19,575	)	$	(50,668	)	$	(16,535	)	$	(117,387	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

APPVION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
(dollars in thousands)
	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Net sales	$	201,500		$	213,901		$	412,334		$	433,531
Cost of sales		148,717			201,257			311,313			411,432
Gross profit		52,783			12,644			101,021			22,099
Selling, general and administrative expenses		32,344			42,176			62,700			76,176
Restructuring		-			1,036			-			26,472
Operating income (loss)		20,439			(30,568	)		38,321			(80,549	)
Other expense (income)
Interest expense		14,788			15,086			29,749			30,093
Debt extinguishment expense		24,767			-			24,767			-
Interest income		-			-			-			(12	)
Foreign exchange (gain) loss		(331	)		1,261			380			994
Other (income) expense		-			(40	)		-			72
Loss before income taxes		(18,785	)		(46,875	)		(16,575	)		(111,696	)
Provision for income taxes		110			75			177			140
Net loss		(18,895	)		(46,950	)		(16,752	)		(111,836	)
Other comprehensive (loss) income
Change in retiree plans		(398	)		(4,254	)		(795	)		(4,782	)
Realized and unrealized (losses) gains on derivatives		(282	)		536			1,012			(769	)
Total other comprehensive (loss) income		(680	)		(3,718	)		217			(5,551	)
Comprehensive loss	$	(19,575	)	$	(50,668	)	$	(16,535	)	$	(117,387	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
(unaudited)
(dollars in thousands)
	June 30, 2013			July 1, 2012
Cash flows from operating activities:
Net loss	$	(16,752	)	$	(111,836	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation		14,073			81,508
Amortization of intangible assets		1,142			1,143
Impaired inventory revaluation		-			11,078
Amortization of financing fees		1,408			1,292
Amortization of bond discount		572			519
Employer 401(k) non-cash matching contributions		1,447			1,798
Foreign exchange loss		393			1,001
Non-cash loss (gain) on hedging		197			(1,350	)
Loss on disposals of equipment		83			630
Non-cash debt refinancing costs		6,668			-
(Increase)/decrease in assets and increase/(decrease) in liabilities:
Accounts receivable		1,760			(6,126	)
Inventories		(8,897	)		(14,282	)
Other current assets		(2,342	)		1,942
Accounts payable and other accrued liabilities		(18,593	)		13,259
Accrued pension		(9,014	)		(16,197	)
Other, net		(1,293	)		15,944
Net cash used by operating activities		(29,148	)		(19,677	)
Cash flows from investing activities:
Proceeds from sale of equipment		6			2
Additions to property, plant and equipment		(10,457	)		(4,385	)
Net cash used by investing activities		(10,451	)		(4,383	)
Cash flows from financing activities:
Payments of senior secured first lien notes payable		(300,710	)		-
Proceeds from first lien term loan		331,650			-
Debt acquisition costs		(6,364	)		-
Payments relating to capital lease obligations		(44	)		(24	)
Proceeds from old revolving line of credit		155,300			136,150
Payments of old revolving line of credit		(159,000	)		(104,000	)
Proceeds from new revolving line of credit		34,600			-
Payments of State of Ohio loans		(654	)		(620	)
Proceeds from municipal debt		-			300
Proceeds from issuance of redeemable common stock		1,651			1,564
Payments to redeem common stock		(10,705	)		(8,559	)
Decrease in cash overdraft		(1,410	)		(4,635	)
Net cash provided by financing activities		44,314			20,176
Effect of foreign exchange rate changes on cash and cash equivalents		(13	)		(7	)
Change in cash and cash equivalents		4,702			(3,891	)
Cash and cash equivalents at beginning of period		1,851			7,241
Cash and cash equivalents at end of period	$	6,553		$	3,350

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

APPVION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
(unaudited)
(dollars in thousands)
	June 30, 2013			July 1, 2012
Cash flows from operating activities:
Net loss	$	(16,752	)	$	(111,836	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation		14,073			81,508
Amortization of intangible assets		1,142			1,143
Impaired inventory revaluation		-			11,078
Amortization of financing fees		1,408			1,292
Amortization of bond discount		572			519
Employer 401(k) non-cash matching contributions		1,447			1,798
Foreign exchange loss		393			1,001
Non-cash loss (gain) on hedging		197			(1,350	)
Loss on disposals of equipment		83			630
Non-cash debt refinancing costs		6,668			-
(Increase)/decrease in assets and increase/(decrease) in liabilities:
Accounts receivable		1,760			(6,126	)
Inventories		(8,897	)		(14,282	)
Other current assets		(2,342	)		1,942
Accounts payable and other accrued liabilities		(21,876	)		9,781
Accrued pension		(9,014	)		(16,197	)
Other, net		(2,725	)		14,156
Net cash used by operating activities		(33,863	)		(24,943	)
Cash flows from investing activities:
Proceeds from sale of equipment		6			2
Additions to property, plant and equipment		(10,457	)		(4,385	)
Net cash used by investing activities		(10,451	)		(4,383	)
Cash flows from financing activities:
Payments of senior secured first lien notes payable		(300,710	)		-
Proceeds from first lien term loan		331,650			-
Debt acquisition costs		(6,364	)		-
Payments relating to capital lease obligations		(44	)		(24	)
Proceeds from old revolving line of credit		155,300			136,150
Payments of old revolving line of credit		(159,000	)		(104,000	)
Proceeds from new revolving line of credit		34,600			-
Payments of State of Ohio loans		(654	)		(620	)
Proceeds from municipal debt		-			300
Due from parent		(4,339	)		(1,729	)
Decrease in cash overdraft		(1,410	)		(4,635	)
Net cash provided by financing activities		49,029			25,442
Effect of foreign exchange rate changes on cash and cash equivalents		(13	)		(7	)
Change in cash and cash equivalents		4,702			(3,891	)
Cash and cash equivalents at beginning of period		1,851			7,241
Cash and cash equivalents at end of period	$	6,553		$	3,350

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE COMMON STOCK,
ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED
(unaudited)
(dollars in thousands, except share data)
	Redeemable Common Stock
	Shares Outstanding		Amount			Accumulated Deficit			Accumulated Other Comprehensive Income
Balance, December 29, 2012	8,730,118		$	81,704		$	(439,923	)	$	5,322
Net loss	-			-			(16,752	)		-
Other comprehensive income	-			-			-			217
Issuance of redeemable common stock	175,659			3,083			-			-
Redemption of redeemable common stock	(605,943	)		(10,705	)		-			-
Accretion of redeemable common stock	-			(2,142	)		2,142			-
Balance, June 30, 2013	8,299,834		$	71,940		$	(454,533	)	$	5,539
Balance, December 31, 2011	9,212,808		$	97,615		$	(299,226	)	$	13,024
Net loss	-			-			(111,836	)		-
Other comprehensive loss	-			-			-			(5,551	)
Issuance of redeemable common stock	218,748			3,352			-			-
Redemption of redeemable common stock	(526,234	)		(8,559	)		-			-
Accretion of redeemable common stock	-			(2,563	)		2,563			-
Balance, July 1, 2012	8,905,322		$	89,845		$	(408,499	)	$	7,473

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

APPVION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
FOR SIX MONTHS ENDED
(unaudited)
(dollars in thousands, except share data)
	Common Stock
	Shares Outstanding		Amount		Paid-in Capital		Due from  Parent			Accumulated Deficit			Accumulated Other Comprehensive Income
Balance, December 29, 2012		100	$	10,500	$	623,305	$	(237,257	)	$	(754,779	)	$	5,322
Net loss		-		-		-		-			(16,752	)		-
Other comprehensive income		-		-		-		-			-			217
Change in due from parent		-		-		-		(7,622	)		-			-
Balance June 30, 2013		100	$	10,500	$	623,305	$	(244,879	)	$	(771,531	)	$	5,539
											-
Balance, December 31, 2011		100	$	10,500	$	623,305	$	(229,100	)	$	(606,328	)	$	13,024
Net loss		-		-		-		-			(111,836	)		-
Other comprehensive loss		-		-		-		-			-			(5,551	)
Change in due from parent		-		-		-		(5,207	)		-			-
Balance, July 1, 2012		100	$	10,500	$	623,305	$	(234,307	)	$	(718,164	)	$	7,473

The accompanying notes are an integral part of these condensed consolidated financial statements.

10

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.       BASIS OF PRESENTATION

In the opinion of management, all adjustments necessary for the fair statement of comprehensive loss for the three and six months ended June 30, 2013 and July 1, 2012, the cash flows for the six months ended June 30, 2013 and July 1, 2012 and financial position at June 30, 2013 and December 29, 2012 have been made. All adjustments made were of a normal recurring nature.

These condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes of Paperweight Development Corp. (“PDC”) and its 100%-owned subsidiaries (collectively the “Company”), which includes the consolidated financial statements of Appvion, Inc., formally known as Appleton Papers Inc., and its 100%-owned subsidiaries (collectively “Appvion”) for each of the three years in the period ended December 29, 2012, which are included in the annual report on Form 10-K for the year ended December 29, 2012. The consolidated balance sheet data as of December 29, 2012, contained within these condensed financial statements, was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

During fourth quarter 2012, the Company adopted mark-to-market accounting for its pension and other postretirement benefit plans. Under mark-to-market accounting, all actuarial gains and losses are immediately recognized in net periodic cost annually in the fourth quarter of each year and whenever a plan is determined to qualify for a remeasurement during a fiscal year and, the market-related value of plan assets used in the cost calculations is equal to fair value. Under the Company’s previous accounting method, a portion of the actuarial gains and losses was deferred in accumulated other comprehensive loss on the Condensed Consolidated Balance Sheet and amortized into future periods. In addition, the previous method smoothed the investment gains and losses of the plan assets over a period of five years. While the Company’s historical policy of recognizing pension and other postretirement benefits expense was considered acceptable under accounting principles generally accepted in the United States, the Company believes this new policy to be preferable as it eliminates the delay in recognizing actuarial gains and losses within operating results. This change will also improve the transparency within the Company’s operating results by immediately recognizing the effects of economic and interest rate trends on plan investments and assumptions in the year these actuarial gains and losses are actually incurred. All prior periods presented were retrospectively adjusted to reflect the period-specific effects of applying the new accounting policy.

In connection with this change in accounting policy for pension and other postretirement benefit plans, the Company also elected to change its method of accounting for certain costs included in inventory. The Company elected to exclude the amount of its pension and other postretirement benefit costs applicable to former employees from inventoriable costs. While the Company’s historical policy of including all pension and other postretirement benefits costs, excluding those charged directly to selling, general and administrative (“SG&A”) expenses, as a component of inventoriable costs was acceptable, it believes the new policy is preferable as inventoriable costs will only include costs that are directly attributable to current employees involved in the production of inventory. All prior periods presented were retrospectively adjusted to reflect the period-specific effects of applying the new accounting policy.

The effect of the accounting policy changes on the previously-reported results for the three and six months ended July 1, 2012 was a $1.9 million reduction in net loss and a $1.7 million reduction in net loss, respectively.

2.       RESTRUCTURING AND OTHER RELATED COSTS

On February 22, 2012, the Company entered into a long-term supply agreement for the purchase of carbonless and thermal base stock for coating at the Company’s converting facilities. Under the terms of the agreement, the supplier will be the exclusive supplier of certain thermal and carbonless base stock used by the Company. The term of the agreement is 15 years and includes successive five-year renewal terms unless either party gives notice of non-renewal.

11

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

In connection with its approval of this supply agreement, the Company’s Board of Directors authorized a plan for the Company to dispose of papermaking assets at its West Carrollton, Ohio facility and move its carbonless coating to the Company’s converting plant in Appleton, Wisconsin. As a result, 314 jobs were eliminated at West Carrollton and 68 jobs added at the Appleton facility. The Company maintains its thermal coating operations at the West Carrollton facility. The Company recorded all associated restructuring expense and other related costs, totaling $106.0 million, during 2012. These include the following for the three and six months ended July 1, 2012 (dollars in thousands):

	For the Three		For the Six		Location on
	Months Ended		Months Ended		Statement of
	July 1, 2012		July 1, 2012		Comprehensive Loss
Employee termination benefits	$	95	$	25,531	Restructuring
Decommissioning expense		941		941	Restructuring
Accelerated depreciation		36,873		62,253	Cost of sales
Revaluation of inventory		1,117		11,078	Cost of sales
Loss on disposal of fixed assets		-		572	Cost of sales
	$	39,026	$	100,375

Of the costs recorded during second quarter 2012, $21.5 million were allocated to the carbonless papers segment and $17.5 million were allocated to the thermal papers segment. Of the costs recorded during the first six months of 2012, $55.2 million were allocated to the carbonless papers segment and $45.2 million were allocated to the thermal papers segment.

The table below summarizes the components of the restructuring reserve included in the Condensed Consolidated Balance Sheets as of June 30, 2013 and December 29, 2012.

	December 29, 2012 Reserve		2013 Additions to Reserve		2013 Utilization			June 30, 2013 Reserve
Exit costs – equipment decommissioning	$	765	$	-	$	(275	)	$	490
Employee termination benefits		18,454		-		(430	)		18,024
	$	19,219	$	-	$	(705	)	$	18,514

Employee termination benefits include severance as well as related benefits and pension costs. At June 30, 2013, $1.5 million of the total restructuring reserve was included in current liabilities and $17.0 million was included in other long-term liabilities. The Company expects any remaining charges for exit costs to be immaterial. It is estimated that cash of approximately $31 million remains to be paid as a result of ceasing papermaking operations at West Carrollton. Of this amount, it is expected that approximately $1 million will be paid during 2013. In addition, approximately $12 million will be disbursed over the next five years as a result of distributions from the Company’s stock fund to former West Carrollton employees terminated as a result of the restructuring. The remaining $18 million may be paid over the next five to 20 years.

12

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

3.       OTHER INTANGIBLE ASSETS

The Company’s intangible assets consist of the following (dollars in thousands):

	As of June 30, 2013				As of December 29, 2012
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable intangible assets:
Trademarks	$	44,665	$	27,324	$	44,665	$	26,275
Patents		7,808		7,808		7,808		7,808
Customer relationships		5,365		2,874		5,365		2,781
Subtotal		57,838	$	38,006		57,838	$	36,864
Unamortizable intangible assets:
Trademarks		22,865				22,865
Total	$	80,703			$	80,703

Amortization expense for the three and six months ended June 30, 2013 was $0.5 million and $1.1 million, respectively. Amortization expense for the three and six months ended July 1, 2012 was $0.5 million and $1.1 million, respectively.

4.       INVENTORIES

Inventories consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Finished goods	$	55,175	$	43,243
Raw materials, work in process, stores and spare parts		47,975		51,106
	$	103,150	$	94,349

Stores and spare parts inventory balances of $15.6 million and $15.9 million at June 30, 2013 and December 29, 2012, respectively, are valued at average cost and are included in raw materials, work in process, stores and spare parts. All other inventories are valued using the first-in, first-out (“FIFO”) method.

5.       PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment balances consist of the following (dollars in thousands):

	June 30, 2013			December 29, 2012
Land and improvements	$	9,634		$	9,634
Buildings and improvements		135,268			134,144
Machinery and equipment		668,257			663,915
Software		36,701			33,643
Capital leases		309			304
Construction in progress		12,304			8,631
		862,473			850,271
Accumulated depreciation		(620,347	)		(607,006	)
	$	242,126		$	243,265

13

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

Depreciation expense for the three and six months ended June 30, 2013 and July 1, 2012 consists of the following (dollars in thousands):

	For the Three		For the Three		For the Six		For the Six
	Months Ended		Months Ended		Months Ended		Months Ended
Depreciation Expense	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Cost of sales	$	6,486	$	45,674	$	12,751	$	80,123
Selling, general and administrative expenses		661		693		1,322		1,385
	$	7,147	$	46,367	$	14,073	$	81,508

Included in the depreciation expense above for the three and six months ended July 1, 2012, the Company recorded $36.9 million and $62.2 million of accelerated depreciation related to the decommissioning of papermaking assets at the West Carrollton, Ohio facility, respectively. These amounts were included in cost of sales on the Company’s Condensed Consolidated Statement of Comprehensive Loss for the three months and six months ended July 1, 2012 and in accumulated depreciation as presented above.

6.       OTHER CURRENT AND NONCURRENT ASSETS

Other current assets consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Environmental indemnification receivable	$	61,717	$	65,000
Other		7,959		5,620
	$	69,676	$	70,620

The environmental indemnification receivables of $61.7 million and $65.0 million, noted above for the periods ended June 30, 2013 and December 29, 2012, respectively, represent an indemnification receivable from Arjo Wiggins Appleton Ltd, now known as Windward Prospects Ltd (“AWA”), as recorded on the Condensed Consolidated Balance Sheet of Paperweight Development Corp. and Subsidiaries and an indemnification receivable from PDC as recorded on the Condensed Consolidated Balance Sheet of Appvion, Inc. and Subsidiaries.

Other noncurrent assets for Paperweight Development Corp. and Subsidiaries consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Deferred debt issuance costs	$	8,642	$	7,736
Other		8,571		6,750
	$	17,213	$	14,486

Other noncurrent assets for Appvion, Inc. and Subsidiaries consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Deferred debt issuance costs	$	8,642	$	7,736
Other		8,559		6,738
	$	17,201	$	14,474

14

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

7.      OTHER ACCRUED LIABILITIES

Other accrued liabilities, as presented in the current liabilities section of the balance sheet, consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Compensation	$	5,480	$	14,800
Trade discounts		12,614		16,796
Workers’ compensation		8,846		4,875
Accrued insurance		1,739		1,896
Other accrued taxes		1,432		1,494
Postretirement benefits other than pension		3,248		3,248
Fox River Liabilities		61,717		65,000
Restructuring reserve		1,486		1,219
Other		5,929		10,307
	$	102,491	$	119,635

8.       NEW ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-04, "Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date." This guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date as the sum of the following: (a) The amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance also requires an entity to disclose the nature and amount of the obligation. ASU 2013-04 is effective for the Company's annual and interim periods beginning after December 15, 2013, though early adoption is permitted, and retrospective application is required for all prior periods presented. The Company is currently evaluating the effects, if any; the adoption will have on its consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This update adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. The updated standard is effective prospectively for the Company's annual and interim periods beginning after December 15, 2012. As required, the Company adopted this guidance beginning in the first quarter ended March 31, 2013 and the disclosures have been included in its condensed consolidated financial statements in Note 18, Accumulated other Comprehensive Income.

In July 2012, the FASB issued ASU No. 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment.” It provides the option to perform a qualitative, rather than quantitative, assessment to determine whether it is more likely than not an indefinite-lived intangible asset is impaired. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, though early adoption is permitted. As required, the Company adopted this guidance beginning in the first quarter ended March 31, 2013, and there was no impact to the Company’s condensed consolidated financial statements as a result of adoption.

In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities”. It expands required disclosures related to the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. It requires disclosure of net and gross positions in covered financial instruments and derivative instruments which are either (1) offset in accordance with ASC Sections 210-20-45 or 815-10-45, or (2) subject to an enforceable netting or other similar arrangement. To clarify the guidance provided in ASU 2011-11, the FASB issued ASU No. 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" in January 2013. It clarifies the scope of the guidance to include derivatives, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to master netting or similar arrangements. The amendments are effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. The Company will be required to adopt this guidance as of its fiscal year beginning December 29, 2013 and is evaluating the effects, if any; the adoption will have on its consolidated financial statements.

15

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

9.      EMPLOYEE BENEFITS

The components of net periodic pension cost associated with the defined benefit pension plans include the following (dollars in thousands):

Pension Benefits	For the Three Months Ended June 30, 2013			For the Three Months Ended July 1, 2012			For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net periodic benefit cost
Service cost	$	1,299		$	977		$	2,598		$	1,954
Interest cost		4,618			4,867			9,236			9,734
Expected return on plan assets		(6,029	)		(5,443	)		(12,058	)		(10,886)
Amortization of prior service cost		121			122			243			244
Net periodic benefit cost	$	9		$	523		$	19		$	1,046

The Company expects to contribute $12.5 million to its defined benefit pension plan in 2013. The Company contributed $8.8 million to the plan during the first six months of 2013.

Certain of the Company’s hourly employees participated in a multi-employer defined benefit plan, the Pace Industry Union-Management Pension Plan (EIN #11-6166763). Participants in this plan included the West Carrollton, Ohio represented manufacturing employees, where the collective bargaining agreement expired April 1, 2012, as well as the represented employees at the Kansas City, Kansas distribution center, where the collective bargaining agreement expired December 31, 2011. As a result of labor contracts ratified in June 2012 and September 2012, by the bargaining employees in Kansas City and West Carrollton, respectively, both groups elected to end their participation in this multi-employer plan and instead participate in the defined benefit pension plan sponsored by the Company. This resulted in a full withdrawal from the multi-employer plan, for which, the Company recorded a $7.0 million expense in third quarter 2012 representing its estimated cost to satisfy its complete withdrawal liability under the terms of the plan’s trust agreement. This was in addition to the $18.0 million partial withdrawal liability recorded during first quarter 2012 due to the workforce reduction at the West Carrollton, Ohio plant resulting from the cessation of papermaking activities. The estimated obligation for the complete withdrawal liability was derived from available information, including but not limited to collective bargaining agreements, plan trust agreements, participation agreements, ERISA statutes, regulations and rulings, discussions with the plan trustee and discussions with legal counsel. Based on the analysis of available information, it is reasonably possible that the Company’s costs to satisfy its withdrawal liability, when ultimately settled with the plan, could range from $16 million up to $54 million, with a payment period extending up to 20 years. The likelihood of an outcome in excess of the $25 million accrued amount is significantly less than other possible outcomes within the range primarily due to plan provisions that implement statutory limits on the amount of annual payments and the maximum number of payment periods.

10.      POSTRETIREMENT BENEFIT PLANS OTHER THAN PENSIONS

The components of other postretirement benefit cost include the following (dollars in thousands):

Other Postretirement Benefits	For the Three Months Ended June 30, 2013			For the Three Months Ended July 1, 2012			For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net periodic benefit cost
Service cost	$	81		$	94		$	162		$	187
Interest cost		375			470			750			940
Amortization of prior service credit		(519	)		(650	)		(1,038	)		(1,300)
Curtailment gain		-			(3,726	)		-			(3,726)
Net periodic benefit income	$	(63)		$	(3,812	)	$	(126	)	$	(3,899)

16

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

11.      LONG-TERM INCENTIVE COMPENSATION

In December 2001, the Company adopted the Appleton Papers Inc. Long-Term Incentive Plan (“LTIP”). Effective January 3, 2010, the Company adopted a long-term restricted stock unit plan ("RSU"). Both plans utilize phantom units. The value of a unit in the LTIP is based on the change in the fair market value of PDC’s common stock under the terms of the employee stock ownership plan (the “ESOP”) between the grant date and the exercise date. The value of a unit in the RSU is based on the value of PDC common stock, as determined by the ESOP trustee. As of June 30, 2013, the fair market value of one share of PDC common stock is $17.85. All units under both the LTIP and RSU plans will vest immediately, and cash payment will be made upon a change in control as defined in the plans.

On January 2, 2013, 160,000 RSU units became fully vested and exercisable. In accordance with the plan, payment for these RSU’s was made on February 22, 2013. During first quarter 2013, 102,245 additional units were granted under the RSU plan. Due to terminations of employment, 3,500 unvested units were forfeited during the first six months of 2013. A balance of 207,925 RSU units remains as of June 30, 2013. Approximately $0.3 million and $0.6 million of expense, related to this plan, was recorded during the three- and six-month periods ended June 30, 2013. Approximately $1.0 million and $1.2 million of expense, related to this plan, was recorded during the three- and six-month periods ended July 1, 2012. During the first three months of 2013, 189,100 additional units were granted under the LTIP plan. Approximately $0.5 million and $0.7 million of expense, related to this plan, was recorded during the three- and six-month periods ended June 30, 2013. Approximately $1.6 million and $1.7 million of expense, related to this plan, was recorded during the three- and six-month periods ended July 1, 2012.

Beginning in 2006, the Company established a nonqualified deferred compensation agreement with each of its non-employee directors. Approximately $0.1 million and $0.2 million was recorded as expense, related to this plan, for each of the three-month periods ended June 30, 2013 and July 1, 2012, respectively. Approximately $0.2 million and $0.3 million was recorded as expense, related to this plan, for each of the six-month periods ended June 30, 2013 and July 1, 2012, respectively.

12.      COMMITMENTS AND CONTINGENCIES

Lower Fox River

 Appvion Removed as a Potentially Responsible Party (“PRP”). On April 10, 2012, the United States District Court for the Eastern District of Wisconsin granted Appvion’s motion for summary judgment and dismissed all claims against Appvion in the enforcement action. The decision establishes that Appvion is no longer a PRP, no longer liable under the federal Comprehensive Environmental Response, Compensation, and Liability Act, (“CERCLA” or “Superfund”), no longer considered a legal successor to NCR’s liabilities, and no longer required to comply with the 106 Order commanding remediation of the Lower Fox River. In addition, on July 3, 2012, the United States District Court for the Eastern District of Wisconsin determined that Appleton Coated Paper Company and NCR did not arrange for the disposal of hazardous waste within the meaning of CERCLA.

 The rulings do not affect Appvion’s rights or obligations to share defense and liability costs with NCR in accordance with the terms of a 1998 agreement and a 2005 arbitration determination (“the Arbitration”) arising out of Appvion’s acquisition of assets from NCR in 1978 while it was a subsidiary of B.A.T Industries Limited (“BAT”). Appvion and BAT have joint and several liability under the Arbitration. Appvion has initiated the dispute resolution procedures outlined in the 1998 agreement. Issues in dispute include the scope of Appvion’s liability under the agreement as well as funding requests and supporting documentation from NCR (the “Dispute Resolution”). The current carrying amount of Appvion’s liability under the Arbitration is $61.7 million, which represents Appvion’s best estimate of amounts to be paid for 2012 and 2013. On June 8, 2012, BAT served AWA with a claim filed in a United Kingdom court, seeking a declaration that BAT is indemnified by AWA from and against any losses relating to the Lower Fox River. On June 26, 2012, BAT served Appvion with the same claim, seeking a declaration that BAT is indemnified by Appvion. Appvion intends to vigorously defend against this claim and has filed an application challenging the jurisdiction of the United Kingdom court.

17

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Prior to the ruling in the above enforcement action, the United States Environmental Protection Agency (“EPA”) and Wisconsin Department of Natural Resources (“DNR”) claimed Appvion was a PRP with respect to historic discharges of polychlorinated biphenyls (“PCBs”) into the Lower Fox River in Wisconsin. Carbonless paper containing PCBs was manufactured at what is currently the Appleton plant from 1954 until 1971. During this period, wastewater containing PCBs was discharged into the Lower Fox River from a publicly-owned treatment works, from the Combined Locks, Wisconsin paper mill and from other local industrial facilities. Wastewater from the Appleton plant was processed through the publicly-owned treatment works. Appvion purchased the Appleton plant and the Combined Locks, Wisconsin paper mill from NCR in 1978, long after the use of PCBs in the manufacturing process was discontinued. The EPA issued an administrative order in November 2007, directing the PRPs to implement the remedial action of the Fox River pursuant to which certain of the PRPs commenced remediation in 2008. The various PRPs, including NCR, the EPA and the DNR continue to contest the scope, extent and costs of the remediation as well as the appropriate basis for determining the parties’ relative shares of the remediation cost.

The rulings also do not affect either of the two indemnification agreements entered in 2001 wherein AWA agreed to indemnify PDC and PDC agreed to indemnify Appvion for costs, expenses and liabilities related to certain governmental and third-party environmental claims (including certain claims under the Arbitration), which are defined in the agreements as the Fox River Liabilities. Appvion has recorded a $61.7 million environmental indemnification receivable as of June 30, 2013.

Estimates of Liability. The accrued Arbitration liability is derived from available information, including consideration of uncertainties regarding the scope and cost of implementing the final remediation plan, the scope of restoration and final valuation of natural resource damage (“NRD”) assessments, the evolving nature of remediation and restoration technologies and governmental policies, NCR’s share of liability relative to other PRPs and the extent of BAT’s performance under the Arbitration. Appvion believes NCR has paid more than its estimated share of the liability based on the assumptions below. Based on the analysis of available information, it is reasonably possible that the Company’s costs to satisfy its Arbitration liability, when ultimately settled, could range from $10 million to $310 million, with a payment period extending beyond ten years. The Company has recorded a liability of $61.7 million at June 30, 2013, which is its best estimate of the probable loss within this range. The Company believes the likelihood of an outcome in the upper end of the range is significantly less than other possible outcomes within the range. Interim legal determinations may periodically obligate NCR (and BAT and Appvion pursuant to the Arbitration) to fund portions of the cleanup costs to extents greater than NCR’s share as finally determined, and in such instances, Appvion may reserve additional amounts (including appropriate reimbursement under its indemnification agreements as discussed below).

The following assumptions were used in evaluating Appvion’s Arbitration liability:

•   As of December 31, 2012, NCR has recorded an estimated liability of $115 million representing its portion of defense and liability costs with respect to the Lower Fox River;

•   Technical analyses contending that discharges from NCR’s former assets represent 8% to 10% of the total PCBs discharged by the PRPs;

•   Appvion’s and BAT’s joint and several responsibility for over half of the claims asserted against NCR and Appvion, based on the Arbitration and the Dispute Resolution;

•   Based on legal analyses and ongoing reviews of publicly-available financial information, Appvion believes that other PRPs will be required, and have adequate financial resources, to pay their respective shares of the remediation and NRD claims for the Lower Fox River; and

•   legal fees and other expenses.

Appvion believes its recorded liability reflects its best estimate of expected payments during 2013 under the Arbitration Agreement. While it is reasonably possible that Appvion may be responsible beyond 2013 for amounts under the Arbitration, payments beyond 2013 are not deemed probable because ongoing litigation, continuing negotiation, and the Dispute Resolution process could significantly affect Appvion’s future obligation under the Arbitration.

18

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

AWA Indemnification. Pursuant to two indemnification agreements entered in 2001, AWA agreed to indemnify PDC and PDC agreed to indemnify Appvion for costs, expenses and liabilities related to certain governmental and third-party environmental claims, which are defined in the agreements as the Fox River Liabilities.

Under the indemnification agreements, Appvion is indemnified for the first $75 million of Fox River Liabilities and for amounts in excess of $100 million. During 2008, Appvion paid $25 million to satisfy its portion of the Fox River Liabilities not covered by the indemnification agreement with AWA. As of June 30, 2013, AWA has paid $276.8 million in connection with Fox River Liabilities. At June 30, 2013, PDC’s total indemnification receivable from AWA was $61.7 million, all of which is recorded in other current assets. At June 30, 2013, the total Appvion indemnification receivable from PDC was $61.7 million, all of which is recorded in other current assets.

In March 2008, Appvion received favorable jury verdicts in a state court declaratory judgment relating to insurance coverage of its environmental claims involving the Fox River. A final judgment and order was entered in January 2009. The insurers appealed the final judgment. In June 2010, the Wisconsin Court of Appeals upheld the final judgment. Settlements have been negotiated between the insurers and Appvion. Under the terms of the indemnification agreement, recoveries from insurance are reimbursed to AWA to the extent of its indemnification obligation. During 2010, Appvion recorded an $8.9 million receivable, representing settlements to be received in excess of amounts reimbursable to AWA, in the Consolidated Balance Sheet as of January 1, 2011. During 2011, Appvion received $6.2 million of these funds. During third quarter 2012, an additional environmental expense insurance recovery of $2.2 million was recorded as a separate line item within operating income on the Consolidated Statement of Comprehensive Loss and all remaining funds were received by Appvion in 2012.

The indemnification agreements negotiated with AWA are designed to ensure that Appvion will not be required to fund any of the indemnified costs and expenses in relation to the Fox River Liabilities. This arrangement is working as designed and is expected to continue to protect Appvion with respect to the indemnified costs and expenses, based on Appvion’s review of the financial condition of AWA and estimates of Appvion’s liability. As earlier noted, Appvion’s ultimate liability pursuant to the Arbitration could prove to be significantly larger than the current carrying amount and potentially could exceed the financial capability of AWA. In the event Appvion is unable to secure payment from AWA or its former parent companies, Appvion may be liable for amounts pursuant to the Arbitration and these amounts may be material to Appvion.

West Carrollton

The West Carrollton, Ohio facility operates pursuant to various state and federal permits for discharges and emissions to air and water. As a result of the de-inking of carbonless paper containing PCBs through the early 1970s, there may have been releases of PCBs and volatile organic compounds into the soil in the area of the wastewater impoundments at the West Carrollton facility and low levels of PCBs have been detected in the groundwater immediately under this area. In addition, PCB contamination is present in sediment in the adjacent Great Miami River, but it is believed that this contamination is from a source other than the West Carrollton facility.

Based on investigation and delineation of PCB contamination in soil and groundwater in the area of the wastewater impoundments, the Company believes that it may be necessary to undertake remedial action in the future, although the Company is currently under no obligation to do so. The Company has not had any discussions or communications with any federal, state or local agencies or authorities regarding remedial action to address PCB contamination at the West Carrollton facility. The cost for remedial action, which could include installation of a cap, long-term pumping, treating and/or monitoring of groundwater and removal of sediment in the Great Miami River, was estimated in 2001 to range up to approximately $10.5 million, with approximately $3 million in short-term capital costs and the remainder to be incurred over a period of 30 years. However, costs could exceed this amount if additional contamination is discovered, if additional remedial action is necessary or if the remedial action costs are more than expected.

Because of the uncertainty surrounding the ultimate course of action for the West Carrollton facility property, the Great Miami River remediation and the Company’s share of these remediation costs, if any, and since the Company is currently under no obligation to undertake remedial action in the future, no provision has been recorded in its financial statements for estimated remediation costs. In conjunction with the acquisition of PDC by the ESOP in 2001, and as limited by the terms of the purchase agreement, AWA agreed to indemnify the Company for 50% of all environmental liabilities at West Carrollton up to $5.0 million and 100% of all such environmental costs exceeding $5.0 million. In addition, the former owners and operators of the West Carrollton facility may be liable for all or part of the cost of remediation of historic PCB contamination.

19

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Other

From time to time, the Company may be subject to various demands, claims, suits or other legal proceedings arising in the ordinary course of business. A comprehensive insurance program is maintained to provide a measure of financial protection against such matters, though not all such exposures are, or can be, addressed by insurance. Estimated costs are recorded for such demands, claims, suits or proceedings of this nature when reasonably determinable. The Company has successfully defended such claims, settling some for amounts which are not material to the business and obtaining dismissals in others. While the Company will vigorously defend itself and expects to prevail in any similar cases that may be brought against it in the future, there can be no assurance that it will be successful.

Except as described above, and assuming the Company’s expectations regarding defending such demands, claims, suits or other legal or regulatory proceedings prove accurate, the Company does not believe that any pending or threatened demands, claims, suits or other legal proceedings will have, individually or in the aggregate, a materially adverse effect on its business, financial condition and results of operations or cash flows. 

13.      EMPLOYEE STOCK OWNERSHIP PLAN

The Company’s matching contributions charged to expense were $0.6 million and $1.1 million for the three-month periods ended June 30, 2013 and July 1, 2012, respectively. The Company’s matching contributions charged to expense were $1.4 million and $1.8 million for the six-month periods ended June 30, 2013 and July 1, 2012, respectively. As a result of hardship withdrawals, required diversifications and employee terminations, 605,943 shares of PDC redeemable common stock were repurchased during the first six months of 2013 at an aggregate price of approximately $10.7 million. During the same period, the ESOP trustee purchased 94,067 shares of PDC redeemable common stock for an aggregate price of $1.6 million using pre-tax deferrals, rollovers and loan payments made by employees, while the Company’s matching contributions for this same period resulted in an additional 81,592 shares of redeemable common stock being issued. As a result of hardship withdrawals, required diversifications and employee terminations, 526,234 shares of PDC redeemable common stock were repurchased during the first six months of 2012 at an aggregate price of approximately $8.6 million. During the same period, the ESOP trustee purchased 104,201 shares of PDC redeemable common stock for an aggregate price of $1.6 million using pre-tax deferrals, rollovers and loan payments made by employees, while the Company’s matching contributions for this same period resulted in an additional 114,547 shares of redeemable common stock being issued.

In accordance with ASC 480, “Distinguishing Liabilities from Equity,” redeemable equity securities are required to be accreted so the amount in the balance sheet reflects the estimated amount redeemable at the earliest redemption date based upon the redemption value at each period-end. Redeemable common stock is being accreted to the earliest redemption date, mandated by federal law, based upon the estimated fair market value of the redeemable common stock as of June 30, 2013. As of this date, the fair market value of one share of PDC common stock was $17.85. For several semi-annual periods prior to year-end 2010, stock valuations resulted in decreases to the stock price. The impact of these reductions caused the Company to reduce redeemable common stock accretion by $2.1 million for the six months ended June 30, 2013. Based upon the estimated fair value of the redeemable common stock, an ultimate redemption liability of approximately $148 million has been determined. The redeemable common stock recorded book value as of June 30, 2013, was $72 million.

Similarly, redeemable common stock accretion was reduced by $2.6 million for the six months ended July 1, 2012. Based upon the estimated fair value of the redeemable common stock, an ultimate redemption liability of approximately $167 million was determined. The recorded book value of the redeemable common stock as of July 1, 2012, was $90 million.

20

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

14.      DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company selectively uses financial instruments to manage some market risks from changes in foreign currency exchange rates or commodity prices. The fair values of all derivatives are recorded in the Condensed Consolidated Balance Sheets. The change in a derivative’s fair value is recorded each period in current earnings or accumulated other comprehensive income, depending on whether the derivative is designated and qualifies as part of a hedge transaction and, if so, the type of hedge transaction.

The Company selectively hedges forecasted transactions that are subject to foreign currency exchange exposure by using forward exchange contracts. These instruments are designated as cash flow hedges and are recorded in the Condensed Consolidated Balance Sheet at fair value using Level 2 observable market inputs. The fair value of foreign currency forward contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward note, also deemed to be categorized as Level 2. The effective portion of the contracts’ gains or losses due to changes in fair value is initially recorded as a component of accumulated other comprehensive income and is subsequently reclassified into earnings when the underlying transactions occur and affect earnings or if it becomes probable the forecasted transactions will not occur. These contracts are highly effective in hedging the variability in future cash flows attributable to changes in currency exchange rates. The notional amount of foreign exchange contracts used to hedge foreign currency transactions was $18.6 million as of June 30, 2013. These contracts have settlement dates extending through December 2013.

The Company selectively hedges forecasted commodity transactions that are subject to pricing fluctuations by using collar contracts to manage risks associated with market fluctuations in energy prices. These contracts are recorded in the Condensed Consolidated Balance Sheet at fair value using Level 2 observable market inputs based on the New York Mercantile Exchange as measured on the last trading day of the accounting period and compared to the collar price. The contracts’ gains or losses due to changes in fair value are recorded in current period earnings. At June 30, 2013, the hedged volumes of these contracts totaled 613,970 MMBTU (Million British Thermal Units) of natural gas. The contracts have settlement dates extending through December 2013.

The Company selectively hedges forecasted commodity transactions that are subject to pricing fluctuations by using swap contracts to manage risks associated with market fluctuations in pulp prices. During first quarter 2012, there were two pulp swap contracts in place. The first swap had a hedge volume of 2,000 tons of pulp and was settled in February 2012. It was not designated as a hedge, and therefore, gains or losses due to changes in fair value were recorded in current period earnings. The second pulp hedge was designated as a cash flow hedge of forecasted pulp purchases, and therefore, the change in the effective portion of the fair value of the hedge was deferred in accumulated other comprehensive income until the inventory containing the pulp was sold. This pulp hedge was settled as of September 30, 2012. As of June 30, 2013, there were no swap contracts in place.

The following table presents the location and fair values of derivative instruments included in the Company’s Condensed Consolidated Balance Sheets (dollars in thousands):

Designated as a Hedge	Balance Sheet Location	June 30, 2013		December 29, 2012
Foreign currency exchange derivatives	Other current liabilities	$	141	$	1,014
Not Designated as a Hedge
Natural gas collar	Other current liabilities		23		43

21

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

The following table presents the location and amount of losses (gains) on derivative instruments and related hedge items included in the Company’s Condensed Consolidated Statement of Comprehensive Loss for the three and six months ended June 30, 2013 and July 1, 2012 and (gains) losses initially recognized in accumulated other comprehensive income in the Condensed Consolidated Balance Sheets at the period-ends presented (dollars in thousands):

Designated as a Hedge	Statement of Comprehensive Loss Location	For the Three Months  Ended June 30, 2013		For the Three Months Ended July 1, 2012	For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Foreign currency exchange derivatives	Net sales	$	184	$                                         (987)	$	291	$	(1,583)
Losses (gains) recognized in accumulated other comprehensive income						119		(1,549)
Pulp fixed swap	Cost of sales		-	197		197		394
Pulp fixed swap	Other (income) expense		-	(40)		-		72
Losses recognized in accumulated other comprehensive income						-		558
Not Designated as a Hedge
Natural gas collar/fixed swap	Cost of sales		144	(83)		(20)		268
Pulp fixed swap	Cost of sales		-	-		-		10

For a discussion of the fair value of financial instruments, see Note 16, Fair Value Measurements.

15.      LONG-TERM OBLIGATIONS

Long-term obligations, excluding capital lease obligations, consist of the following (dollars in thousands):

	June 30, 2013			December 29, 2012
Old revolving credit facility at approximately 4.25%	$	-		$	3,700
New revolving credit facility at approximately 5.00%		34,600			-
Secured variable rate industrial development bonds, 0.3% average interest rate at June 30, 2013, $2,650 due in 2013 and $6,000 due in 2027		8,650			8,650
State of Ohio assistance loan at 6%, approximately $100 due monthly and final payment due May 2017		4,700			5,210
State of Ohio loan at 3%, approximately $30 due monthly and final payment due May 2019		1,857			2,002
Columbia County, Wisconsin municipal debt due December 2019		300			300
Senior subordinated notes payable at 9.75%, due June 2014		32,195			32,195
Senior secured first lien notes payable at 10.5%, due June 2015		4,290			305,000
Unamortized discount on 10.5% senior secured first lien notes payable, due June 2015		(37	)		(3,224	)
Second lien notes payable at 11.25%, due December 2015		161,766			161,766
First lien term loan at 5.75%, due June 2019		335,000			-
Unamortized discount on first lien term loan, due June 2019		(3,346	)		-
		579,975			515,599
Less obligations due within one year		(61,935	)		(3,975	)
	$	518,040		$	511,624

22

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

On June 28, 2013, Appvion completed a voluntary refinancing of a portion of its debt to extend debt maturities, reduce interest costs and increase financial flexibility and liquidity options. The refinancing included the execution of a new credit agreement providing for a $100 million five-year revolving line of credit due June 2018 and a $335 million first lien term loan due June 2019. The new line of credit replaced the five-year, $100 million revolving credit facility due February 2015. The new revolving credit facility provides for up to $100 million of revolving loans including a letter of credit sub-facility of up to $25 million and a swing line sub-facility of up to $5 million. Appvion’s borrowings under the revolving credit facility will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum.

Proceeds from the $335 million first lien term loan, less expenses and discounts, were $326.3 million. These proceeds were used to redeem $300.7 million of the 10.5% senior secured first lien notes due June 2015, pay $1.1 million of interest due on the notes, pay $18.1 million of note premiums and costs associated with the note redemption, repay $6.0 million of the old revolver and pay $0.4 million of interest and fees due on the old revolver. The $18.1 million is included in debt extinguishment expense on the Condensed Consolidated Statement of Comprehensive Loss for the three and six months ended June 30, 2013. Also as a result of the refinancing, $6.7 million of unamortized deferred debt issuance costs and original issue discount associated with the redeemed senior secured first lien notes and old revolver were written off and included in debt extinguishment expense.

The first lien term loan will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum. On July 30, 2013, Appvion fixed the interest rate at 7.24% on $100.0 million of this variable rate debt using an interest swap contract with a forward start date of September 14, 2014 and a maturity date of June 28, 2019. The term loan will amortize in equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal amount, with the balance payable on June 28, 2019. Also, within five business days after the year-end financial statements have been filed, Appvion shall prepay an aggregate principal amount of the term loan equal to the excess, if any, of (a) 50% of defined excess cash flow, provided that such percentage shall be reduced to (1) 25% based upon Appvion achieving a consolidated leverage ratio of less than 3.50 to 1.0 but greater than or equal to 2.50 to 1.0 and (2) 0% based upon Appvion achieving a consolidated leverage ratio of less than 2.50 to 1.0 minus (b) the aggregate amount of all prepayments of the revolving credit line which constitute permanent reductions of the revolving credit facility and all optional prepayments of the first lien term loan made during the year.

On July 31, 2013, Appvion redeemed the remaining $4.3 million of 10.5% senior secured first lien notes due June 2015, plus interest and $0.3 million of debt extinguishment expense.

The new credit agreement ranks senior in right of payment to all existing and future subordinated indebtedness of Appvion and is secured by security interests in substantially all of the property and assets of Appvion and the debt guarantors. As noted above, the maturity date of the revolving credit facility is June 28, 2018 and the maturity date of the first lien term loan is June 28, 2019. If any amount of the second lien notes remains outstanding on June 30, 2015, then the maturity date of the revolving credit facility shall automatically be deemed to be June 30, 2015 and if any amount of the second lien notes remains outstanding on September 15, 2015, the maturity date of the first lien term loan shall automatically be deemed to be September 15, 2015. The new credit agreement is unconditionally, and jointly and severally, guaranteed by PDC and Appvion Canada, Ltd. It contains affirmative and negative covenants customary for similar credit facilities, which among other things, requires Appvion to meet a minimum fixed charge coverage ratio under certain circumstances and restricts Appvion’s ability and the ability of Appvion’s subsidiaries, subject to certain exceptions, to incur additional indebtedness and liens, engage in sale and leaseback transactions, make investments, make loans and advances, transact certain asset sales, engage in mergers, acquisitions, consolidations, liquidations and dissolutions, pay dividends or make other payments in respect of equity interests and other restricted payments, engage in certain transactions with affiliates, limit capital expenditures and make prepayments, redemptions and repurchases of other indebtedness.

During the first six months of 2013, the Company made mandatory debt repayments of $0.7 million, plus interest, on its State of Ohio loans. Prior to the refinancing, Appvion had borrowed an additional $36.9 million, net, from the old revolving credit facility. This was repaid in full with $6.0 million of proceeds from the $335 million first lien term loan and $34.6 million of borrowing from the new revolving credit facility. As of June 30, 2013, the outstanding balance on the new revolving line of credit was $34.6 million. In addition, approximately $15.7 million of the new revolving credit facility was used to support outstanding letters of credit.

23

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

During March 2012, the Company received the proceeds of a $0.3 million note issued to Appvion, Inc. by Columbia County, Wisconsin.

The first lien notes and the second lien notes, as amended, contain covenants that restrict Appvion’s ability and the ability of Appvion’s other guarantors to sell assets or merge or consolidate with or into other companies; borrow money; incur liens; pay dividends or make other distributions; make other restricted payments and investments; place restrictions on the ability of certain subsidiaries to pay dividends or other payments to Appvion; enter into sale and leaseback transactions; amend particular agreements relating to the transaction with former parent AWA and the ESOP; and enter into transactions with certain affiliates. These covenants are subject to important exceptions and qualifications set forth in the indenture governing the 11.25% second lien notes due 2015, as amended.

The senior subordinated notes, as amended, are unconditionally guaranteed by PDC and Rose Holdings Limited, subject to certain limitations.

The Company was in compliance with all debt covenants at June 30, 2013, and is forecasted to remain compliant for the next 12 months. The Company’s ability to comply with the financial covenants in the future depends on achieving forecasted operating results and operating cash flows. The Company’s failure to comply with its covenants, or an assessment that it is likely to fail to comply with its covenants, could lead the Company to seek amendments to, or waivers of, the financial covenants. The Company cannot provide assurance that it would be able to obtain any amendments to or waivers of the covenants. In the event of non-compliance with debt covenants, if the lenders will not amend or waive the covenants, the debt would be due and the Company would need to seek alternative financing. The Company cannot provide assurance that it would be able to obtain alternative financing. If the Company were not able to secure alternative financing, this would have a material adverse impact on the Company.

16.      FAIR VALUE MEASUREMENTS

The carrying amount (including current portions) and estimated fair value of certain of the Company’s recorded financial instruments are as follows (dollars in thousands):

	June 30, 2013				December 29, 2012
	Carrying		Fair		Carrying		Fair
Financial Instruments	Amount		Value		Amount		Value
Senior subordinated notes payable	$	32,195	$	32,195	$	32,195	$	32,356
Senior secured first lien notes payable		4,253		4,515		301,776		319,883
Second lien notes payable		161,766		179,560		161,766		175,516
First lien term loan		331,654		331,654		-		-
Revolving credit facility		34,600		34,600		3,700		3,700
State of Ohio loans		6,557		6,557		7,212		7,212
Columbia County, Wisconsin municipal debt		300		300		300		300
Industrial development bonds		8,650		8,650		8,650		8,650
	$	579,975	$	598,031	$	515,599	$	547,617

The senior subordinated notes payable are not regularly traded in public markets so fair value was determined using Level 2 observable market inputs including pricing for similar debt. The senior secured first lien notes payable and the second lien notes payable are traded regularly in public markets and therefore, the fair value was determined using Level 1 inputs based on quoted market prices. The first lien term loan is not traded in public markets though, since it was executed on June 28, 2013, the fair value of this debt is equal to its carrying value. The fair value of the State of Ohio loans was determined using Level 2 observable market inputs including current rates for financial instruments of the same remaining maturity and similar terms. The industrial development bonds have a variable interest rate that reflects current market terms and conditions.

Due to their short-term nature, the carrying values of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of fair value as of June 30, 2013 and December 29, 2012.

24

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

17.      SEGMENT INFORMATION

The Company’s reportable segments are as follows: carbonless papers, thermal papers and Encapsys®. Management evaluates the performance of the segments based primarily on operating income (loss). Items excluded from the determination of segment operating income (loss) are unallocated corporate charges, interest income, interest expense, debt extinguishment expense, foreign exchange (gain) loss and other (income) expense. The Company does not allocate total assets internally in assessing operating performance and does not track capital expenditures by segment. Net sales, operating income (loss) and depreciation and amortization, as determined by the Company for its reportable segments, are as follows (dollars in thousands):

	For the Three Months Ended			For the Three Months Ended			For the Six Months Ended			For the Six Months Ended
Net sales	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Carbonless papers	$	88,287		$	106,329		$	178,027		$	219,876
Thermal papers		104,828			99,579			217,394			198,412
		193,115			205,908			395,421			418,288
Encapsys		12,950			12,865			26,068			26,194
Intersegment (A)		(4,565	)		(4,872	)		(9,155	)		(10,951	)
Total	$	201,500		$	213,901		$	412,334		$	433,531
Operating income (loss)
Carbonless papers	$	8,889		$	(13,495	)	$	19,683		$	(40,750	)
Thermal papers		12,104			(8,279	)		18,530			(30,061	)
		20,993			(21,774	)		38,213			(70,811	)
Encapsys		3,254			2,932			6,690			5,074
Unallocated corporate charges		(3,127	)		(11,026	)		(5,191	)		(13,171	)
Intersegment (A)		(681	)		(700	)		(1,391	)		(1,641	)
Total	$	20,439		$	(30,568	)	$	38,321		$	(80,549	)
Depreciation and amortization (B)
Carbonless papers	$	3,851		$	25,603		$	7,506		$	44,879
Thermal papers		3,354			20,577			6,709			35,982
		7,205			46,180			14,215			80,861
Encapsys		497			743			964			1,754
Unallocated corporate charges		17			16			36			36
Total	$	7,719		$	46,939		$	15,215		$	82,651

(A)   Intersegment represents the portion of the Encapsys segment financial results relating to microencapsulated products provided internally for the production of carbonless papers.

(B)   Depreciation and amortization are allocated to the reportable segments based on the amount of activity provided by departments to the respective product lines in each reportable segment.

25

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

During the three and six months ended July 1, 2012, the Company recorded $39.0 million and $100.4 million in restructuring expense and other costs related to the ceasing of papermaking operations at the West Carrollton, Ohio facility (see Note 2, Restructuring and Other Related Costs). The operating loss of the carbonless papers segment for the three and six months ended July 1, 2012 included $21.5 million and $55.2 million, respectively, of restructuring and other related charges and $17.5 million and $45.2 million, respectively, was allocated to the thermal papers segment. Unallocated corporate charges for the three and six months ended July 1, 2012 included $6.5 million and $6.9 million, respectively, of transaction costs for a discontinued business combination.

Of the $39.0 million and $100.4 million of restructuring and other related charges recorded during the three and six months ended July 1, 2012, $36.9 million and $62.2 million, respectively, was related to accelerated depreciation of the decommissioned papermaking assets. The carbonless papers segment was charged with $20.3 million and $34.2 million of this depreciation, respectively. The thermal papers segment was charged with $16.6 million and $28.0 million of this depreciation, respectively.

18.      ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in accumulated other comprehensive income by component for the six months ended June 30, 2013 are as follows (dollars in thousands):

	Change in			Hedging
	Retiree Plans			Activities			Total
Balance, December 29, 2012	$	6,453		$	(1,131	)	$	5,322
Other comprehensive income before reclassifications		-			524			524
Amounts reclassified from accumulated other comprehensive income		(795	)		488			(307	)
Net other comprehensive (loss) income		(795	)		1,012			217
Balance,  June 30, 2013	$	5,658		$	(119	)	$	5,539

The changes in accumulated other comprehensive income by component for the six months ended July 1, 2012 were as follows (dollars in thousands):

	Change in			Hedging
	Retiree Plans			Activities			Total
Balance, December 31, 2011	$	11,265		$	1,759		$	13,024
Other comprehensive income before reclassifications		-			420			420
Amounts reclassified from accumulated other comprehensive income		(4,782	)		(1,189	)		(5,971	)
Net other comprehensive loss		(4,782	)		(769	)		(5,551	)
Balance,  July 1, 2012	$	6,483		$	990		$	7,473

All amounts presented are net of tax.

26

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

AND APPVION, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Details about these reclassifications are as follows (dollars in thousands):

	Amounts Reclassified from
	Accumulated Other
	Comprehensive Income
Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended June 30, 2013			For the Three Months Ended July 1, 2012			For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012			Affected Line Item in Consolidated Statements of Comprehensive Loss
Changes in retiree plans
Amortization of prior service credit	$	398		$	4,254		$	795		$	4,782	(a)
Hedging activities
Foreign exchange contracts	$	(184	)	$	987		$	(291	)	$	1,583		Net sales
Commodity contracts		-			(197	)		(197	)		(394	)	Cost of sales
	$	(184	)	$	790		$	(488	)	$	1,189
Total reclassifications for the period	$	214		$	5,044		$	307		$	5,971
(a) These accumulated other comprehensive income components are included in the computation of net periodic pension
cost. See Note 9, Employee Benefits, and Note 10, Postretirement Benefit Plans other than Pensions.

All amounts presented are net of tax.

19.      GUARANTOR FINANCIAL INFORMATION

Appvion (the “Issuer”) has issued senior subordinated notes, as amended, which are guaranteed by PDC (the “Parent Guarantor”), as well as by Rose Holdings Limited, a 100%-owned subsidiary of Appvion (the “Subsidiary Guarantor”).

Presented below is condensed consolidating financial information for the Parent Guarantor, the Issuer, the Subsidiary Guarantor and a 100%-owned non-guarantor subsidiary (the “Non-Guarantor Subsidiary”) as of June 30, 2013 and December 29, 2012, and for the three and six months ended June 30, 2013 and July 1, 2012. This financial information should be read in conjunction with the consolidated financial statements and other notes related thereto.

The first lien notes and the second lien notes, as amended, place restrictions on the subsidiaries of the Issuer that would limit dividend distributions by these subsidiaries.

27

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor Subsidiary			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	-		$	6,083		$	-	$	470		$	-		$	6,553
Accounts receivable, net		-			86,426			-		4,571			-			90,997
Inventories		-			101,802			-		1,348			-			103,150
Due from parent		-			61,717			-		-			(61,717	)		-
Other current assets		61,717			7,716			-		243			-			69,676
Total current assets		61,717			263,744			-		6,632			(61,717	)		270,376
Property, plant and equipment, net		-			242,116			-		10			-			242,126
Investment in subsidiaries		(377,066	)		14,247			-		-			362,819			-
Other assets		12			59,884			-		14			-			59,910
Total assets	$	(315,337	)	$	579,991		$	-	$	6,656		$	301,102		$	572,412
LIABILITIES, REDEEMABLE COMMON STOCK, COMMON STOCK, PAID-IN CAPITAL, DUE FROM PARENT, ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Current liabilities
Current portion of long-term debt	$	-		$	61,935		$	-	$	-		$	-		$	61,935
Accounts payable		-			65,738			-		69			-			65,807
Due to (from) parent and affiliated companies		61,717			9,741			-		(9,741	)		(61,717	)		-
Other accrued liabilities		-			101,579			-		2,081			-			103,660
Total current liabilities		61,717			238,993			-		(7,591	)		(61,717	)		231,402
Long-term debt		-			518,040			-		-			-			518,040
Other long-term liabilities		-			200,024			-		-			-			200,024
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income		(377,054	)		(377,066	)		-		14,247			362,819			(377,054	)
Total liabilities, redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	$	(315,337	)	$	579,991		$	-	$	6,656		$	301,102		$	572,412

28

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 29, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor Subsidiary			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	-		$	1,593		$	-	$	258		$	-		$	1,851
Accounts receivable, net		-			88,111			-		4,569			-			92,680
Inventories		-			92,939			-		1,410			-			94,349
Due from parent		-			65,000			-		-			(65,000	)		-
Other current assets		65,000			5,570			-		50			-			70,620
Total current assets		65,000			253,213			-		6,287			(65,000	)		259,500
Property, plant and equipment, net		-			243,254			-		11			-			243,265
Investment in subsidiaries		(352,909	)		14,216			-		-			338,693			-
Other assets		12			58,298			-		15			-			58,325
Total assets	$	(287,897	)	$	568,981		$	-	$	6,313		$	273,693		$	561,090
LIABILITIES, REDEEMABLE COMMON STOCK, COMMON STOCK, PAID-IN CAPITAL, DUE FROM PARENT, ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Current liabilities
Current portion of long-term debt	$	-		$	3,975		$	-	$	-		$	-		$	3,975
Accounts payable		-			68,574			-		26			-			68,600
Due to (from) parent and affiliated companies		65,000			10,799			-		(10,799	)		(65,000	)		-
Other accrued liabilities		-			119,690			-		2,412			-			122,102
Total current liabilities		65,000			203,038			-		(8,361	)		(65,000	)		194,677
Long-term debt		-			511,624			-		-			-			511,624
Other long-term liabilities		-			207,228			-		458			-			207,686
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income		(352,897	)		(352,909	)		-		14,216			338,693			(352,897	)
Total liabilities, redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	$	(287,897	)	$	568,981		$	-	$	6,313		$	273,693		$	561,090

29

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor Subsidiary		Eliminations			Consolidated
Net sales	$	-		$	410,157		$	-	$	21,837	$	(19,660	)	$	412,334
Cost of sales		-			311,016			-		19,927		(19,630	)		311,313
Gross profit		-			99,141			-		1,910		(30	)		101,021
Selling, general and administrative expenses		-			61,689			-		1,011		-			62,700
Operating income		-			37,452			-		899		(30	)		38,321
Interest expense		-			29,749			-		-		-			29,749
Debt extinguishment expense		-			24,767			-		-		-			24,767
Loss in equity investments		16,752			24			-		-		(16,776	)		-
Other (income) expense		-			(382	)		-		737		25			380
(Loss) income before income taxes		(16,752	)		(16,706	)		-		162		16,721			(16,575	)
Provision for income taxes		-			46			-		131		-			177
Net (loss) income		(16,752	)		(16,752	)		-		31		16,721			(16,752	)
Other comprehensive income
Changes in retirement plans		(795	)		(795	)		-		-		795			(795	)
Realized and unrealized gains on derivatives		1,012			1,012			-		-		(1,012	)		1,012
Total other comprehensive income		217			217			-		-		(217	)		217
Comprehensive (loss) income	$	(16,535	)	$	(16,535	)	$	-	$	31	$	16,504		$	(16,535	)

30

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE SIX MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	434,114		$	-	$	25,556		$	(26,139	)	$	433,531
Cost of sales		-			411,245			-		26,098			(25,911	)		411,432
Gross profit (loss)		-			22,869			-		(542	)		(228	)		22,099
Selling, general and administrative expenses		-			75,145			-		1,031			-			76,176
Restructuring		-			26,472			-		-			-			26,472
Operating loss		-			(78,748	)		-		(1,573	)		(228	)		(80,549	)
Interest expense		-			30,267			-		-			(174	)		30,093
Interest income		-			(12	)		-		(174	)		174			(12	)
Loss in equity investments		111,836			1,779			-		-			(113,615	)		-
Other expense		-			1,002			-		140			(76	)		1,066
Loss before income taxes		(111,836	)		(111,784	)		-		(1,539	)		113,463			(111,696	)
Provision for income taxes		-			52			-		88			-			140
Net loss		(111,836	)		(111,836	)		-		(1,627	)		113,463			(111,836	)
Other comprehensive loss
Changes in retirement plans		(4,782	)		(4,782	)		-		-			4,782			(4,782	)
Realized and unrealized losses on derivatives		(769	)		(769	)		-		-			769			(769	)
Total other comprehensive loss		(5,551	)		(5,551	)		-		-			5,551			(5,551	)
Comprehensive loss	$	(117,387	)	$	(117,387	)	$	-	$	(1,627	)	$	119,014		$	(117,387	)

31

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	200,633		$	-	$	10,630		$	(9,763	)	$	201,500
Cost of sales		-			148,558			-		9,690			(9,531	)		148,717
Gross profit		-			52,075			-		940			(232	)		52,783
Selling, general and administrative expenses		-			31,871			-		473			-			32,344
Operating income		-			20,204			-		467			(232	)		20,439
Interest expense		-			14,788			-		-			-			14,788
Debt extinguishment expense		-			24,767			-		-			-			24,767
Loss in equity investments		18,895			392			-		-			(19,287	)		-
Other (income) expense		-			(868	)		-		440			97			(331	)
(Loss) income before income taxes		(18,895	)		(18,875	)		-		27			18,958			(18,785	)
Provision for income taxes		-			20			-		90			-			110
Net loss		(18,895	)		(18,895	)		-		(63	)		18,958			(18,895)
Other comprehensive loss
Changes in retirement plans		(398	)		(398	)		-		-			398			(398	)
Realized and unrealized losses on derivatives		(282	)		(282	)		-		-			282			(282	)
Total other comprehensive loss		(680	)		(680	)		-		-			680			(680	)
Comprehensive loss	$	(19,575	)	$	(19,575	)	$	-	$	(63	)	$	19,638		$	(19,575	)

32

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	213,735		$	-	$	13,091		$	(12,925	)	$	213,901
Cost of sales		-			201,048			-		13,031			(12,822	)		201,257
Gross profit		-			12,687			-		60			(103	)		12,644
Selling, general and administrative expenses		-			41,643			-		533			-			42,176
Restructuring		-			1,036			-		-			-			1,036
Operating loss		-			(29,992	)		-		(473	)		(103	)		(30,568	)
Interest expense		-			15,165			-		-			(79	)		15,086
Interest income		-			-			-		(79	)		79			-
Loss in equity investments		46,950			883			-		-			(47,833	)		-
Other expense		-			880			-		449			(108	)		1,221
Loss before income taxes		(46,950	)		(46,920	)		-		(843	)		47,838			(46,875	)
Provision for income taxes		-			30			-		45			-			75
Net loss		(46,950	)		(46,950	)		-		(888	)		47,838			(46,950	)
Other comprehensive loss
Changes in retirement plans		(4,254	)		(4,254	)		-		-			4,254			(4,254	)
Realized and unrealized gains on derivatives		536			536			-		-			(536	)		536
Total other comprehensive loss		(3,718	)		(3,718	)		-		-			3,718			(3,718	)
Comprehensive loss	$	(50,668	)	$	(50,668	)	$	-	$	(888	)	$	51,556		$	(50,668	)

33

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent						Subsidiary		Non-Guarantor
	Guarantor			Issuer			Guarantors		Subsidiary			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) income	$	(16,752	)	$	(16,752	)	$	-	$	31		$	16,721		$	(16,752	)
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:
Depreciation and amortization		-			15,214			-		1			-			15,215
Other		-			10,031			-		737			-			10,768
Change in assets and liabilities, net		21,467			(41,510	)		-		(1,615	)		(16,721	)		(38,379	)
Net cash provided (used) by operating activities		4,715			(33,017	)		-		(846	)		-			(29,148	)
Cash flows from investing activities:
Proceeds from sale of equipment		-			6			-		-			-			6
Additions to property, plant and equipment		-			(10,457	)		-		-			-			(10,457	)
Net cash used by investing activities		-			(10,451	)		-		-			-			(10,451	)
Cash flows from financing activities:
Payments of senior secured first lien notes payable		-			(300,710	)		-		-			-			(300,710	)
Proceeds from first lien term loan		-			331,650			-		-			-			331,650
Debt acquisition costs		-			(6,364	)		-		-			-			(6,364	)
Payments relating to capital lease obligations		-			(44	)		-		-			-			(44	)
Proceeds from old revolving line of credit		-			155,300			-		-			-			155,300
Payments of old revolving line of credit		-			(159,000	)		-		-			-			(159,000	)
Proceeds from new revolving line of credit		-			34,600			-		-			-			34,600
Payments of State of Ohio loans		-			(654	)		-		-			-			(654	)
Due to (from) parent and affiliated companies, net		4,339			(5,397	)		-		1,058			-			-
Proceeds from issuance of redeemable common stock		1,651			-			-		-						1,651
Payments to redeem common stock		(10,705	)		-			-		-			-			(10,705	)
Decrease in cash overdraft		-			(1,410	)		-		-			-			(1,410	)
Net cash (used) provided by financing activities		(4,715	)		47,971			-		1,058			-			44,314
Effect of foreign exchange rate changes on cash and cash equivalents		-			(13	)		-		-			-			(13	)
Change in cash and cash equivalents		-			4,490			-		212			-			4,702
Cash and cash equivalents at beginning of period		-			1,593			-		258			-			1,851
Cash and cash equivalents at end of period	$	-		$	6,083		$	-	$	470		$	-		$	6,553

34

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent						Subsidiary		Non-Guarantor
	Guarantor			Issuer			Guarantors		Subsidiary			Eliminations			Consolidated
Cash flows from operating activities:
Net loss	$	(111,836	)	$	(111,836	)	$	-	$	(1,627	)	$	113,463		$	(111,836	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Depreciation and amortization		-			82,649			-		2			-			82,651
Other		-			14,828			-		140			-			14,968
Change in assets and liabilities,    net		117,102			(7,643	)		-		(1,456	)		(113,463	)		(5,460	)
Net cash provided (used) by operating activities		5,266			(22,002	)		-		(2,941	)		-			(19,677	)
Cash flows from investing activities:
Proceeds from sale of equipment		-			2			-		-			-			2
Additions to property, plant and equipment		-			(4,385	)		-		-			-			(4,385	)
Net cash used by investing activities		-			(4,383	)		-		-			-			(4,383	)
Cash flows from financing activities:
Payments relating to capital lease obligation		-			(24	)		-		-			-			(24	)
Proceeds from revolving line of credit		-			136,150			-		-			-			136,150
Payments of revolving line of credit		-			(104,000	)		-		-			-			(104,000	)
Payments of State of Ohio loans		-			(620	)		-		-			-			(620	)
Proceeds from municipal debt		-			300			-		-			-			300
Due to (from) parent and affiliated companies, net		1,729			(4,686	)		-		2,957			-			-
Proceeds from issuance of redeemable common stock		1,564			-			-		-			-			1,564
Payments to redeem common stock		(8,559	)		-			-		-			-			(8,559	)
Decrease in cash overdraft		-			(4,635	)		-		-			-			(4,635	)
Net cash (used) provided by financing activities		(5,266	)		22,485			-		2,957			-			20,176
Effect of foreign exchange rate changes on cash and cash equivalents		-			(7	)		-		-			-			(7	)
Change in cash and cash equivalents		-			(3,907	)		-		16			-			(3,891	)
Cash and cash equivalents at beginning of period		-			6,688			-		553			-			7,241
Cash and cash equivalents at end of period	$	-		$	2,781		$	-	$	569		$	-		$	3,350

35

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

Unless stated to the contrary or the context requires otherwise, all references in this report to the Company refer to Paperweight Development Corp. (“PDC” or “Paperweight”) and its 100%-owned subsidiaries. It includes Appvion, Inc., formerly known as Appleton Papers Inc., and its 100%-owned subsidiaries (collectively “Appvion”).

Overview

This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity of PDC and Appvion for the quarter ended June 30, 2013. This discussion should be read in conjunction with the accompanying condensed consolidated financial statements and related notes. Reference should also be made to the Annual Report on Form 10-K for the year ended December 29, 2012, the consolidated financial statements and related notes included therein.

On June 28, 2013, Appvion completed a voluntary refinancing of a portion of its debt to extend debt maturities, reduce interest costs and increase financial flexibility and liquidity options. The refinancing included the execution of a new credit agreement providing for a $100 million five-year revolving line of credit due June 2018 and a $335 million first lien term loan due June 2019. The new line of credit replaced the five-year, $100 million revolving credit facility due February 2015. The new revolving credit facility provides for up to $100 million of revolving loans including a letter of credit sub-facility of up to $25 million and a swing line sub-facility of up to $5 million. Appvion’s borrowings under the revolving credit facility will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum.

Proceeds from the $335 million first lien term loan, less expenses and discounts, were $326.3 million. These proceeds were used to redeem $300.7 million of the 10.5% senior secured first lien notes due June 2015, pay $1.1 million of interest due on the notes, pay $18.1 million of note premiums and costs associated with the note redemption, repay $6.0 million of the old revolver and pay $0.4 million of interest and fees due on the old revolver. The $18.1 million is included in debt extinguishment expense on the Condensed Consolidated Statement of Comprehensive Loss for the three and six months ended June 30, 2013. Also as a result of the refinancing, $6.7 million of unamortized deferred debt issuance costs and original issue discount associated with the redeemed senior secured first lien notes and old revolver were written off and included in debt extinguishment expense. The first lien term loan will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum. On July 30, 2013, Appvion fixed the interest rate at 7.24% on $100.0 million of this variable rate debt using an interest rate swap contract with a forward start date of September 14, 2014 and a maturity date of June 28, 2019. For further information, see the Cash Flows from Financing Activities in the Liquidity and Capital Resources section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as Note 15, Long-term Obligations, of Notes to Condensed Consolidated Financial Statements.

On July 31, 2013, Appvion redeemed the remaining $4.3 million of 10.5% senior secured first lien notes due June 2015, plus interest and $0.3 million of debt extinguishment expense.

During fourth quarter 2012, the Company adopted mark-to-market accounting for its pension and other postretirement benefit plans. Under mark-to-market accounting, all actuarial gains and losses are immediately recognized in net periodic cost annually in the fourth quarter of each year and whenever a plan is determined to qualify for a remeasurement during a fiscal year and, the market-related value of plan assets used in the cost calculations is equal to fair value. Under the Company’s previous accounting method, a portion of the actuarial gains and losses was deferred in accumulated other comprehensive loss on the Consolidated Balance Sheet and amortized into future periods. In addition, the previous method smoothed the investment gains and losses of the plan assets over a period of five years. While the Company’s historical policy of recognizing pension and other postretirement benefits expense was considered acceptable under accounting principles generally accepted in the United States, the Company believes this new policy to be preferable as it eliminates the delay in recognizing actuarial gains and losses within operating results. This change will also improve the transparency within the Company’s operating results by immediately recognizing the effects of economic and interest rate trends on plan investments and assumptions in the year these actuarial gains and losses are actually incurred. All prior periods presented were retrospectively adjusted to reflect the period-specific effects of applying the new accounting policy. See Note 1, Basis of Presentation, for further details relating to this accounting policy change.

36

In connection with this change in accounting policy for pension and other postretirement benefit plans, the Company also elected to change its method of accounting for certain costs included in inventory. The Company elected to exclude the amount of its pension and other postretirement benefit costs applicable to former employees from inventoriable costs. While the Company’s historical policy of including all pension and other postretirement benefits costs, excluding those charged directly to selling, general and administrative ("SG&A") expenses, as a component of inventoriable costs was acceptable, it believes the new policy is preferable as inventoriable costs will only include costs that are directly attributable to current employees involved in the production of inventory. All prior periods presented were retrospectively adjusted to reflect the period-specific effects of applying the new accounting policy. See Note 1, Basis of Presentation, for further details relating to this accounting policy change.

Financial Highlights

Second quarter 2013 net sales of $201.5 million were $12.4 million, or 5.8%, lower than second quarter 2012 net sales. Overall, second quarter 2013 shipment volumes were approximately 9% lower than the same period last year. Current quarter thermal papers net sales of $104.8 million were $5.2 million, or 5.3%, higher than second quarter 2012 net sales on a volume increase of approximately 7%. Second quarter 2013 carbonless papers sales of $88.3 million were $18.0 million, or 17.0%, lower than prior year net sales for the quarter on a volume decrease of approximately 21%. Over half of the decrease in both net sales and volume was attributable to discontinuing sales into certain non-strategic international markets. Second quarter 2013 Encapsys® total net sales of $13.0 million were flat when compared to second quarter 2012 net sales though external net sales were 4.9% higher than the prior year quarter on flat sales volumes.

As a result of the cessation of papermaking operations in West Carrollton, Ohio, the Company recorded $39.0 million of restructuring expense and other related costs during second quarter 2012. Of this amount, non-cash charges totaling $38.0 million, for accelerated depreciation and inventory revaluation, were recorded in cost of sales. This accounted for a majority of the $52.6 million decrease in second quarter 2013 cost of sales as compared to second quarter 2012. The remaining $1.0 million of second quarter 2012 restructuring expense and other related costs was for employee termination costs and fixed asset decommissioning expense and was recorded as restructuring within SG&A expenses.

Second quarter 2013 SG&A expenses were $9.8 million, or 23.2%, less than the previous year quarter largely due to reduced expense associated with incentive compensation and deferred compensation as well as lower distribution costs. In addition, second quarter 2012 spending included $6.5 million of costs associated with the discontinued business combination transaction.

As a result of the June 2013 voluntary refinancing, the Company recorded $24.8 million of debt extinguishment expense.

The Company recorded a net loss in second quarter 2013 of $18.9 million compared to a net loss of $47.0 million in second quarter 2012.

37

Comparison of Unaudited Results of Operations for the Quarters Ended June 30, 2013 and July 1, 2012

	Paperweight Development Corp. and Subsidiaries and Appvion, Inc. and Subsidiaries
	For the Quarter Ended
	June 30,			July 1,			Increase
	2013			2012			(Decrease)
	(dollars in millions)
Net sales	$	201.5		$	213.9			-5.8	%
Cost of sales		148.7			201.3			-26.1	%
Gross profit		52.8			12.6			319.0	%
Selling, general and administrative expenses		32.4			42.2			-23.2	%
Restructuring		-			1.0			-100.0	%
Operating income (loss)		20.4			(30.6	)		166.7	%
Interest expense, net		14.7			15.1			-2.6	%
Debt extinguishment expense		24.8			-		n		m
Other non-operating (income) expense, net		(0.3	)		1.2		125.0		%
Loss before income taxes		(18.8	)		(46.9	)	59.9		%
Provision for income taxes		0.1			0.1			-
Net loss	$	(18.9	)	$	(47.0	)	59.8		%
Comparison as a percentage of net sales
Cost of sales		73.8	%		94.1	%		-20.3	%
Gross margin		26.2	%		5.9	%		20.3	%
Selling, general and administrative expenses		16.1	%		19.7	%		-3.6	%
Operating margin		10.1	%		-14.3	%		24.4	%
Loss before income taxes		-9.3	%		-21.9	%		12.6	%
Net loss		-9.4	%		-22.0	%		12.6	%

Net sales for second quarter 2013 were $201.5 million, a decrease of $12.4 million, or 5.8%, compared to the prior year period. Though thermal papers net sales were up 5.3%, carbonless papers net sales were down 17.0% and Encapsys sales were flat. Within the paper business, shipment volumes were lower by approximately 9%.

Second quarter 2013 operating income of $20.4 million improved from a second quarter 2012 operating loss of $30.6 million. Second quarter 2012 operating results included $39.0 million of restructuring expense and other costs related to ceasing papermaking operations in West Carrollton, Ohio. This $39.0 million charge included restructuring expense of $1.0 million for employee termination costs and fixed asset decommissioning expense and a $38.0 million non-cash charge to cost of sales for accelerated depreciation and inventory revaluation to lower of cost or market. The Company’s financial results for second quarter 2013 were positively impacted by improved product mix of $1.9 million, $2.3 million of which was in the carbonless segment, and favorable raw materials and utilities pricing of $0.5 million. A $3.4 million reduction in manufacturing costs included lower transition costs related to the 15-year base paper supply agreement, as well as lower depreciation expense, offsetting unfavorable manufacturing operations. This was partially offset by reduced operating income of $3.0 million resulting from lower shipment volumes. Second quarter 2013 SG&A expenses were $9.8 million lower than the previous year quarter due to reduced expense associated with incentive compensation and deferred compensation as well as lower distribution costs. In addition, second quarter 2012 spending included $6.5 million of costs associated with the discontinued business combination transaction.

The Company recorded a net loss in second quarter 2013 of $18.9 million compared to a net loss of $47.0 million in second quarter 2012. In addition to the items noted above, as a result of the June 2013 voluntary refinancing, the Company recorded $24.8 million of debt extinguishment expense. Non-operating income of $0.3 million was recorded during second quarter 2013, compared to $1.2 million of non-operating expense for the same quarter last year, largely due to a $1.6 million swing in foreign currency exchange.

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Comparison of Unaudited Results of Operations for the Six Months Ended June 30, 2013 and July 1, 2012

	Paperweight Development Corp. and Subsidiaries and Appvion, Inc. and Subsidiaries
	For the Six Months Ended
	June 30,			July 1,			Increase
	2013			2012			(Decrease)
	(dollars in millions)
Net sales	$	412.3		$	433.5			-4.9	%
Cost of sales		311.3			411.4			-24.3	%
Gross profit		101.0			22.1			357.0	%
Selling, general and administrative expenses		62.7			76.1			-17.6	%
Restructuring		-			26.5			-100.0	%
Operating income (loss)		38.3			(80.5	)		147.6	%
Interest expense, net		29.7			30.1			-1.3	%
Debt extinguishment expense		24.8			-		n		m
Other non-operating expense, net		(0.4	)		1.0		-60.0		%
Loss before income taxes		(16.6	)		(111.6	)	85.1		%
Provision for income taxes		0.2			0.2			-
Net loss	$	(16.8	)	$	(111.8	)	85.0		%
Comparison as a percentage of net sales
Cost of sales		75.5	%		94.9	%		-19.4	%
Gross margin		24.5	%		5.1	%		19.4	%
Selling, general and administrative expenses		15.2	%		17.6	%		-2.4	%
Operating margin		9.3	%		-18.6	%		27.9	%
Loss before income taxes		-4.0	%		-25.7	%		21.7	%
Net loss		-4.1	%		-25.8	%		21.7	%

 Net sales for the first six months of 2013 were $412.3 million, a decrease of $21.2 million, or 4.9%, compared to the first six months of 2012. Net sales growth of 9.6% within the thermal papers segment, on a shipment volume increase of approximately 11%, partially offset lower net sales and shipment volumes within the carbonless papers business segment and flat net sales and lower shipment volumes of approximately 2% within the Encapsys segment. The Company also recorded a $2.1 million benefit resulting from favorable pricing.

Operating income of $38.3 million was recorded for the first six months of 2013. This compared to an operating loss of $80.5 million for the same period last year. Improved product mix, favorable raw materials and utilities pricing and favorable manufacturing costs, which included lower transition costs related to the 15-year base paper supply agreement, as well as lower depreciation expense, improved current year operating income by $10.1 million. That improvement was partially offset by a $4.7 million reduction of operating income due to lower shipment volumes. The first half 2012 operating loss included $100.4 million of restructuring expense and other costs related to ceasing papermaking operations in West Carrollton, Ohio. Noncash expense of $62.2 million for accelerated depreciation related to the decommissioning of papermaking assets as well as an $11.1 million noncash write-down of papermaking stores and spare parts inventories to lower of cost or market were included in cost of sales. A $0.6 million noncash write-off of construction in progress was also included in cost of sales. Year-to-date 2012 restructuring expense of $26.5 million included $25.6 million of employee termination benefits, including severance, related benefits and pension costs and $0.9 million of decommissioning costs. Year-to-date 2013 SG&A expenses were $13.4 million lower than the same previous year period due to reduced expense associated with incentive compensation, deferred compensation and benefits expense as well as lower distribution costs. In addition, prior year SG&A expenses included $6.9 million of business combination transaction costs.

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The Company reported a net loss of $16.8 million for the first six months of 2013 compared to a net loss of $111.8 million reported last year. The 2013 loss included $24.8 million of debt extinguishment expense recorded as a result of the June 2013 voluntary refinancing. The net loss for the first six months of 2012 included $105.1 million of restructuring expense and other costs related to West Carrollton and the overall transition to the base paper supply agreement, as well as the $6.9 million of business combination transaction costs.

Business Segment Discussion

Second quarter 2013 net sales within the Company’s paper business were $193.1 million or $12.8 million lower than second quarter 2012 net sales. First half 2013 net sales within the Company’s paper business were $395.4 million or $22.9 million lower than the same period last year. Second quarter 2013 operating income of $21.0 million compared to a second quarter 2012 operating loss of $21.8 million. First half 2013 operating income of $38.2 million compared to a first half 2012 operating loss of $70.8 million. The year-on-year operating income variance was the result of the following (dollars in millions):

	For the Three Months Ended June 30, 2013 v.			For the Six Months Ended June 30, 2013 v.
	the Three Months Ended July 1, 2012			the Six Months Ended July 1, 2012
Restructuring and other related costs	$	39.0		$	100.4
Favorable price and mix		1.6			7.7
Favorable raw materials and utilities pricing		.7			3.2
Lower selling, general and administrative expense and other		1.3			2.7
Favorable manufacturing costs		2.9			.3
Lower shipment volumes		(2.7	)		(5.3	)
	$	42.8		$	109.0

Carbonless Papers

• Second quarter 2013 carbonless net sales totaled $88.3 million, a decrease of $18.0 million, or 17.0%, from prior year. Shipment volumes during second quarter 2013 were approximately 21% lower than the same period last year. Over half of this decline in both net sales and volume was the result of the Company’s 2012 decision to discontinue selling carbonless papers into certain non-strategic international markets. Softer markets, especially internationally, contributed to the remainder of the decline. During the first six months of 2013, carbonless net sales totaled $178.0 million, a decrease of $41.9 million, or 19.0% from prior year. On a year-to-date basis, 2013 carbonless shipment volumes were approximately 24% lower than last year. Discontinuing sales into certain non-strategic international markets reduced carbonless shipment volumes by approximately 12% year-to-date. Softer markets, especially internationally, as well as the expected overall downward trend of the carbonless market, contributed to the remainder of the decline. During the first six months of 2013, the negative impact of lower shipment volumes was partially offset by the benefit realized from favorable pricing.

• Second quarter 2013 carbonless papers operating income of $8.9 million compared to a $13.5 million operating loss reported in second quarter 2012. Second quarter 2013 operating results were positively impacted by favorable mix of $2.3 million while last year’s quarter included restructuring and other related costs of $21.5 million. During the first six months of 2013, operating income of $19.7 million was reported compared to a $40.7 million operating loss for the same period in 2012. The prior year six-month operating loss included $55.2 million of restructuring and other related costs.

Thermal Papers

• Second quarter 2013 thermal papers net sales totaled $104.8 million, an increase of $5.2 million, or 5.3%, over the same prior year period. Shipment volumes were up for the period by over 7% when compared to second quarter 2012. Receipt paper volumes grew by approximately 8% over the previous year second quarter. Moreover, demand for tag, label and entertainment (“TLE”) products remains solid and accounted for an increase in shipment volumes of nearly 7%. During the first six months of 2013, thermal papers net sales totaled $217.4 million, an increase of $19.0 million, or 9.6% from prior year. On a year-to-date basis, 2013 thermal shipment volumes were approximately 11% higher than last year, with receipt paper volumes growing by over 15% and TLE volumes increasing 7%.

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• The thermal papers segment recorded operating income of $12.1 million for second quarter 2013. This compared to a second quarter 2012 operating loss of $8.3 million which included $17.5 million of restructuring and other related charges. During the first six months of 2013, operating income of $18.5 million was reported compared to a $30.1 million operating loss for the same period in 2012. The prior year six-month operating loss included $45.2 million of restructuring and other related costs.

Encapsys

• Encapsys second quarter 2013 net sales of $13.0 million were flat when compared to second quarter 2012. Current quarter external net sales were 4.9% higher whereas sales volumes shipped to external markets were flat. Year-to-date 2013 net sales of $26.1 million were also flat compared to the same six-month period last year. Current year-to-date external net sales were 11.0% higher on increased external shipment volumes of nearly 9%.

• Encapsys second quarter 2013 operating income was $3.3 million compared to $2.9 million during the same quarter of 2012. Operating income for the six months ended June 30, 2013 was $6.7 million. During the same period last year, Encapsys reported operating income of $5.1 million. Both current year periods benefited from favorable product mix and favorable manufacturing costs.

Unallocated Corporate Charges

• Unallocated corporate charges totaled $3.1 million for second quarter 2013 and $11.0 million for second quarter 2012. The prior year quarter spending included $6.5 million of discontinued business combination transaction costs. Year-to-date 2013 expense was $5.1 million compared to $13.2 million for the first six months of 2012. Prior year spending included $6.9 million of costs associated with the discontinued business combination transaction.

Liquidity and Capital Resources

Overview. The Company’s primary sources of liquidity and capital resources are cash provided by operations and available borrowings under its revolving credit facility. The Company expects that cash on hand, internally generated cash flow and available credit from its revolving credit facility, will provide the necessary funds for the reasonably foreseeable operating and recurring cash needs (e.g., working capital, debt service, other contractual obligations and capital expenditures). At June 30, 2013, the Company had $6.6 million of cash and approximately $49.7 million of unused borrowing capacity under its revolving credit facility. The revolving credit facility had an outstanding balance of $34.6 million and net debt (total debt less cash) was $573.4 million. Net debt increased $59.7 million since year-end 2012 as significant cash payments during the first six months of 2013 included $29.1 million of debt interest, $23.9 million of refinancing costs, $9.1 million of net redemptions of common stock and $8.8 million of contributions to the pension plan.

The Company was in compliance with all debt covenants at June 30, 2013, and is forecasted to remain compliant for the next 12 months. The Company’s ability to comply with the financial covenants in the future depends on achieving forecasted operating results and operating cash flows. The Company’s failure to comply with its covenants, or an assessment that it is likely to fail to comply with its covenants, could lead the Company to seek amendments to, or waivers of, the financial covenants. The Company cannot provide assurance that it would be able to obtain any amendments to or waivers of the covenants. In the event of non-compliance with debt covenants, if the lenders will not amend or waive the covenants, the debt would be due and the Company would need to seek alternative financing. The Company cannot provide assurance that it would be able to obtain alternative financing. If the Company were not able to secure alternative financing, this would have a material adverse impact on the Company.

Cash Flows from Operating Activities-Paperweight Development Corp. and Subsidiaries. Net cash used by operating activities during the first six months of 2013 was $29.1 million compared to $19.7 million of net cash used during the same six-month period last year. Net loss of $16.8 million, adjusted for non-cash charges, provided $2.6 million in operating cash for the period. Non-cash charges included $15.2 million of depreciation and amortization, $1.4 million of non-cash employer matching contributions to the KSOP and $2.8 million of other non-cash charges. Net loss was also adjusted for $24.8 million of debt extinguishment expense, which included an $18.1 million payment of debt retirement premium, related to the June 2013 voluntary refinancing. An increase in working capital used $28.1 million of cash. A decrease in the pension liability, which included $8.8 million of pension plan contributions, resulted in a $9.0 million net use of cash. Other uses of cash totaled $1.3 million.

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The primary component of the change in working capital was an $18.6 million decrease in accounts payable and other accrued liabilities. During the current year period there was a $9.3 million reduction in accrued compensation largely due to the first quarter payment of bonuses earned in 2012, a $4.2 million reduction in accrued customer rebates due to the payment of rebates earned in 2012, and a $2.9 million payment of vested deferred compensation. Also during the six months ended June 30, 2013, cash was used as inventories increased $8.9 million as a result of seasonal inventory builds and generally softer markets. Other components of the change in working capital were a $1.8 million decrease in accounts receivable as well as a $2.4 million increase in other current assets.

Cash Flows from Operating Activities-Appvion, Inc. and Subsidiaries. Net cash used by operating activities during the first half of 2013 was $33.8 million. Cash used by operating activities during first half 2012 was $24.9 million. As Appvion is the primary operating subsidiary of the Company, a majority of the components of cash flows from operating activities are the same as those discussed above for Paperweight Development Corp. and Subsidiaries. Under an arbitration award with NCR related to remediation of the Lower Fox River, Appvion agreed to share defense and liability costs with NCR and therefore the funding under this agreement is included in operating activities. This is the main driver of the additional changes in cash flows from operating activities.

Cash Flows from Investing Activities-Paperweight Development Corp and Subsidiaries and Appvion, Inc. and Subsidiaries.During the first six months of 2013, $10.5 million of cash was used for investing activities, all of which was for the acquisition of property, plant and equipment. This compares to $4.4 million used during first half 2012, all of which was used for the acquisition of property, plant and equipment.

Cash Flows from Financing Activities-Paperweight Development Corp. and Subsidiaries. Net cash provided by financing activities during first half 2013 was $44.3 million compared to $20.2 million of cash provided during the prior year. During the first six months of 2013, the Company made mandatory debt repayments of $0.7 million, plus interest, on its State of Ohio loans. The Company also borrowed $155.3 million and repaid $159.0 million on its old revolving credit facility, as amended.

First half 2013 proceeds from the issuance of PDC redeemable common stock totaled $1.6 million. The ESOP trustee purchased this stock using pre-tax deferrals, rollovers and loan payments made by employees during the first six months of 2013. Payments to redeem PDC stock were $10.7 million during this same period of 2013.

Cash overdrafts decreased $1.4 million during the first half of 2013. Cash overdrafts represent short-term obligations, in excess of deposits on hand, which have not yet cleared through the banking system. Fluctuations in the balance are a function of quarter-end payment patterns and the speed with which the payees deposit the checks.

On June 28, 2013, Appvion completed a voluntary refinancing of a portion of its debt to extend debt maturities, reduce interest costs and increase financial flexibility and liquidity options. The refinancing included the execution of a new credit agreement providing for a $100 million five-year revolving line of credit due June 2018 and a $335 million first lien term loan due June 2019. The new line of credit replaced the five-year, $100 million revolving credit facility due February 2015. The new revolving credit facility provides for up to $100 million of revolving loans including a letter of credit sub-facility of up to $25 million and a swing line sub-facility of up to $5 million. Appvion’s borrowings under the revolving credit facility will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum.

Proceeds from the $335 million first lien term loan, less expenses and discounts, were $326.3 million. These proceeds were used to redeem $300.7 million of the 10.5% senior secured first lien notes due June 2015, pay $1.1 million of interest due on the notes, pay $18.1 million of note premiums and costs associated with the note redemption, repay $6.0 million of the old revolver and pay $0.4 million of interest and fees due on the old revolver. The $18.1 million is included in debt extinguishment expense on the Condensed Consolidated Statement of Comprehensive Loss for the three and six months ended June 30, 2013. In addition, there was a cash outlay of $6.4 million for debt acquisition costs. As a result of the refinancing, $6.7 million of unamortized deferred debt issuance costs and original issue discount associated with the redeemed senior secured first lien notes and old revolver were written off and included in debt extinguishment expense.

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The first lien term loan will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum. On July 30, 2013, Appvion fixed the interest rate at 7.24% on $100.0 million of this variable rate debt using an interest swap contract with a forward start date of September 14, 2014 and a maturity date of June 28, 2019. The term loan will amortize in equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal amount, with the balance payable on June 28, 2019. Also, within five business days after the year-end financial statements have been filed, Appvion shall prepay an aggregate principal amount of the term loan equal to the excess, if any, of (a) 50% of defined excess cash flow, provided that such percentage shall be reduced to (1) 25% based upon Appvion achieving a consolidated leverage ratio of less than 3.50 to 1.0 but greater than or equal to 2.50 to 1.0 and (2) 0% based upon Appvion achieving a consolidated leverage ratio of less than 2.50 to 1.0 minus (b) the aggregate amount of all prepayments of the revolving credit line which constitute permanent reductions of the revolving credit facility and all optional prepayments of the first lien term loan made during the year.

On July 31, 2013, Appvion redeemed the remaining $4.3 million of 10.5% senior secured first lien notes due June 2015, plus interest and $0.3 million of debt extinguishment expense.

The new credit agreement ranks senior in right of payment to all existing and future subordinated indebtedness of Appvion and is secured by security interests in substantially all of the property and assets of Appvion and the debt guarantors. As noted above, the maturity date of the revolving credit facility is June 28, 2018 and the maturity date of the first lien term loan is June 28, 2019. If any amount of the second lien notes remains outstanding on June 30, 2015, then the maturity date of the revolving credit facility shall automatically be deemed to be June 30, 2015 and if any amount of the second lien notes remains outstanding on September 15, 2015, the maturity date of the first lien term loan shall automatically be deemed to be September 15, 2015. The new credit agreement is unconditionally, and jointly and severally, guaranteed by PDC and Appvion Canada, Ltd. It contains affirmative and negative covenants customary for similar credit facilities, which among other things, requires Appvion to meet a minimum fixed charge coverage ratio under certain circumstances and restricts Appvion’s ability and the ability of Appvion’s subsidiaries, subject to certain exceptions, to incur additional indebtedness and liens, engage in sale and leaseback transactions, make investments, make loans and advances, transact certain asset sales, engage in mergers, acquisitions, consolidations, liquidations and dissolutions, pay dividends or make other payments in respect of equity interests and other restricted payments, engage in certain transactions with affiliates, limit capital expenditures and make prepayments, redemptions and repurchases of other indebtedness.

Cash Flows from Financing Activities-Appvion,  Inc. and Subsidiaries. Net cash provided by financing activities during first half 2013 was $49.0 million compared to cash provided of $25.4 million during the prior year period. As Appvion is the primary operating subsidiary of the Company, a majority of the components of cash flows from financing activities are the same as those discussed above for Paperweight Development Corp. and Subsidiaries. As Appvion is indemnified by PDC for payments made under the arbitration award with NCR related to the remediation of the Lower Fox River, funds due from PDC are recorded as a financing activity. The main driver of the additional changes in cash flows from financing activities is due to this change in due from PDC.

New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-04, "Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date." This guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date as the sum of the following: (a) The amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance also requires an entity to disclose the nature and amount of the obligation. ASU 2013-04 is effective for the Company's annual and interim periods beginning after December 15, 2013, though early adoption is permitted, and retrospective application is required for all prior periods presented. The Company is currently evaluating the effects, if any; the adoption will have on its consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This update adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. The updated standard is effective prospectively for the Company's annual and interim periods beginning after December 15, 2012. As required, the Company adopted this guidance beginning in the first quarter ended March 31, 2013 and the disclosures have been included in its condensed consolidated financial statements in Note 18, Accumulated other Comprehensive Income.

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In July 2012, the FASB issued ASU No. 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment.” It provides the option to perform a qualitative, rather than quantitative, assessment to determine whether it is more likely than not an indefinite-lived intangible asset is impaired. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, though early adoption is permitted. As required, the Company adopted this guidance beginning in the first quarter ended March 31, 2013, and there was no impact to the Company’s condensed consolidated financial statements as a result of adoption.

In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities.” It expands required disclosures related to the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. It requires disclosure of net and gross positions in covered financial instruments and derivative instruments which are either (1) offset in accordance with ASC Sections 210-20-45 or 815-10-45, or (2) subject to an enforceable netting or other similar arrangement. To clarify the guidance provided in ASU 2011-11, the FASB issued ASU No. 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" in January 2013. It clarifies the scope of the guidance to include derivatives, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to master netting or similar arrangements. The amendments are effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. The Company will be required to adopt this guidance as of its fiscal year beginning December 29, 2013 and is evaluating the effects, if any; the adoption will have on its consolidated financial statements.

Item 3—Quantitative and Qualitative Disclosures about Market Risk

For information regarding quantitative and qualitative disclosures about market risk, see the Annual Report on Form 10-K for the year ended December 29, 2012. Other than with respect to the update below, there have been no material changes in the quantitative or qualitative exposure to market risk from that described in the Form 10-K.

Interest Rate Risk. As a result of the June 28, 2013 voluntary refinancing, the Company increased its variable rate debt to $343.7 million. The new $335.0 million first lien term loan will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum. The current annual interest rate charged is 5.75%. On July 30, 2013, Appvion fixed the interest rate at 7.24% on $100.0 million of this variable rate debt using an interest swap contract with a forward start date of September 14, 2014 and a maturity date of June 28, 2019.

Item 4—Controls and Procedures

Paperweight Development Corp. and Subsidiaries

Changes in Internal Controls over Financial Reporting

There have been no changes in PDC’s internal control over financial reporting during PDC’s second quarter 2013 that have materially affected, or are reasonably likely to materially affect, PDC’s internal control over financial reporting.

Disclosure Controls and Procedures

PDC maintains a set of disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely discussion regarding required disclosure. PDC carried out an evaluation, under the supervision and with the participation of management, including the CEO and CFO, of the effectiveness, design and operation of PDC’s disclosure controls and procedures. Based on that evaluation, the CEO and CFO of PDC concluded that its disclosure controls and procedures are effective as of the end of the period covered by this report.

Appvion, Inc. and Subsidiaries

Changes in Internal Controls over Financial Reporting

There have been no changes in Appvion’s internal control over financial reporting during Appvion’s second quarter 2013 that have materially affected, or are reasonably likely to materially affect, Appvion’s internal control over financial reporting.

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Disclosure Controls and Procedures

Appvion maintains a set of disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the CEO and CFO, as appropriate, to allow timely discussion regarding required disclosure. Appvion carried out an evaluation, under the supervision and with the participation of management, including the CEO and CFO, of the effectiveness, design and operation of Appvion’s disclosure controls and procedures. Based on that evaluation, the CEO and CFO of Appvion concluded that its disclosure controls and procedures are effective as of the end of the period covered by this report.

PART II – OTHER INFORMATION

Item 1.     Legal Proceedings

Information regarding legal proceedings is contained in Note 12 to the Condensed Consolidated Financial Statements contained in this report and is incorporated herein by reference.

Item 1A.  Risk Factors

Other than with respect to the updated risk factors below, there have been no material changes in the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 29, 2012.

The Company has a substantial amount of indebtedness outstanding and, as a result, it is operating as a highly leveraged company.

The Company’s total debt at June 30, 2013, was approximately $580 million. For a description of the components of the Company’s debt, as well as discussion of the June 28, 2013 voluntary refinancing of a portion of its debt, see Note 15 of the Notes to Condensed Consolidated Financial Statements. This large amount of indebtedness could:

•         make it more difficult for the Company to satisfy its financial obligations with respect to the revolving credit facility, the first lien term loan, the second lien notes and senior subordinated notes, as amended;

•         require the Company to dedicate a substantial portion of cash flow from operations to payments on indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, acquisitions, research and development or general corporate activities;

•         limit the Company’s ability to obtain additional financing for working capital, capital expenditures, acquisitions, research and development or general corporate purposes and

•         limit the Company’s flexibility in planning for, or reacting to, changes in its businesses and the industries in which it operates.

Furthermore, although the Company’s ability to borrow money is restricted by the terms of its various debt agreements, it may be possible for the Company to incur even more debt and, if it does so, these risks could intensify.

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The Company’s ability to service its debt is dependent on its future operating results and the Company cannot be sure that it will be able to meet its debt obligations as they come due.

The Company’s ability to meet its payment obligations, relating to its indebtedness, is subject to a variety of factors, including, for example, changes in:

•         demand for and selling prices of the Company’s products;

•         competition;

•         costs of raw materials and operating costs;

•         the rate of decline in sales of carbonless paper products;

•         environmental regulations and

•         general economic conditions.

The Company expects to use cash flow from operations to pay its expenses and scheduled interest and principal payments due under its outstanding indebtedness. Its ability to make these payments depends on its future performance, which is affected by financial, business, economic and other factors, many of which the Company cannot control. The recent recession and credit crisis and related turmoil in the global financial system has had and may continue to have an adverse effect on the Company’s business, financial condition, results of operations and cash flows. Consequently, its business may not generate sufficient cash flow from operations in the future and its anticipated growth in revenue and cash flow may not be realized, either or both of which could result in the Company being unable to repay or pay interest on its indebtedness or to fund other liquidity needs. If the Company does not have enough money, it may be required to refinance all or part of its then-existing debt, sell assets or borrow more money. The Company cannot make any assurances that it will be able to accomplish any of these alternatives on terms acceptable to it, or at all. In addition, the terms of existing or future debt agreements, including the first lien term loan, the revolving credit facility and the indentures governing the notes, may restrict the Company from adopting any of these alternatives. The failure to generate sufficient cash flow or to achieve any of these alternatives could significantly adversely affect the value of its indebtedness and its ability to pay the amounts due. In addition, if the Company defaults in the payment of amounts due, it would give rise to an event of default under the note indentures and possible acceleration of amounts due under its outstanding indebtedness. In the event of any acceleration, there can be no assurance that the Company will have enough cash to repay its outstanding indebtedness. On June 28, 2013, the Company completed a voluntary refinancing of a portion of its debt. The indebtedness incurred under the new first lien term loan and revolving line of credit bears interest at variable rates, and therefore if interest rates increase, debt service requirements would increase. On July 30, 2013, Appvion fixed the interest rate at 7.24% on $100.0 million of this variable rate debt using an interest swap contract with a forward start date of September 14, 2014 and a maturity date of June 28, 2019.

The Company has competitors in its various markets and it may not be able to maintain prices and margins for its products.

The Company competes based on a number of factors, including price, product availability, quality and customer service. Additionally, the Company competes with domestic production and imports from Europe and Asia. In 2007, the Company filed antidumping petitions against imports of certain lightweight thermal paper (“LWTP”) from China, Germany and Korea and a countervailing duty petition against such imports from China. In 2008, the U.S Department of Commerce (“Department”) issued its final determination, affirming that certain Chinese producers and exporters of LWTP sold the product in the U.S. at prices below fair value, imposing final duties of 19.77% to 115.29%, and that German producers and exporters sold the product in the U.S. at prices below fair value and imposed final duties on those imports of 6.5%. In addition, for all but one Chinese producer, the Department imposed countervailing duties of between 13.17% and 137.25%. In 2008, the U.S. International Trade Commission (“ITC”) determined the U.S. industry producing LWTP is threatened with material injury due to unfairly traded imports from China and Germany, and final duties went into effect in 2008. These duties do not have a direct impact on the Company’s net income.

A German manufacturer filed an appeal of the ITC determination to the U.S. Court of International Trade (“CIT”). The appeal was decided in favor of the Company in 2009, and the German manufacturer filed a further appeal to the U.S. Court of Appeals for the Federal Circuit (“CAFC”). In 2011, the CAFC remanded the matter for further consideration by the ITC, and the ITC upheld its original determination. In January 2012, the CIT upheld the ITC’s decision on remand, and the German manufacturer filed another appeal of the matter to the CAFC. In January 2013, the CAFC affirmed the decision of the CIT in favor of the Company.

46

In addition, for each of the four 12-month periods following implementation of the final duties, the Company and the German manufacturer have filed requests for administrative review with the Department, seeking to modify the amount of the duties based on the market practices during each respective 12-month period. In 2011, the Department issued a final determination in the first 12-month review period, resulting in a dumping margin of 3.77 percent for imports from the German manufacturer for the period from November 2008 to October 2009. In 2012, the Department issued a final determination in the second 12-month review period, resulting in a dumping margin of 4.33% for imports from the German manufacturer for the period from November 2009 to October 2010. In 2013, the Department issued a final determination in the third 12-month review period, resulting in a dumping margin of 75.36% for imports from the German manufacturer for the period from November 2010 to October 2011. The significant increase in the dumping margin was based on the Department’s finding that the German manufacturer knowingly and intentionally submitted fraudulent responses to the Department. The German manufacturer has appealed the Department’s final determination in the third administrative review. Upon final resolution of the appeals and the fourth administrative review, certain of the duties could be reduced, increased or eliminated.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements. The words “will,” “may,” “should,” “believes,” “anticipates,” “intends,” “estimates,” “expects,” “projects,” “plans,” “seeks” or similar expressions are intended to identify forward-looking statements. All statements in this report other than statements of historical fact, including statements which address the Company’s strategy, future operations, future financial position, estimated revenues, projected costs, prospects, plans and objectives of management and events or developments that it expects or anticipates will occur, are forward-looking statements. All forward-looking statements speak only as of the date on which they are made. They rely on a number of assumptions concerning future events and are subject to a number of risks and uncertainties, many of which are outside the Company’s control, that could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the factors listed under “Item 1A – Risk Factors” in the Annual Report on Form 10-K for the year ended December 29, 2012, as well as in the Quarterly Report on Form 10-Q for the current quarter ended June 30, 2013, which factors are incorporated herein by reference and as updated above. Many of these factors are beyond the Company’s ability to control or predict. Given these uncertainties, undue reliance should not be placed on the forward-looking statements. The Company disclaims any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

47

Item 6 – Exhibits

10.1	Amended and Restated Trust Agreement for the Appvion, Inc. Employee Stock Ownership Trust, effective April 1, 2013, as amended August 7, 2013.
31.1	Certification of Mark R. Richards, Chairman, President and Chief Executive Officer of Appvion, Inc., pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934 as amended.
31.2	Certification of Thomas J. Ferree, Senior Vice President Finance, Chief Financial Officer and Treasurer of Appvion, Inc., pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934 as amended.
31.3	Certification of Mark R. Richards, Chairman, President and Chief Executive Officer of Paperweight Development Corp., pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934 as amended.
31.4	Certification of Thomas J. Ferree, Senior Vice President Finance, Chief Financial Officer and Treasurer of Paperweight Development Corp., pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934 as amended.
32.1	Certification of Mark R. Richards, Chairman, President and Chief Executive Officer of Appvion, Inc., pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Thomas J. Ferree, Senior Vice President Finance, Chief Financial Officer and Treasurer of Appvion, Inc., pursuant to 18 U.S.C. Section 1350.
32.3	Certification of Mark R. Richards, Chairman, President and Chief Executive Officer of Paperweight Development Corp., pursuant to 18 U.S.C. Section 1350.
32.4	Certification of Thomas J. Ferree, Senior Vice President Finance, Chief Financial Officer and Treasurer of Paperweight Development Corp., pursuant to 18 U.S.C. Section 1350.
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	Taxonomy Extension Label Linkbase
101.pre	Taxonomy Extension Presentation Linkbase

48

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.

	Appvion, Inc.  (Registrant)
Date: August 8, 2013	/s/ Thomas J. Ferree
	Thomas J. Ferree
	Senior Vice President Finance, Chief Financial Officer and Treasurer (Signing on behalf of the Registrant and as the Principal Financial Officer)

49

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.

	Paperweight Development Corp. (Registrant)
Date: August 8, 2013	/s/ Thomas J. Ferree
	Thomas J. Ferree
	Senior Vice President Finance, Chief Financial Officer and Treasurer (Signing on behalf of the Registrant and as the Principal Financial Officer)

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EX-10.1

Exhibit 10.1

AMENDED AND RESTATED TRUST AGREEMENT FOR THE

APPLETON PAPERS INC. EMPLOYEE STOCK OWNERSHIP TRUST

(Effective as of April 1, 2013)

TABLE OF CONTENTS

ARTICLE I DEFINITIONS			2
1.1	Code	2
1.2	Committee	2
1.3	Company Stock	2
1.4	Company	2
1.5	ERISA	2
1.6	Independent Trustee	2
1.7	Net Worth	2
1.8	Non-Indemnity Loss	2
1.9	Participant	2
1.10	Participating Company	2
1.11	Plan	2
1.12	Recordkeeper	3
1.13	Trust	3
1.14	Trust Fund	3
1.15	Trustee	3
1.16	Valuation Date	3
ARTICLE II ESTABLISHMENT OF TRUST			3
2.1	Trust Established	3
2.2	Independent Trustee	3
2.3	Limit of Participating Companies’ Interests	3
2.4	Trustee Compensation	3
ARTICLE III MANAGEMENT AND CONTROL OF TRUST FUND ASSETS			4
3.1	Trust Fund	4
3.2	Responsibility of Trustee	4
3.3	Named Fiduciary	5
3.4	General Powers	5
3.5	Exercise of Trustee’s Duties	8
3.6	Plan Administration	8
3.7	Continuation of Powers on Trust Termination	8
ARTICLE IV INVESTMENT OF TRUST FUND			9
4.1	Investment of Cash	9
4.2	Stock Dividends, Splits and Other Capital Reorganizations	9
4.3	Voting of Company Stock	9
4.4	Tender or Exchange Offers	10
4.5	Put Option	10

ARTICLE V EXPENSES			10
ARTICLE VI REMOVAL AND RESIGNATION OF TRUSTEE AND SUCCESSOR TRUSTEE			11
ARTICLE VII AMENDMENT OF TRUST AND TERMINATION OF PLAN			11
7.1	Amendment of Trust	11
7.2	Termination of Plan	11
ARTICLE VIII MISCELLANEOUS			11
8.1	Nonalienation of Benefits	11
8.2	Exclusive Benefit	11
8.3	Effect of Plan	11
8.4	Entire Agreement	12
8.5	Notices	12
8.6	Liability for Predecessor or Successor	12
8.7	Liability for Acts of Others	12
8.8	Indemnification	12
8.9	Controlling Law	14
8.10	Effective Date	14
8.11	Execution in Counterpart	14

AMENDED AND RESTATED TRUST AGREEMENT FOR THE

APPLETON PAPERS INC. EMPLOYEE STOCK OWNERSHIP TRUST

THIS TRUST AGREEMENT (this “Agreement”) is entered into on April 1, 2013 by and between Appleton Papers Inc. (the “Company”) and Reliance Trust Company (the “Trustee”).

WITNESSETH THAT:

WHEREAS, the Company maintains the Plan, which is intended to qualify under Code § 401(a) and is intended to qualify as an employee stock ownership plan within the meaning of Code § 4975(e)(7), for the benefit of its eligible employees and those of a Participating Company;

WHEREAS, the Company has established two trusts for the purpose of funding benefits under the Plan:  the Principal Trust Company Directed Trust (the “Principal Directed Trust”) and this Trust, both of which are for the exclusive benefit of participants in the Plan and their beneficiaries;

WHEREAS, the Principal Directed Trust holds the assets invested in various mutual funds selected by the Benefit Finance Committee of the Company;

WHEREAS, the Company has appointed Delaware Charter Guarantee & Trust Company, d/b/a Principal Trust Company to serve as trustee for the Principal Directed Trust;

WHEREAS, a portion of the Plan’s assets are held by State Street Bank and Trust Company (the “Original Trustee”) pursuant to the Appleton Papers Inc. Employee Stock Ownership Trust Agreement, dated June 1, 2001, as amended (the “Original Trust Agreement”);

WHEREAS, the Company has amended and restated the Original Trust Agreement into this Agreement and appointed the Trustee as the Plan’s trustee to hold and administer the portion of the Plan’s assets originally held under the Original Trust Agreement pursuant to this Agreement;

WHEREAS, simultaneous with this Agreement, the Original Trustee will resign as the Plan’s trustee;

WHEREAS, the Company desires to appoint the Trustee as a trustee to hold and administer a portion of the Plan’s assets in accordance with this Agreement; and

WHEREAS, the Trustee has agreed to serve as trustee of the trust established under this Agreement.

NOW, THEREFORE, the Company and the Trustee mutually covenant and agree as follows:

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ARTICLE I

DEFINITIONS

The following words and phrases, when used in this Agreement with an initial capital letter, will have the meanings set forth below unless a different meaning plainly is required by the context.  Any reference to a section number will refer to a section of this Agreement unless otherwise specified.

1.1Code means the Internal Revenue Code of 1986, as amended.

1.2Committee means the Committee as defined in Section 1.12 of the Plan.

1.3Company Stock means the common stock of Paperweight Development Corp., the Company’s parent, or any other qualifying employer security within the meaning of ERISA § 407(d)(5).

1.4Company means Appleton Papers Inc. and its successors that adopt the Plan.

1.5ERISA means the Employee Retirement Income Security Act of 1974, as amended.

1.6Independent Trustee means an independent trustee appointed by the Company for certain assets of the Plan held separate from the Trust.

1.7Net Worth means the fair market value of all property held in the Trust Fund reduced by any liabilities other than liabilities to participants in the Plan and their beneficiaries.

1.8Non-Indemnity Loss means any claim, damage, expense, liability or loss that is found by a court of competent jurisdiction, in a final judgment from which no appeal can be taken, to have resulted either from a breach by the Trustee of its fiduciary duties under Title I of ERISA or, in non-fiduciary matters, from the bad faith, gross negligence, willful misconduct or material breach of the terms of this Agreement by the Trustee.

1.9 Participant means a participant in the Plan and his or her beneficiary or alternate payee under the Plan.

     1.10 Participating Company means the Company and any of its affiliates that have adopted or hereafter may adopt the Plan for the benefit of its employees and that continue to participate in the Plan.

                1.11Plan means the Appleton Papers Inc. Savings and Employee Stock Ownership Plan, as amended from time to time.

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1.12Recordkeeper means the Plan’s duly appointed recordkeeper and any of its respective agents or assigns, including processing agents.  The Committee will notify the Trustee of the Recordkeeper’s identity and will promptly notify the Trustee of any change in the Recordkeeper’s identity.

1.13Trust means the trust established by this Agreement.

1.14Trust Fund means the total amount of cash and other property held from time to time under this Agreement.

1.15Trustee means Reliance Trust Company.

1.16Valuation Date means the valuation date as defined in Section 1.74 of the Plan.

                     ARTICLE II                      

ESTABLISHMENT OF THE TRUST

2.1Trust Established.  By this Agreement the Company establishes with the Trustee, as a funding medium for the Plan, the Trust consisting of the Trust Fund and such earnings, profits, increments, additions and appreciation thereto and thereon as may accrue from time to time.

2.2Independent Trustee.  The Trust created under this Agreement is a separate trust from any trusts that may be held by an Independent Trustee and the Trustee will not be responsible for any assets of the Plan that are held in any such separate trusts by an Independent Trustee.  The Trustee is expressly relieved of any responsibility or liability, whether as co-fiduciary or otherwise, in accordance with ERISA § 405(b)(3)(A), for any losses resulting to the Plan arising from any acts or omissions on the part of an Independent Trustee.

2.3Limit of Participating Companies’ Interests.  Except as provided in the succeeding paragraph and ERISA, the Participating Companies will not have any right, title, interest, claim or demand whatsoever in or to the funds held by the Trustee, other than the right to a proper application and accounting therefor by the Trustee as provided in this Agreement, nor will any funds revert to any Participating Company except as permitted by ERISA or required by the Code for qualification of the Plan.

Any other provisions of this Agreement or the Plan notwithstanding, if and to the extent permitted by the Code, ERISA and other applicable laws and regulations thereunder, on the Company’s request, a contribution made by a mistake in fact or conditioned on the deductibility of the contribution under Code § 404 will be returned to the specified Participating Company within one year after the mistaken payment of the contribution or the disallowance of the deduction (to the extent disallowed), whichever is applicable.

2.4Trustee Compensation.  The Trustee will be entitled to compensation for its services under this Agreement at such rates as from time to time the Trustee and the Company agree in writing.  The Trustee will retain for its own account, as additional compensation under this Agreement, earnings (i.e., float) on amounts received in the Trust Fund before such amounts are invested pursuant to this Agreement and on amounts held pending distribution.

3

(a)Contributions and Purchases.  The timing of cash investment by the Trustee is dependent on the Recordkeeper and its reconciliation of funds received in the Trust.  If funds are sent to the Trustee via wire, or Automated Clearing House (“ACH”) debt to the Company’s bank account, the investment of these funds will generally occur within one business day of receipt.  The Company may review the service contract with the Recordkeeper to identify specific standards concerning the timing of investment purchases.  The Trustee will earn income approximating the rates of return on a two (2) year Treasury note on money received from the date of deposit with the Trustee until the later of the date the monies are wired in payment of investment purchases or the settlement date.  The Company may monitor and compute the amount of income earned by the Trustee by reviewing the date of deposit (as reported on the account statements) versus the settlement date of the purchases.

(b)Distributions and Sales.  Generally, in connection with any distributions, the Trustee will wire funds to the Recordkeeper within one business day of the funds becoming available as a result of sale settlements.  If the Trustee issues Participant distribution checks or other trust checks, the Trustee earns income from the date cash is made available in a Trust account until the date a check is cashed.  The amount of income the Trustee earns shall be calculated in the same manner described in §2.4(a).  The Trustee will generally issue distribution checks within two business days of receipt of both cash and complete payment instructions.

ARTICLE III

MANAGEMENT AND CONTROL OF TRUST FUND ASSETS

3.1Trust Fund.  The Trustee may manage, invest and account for all contributions made by the Company and any Participating Company under the Plan as one Trust Fund without identification of any part of the Trust assets as being attributable to the Company, a Participating Company or any other person.  If, for any reason, it becomes necessary to determine the portion of the Trust Fund allocable to the Participants related to the Company or any Participating Company as of any date, the Committee will specify such date as a Valuation Date and, after all adjustments required under the Plan as of that Valuation Date have been made, the portion of the Trust Fund attributable to each of such Participants will be determined by the Committee and will consist of an amount equal to the aggregate of the account balances of each of such Participants plus an amount equal to any contributions allocable to such Participants since the close of the immediately preceding Plan Year.  The Trustee need not inquire into the source of any money or property transferred to it nor the authority or right of the transferor to transfer such money or property to the Trustee.

3.2Responsibility of Trustee.  The Trustee will not be responsible in any way for the adequacy of the Trust Fund to discharge any or all liabilities under the Plan or for the proper application of distributions made or other action taken on the Committee’s written direction.  The Trustee’s powers, rights and duties will be limited to those set forth in this Agreement, and nothing contained in the Plan, either expressly or by implication, will be deemed to impose any additional duties on the Trustee.

4

3.3Named Fiduciary.  The Committee will be a named fiduciary of the Plan and Trust as described in ERISA § 402(a)(2).  Each Participant will also be a named fiduciary with respect to the exercise of investment directions relating to the acquisition or disposition of Company Stock, as applicable under the terms of this Agreement, including the exercise of voting and tender or exchange offer rights for Company Stock credited to such Participant’s account.

3.4General Powers.  Subject to the provisions of §§ 3.5 and 3.6 and Article IV, with respect to the Trust Fund, the Trustee will have the following powers, rights and duties in addition to those provided elsewhere in this Agreement or by law:

(a)The Trustee will receive and hold all contributions paid to it under the Plan, provided that the Trustee will have no duty to require any contributions to be made to it, to determine that the contributions received by it comply with the provisions of the Plan or with any resolution of the Company’s board of directors providing therefore.

(b)As directed by the Committee, the Trustee will retain in cash (pending investment, reinvestment or distribution including distribution of dividends) such reasonable amount as may be required for the proper administration of the Trust and to invest such cash as provided in § 4.1.  Pending receipt of directions from the Committee, the Trustee may retain reasonable amounts of cash, in its discretion, without any liability for interest.

(c)As directed by the Committee, the Trustee will make distributions from the Trust Fund to such persons, in such manner, at such times and in such forms (Company Stock, cash or a combination of both) as directed, without inquiring as to whether a payee is entitled to the payment, or as to whether a payment is proper, and without liability for a payment made in good faith without actual notice or knowledge of the changed condition or status of the payee or the Company.  If any payment of benefits directed to be made from the Trust Fund by the Trustee is not claimed, the Trustee will notify the Committee of that fact promptly.  The Committee will make a diligent effort to ascertain the whereabouts of the payee.  The Trustee will dispose of such payments as the Committee directs.  The Trustee will have no obligation to ascertain the whereabouts of any payee of benefits from the Trust Fund.

(d)The Trustee shall vote any Company Stock as provided in § 4.3 and, as directed by the Committee, shall vote other stocks, bonds or other securities held in the Trust, and as directed by the Committee, otherwise consent to or request any action on the part of the issuer in person, by proxy or power of attorney.

(e)As directed by the Committee, the Trustee may contract or otherwise enter into transactions with the Company or any Company shareholder for the purpose of acquiring or selling Company Stock and, subject to § 3.5, may retain such Company Stock.

(f)As directed by the Committee, the Trustee may compromise, contest, arbitrate, settle or abandon claims and demands by or against the Trust Fund.

5

(g)As directed by the Committee, the Trustee may begin, maintain and defend any litigation necessary in connection with the investment, reinvestment and administration of the Trust.  To the extent not paid from the Trust Fund, the Company will indemnify the Trustee against all expenses and liabilities reasonably sustained or anticipated by the Trustee by reason thereof (including reasonable attorneys’ fees) as and when the Trustee incurs such expenses and liabilities.

(h)The Trustee may retain any funds or property subject to any dispute without liability for the payment of interest or decline to make payment or delivery thereof until final adjudication is made by a court of competent jurisdiction.

(i)The Trustee will report to the Company as of the last day of each Plan Year of the Plan (which shall be the same as the Trust’s fiscal year), as of any Valuation Date, or at such other times as may be required under the Plan, as to the Trust Fund’s Net Worth, as determined by the Trustee.

(j)The Trustee will furnish to the Company and the Committee an annual written account, as well as accounts for such other periods as may be required under the Plan, showing the Net Worth of the Trust Fund at the end of the period(s), all investments, receipts, disbursements and other transactions made by the Trustee during the period(s) and such other information as the Trustee may possess that the Company requires to comply with ERISA § 103.  The Trustee will keep accurate accounts of all investments and earnings thereon, and all accounts, books and records related to such investments will be open to inspection by any person designated by the Company or the Committee.  All accounts of the Trustee will be kept on an accrual basis.  If, during the term of this Agreement, the Department of Labor issues regulations under ERISA regarding the valuation of securities or other assets for purposes of the reports required by ERISA, the Trustee will use such valuation methods for purposes of the accounts described by this § 3.4(j).  If shares of Company Stock are not traded with sufficient volume or frequency, as determined by the Committee, to be considered readily tradable on a national securities market or exchange, all valuations of shares of Company Stock will originally be made by an independent appraiser (as described in Code § 401(a)(28)(C)) retained by the Trustee and reviewed and finalized by the Trustee in accordance with ERISA § 3(18)(B).  The Company may approve such accounts by written notice of approval delivered to the Trustee or by failure to express objection to such accounts in writing delivered to the Trustee within 30 days from the date on which the accounts were delivered to the Company.  On the receipt of a written approval of the accounts or on the passage of the period of time within which objection may be filed without written objections having been delivered to the Trustee, such accounts will be deemed to be approved and the Trustee will be released and discharged as to all items, matters and things set forth in such accounts, as fully as if such accounts had been settled and allowed by decree of a court of competent jurisdiction in an action or proceeding in which the Trustee, the Company and all persons having or claiming to have any interest in the Trust Fund or under the Plan were parties.  Notwithstanding the foregoing, the statute of limitations set forth in ERISA §413 shall apply with respect to any alleged violations of ERISA.

6

(k)As directed by the Committee, the Trustee will pay any estate, inheritance, income or other tax, charge or assessment attributable to any benefit that it will or may be required to pay out of such benefit.  Before making any payment, the Trustee may require such release or other document from any taxing authority and such indemnity from the intended payee as it deems necessary for its protection.

(l)The Trustee may employ and reasonably rely on information and advice furnished by agents, attorneys, independent appraisers, accountants or other persons of its choice for such purposes as it considers desirable.

(m)The Trustee may assume, until advised to the contrary, that the Trust evidenced by this Agreement is entitled to tax exemption under Code § 501(a).

(n)The Trustee will have the authority to invest and reinvest the assets of the Trust Fund, on direction from the Committee, in personal property of any kind, including, but not limited to, bonds, notes, debentures, mortgages, equipment, trust certificates, investment trust certificates, guaranteed investment contracts, preferred or common stock and registered investment companies.  The Trustee will follow the Committee’s directions and will have no duty to review the assets from time to time so acquired nor to make any recommendations with respect to the investment, reinvestment or retention thereof.  However, all investments in Company Stock will be undertaken pursuant to the provisions of § 4.1.

(o)As directed by the Committee, the Trustee may exercise any options, subscription rights and other privileges with respect to Trust assets, subject to Article IV.

(p)The Trustee may register ownership of any securities or other property held by it in its own name or in the name of a nominee, with or without the addition of words indicating that such securities or other property are held in a fiduciary capacity, and may hold any securities in bearer form.  The Trustee’s books and records will at all times reflect that all such investments are part of the Trust.

(q)As directed by the Committee, the Trustee may borrow such sums from time to time as the Committee considers necessary or desirable and in the best interest of the Trust Fund, including to purchase Company Stock, and to enter into such agreements as directed by the Committee as the Committee determines necessary or appropriate to accomplish such actions, and for that purpose may mortgage or pledge any part of the Trust Fund subject to the provisions of Code § 4795(c) and the regulations issued thereunder.

(r)The Trustee may deposit securities with a clearing corporation as permitted by applicable law.  The certificates representing securities, including those in bearer form, may be held in bulk form with, and may be merged into, certificates of the same class of the same issuer that constitute assets of other accounts or owners, without certification as to the ownership attached.  Utilization of a book-entry system may be made for the transfer or pledge of securities held by the Trustee or by a clearing corporation.  The Trustee will at all times maintain a separate and distinct record of the securities owned by the Trust.

7

(s)The Trustee may participate in and use the Federal Book-Entry Account System, a service provided by the Federal Reserve Bank for its member banks for deposit of Treasury securities.

(t)As directed by the Committee, the Trustee will perform any and all other acts that are necessary or appropriate for the proper management, investment and distribution of the Trust Fund.

(u)Except as provided in § 4.4, the Trustee will not sell, exchange, transfer or otherwise dispose of Company Stock unless directed to do so by the Committee.

3.5Exercise of Trustee’s Duties.  The Trustee will discharge its duties under this Agreement solely in the interest of the Participants and other persons entitled to benefits under the Plan and (a) for the exclusive purpose of providing benefits to Participants and other persons entitled to benefits under the Plan and defraying reasonable expenses of administering the Plan, (b) with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims and (c) in accordance with the documents and instruments governing the Plan unless, in the Trustee’s good faith judgment, the documents and instruments are not consistent with ERISA or this Agreement.  Notwithstanding any other provision of this Agreement, the Trustee will not be required to comply with any provision of this Agreement that is not consistent with the requirements of ERISA.  Moreover, if a court of competent jurisdiction issues an opinion or order to the Plan, the Company or the Trustee that, in the opinion of counsel to the Company or the Trustee, invalidate any provision of this Agreement under ERISA in all circumstances or in any particular circumstances, on notice thereof to the Company or to the Trustee, as the case may be, such invalid or conflicting provision of this Agreement will be given no further force or effect.

3.6Plan Administration.  The Plan will be administered by the Committee.  Except as provided in §§ 3.4(a),  3.4(h), 3.4(i), 3.4(j), 3.4(1), 3.4(n) dealing with Company Stock, 3.4(p), 3.4(r) and 3.4(s), the Trustee will have no authority to act unless directed by the Committee.  The Committee may authorize one or more individuals to sign all communications between the Committee and the Trustee and will at all times keep the Trustee advised of the names of the members of the Committee and individuals authorized to sign on the Committee’s behalf and provide specimen signatures thereof.  The Committee may authorize the Trustee to act without directions or instructions from the Committee on any matter or class of matters with respect to which directions or instructions from the Committee are called for under this Agreement.  The Trustee will be fully protected in relying on any communication sent by any authorized person and will not be required to verify the accuracy or validity of any signature unless the Trustee has reasonable grounds to doubt the authenticity of any signature.  If the Trustee requests any directions under this Agreement and does not receive them, the Trustee will act or refrain from acting, as it may determine with no liability for such action or inaction.

3.7Continuation of Powers on Trust Termination.  Notwithstanding anything to the contrary in this Agreement, on termination of the Trust, the Trustee’s powers, rights and duties under this Agreement will continue until all Trust Fund assets have been liquidated.

8

ARTICLE IV

INVESTMENT OF TRUST FUND

4.1Investment of Cash.  The primary purpose of the Plan is to acquire an ownership interest in the Company either from the Company or its shareholders and to provide benefits to Participants in the form of shares of Company Stock.  Accordingly, the portion of the Plan that is intended to be an employee stock ownership plan has been established to provide for investment primarily in shares of Company Stock.  The Trustee will purchase Company Stock with the assets contained in the Participants’ accounts under the Plan on the Committee’s direction, unless the Trustee determines that such purchase is prohibited by ERISA.  The Trustee will purchase Company Stock from the Company or from any shareholder, if the Trustee is directed by the Committee to do so, and such Company Stock may be outstanding, newly issued or treasury stock.  All such purchases must be at a price not in excess of fair market value, as determined by an independent appraiser and as approved by the Trustee, if such Company Stock is not publicly traded.  Pending investment of cash in Company Stock, the Trustee may invest such cash in savings accounts, certificates of deposit, high-grade, short-term debt securities or other high-grade, short-term bonds, mutual funds that invest in the foregoing or other investments or may hold it as cash.  Such investments may include any common or collective funds (including a common debt, or collective fund for which the Trustee or one of its affiliates serves as investment advisor or trustee) maintained as a short-term investment fund.  Such investments may also include any others approved by the Committee for these purposes.  To the extent that the Trust Fund is invested in such common or collective funds, the terms of the instrument establishing such funds are made a part of this Agreement as fully as if set forth at length in this Agreement.  Any cash dividends received by the Trustee on Company Stock held in the Trust Fund will be applied, after the receipt of such cash dividend, as provided by Article 6 of the Plan.

4.2Stock Dividends, Splits and Other Capital Reorganizations.  Any Company Stock received by the Trustee as a stock split or dividend or as a result of a reorganization or other recapitalization of the Company will be allocated as of each Valuation Date under the Plan in proportion to the Company Stock to which it is attributable.

4.3Voting of Company Stock.  Subject to ERISA, with respect to any corporate matter that involves the voting of Company Stock with respect to the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all of the assets of a trade or business or such other transactions that may be prescribed by regulation (and, if the Company has a registration-type class of securities, all other shareholder voting issues), each Participant will be entitled to direct the Trustee as to the exercise of any shareholder voting rights attributable to shares of Company Stock allocated to his accounts under the Plan, but only to the extent required by Code § 401(a)(21) and 409(e)(3) and the regulations thereunder.  For purposes of the foregoing sentence, each Participant will be a named fiduciary of the Plan as described in ERISA § 402(a)(2).  The Committee will have the sole responsibility for determining when a corporate matter has arisen that involves the voting of Company Stock under this § 4.3.  If a Participant is entitled to direct the Trustee under this § 4.3, all allocated Company Stock as to which instructions have been received (which may include an instruction to abstain) will be voted by the Trustee in accordance with such instructions, provided that the Trustee may vote the shares as it determines is necessary to fulfill its fiduciary duties under ERISA.  The Trustee will vote any shares as to which no voting instructions have been received as directed by the Committee as a named fiduciary of the Plan, as described in ERISA § 402.  In all other circumstances, the Trustee will vote all shares of Company Stock as directed by the Committee as a named fiduciary of the Plan as described in ERISA § 402.

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4.4Tender or Exchange Offers.  Subject to ERISA, in the event of a tender or exchange offer or other offer to purchase shares of Company Stock held by the Trust, the Trustee will tender or sell the shares as directed by each Participant with respect to shares of Company Stock allocated to his account under the Plan, subject to the fiduciary duties of the Trustee under ERISA.  For purposes of the foregoing sentence, each Participant will be a named fiduciary of the Plan as described in ERISA § 402(a)(2).  In all other circumstances, the Trustee will tender or exchange shares of Company Stock as directed by the Committee as a named fiduciary of the Plan, as described in ERISA § 402.  In carrying out its responsibilities under this § 4.4, the Trustee may rely on information furnished to it by the Committee, including the names and current addresses of Participants and the number of shares of Company Stock allocated to their accounts under the Plan.

4.5Put Option.  If the distribution of a Participant’s account is to be made in cash, a Participant exercises his rights under Section 6.5 of the Plan or the Trustee expects to incur substantial Trust expenses that will not be paid directly by the Company or a Participating Company and the Trustee determines that the Trust Fund has insufficient cash to make anticipated distributions or pay Trust expenses, the Trust will have a put option to the Company on Company Stock it holds for the purpose of acquiring the cash to make such anticipated distributions and paying such expenses.  The purchase price for the sale of stock by the Trustee to the Company will be the fair market value of the stock as of the date of the sale.

ARTICLE V

EXPENSES

The Trustee will pay from the Trust Fund the expenses it incurs in the performance of its duties under this Agreement, including fees for legal services rendered to it, its compensation and all other proper charges and disbursements, including all personal property taxes, income taxes and other taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws on or in respect of the Trust or any money, property or security forming a part of the Trust Fund.  Such expenses will constitute a charge on the Trust Fund unless the Company pays the same or any part thereof.  To the extent the Company or a Participating Company pays any expenses that are properly payable from the Trust Fund, the Trustee will reimburse the Company or Participating Company from the Trust Fund if requested to do so by the Company or the Participating Company.  The Company will promptly pay for any services required of the Trustee that may arise after the Trustee’s resignation or removal based on the Trustee’s then prevailing fee schedule.  This provision will survive the termination of this Agreement.

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ARTICLE VI

REMOVAL AND RESIGNATION OF TRUSTEE AND SUCCESSOR TRUSTEE

The Company may remove the Trustee at any time on 60 days’ written notice delivered to the Trustee.  The Trustee may resign at any time on 60 days’ written notice delivered to the Company.  If the Trustee is removed or resigns in accordance with this Article VI, the Company will notify the Trustee of the appointment of a successor trustee and the Trustee will convey and deliver to such successor trustee all of the Trust assets.  Within 90 days after the Trustee’s removal or resignation, the Trustee will make a final accounting to the Company and the Committee as of the effective date of such removal or resignation pursuant to the terms of § 3.4(j).

ARTICLE VII

AMENDMENT OF TRUST AND TERMINATION OF PLAN

7.1Amendment of Trust.  The Company and the Trustee may amend this Agreement by written agreement at any time or from time to time, and any such amendment by its terms may be retroactive.  Notwithstanding the foregoing, no amendment will be made that would authorize or permit any Trust assets, other than such assets as are required to pay taxes and administration expenses, to be used for or diverted to purposes other than the exclusive benefit of Participants, except that this Agreement may be amended retroactively and to affect the benefits of Participants if necessary to cause the Plan and Trust to be or remain qualified and exempt from income taxes under the Code.

7.2Termination of Plan.  In the event of the Plan’s termination, the Trustee will continue to hold the Trust, to be applied and distributed in accordance with the Plan’s terms.

ARTICLE VIII

MISCELLANEOUS

8.1Nonalienation of Benefits.  Except as provided under the provisions of the Plan relating to loans to Participants and to qualified domestic relations orders and to the extent permitted by law, neither the benefits payable from the Trust nor any interest in the Trust will be subject in any manner to the claim of any creditor of a Participant or to any legal process by any creditor of such Participant.  A Participant will not have any right to alienate, commute, anticipate or assign any right to benefits payable from or any interest in the Trust, except as provided in the Plan.

8.2Exclusive Benefit.  Except as otherwise provided in the Plan and this Agreement, no part of the Trust will be used for or diverted to any purpose other than for the exclusive benefit of Participants or the payment of expenses as provided in this Agreement.

8.3Effect of Plan.  The Trustee is not a party to the Plan, and in no event will the Plan’s terms, either expressly or by implication, be deemed to impose on the Trustee any responsibility other than as set forth in this Agreement.  In the event of any conflict between the Plan’s provisions and this Agreement, this Agreement will be deemed to be incorporated into and be a part of the Plan, and the terms of this Agreement will control over any inconsistent terms of the Plan.  The Trustee will not be a named fiduciary under the Plan and will not have the authority to interpret the Plan.

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8.4Entire Agreement.  This Agreement constitutes the entire agreement between the parties with regard to its subject matter.  There are no other agreements or understandings between the parties relating to this Agreement’s subject matter other than those set forth or provided for in this Agreement.

8.5Notices.  Notices, directions and other communications provided in writing will be mailed to the parties at the following addresses:

If to the Company:               ESOP Administrative Committee

Appleton Papers Inc.

P.O. Box 359

Appleton, WI  54912-0359

Attn:  Tom Ferree

If to the Trustee:                  Reliance Trust Company

P.O. Box 28166

Atlanta, Georgia 30358

Attn: Steve Martin

8.6Liability for Predecessor or Successor.  Except as required under ERISA, no successor trustee under this Agreement in any way will be liable or responsible for any prior trustee’s actions or omissions in the administration of the Trust or the assets comprising the Trust prior to the date such successor trustee assumes its obligations under this Agreement.  No prior trustee will in any way be liable or responsible for any successor trustee’s actions or omissions.

8.7Liability for Acts of Others.  The Trustee will not be liable for the acts or omissions of the Company, the Committee or any Independent Trustee except with respect to any acts or omissions of any such party in which the Trustee participates knowingly or that it knowingly undertakes to conceal and that it knows constitutes a breach of fiduciary responsibility of such party.

8.8Indemnification.  Recognizing that engagements of the type contemplated in this Agreement can result in government investigations, litigation or other proceedings, the Company agrees to indemnify the Trustee and its directors, employees and officers against and from any and all claims, damages, expenses, liabilities and losses whatsoever (including, but not limited to, any and all expenses reasonably incurred in investigating, preparing for, defending or responding to discovery requests or other requests for information relating to any investigations, litigation, arbitration or other proceedings, commenced or threatened, or any claim whatsoever, whether or not resulting in any liability), to which any or all of them may become subject under any applicable federal or state law or otherwise relating to the Trustee’s duties as a trustee (including all events that occurred prior to the Trustee becoming a trustee or after the Trustee’s service as a trustee has terminated).  However, the Trustee’s indemnification will not apply to any Non-Indemnity Loss.

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   If the Trustee receives notice of a proceeding, the Trustee will notify the Company of the proceeding in writing within 30 days of its receipt of notice of the proceeding.  However, the Trustee’s failure to so notify the Company will not relieve the Company from any liability for indemnification under this § 8.8 except to the extent that the failure to notify the Company actually prejudiced the Company’s defense of any proceeding.  The Company will be entitled to assume the defense of the proceeding with legal counsel reasonably satisfactory to the Trustee or to otherwise participate in the proceeding.  If the Company elects to assume the defense of the proceeding, it will pay all costs of defense.

   The Trustee will have the right to employ its own legal counsel in any proceeding if (a) the Company authorizes the Trustee’s employment of its own legal counsel, (b) the Trustee’s legal counsel advises it that there may be one or more legal defenses available to the Trustee that are in addition to or different from defenses available to the Company and the Company’s legal counsel declines to assert such defenses (in which case the Company will not have the right to assume the defense of the proceeding on the Trustee’s behalf) or (c) the Trustee’s legal counsel informs the Trustee that a potential conflict of interest exists between the Company and the Trustee.  The Trustee will not be required to disclose or otherwise share its counsel’s advice to satisfy either clause (b) or (c).

   The rights of indemnification provided to the Trustee in this § 8.8 will also be available to all directors, officers and employees of the Trustee against whom any such claim is asserted, without regard to whether such claim is also asserted against the Trustee, and to any insurance carrier that is obligated to pay any losses or defense costs associated with any claim pursuant to an insurance policy under which the Trustee is an insured or otherwise provided coverage.

   The Company, regardless of the type or nature of any claims asserted against the Trustee as part of a proceeding and without regard to whether any such claims, if established, would constitute a Non-Indemnity Loss, will reimburse the Trustee for all reasonably incurred expenses and fees as and when the Trustee incurs them in connection with any proceeding, including without limitation the expenses and fees of investigating, responding to discovery proceedings, testifying in any hearing and consulting with the Company or its advisors and attorneys, the Trustee’s share of fees and expenses of mediators or arbitrators, and for the reasonable expenses and fees of the experts and legal counsel whom the Trustee engages for any proceeding.  Any such reasonably incurred expenses and fees advanced to the Trustee as part of a proceeding will be returned to the Company only if a claim with respect to which such advancement has been made is finally determined to be Non-Indemnity Loss.

   If the Trustee seeks payment from the Company or seeks to enforce the indemnification or agreement to hold harmless pursuant to this § 8.8, the Trustee will provide the Company all applicable invoices for legal fees and other expenses it incurs in investigating or defending such claims and any supporting documentation as the Company reasonably requires.  However, the Trustee may redact the invoices and documentation or take other measures to preserve the attorney-client privilege, work product doctrine or other applicable privilege.

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8.9Controlling Law.  This Agreement will be construed according to the laws of the State of Georgia, except to the extent superseded by ERISA or any other federal law.

8.10Effective Date.  This Agreement will be effective on and after April 1, 2013.

8.11Execution in Counterpart.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original and all of which together will constitute one and the same instrument.

[Remainder of page intentionally left blank; signature page to follow]

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IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the Trustee have caused this Agreement to be signed on the 1st day of April, 2013.

	COMPANY
	Appleton Papers Inc.
By:	/s/ Thomas J. Ferree
	Thomas J. Ferree Senior Vice President, Chief Financial Officer
	TRUSTEE
	Reliance Trust Company, not in its corporate capacity but solely in its capacity as trustee of the Appleton Papers Inc. Employee Stock Ownership Trust:
By:	/s/ Stephen A. Martin
	Stephen A. Martin Senior Vice President

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AMENDMENT TO TRUST AGREEMENT

Amendment to Trust Agreement dated effective as of August 8, 2013 by and between Appvion, Inc. (the “Company”) and Reliance Trust Company (the “Trustee”).

WHEREAS, the Company and the Trustee are parties to the Amended and Restated Trust Agreement, dated effective April 1, 2013, (the “Agreement”) pursuant to which Reliance Trust Company was appointed and agreed to serve as the Trustee of the Appleton Papers Inc. Employee Stock Ownership Trust.

WHEREAS, on May 9, 2013 Appleton Papers Inc. filed a Certificate of Amendment with the Delaware Secretary of State changing the name of the Company from Appleton Papers Inc. to Appvion, Inc.

NOW, THEREFORE, pursuant to Section 7.1of the Agreement, the Company, authorized by the actions of its Board of Directors, hereby amends the Agreement as follows:

The name of the Company and all references therein shall be amended from Appleton Papers Inc. to Appvion, Inc., including the title of the Agreement which shall now be known as the Amended and Restated Trust Agreement for the Appvion, Inc. Employee Stock Ownership Trust.

Except as stated herein, the provisions of the Trust Agreement shall survive in full force and effect in accordance with their terms.

(THIS SPACE INTENTIONALLY LEFT BLANK)

IN WITNESS WHEREOF, the Company has caused this Amendment to Trust Agreement to be executed as of the day and year first written above.

	APPVION, INC.
By:	/s/ Tami L. Van Straten
Name:	Tami L. Van Straten
Title:	Vice President, General Counsel & Secretary

Pursuant to Section 7.1 of the Agreement, the Trustee hereby consents to this Amendment to Trust Agreement set forth above as of the day and year first written above.

	RELIANCE TRUST COMPANY
By:	/s/ Howard Kaplan
Name:	Howard Kaplan
Title:	Senior Vice President, Retirement Strategies Group

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Mark R. Richards, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Appvion, 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(s) 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 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(s) 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.

Dated:  August 8, 2013		/s/ Mark R. Richards
	Name:	Mark R. Richards
	Title:	Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Thomas J. Ferree, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Appvion, 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(s) 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 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(s) 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.

Dated:  August 8, 2013		/s/ Thomas J. Ferree
	Name:	Thomas J. Ferree
	Title:	Senior Vice President Finance, Chief Financial Officer and Treasurer

EX-31.3

Exhibit 31.3

CERTIFICATION

I, Mark R. Richards, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Paperweight Development Corp.;

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(s) 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 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(s) 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.

Dated: August 8, 2013		/s/ Mark R. Richards
	Name:	Mark R. Richards
	Title:	Chairman, President and Chief Executive Officer

EX-31.4

Exhibit 31.4

CERTIFICATION

I, Thomas J. Ferree, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Paperweight Development Corp.;

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 officers 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 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(s) 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.

Dated: August 8, 2013		/s/ Thomas J. Ferree
	Name:	Thomas J. Ferree
	Title:	Senior Vice President Finance, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Statement

Pursuant to §906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. §1350, the undersigned officer of Appvion, Inc. (the “Company”), hereby certifies that to his knowledge:

(1) the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

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

	APPVION, INC.
Dated:  August 8, 2013		/s/ Mark R. Richards
	Name:	Mark R. Richards
	Title:	Chairman, President and Chief Executive Officer

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

Statement

Pursuant to §906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. §1350, the undersigned officer of Appvion, Inc. (the “Company”), hereby certifies that to his knowledge:

(1) the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

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

	APPVION, INC.
Dated:  August 8, 2013		/s/ Thomas J. Ferree
	Name:	Thomas J. Ferree
	Title:	Senior Vice President Finance, Chief Financial Officer and Treasurer

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of the Securities Exchange Act of 1934, as amended.

EX-32.3

Exhibit 32.3

Statement

Pursuant to §906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. §1350, the undersigned officer of Paperweight Development Corp. (the “Company”), hereby certifies that to his knowledge:

(1) the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

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

	PAPERWEIGHT DEVELOPMENT CORP.
Dated:  August 8, 2013		/s/ Mark R. Richards
	Name:	Mark R. Richards
	Title:	Chairman, President and Chief Executive Officer

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of the Securities Exchange Act of 1934, as amended.

EX-32.4

Exhibit 32.4

Statement

Pursuant to §906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. §1350, the undersigned officer of Paperweight Development Corp. (the “Company”), hereby certifies that to his knowledge:

(1) the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

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

	PAPERWEIGHT DEVELOPMENT CORP.
Dated: August 8, 2013		/s/ Thomas J. Ferree
	Name:	Thomas J. Ferree
	Title:	Senior Vice President Finance, Chief Financial Officer and Treasurer

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of the Securities Exchange Act of 1934, as amended.

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Long-Term Incentive Compensation

6 Months Ended

Jun. 30, 2013

Long-Term Incentive Compensation

11.      LONG-TERM INCENTIVE COMPENSATION    

In December 2001, the Company adopted the Appleton Papers Inc. Long-Term Incentive Plan (“LTIP”). Effective January 3, 2010, the Company adopted a long-term restricted stock unit plan ("RSU"). Both plans utilize phantom units. The value of a unit in the LTIP is based on the change in the fair market value of PDC’s common stock under the terms of the employee stock ownership plan (the “ESOP”) between the grant date and the exercise date. The value of a unit in the RSU is based on the value of PDC common stock, as determined by the ESOP trustee. As of June 30, 2013, the fair market value of one share of PDC common stock is $17.85. All units under both the LTIP and RSU plans will vest immediately, and cash payment will be made upon a change in control as defined in the plans.

On January 2, 2013,  160,000 RSU units became fully vested and exercisable. In accordance with the plan, payment for these RSU’s was made on February 22, 2013. During first quarter 2013, 102,245 additional units were granted under the RSU plan. Due to terminations of employment, 3,500unvested units were forfeited during the first six months of 2013. A balance of 207,925 RSU units remains as of June 30, 2013. Approximately $0.3 million and $0.6 million of expense, related to this plan, was recorded during the three- and six-month periods ended June 30, 2013. Approximately $1.0 million and $1.2 million of expense, related to this plan, was recorded during the three- and six-month periods ended July 1, 2012. During the first three months of 2013, 189,100 additional units were granted under the LTIP plan. Approximately $0.5 million and $0.7 million of expense, related to this plan, was recorded during the three- and six-month periods ended June 30, 2013. Approximately $1.6 million and $1.7 million of expense, related to this plan, was recorded during the three- and six-month periods ended July 1, 2012.

Beginning in 2006, the Company established a nonqualified deferred compensation agreement with each of its non-employee directors. Approximately $0.1 million and $0.2 million was recorded as expense, related to this plan, for each of the three-month periods ended June 30, 2013 and July 1, 2012, respectively. Approximately $0.2 million and $0.3 million was recorded as expense, related to this plan, for each of the six-month periods ended June 30, 2013 and July 1, 2012, respectively.

Appvion, Inc. [Member]

Long-Term Incentive Compensation

11.      LONG-TERM INCENTIVE COMPENSATION    

In December 2001, the Company adopted the Appleton Papers Inc. Long-Term Incentive Plan (“LTIP”). Effective January 3, 2010, the Company adopted a long-term restricted stock unit plan ("RSU"). Both plans utilize phantom units. The value of a unit in the LTIP is based on the change in the fair market value of PDC’s common stock under the terms of the employee stock ownership plan (the “ESOP”) between the grant date and the exercise date. The value of a unit in the RSU is based on the value of PDC common stock, as determined by the ESOP trustee. As of June 30, 2013, the fair market value of one share of PDC common stock is $17.85. All units under both the LTIP and RSU plans will vest immediately, and cash payment will be made upon a change in control as defined in the plans.

On January 2, 2013,  160,000 RSU units became fully vested and exercisable. In accordance with the plan, payment for these RSU’s was made on February 22, 2013. During first quarter 2013, 102,245 additional units were granted under the RSU plan. Due to terminations of employment, 3,500unvested units were forfeited during the first six months of 2013. A balance of 207,925 RSU units remains as of June 30, 2013. Approximately $0.3 million and $0.6 million of expense, related to this plan, was recorded during the three- and six-month periods ended June 30, 2013. Approximately $1.0 million and $1.2 million of expense, related to this plan, was recorded during the three- and six-month periods ended July 1, 2012. During the first three months of 2013, 189,100 additional units were granted under the LTIP plan. Approximately $0.5 million and $0.7 million of expense, related to this plan, was recorded during the three- and six-month periods ended June 30, 2013. Approximately $1.6 million and $1.7 million of expense, related to this plan, was recorded during the three- and six-month periods ended July 1, 2012.

Beginning in 2006, the Company established a nonqualified deferred compensation agreement with each of its non-employee directors. Approximately $0.1 million and $0.2 million was recorded as expense, related to this plan, for each of the three-month periods ended June 30, 2013 and July 1, 2012, respectively. Approximately $0.2 million and $0.3 million was recorded as expense, related to this plan, for each of the six-month periods ended June 30, 2013 and July 1, 2012, respectively.

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Employee Benefits (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended		6 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 29, 2012	Mar. 31, 2012	Jun. 30, 2013 Pension Benefits [Member]	Dec. 29, 2012 Minimum [Member]	Dec. 29, 2012 Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Expected contribution in the current fiscal year				$ 12.5
Company contribution to defined benefit pension plan				8.8
Multiemployer Plan Withdrawal Liability			18
Mulitemployer Plan Full Withdrawal Expense	7
Multiemployer Plan Full Withdrawal Expense Payment Period		20 years
Multiemployer Plan Full Withdrawal Expense					16	54
Multiemployer Plan Full Withdrawal Expense Likely Maxium Amount		$ 25

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Condensed Consolidated Statements Of Comprehensive Loss (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Net sales	$ 201,500,000	$ 213,901,000	$ 412,334,000	$ 433,531,000
Cost of sales	148,717,000	201,257,000	311,313,000	411,432,000
Gross profit	52,783,000	12,644,000	101,021,000	22,099,000
Selling, general and administrative expenses	32,344,000	42,176,000	62,700,000	76,176,000
Restructuring		1,036,000		26,472,000
Operating income (loss)	20,439,000	(30,568,000)	38,321,000	(80,549,000)
Other expense (income)
Interest expense	14,788,000	15,086,000	29,749,000	30,093,000
Debt extinguishment expense	24,767,000		24,767,000
Interest income				(12,000)
Foreign exchange (gain) loss	(331,000)	1,261,000	380,000	994,000
Other (income) expense		(40,000)		72,000
Loss before income taxes	(18,785,000)	(46,875,000)	(16,575,000)	(111,696,000)
Provision for income taxes	110,000	75,000	177,000	140,000
Net loss	(18,895,000)	(46,950,000)	(16,752,000)	(111,836,000)
Other comprehensive income (loss)
Changes in retirement plans	(398,000)	(4,254,000)	(795,000)	(4,782,000)
Realized and unrealized (losses) gains on derivatives	(282,000)	536,000	1,012,000	(769,000)
Total other comprehensive (loss) income	(680,000)	(3,718,000)	217,000	(5,551,000)
Comprehensive loss	(19,575,000)	(50,668,000)	(16,535,000)	(117,387,000)
Appvion, Inc. [Member]
Net sales	201,500,000	213,901,000	412,334,000	433,531,000
Cost of sales	148,717,000	201,257,000	311,313,000	411,432,000
Gross profit	52,783,000	12,644,000	101,021,000	22,099,000
Selling, general and administrative expenses	32,344,000	42,176,000	62,700,000	76,176,000
Restructuring		1,036,000		26,472,000
Operating income (loss)	20,439,000	(30,568,000)	38,321,000	(80,549,000)
Other expense (income)
Interest expense	14,788,000	15,086,000	29,749,000	30,093,000
Debt extinguishment expense	24,767,000		24,767,000
Interest income				(12,000)
Foreign exchange (gain) loss	(331,000)	1,261,000	380,000	994,000
Other (income) expense		(40,000)		72,000
Loss before income taxes	(18,785,000)	(46,875,000)	(16,575,000)	(111,696,000)
Provision for income taxes	110,000	75,000	177,000	140,000
Net loss	(18,895,000)	(46,950,000)	(16,752,000)	(111,836,000)
Other comprehensive income (loss)
Changes in retirement plans	(398,000)	(4,254,000)	(795,000)	(4,782,000)
Realized and unrealized (losses) gains on derivatives	(282,000)	536,000	1,012,000	(769,000)
Total other comprehensive (loss) income	(680,000)	(3,718,000)	217,000	(5,551,000)
Comprehensive loss	$ (19,575,000)	$ (50,668,000)	$ (16,535,000)	$ (117,387,000)

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Inventories

6 Months Ended

Jun. 30, 2013

Inventories

4.       INVENTORIES 

Inventories consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Finished goods	$	55,175	$	43,243
Raw materials, work in process, stores and spare parts		47,975		51,106
	$	103,150	$	94,349

Stores and spare parts inventory balances of $15.6  million and $15.9 million at June 30, 2013 and December 29, 2012, respectively, are valued at average cost and are included in raw materials, work in process, stores and spare parts. All other inventories are valued using the first-in, first-out (“FIFO”) method.

Appvion, Inc. [Member]

Inventories

4.       INVENTORIES 

Inventories consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Finished goods	$	55,175	$	43,243
Raw materials, work in process, stores and spare parts		47,975		51,106
	$	103,150	$	94,349

Stores and spare parts inventory balances of $15.6  million and $15.9 million at June 30, 2013 and December 29, 2012, respectively, are valued at average cost and are included in raw materials, work in process, stores and spare parts. All other inventories are valued using the first-in, first-out (“FIFO”) method.

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income

18.      ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in accumulated other comprehensive income by component for the six months ended June 30, 2013 are as follows (dollars in thousands):

	Change in	Hedging
	Retiree Plans	Activities	Total
Balance, December 29, 2012	$ 6,453	$ (1,131)	$ 5,322
Other comprehensive income before reclassifications	-	524	524
Amounts reclassified from accumulated other comprehensive income	(795)	488	(307)
Net other comprehensive (loss) income	(795)	1,012	217
Balance, June 30, 2013	$ 5,658	$ (119)	$ 5,539

The changes in accumulated other comprehensive income by component for the six months ended July 1, 2012 were as follows (dollars in thousands):

	Change in	Hedging
	Retiree Plans	Activities	Total
Balance, December 31, 2011	$ 11,265	$ 1,759	$ 13,024
Other comprehensive income before reclassifications	-	420	420
Amounts reclassified from accumulated other comprehensive income	(4,782)	(1,189)	(5,971)
Net other comprehensive loss	(4,782)	(769)	(5,551)
Balance, July 1, 2012	$ 6,483	$ 990	$ 7,473

All amounts presented are net of tax.

Details about these reclassifications are as follows (dollars in thousands):

	Amount Reclassified from
	Accumulated Other
	Comprehensive Income
Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended June 30, 2013	For the Three Months Ended July 1, 2012	For the Six Months Ended June 30, 2013	For the Six Months Ended July 1, 2012		Affected Line Item in Consolidated Statements of Comprehensive Loss
Changes in retiree plans
Amortization of prior service credit	$ 398	$ 4,254	$ 795	$ 4,782	((a)
Hedging activities
Foreign exchange contracts	$ (184)	$ 987	$ (291)	$ 1,583		Net sales
Commodity contracts	-	(197)	(197)	(394)		Cost of sales
	$ (184)	$                790	$ (488)	$ 1,189
Total reclassifications for the period	$ 214	$ 5,044	$ 307	$ 5,971
(a)These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See Note 9, Employee Benefits, and Note 10, Postretirement Benefit Plans other than Pensions.

All amounts presented are net of tax.

Appvion, Inc. [Member]

Accumulated Other Comprehensive Income

18.      ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in accumulated other comprehensive income by component for the six months ended June 30, 2013 are as follows (dollars in thousands):

	Change in	Hedging
	Retiree Plans	Activities	Total
Balance, December 29, 2012	$ 6,453	$ (1,131)	$ 5,322
Other comprehensive income before reclassifications	-	524	524
Amounts reclassified from accumulated other comprehensive income	(795)	488	(307)
Net other comprehensive (loss) income	(795)	1,012	217
Balance, June 30, 2013	$ 5,658	$ (119)	$ 5,539

The changes in accumulated other comprehensive income by component for the six months ended July 1, 2012 were as follows (dollars in thousands):

	Change in	Hedging
	Retiree Plans	Activities	Total
Balance, December 31, 2011	$ 11,265	$ 1,759	$ 13,024
Other comprehensive income before reclassifications	-	420	420
Amounts reclassified from accumulated other comprehensive income	(4,782)	(1,189)	(5,971)
Net other comprehensive loss	(4,782)	(769)	(5,551)
Balance, July 1, 2012	$ 6,483	$ 990	$ 7,473

All amounts presented are net of tax.

Details about these reclassifications are as follows (dollars in thousands):

	Amount Reclassified from
	Accumulated Other
	Comprehensive Income
Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended June 30, 2013	For the Three Months Ended July 1, 2012	For the Six Months Ended June 30, 2013	For the Six Months Ended July 1, 2012		Affected Line Item in Consolidated Statements of Comprehensive Loss
Changes in retiree plans
Amortization of prior service credit	$ 398	$ 4,254	$ 795	$ 4,782	((a)
Hedging activities
Foreign exchange contracts	$ (184)	$ 987	$ (291)	$ 1,583		Net sales
Commodity contracts	-	(197)	(197)	(394)		Cost of sales
	$ (184)	$                790	$ (488)	$ 1,189
Total reclassifications for the period	$ 214	$ 5,044	$ 307	$ 5,971
(a)These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See Note 9, Employee Benefits, and Note 10, Postretirement Benefit Plans other than Pensions.

All amounts presented are net of tax.

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Segment Information (Schedule Of Segment Reporting Information) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jul. 01, 2012		Jun. 30, 2013		Jul. 01, 2012
Segment Reporting Information [Line Items]
Net sales	$ 201,500		$ 213,901		$ 412,334		$ 433,531
Operating income (loss)	20,439		(30,568)		38,321		(80,549)
Depreciation and amortization	7,719	[1]	46,939	[1]	15,215	[1]	82,651	[1]
Carbonless Paper [Member]
Segment Reporting Information [Line Items]
Net sales	88,287		106,329		178,027		219,876
Operating income (loss)	8,889		(13,495)		19,683		(40,750)
Depreciation and amortization	3,851	[1]	25,603	[1]	7,506	[1]	44,879	[1]
Thermal Papers [Member]
Segment Reporting Information [Line Items]
Net sales	104,828		99,579		217,394		198,412
Operating income (loss)	12,104		(8,279)		18,530		(30,061)
Depreciation and amortization	3,354	[1]	20,577	[1]	6,709	[1]	35,982	[1]
Net Paper Segments [Member]
Segment Reporting Information [Line Items]
Net sales	193,115		205,908		395,421		418,288
Operating income (loss)	20,993		(21,774)		38,213		(70,811)
Depreciation and amortization	7,205	[1]	46,180	[1]	14,215	[1]	80,861	[1]
Encapsys [Member]
Segment Reporting Information [Line Items]
Net sales	12,950		12,865		26,068		26,194
Operating income (loss)	3,254		2,932		6,690		5,074
Depreciation and amortization	497	[1]	743	[1]	964	[1]	1,754	[1]
Unallocated Corporate Charges [Member]
Segment Reporting Information [Line Items]
Operating income (loss)	(3,127)		(11,026)		(5,191)		(13,171)
Depreciation and amortization	17	[1]	16	[1]	36	[1]	36	[1]
Intersegment [Member]
Segment Reporting Information [Line Items]
Net sales	(4,565)	[2]	(4,872)	[2]	(9,155)	[2]	(10,951)	[2]
Operating income (loss)	$ (681)	[2]	$ (700)	[2]	$ (1,391)	[2]	$ (1,641)	[2]

[1] Depreciation and amortization are allocated to the reportable segments based on the amount of activity provided by departments to the respective product lines in each reportable segment.

[2] Intersegment represents the portion of the Encapsys segment financial results relating to microencapsulated products provided internally for the production of carbonless papers.

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Postretirement Benefit Plans Other Than Pensions (Components Of Other Postretirement Benefit Cost) (Details) (Other Postretirement Benefits [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 81	$ 94	$ 162	$ 187
Interest cost	375	470	750	940
Amortization of prior service credit	(519)	(650)	(1,038)	(1,300)
Curtailment gain		(3,726)		(3,726)
Net periodic benefit income	$ (63)	$ (3,812)	$ (126)	$ (3,899)

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Commitments And Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies

12.      COMMITMENTS AND CONTINGENCIES

Lower Fox River

Appvion Removed as a Potentially Responsible Party (“PRP”).On April 10, 2012, the United States District Court for the Eastern District of Wisconsin granted Appvion’s motion for summary judgment and dismissed all claims against Appvion in the enforcement action.  The decision establishes that Appvion is no longer a PRP, no longer liable under the federal Comprehensive Environmental Response, Compensation, and Liability Act, (“CERCLA” or “Superfund”), no longer considered a legal successor to NCR’s liabilities, and no longer required to comply with the 106 Order commanding remediation of the Lower Fox River. In addition, on July 3, 2012, the United States District Court for the Eastern District of Wisconsin determined that Appleton Coated Paper Company and NCR did not arrange for the disposal of hazardous waste within the meaning of CERCLA.

The rulings do not affect Appvion’s rights or obligations to share defense and liability costs with NCR in accordance with the terms of  a 1998 agreement and a 2005 arbitration determination (“the Arbitration”) arising out of Appvion’s acquisition of assets from NCR in 1978 while it was a subsidiary of B.A.T Industries Limited (“BAT”). Appvion and BAT have joint and several liability under the Arbitration. Appvion has initiated the dispute resolution procedures outlined in the 1998 agreement. Issues in dispute include the scope of Appvion’s liability under the agreement as well as funding requests and supporting documentation from NCR (the “Dispute Resolution”). The current carrying amount of Appvion’s liability under the Arbitration is $61.7 million which represents Appvion’s best estimate of amounts to be paid for 2012 and 2013. On June 8, 2012, BAT served AWA with a claim filed in a United Kingdom court, seeking a declaration that BAT is indemnified by AWA from and against any losses relating to the Lower Fox River. On June 26, 2012, BAT served Appvion with the same claim, seeking a declaration that BAT is indemnified by Appvion. Appvion intends to vigorously defend against this claim and has filed an application challenging the jurisdiction of the United Kingdom court.

Prior to the ruling in the above enforcement action, the United States Environmental Protection Agency (“EPA”) and Wisconsin Department of Natural Resources (“DNR”) claimed Appvion was a PRP with respect to historic discharges of polychlorinated biphenyls (“PCBs”) into the Lower Fox River in Wisconsin. Carbonless paper containing PCBs was manufactured at what is currently the Appleton plant from 1954 until 1971. During this period, wastewater containing PCBs was discharged into the Lower Fox River from a publicly-owned treatment works, from the Combined Locks, Wisconsin paper mill and from other local industrial facilities. Wastewater from the Appleton plant was processed through the publicly-owned treatment works.Appvion purchased the Appleton plant and the Combined Locks, Wisconsin paper mill from NCR in 1978, long after the use of PCBs in the manufacturing process was discontinued.The EPA issued an administrative order in November 2007, directing the PRPs to implement the remedial action of the Fox River pursuant to which certain of the PRPs commenced remediation in 2008. The various PRPs, including NCR, the EPA and the DNR continue to contest the scope, extent and costs of the remediation as well as the appropriate basis for determining the parties’ relative shares of the remediation cost.

The rulings also do not affect either of the two indemnification agreements entered in 2001 wherein AWA agreed to indemnify PDC and PDC agreed to indemnify Appvion for costs, expenses and liabilities related to certain governmental and third-party environmental claims(including certain claims under the Arbitration),  which are defined in the agreements as the Fox River Liabilities. Appvion has recorded a $61.7 million environmental indemnification receivable as of June 30, 2013.

Estimates of Liability.The accrued Arbitration liability is derived from available information, including consideration of uncertainties regarding the scope and cost of implementing the final remediation plan, the scope of restoration and final valuation of natural resource damage (“NRD”) assessments, the evolving nature of remediation and restoration technologies and governmental policies, NCR’s share of liability relative to other PRPs and the extent of BAT’s performance under the Arbitration. Appvion believes NCR has paid more than its estimated share of the liability based on the assumptions below. Based on the analysis of available information, it is reasonably possible that the Company’s costs to satisfy its Arbitration liability, when ultimately settled, could range from $10 million to $310 million, with a payment period extending beyond ten years. The Company has recorded a liability of $61.7 million at June 30, 2013, which is its best estimate of the probable loss within this range. The Company believes the likelihood of an outcome in the upper end of the range is significantly less than other possible outcomes within the range.  Interim legal determinations may periodically obligate NCR (and BAT and Appvion pursuant to the Arbitration) to fund portions of the cleanup costs to extents greater than NCR’s share as finally determined, and in such instances, Appvion may reserve additional amounts (including appropriate reimbursement under its indemnification agreements as discussed below).

The following assumptions were used in evaluating Appvion’s Arbitration liability:

" As of December 31, 2012, NCR has recorded an estimated liability of $115 million representing its portion of defense and liability costs with respect to the Lower Fox River;

" Technical analyses contending that discharges from NCR’s former assets represent 8% to 10% of the total PCBs discharged by the PRPs;

" Appvion’s and BAT’s joint and several responsibility for over half of the claims asserted against NCR and Appvion, based on the Arbitration and the Dispute Resolution;

" Based on legal analyses and ongoing reviews of publicly-available financial information, Appvion believes that other PRPs will be required, and have adequate financial resources, to pay their respective shares of the remediation and NRD claims for the Lower Fox River; and

" legal fees and other expenses.

Appvion believes its recorded liability reflects its best estimate of expected payments during 2013 under the Arbitration Agreement. While it is reasonably possible that Appvion may be responsible beyond 2013 for amounts under the Arbitration payments beyond 2013 are not deemed probable because ongoing litigation, continuing negotiation, and the Dispute Resolution process could significantly affect Appvion’s future obligation under the Arbitration.

AWA Indemnification.Pursuant to two indemnification agreements entered in 2001, AWA agreed to indemnify PDC and PDC agreed to indemnify Appvion for costs, expenses and liabilities related to certain governmental and third-party environmental claims, which are defined in the agreements as the Fox River Liabilities.

Under the indemnification agreements, Appvion is indemnified for the first $75 million of Fox River Liabilities and for amounts in excess of $100 million. During 2008, Appvion paid $25 million to satisfy its portion of the Fox River Liabilities not covered by the indemnification agreement with AWA. As of June 30, 2013, AWA has paid $276.8 million in connection with Fox River Liabilities. At June 30, 2013, PDC’s total indemnification receivable from AWA was $61.7 million, all of which is recorded in other current assets. At June 30, 2013, the total Appvion indemnification receivable from PDC was $61.7 million, all of which is recorded in other current assets.

In March 2008, Appvion received favorable jury verdicts in a state court declaratory judgment relating to insurance coverage of its environmental claims involving the Fox River. A final judgment and order was entered in January 2009. The insurers appealed the final judgment. In June 2010, the Wisconsin Court of Appeals upheld the final judgment. Settlements have been negotiated between the insurers and Appvion. Under the terms of the indemnification agreement, recoveries from insurance are reimbursed to AWA to the extent of its indemnification obligation. During 2010, Appvion recorded an $8.9 million receivable, representing settlements to be received in excess of amounts reimbursable to AWA, in the Consolidated Balance Sheet as of January 1, 2011. During 2011, Appvion received $6.2 million of these funds. During third quarter 2012, an additional  environmental expense insurance recovery of $2.2 million was recorded as a separate line item within operating income on the  Consolidated Statement of Comprehensive Loss and all remaining funds were received by Appvion in 2012.

The indemnification agreements negotiated with AWA are designed to ensure that Appvion will not be required to fund any of the indemnified costs and expenses in relation to the Fox River Liabilities. This arrangement is working as designed and is expected to continue to protect Appvion with respect to the indemnified costs and expenses, based on Appvion’s review of the financial condition of AWA and estimates of Appvion’s liability. As earlier noted, Appvion’s ultimate liability pursuant to the Arbitration could prove to be significantly larger than the current carrying amount and potentially could exceed the financial capability of AWA. In the event Appvion is unable to secure payment from AWA or its former parent companies, Appvion may be liable for amounts pursuant to the Arbitration and these amounts may be material to Appvion.

West Carrollton

The West Carrollton, Ohio facility operates pursuant to various state and federal permits for discharges and emissions to air and water. As a result of the de-inking of carbonless paper containing PCBs through the early 1970s, there may have been releases of PCBs and volatile organic compounds into the soil in the area of the wastewater impoundments at the West Carrollton facility and low levels of PCBs have been detected in the groundwater immediately under this area. In addition, PCB contamination is present in sediment in the adjacent Great Miami River, but it is believed that this contamination is from a source other than the West Carrollton facility.

Based on investigation and delineation of PCB contamination in soil and groundwater in the area of the wastewater impoundments, the Company believes that it may be necessary to undertake remedial action in the future, although the Company is currently under no obligation to do so. The Company has not had any discussions or communications with any federal, state or local agencies or authorities regarding remedial action to address PCB contamination at the West Carrollton facility. The cost for remedial action, which could include installation of a cap, long-term pumping, treating and/or monitoring of groundwater and removal of sediment in the Great Miami River, was estimated in 2001 to range up to approximately $10.5 million, with approximately $3 million in short-term capital costs and the remainder to be incurred over a period of 30 years. However, costs could exceed this amount if additional contamination is discovered, if additional remedial action is necessary or if the remedial action costs are more than expected.

Because of the uncertainty surrounding the ultimate course of action for the West Carrollton facility property, the Great Miami River remediation and the Company’s share of these remediation costs, if any, and since the Company is currently under no obligation to undertake remedial action in the future, no provision has been recorded in its financial statements for estimated remediation costs. In conjunction with the acquisition of PDC by the ESOP in 2001, and as limited by the terms of the purchase agreement, AWA agreed to indemnify the Company for 50% of all environmental liabilities at West Carrollton up to $5.0 million and 100% of all such environmental costs exceeding $5.0 million. In addition, the former owners and operators of the West Carrollton facility may be liable for all or part of the cost of remediation of historic PCB contamination.

Other

From time to time, the Company may be subject to various demands, claims, suits or other legal proceedings arising in the ordinary course of business. A comprehensive insurance program is maintained to provide a measure of financial protection against such matters, though not all such exposures are, or can be, addressed by insurance. Estimated costs are recorded for such demands, claims, suits or proceedings of this nature when reasonably determinable. The Company has successfully defended such claims, settling some for amounts which are not material to the business and obtaining dismissals in others. While the Company will vigorously defend itself and expects to prevail in any similar cases that may be brought against it in the future, there can be no assurance that it will be successful.

Except as described above, and assuming the Company’s expectations regarding defending such demands, claims, suits or other legal or regulatory proceedings prove accurate, the Company does not believe that any pending or threatened demands, claims, suits or other legal proceedings will have, individually or in the aggregate, a materially adverse effect on its business, financial condition and results of operations or cash flows. 

Appvion, Inc. [Member]

Commitments And Contingencies

12.      COMMITMENTS AND CONTINGENCIES

Lower Fox River

Appvion Removed as a Potentially Responsible Party (“PRP”).On April 10, 2012, the United States District Court for the Eastern District of Wisconsin granted Appvion’s motion for summary judgment and dismissed all claims against Appvion in the enforcement action.  The decision establishes that Appvion is no longer a PRP, no longer liable under the federal Comprehensive Environmental Response, Compensation, and Liability Act, (“CERCLA” or “Superfund”), no longer considered a legal successor to NCR’s liabilities, and no longer required to comply with the 106 Order commanding remediation of the Lower Fox River. In addition, on July 3, 2012, the United States District Court for the Eastern District of Wisconsin determined that Appleton Coated Paper Company and NCR did not arrange for the disposal of hazardous waste within the meaning of CERCLA.

The rulings do not affect Appvion’s rights or obligations to share defense and liability costs with NCR in accordance with the terms of  a 1998 agreement and a 2005 arbitration determination (“the Arbitration”) arising out of Appvion’s acquisition of assets from NCR in 1978 while it was a subsidiary of B.A.T Industries Limited (“BAT”). Appvion and BAT have joint and several liability under the Arbitration. Appvion has initiated the dispute resolution procedures outlined in the 1998 agreement. Issues in dispute include the scope of Appvion’s liability under the agreement as well as funding requests and supporting documentation from NCR (the “Dispute Resolution”). The current carrying amount of Appvion’s liability under the Arbitration is $61.7 million which represents Appvion’s best estimate of amounts to be paid for 2012 and 2013. On June 8, 2012, BAT served AWA with a claim filed in a United Kingdom court, seeking a declaration that BAT is indemnified by AWA from and against any losses relating to the Lower Fox River. On June 26, 2012, BAT served Appvion with the same claim, seeking a declaration that BAT is indemnified by Appvion. Appvion intends to vigorously defend against this claim and has filed an application challenging the jurisdiction of the United Kingdom court.

Prior to the ruling in the above enforcement action, the United States Environmental Protection Agency (“EPA”) and Wisconsin Department of Natural Resources (“DNR”) claimed Appvion was a PRP with respect to historic discharges of polychlorinated biphenyls (“PCBs”) into the Lower Fox River in Wisconsin. Carbonless paper containing PCBs was manufactured at what is currently the Appleton plant from 1954 until 1971. During this period, wastewater containing PCBs was discharged into the Lower Fox River from a publicly-owned treatment works, from the Combined Locks, Wisconsin paper mill and from other local industrial facilities. Wastewater from the Appleton plant was processed through the publicly-owned treatment works.Appvion purchased the Appleton plant and the Combined Locks, Wisconsin paper mill from NCR in 1978, long after the use of PCBs in the manufacturing process was discontinued.The EPA issued an administrative order in November 2007, directing the PRPs to implement the remedial action of the Fox River pursuant to which certain of the PRPs commenced remediation in 2008. The various PRPs, including NCR, the EPA and the DNR continue to contest the scope, extent and costs of the remediation as well as the appropriate basis for determining the parties’ relative shares of the remediation cost.

The rulings also do not affect either of the two indemnification agreements entered in 2001 wherein AWA agreed to indemnify PDC and PDC agreed to indemnify Appvion for costs, expenses and liabilities related to certain governmental and third-party environmental claims(including certain claims under the Arbitration),  which are defined in the agreements as the Fox River Liabilities. Appvion has recorded a $61.7 million environmental indemnification receivable as of June 30, 2013.

Estimates of Liability.The accrued Arbitration liability is derived from available information, including consideration of uncertainties regarding the scope and cost of implementing the final remediation plan, the scope of restoration and final valuation of natural resource damage (“NRD”) assessments, the evolving nature of remediation and restoration technologies and governmental policies, NCR’s share of liability relative to other PRPs and the extent of BAT’s performance under the Arbitration. Appvion believes NCR has paid more than its estimated share of the liability based on the assumptions below. Based on the analysis of available information, it is reasonably possible that the Company’s costs to satisfy its Arbitration liability, when ultimately settled, could range from $10 million to $310 million, with a payment period extending beyond ten years. The Company has recorded a liability of $61.7 million at June 30, 2013, which is its best estimate of the probable loss within this range. The Company believes the likelihood of an outcome in the upper end of the range is significantly less than other possible outcomes within the range.  Interim legal determinations may periodically obligate NCR (and BAT and Appvion pursuant to the Arbitration) to fund portions of the cleanup costs to extents greater than NCR’s share as finally determined, and in such instances, Appvion may reserve additional amounts (including appropriate reimbursement under its indemnification agreements as discussed below).

The following assumptions were used in evaluating Appvion’s Arbitration liability:

" As of December 31, 2012, NCR has recorded an estimated liability of $115 million representing its portion of defense and liability costs with respect to the Lower Fox River;

" Technical analyses contending that discharges from NCR’s former assets represent 8% to 10% of the total PCBs discharged by the PRPs;

" Appvion’s and BAT’s joint and several responsibility for over half of the claims asserted against NCR and Appvion, based on the Arbitration and the Dispute Resolution;

" Based on legal analyses and ongoing reviews of publicly-available financial information, Appvion believes that other PRPs will be required, and have adequate financial resources, to pay their respective shares of the remediation and NRD claims for the Lower Fox River; and

" legal fees and other expenses.

Appvion believes its recorded liability reflects its best estimate of expected payments during 2013 under the Arbitration Agreement. While it is reasonably possible that Appvion may be responsible beyond 2013 for amounts under the Arbitration payments beyond 2013 are not deemed probable because ongoing litigation, continuing negotiation, and the Dispute Resolution process could significantly affect Appvion’s future obligation under the Arbitration.

AWA Indemnification.Pursuant to two indemnification agreements entered in 2001, AWA agreed to indemnify PDC and PDC agreed to indemnify Appvion for costs, expenses and liabilities related to certain governmental and third-party environmental claims, which are defined in the agreements as the Fox River Liabilities.

Under the indemnification agreements, Appvion is indemnified for the first $75 million of Fox River Liabilities and for amounts in excess of $100 million. During 2008, Appvion paid $25 million to satisfy its portion of the Fox River Liabilities not covered by the indemnification agreement with AWA. As of June 30, 2013, AWA has paid $276.8 million in connection with Fox River Liabilities. At June 30, 2013, PDC’s total indemnification receivable from AWA was $61.7 million, all of which is recorded in other current assets. At June 30, 2013, the total Appvion indemnification receivable from PDC was $61.7 million, all of which is recorded in other current assets.

In March 2008, Appvion received favorable jury verdicts in a state court declaratory judgment relating to insurance coverage of its environmental claims involving the Fox River. A final judgment and order was entered in January 2009. The insurers appealed the final judgment. In June 2010, the Wisconsin Court of Appeals upheld the final judgment. Settlements have been negotiated between the insurers and Appvion. Under the terms of the indemnification agreement, recoveries from insurance are reimbursed to AWA to the extent of its indemnification obligation. During 2010, Appvion recorded an $8.9 million receivable, representing settlements to be received in excess of amounts reimbursable to AWA, in the Consolidated Balance Sheet as of January 1, 2011. During 2011, Appvion received $6.2 million of these funds. During third quarter 2012, an additional  environmental expense insurance recovery of $2.2 million was recorded as a separate line item within operating income on the  Consolidated Statement of Comprehensive Loss and all remaining funds were received by Appvion in 2012.

The indemnification agreements negotiated with AWA are designed to ensure that Appvion will not be required to fund any of the indemnified costs and expenses in relation to the Fox River Liabilities. This arrangement is working as designed and is expected to continue to protect Appvion with respect to the indemnified costs and expenses, based on Appvion’s review of the financial condition of AWA and estimates of Appvion’s liability. As earlier noted, Appvion’s ultimate liability pursuant to the Arbitration could prove to be significantly larger than the current carrying amount and potentially could exceed the financial capability of AWA. In the event Appvion is unable to secure payment from AWA or its former parent companies, Appvion may be liable for amounts pursuant to the Arbitration and these amounts may be material to Appvion.

West Carrollton

The West Carrollton, Ohio facility operates pursuant to various state and federal permits for discharges and emissions to air and water. As a result of the de-inking of carbonless paper containing PCBs through the early 1970s, there may have been releases of PCBs and volatile organic compounds into the soil in the area of the wastewater impoundments at the West Carrollton facility and low levels of PCBs have been detected in the groundwater immediately under this area. In addition, PCB contamination is present in sediment in the adjacent Great Miami River, but it is believed that this contamination is from a source other than the West Carrollton facility.

Based on investigation and delineation of PCB contamination in soil and groundwater in the area of the wastewater impoundments, the Company believes that it may be necessary to undertake remedial action in the future, although the Company is currently under no obligation to do so. The Company has not had any discussions or communications with any federal, state or local agencies or authorities regarding remedial action to address PCB contamination at the West Carrollton facility. The cost for remedial action, which could include installation of a cap, long-term pumping, treating and/or monitoring of groundwater and removal of sediment in the Great Miami River, was estimated in 2001 to range up to approximately $10.5 million, with approximately $3 million in short-term capital costs and the remainder to be incurred over a period of 30 years. However, costs could exceed this amount if additional contamination is discovered, if additional remedial action is necessary or if the remedial action costs are more than expected.

Because of the uncertainty surrounding the ultimate course of action for the West Carrollton facility property, the Great Miami River remediation and the Company’s share of these remediation costs, if any, and since the Company is currently under no obligation to undertake remedial action in the future, no provision has been recorded in its financial statements for estimated remediation costs. In conjunction with the acquisition of PDC by the ESOP in 2001, and as limited by the terms of the purchase agreement, AWA agreed to indemnify the Company for 50% of all environmental liabilities at West Carrollton up to $5.0 million and 100% of all such environmental costs exceeding $5.0 million. In addition, the former owners and operators of the West Carrollton facility may be liable for all or part of the cost of remediation of historic PCB contamination.

Other

From time to time, the Company may be subject to various demands, claims, suits or other legal proceedings arising in the ordinary course of business. A comprehensive insurance program is maintained to provide a measure of financial protection against such matters, though not all such exposures are, or can be, addressed by insurance. Estimated costs are recorded for such demands, claims, suits or proceedings of this nature when reasonably determinable. The Company has successfully defended such claims, settling some for amounts which are not material to the business and obtaining dismissals in others. While the Company will vigorously defend itself and expects to prevail in any similar cases that may be brought against it in the future, there can be no assurance that it will be successful.

Except as described above, and assuming the Company’s expectations regarding defending such demands, claims, suits or other legal or regulatory proceedings prove accurate, the Company does not believe that any pending or threatened demands, claims, suits or other legal proceedings will have, individually or in the aggregate, a materially adverse effect on its business, financial condition and results of operations or cash flows. 

XML

Property, Plant And Equipment (Components Of Property, Plant And Equipment) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Property, Plant And Equipment [Abstract]
Land and improvements	$ 9,634	$ 9,634
Buildings and improvements	135,268	134,144
Machinery and equipment	668,257	663,915
Software	36,701	33,643
Capital lease	309	304
Construction in progress	12,304	8,631
Property, plant and equipment, gross, total	862,473	850,271
Accumulated depreciation	(620,347)	(607,006)
Property, plant and equipment, net, total	$ 242,126	$ 243,265

XML

Long-Term Incentive Compensation (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended
	Jan. 02, 2013	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2013 Deferred Compensation Agreement [Member]	Jul. 01, 2012 Deferred Compensation Agreement [Member]	Jun. 30, 2013 Deferred Compensation Agreement [Member]	Jul. 01, 2012 Deferred Compensation Agreement [Member]	Mar. 31, 2013 Appleton Papers Long Term Incentive Plan (LTIP) [Member]	Jul. 01, 2012 Appleton Papers Long Term Incentive Plan (LTIP) [Member]	Jun. 30, 2013 Appleton Papers Long Term Incentive Plan (LTIP) [Member]	Jul. 01, 2012 Appleton Papers Long Term Incentive Plan (LTIP) [Member]	Mar. 31, 2013 Long-Term Restricted Stock Unit Plan (RSU) [Member]	Jun. 30, 2013 Long-Term Restricted Stock Unit Plan (RSU) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair market value of common stock		$ 17.85		$ 17.85
Units granted													189,100			102,245
Forfeited unvested units															3,500
Units outstanding						207,925
Share-based compensation expense		$ 0.3	$ 1.0	$ 0.6	$ 1.2						$ 0.5	$ 1.6	$ 0.7	$ 1.7
Deferred compensation expense							$ 0.1	$ 0.2	$ 0.2	$ 0.3
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised	160,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number	160,000
Share Price		$ 17.85		$ 17.85

XML

Guarantor Financial Information (Tables)

3 Months Ended

Mar. 31, 2013

Guarantor Financial Information [Abstract]

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	-		$	6,083		$	-	$	470		$	-		$	6,553
Accounts receivable, net		-			86,426			-		4,571			-			90,997
Inventories		-			101,802			-		1,348			-			103,150
Due from parent		-			61,717			-		-			(61,717	)		-
Other current assets		61,717			7,716			-		243			-			69,676
Total current assets		61,717			263,744			-		6,632			(61,717	)		270,376
Property, plant and equipment, net		-			242,116			-		10			-			242,126
Investment in subsidiaries		(377,066	)		14,247			-		-			362,819			-
Other assets		12			59,884			-		14			-			59,910
Total assets	$	(315,337	)	$	579,991		$	-	$	6,656		$	301,102		$	572,412
LIABILITIES, REDEEMABLE COMMON STOCK, COMMON STOCK, PAID-IN CAPITAL, DUE FROM PARENT, ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Current liabilities
Current portion of long-term debt	$	-		$	61,935		$	-	$	-		$	-		$	61,935
Accounts payable		-			65,738			-		69			-			65,807
Due to (from) parent and affiliated companies		61,717			9,741			-		(9,741	)		(61,717	)		-
Other accrued liabilities		-			101,579			-		2,081			-			103,660
Total current liabilities		61,717			238,993			-		(7,591	)		(61,717	)		231,402
Long-term debt		-			518,040			-		-			-			518,040
Other long-term liabilities		-			200,024			-		-			-			200,024
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income		(377,054	)		(377,066	)		-		14,247			362,819			(377,054	)
Total liabilities, redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	$	(315,337	)	$	579,991		$	-	$	6,656		$	301,102		$	572,412

CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 29, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	-		$	1,593		$	-	$	258		$	-		$	1,851
Accounts receivable, net		-			88,111			-		4,569			-			92,680
Inventories		-			92,939			-		1,410			-			94,349
Due from parent		-			65,000			-		-			(65,000	)		-
Other current assets		65,000			5,570			-		50			-			70,620
Total current assets		65,000			253,213			-		6,287			(65,000	)		259,500
Property, plant and equipment, net		-			243,254			-		11			-			243,265
Investment in subsidiaries		(352,909	)		14,216			-		-			338,693			-
Other assets		12			58,298			-		15			-			58,325
Total assets	$	(287,897	)	$	568,981		$	-	$	6,313		$	273,693		$	561,090
LIABILITIES, REDEEMABLE COMMON STOCK, COMMON STOCK, PAID-IN CAPITAL, DUE FROM PARENT, ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Current liabilities
Current portion of long-term debt	$	-		$	3,975		$	-	$	-		$	-		$	3,975
Accounts payable		-			68,574			-		26			-			68,600
Due to (from) parent and affiliated companies		65,000			10,799			-		(10,799	)		(65,000	)		-
Other accrued liabilities		-			119,690			-		2,412			-			122,102
Total current liabilities		65,000			203,038			-		(8,361	)		(65,000	)		194,677
Long-term debt		-			511,624			-		-			-			511,624
Other long-term liabilities		-			207,228			-		458			-			207,686
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income		(352,897	)		(352,909	)		-		14,216			338,693			(352,897	)
Total liabilities, redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	$	(287,897	)	$	568,981		$	-	$	6,313		$	273,693		$	561,090

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary		Eliminations			Consolidated
Net sales	$	-		$	410,157		$	-	$	21,837	$	(19,660	)	$	412,334
Cost of sales		-			311,016			-		19,927		(19,630	)		311,313
Gross profit		-			99,141			-		1,910		(30	)		101,021
Selling, general and administrative expenses		-			61,689			-		1,011		-			62,700
Operating income		-			37,452			-		899		(30	)		38,321
Interest expense		-			29,749			-		-		-			29,749
Debt extinguishment expense		-			24,767			-		-		-			24,767
Interest income		-			-			-		-		-			-
Loss in equity investments		16,752			24			-		-		(16,776	)		-
Other (income) expense		-			(382	)		-		737		25			380
(Loss) income before income taxes		(16,752	)		(16,706	)		-		162		16,721			(16,575	)
Provision for income taxes		-			46			-		131		-			177
Net (loss) income		(16,752	)		(16,752	)		-		31		16,721			(16,752	)
Other comprehensive income
Changes in retirement plans		(795	)		(795	)		-		-		795			(795	)
Realized and unrealized gains on derivatives		1,012			1,012			-		-		(1,012	)		1,012
Total other comprehensive income		217			217			-		-		(217	)		217
Comprehensive (loss) income	$	(16,535	)	$	(16,535	)	$	-	$	31	$	16,504		$	(16,535	)

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE SIX MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	434,114		$	-	$	25,556		$	(26,139	)	$	433,531
Cost of sales		-			411,245			-		26,098			(25,911	)		411,432
Gross profit (loss)		-			22,869			-		(542	)		(228	)		22,099
Selling, general and administrative expenses		-			75,145			-		1,031			-			76,176
Restructuring		-			26,472			-		-			-			26,472
Operating loss		-			(78,748	)		-		(1,573	)		(228	)		(80,549	)
Interest expense		-			30,267			-		-			(174	)		30,093
Interest income		-			(12	)		-		(174	)		174			(12	)
Loss in equity investments		111,836			1,779			-		-			(113,615	)		-
Other expense		-			1,002			-		140			(76	)		1,066
Loss before income taxes		(111,836	)		(111,784	)		-		(1,539	)		113,463			(111,696	)
Provision for income taxes		-			52			-		88			-			140
Net loss		(111,836	)		(111,836	)		-		(1,627	)		113,463			(111,836	)
Other comprehensive loss
Changes in retirement plans		(4,782	)		(4,782	)		-		-			4,782			(4,782	)
Realized and unrealized losses on derivatives		(769	)		(769	)		-		-			769			(769	)
Total other comprehensive loss		(5,551	)		(5,551	)		-		-			5,551			(5,551	)
Comprehensive loss	$	(117,387	)	$	(117,387	)	$	-	$	(1,627	)	$	119,014		$	(117,387	)

Condensed Consolidating Statement Of Comprehensive (Loss) Income

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	200,633		$	-	$	10,630		$	(9,763	)	$	201,500
Cost of sales		-			148,558			-		9,690			(9,531	)		148,717
Gross profit		-			52,075			-		940			(232	)		52,783
Selling, general and administrative expenses		-			31,871			-		473			-			32,344
Operating income		-			20,204			-		467			(232	)		20,439
Interest expense		-			14,788			-		-			-			14,788
Debt extinguishment expense		-			24,767			-		-			-			24,767
Loss in equity investments		18,895			(392	)		-		-			(19,287	)		-
Other (income) expense		-			(868	)		-		440			97			(331	)
(Loss) income before income taxes		(18,895	)		(18,875	)		-		27			18,958			(18,785	)
Provision for income taxes		-			20			-		90			-			110
Net loss		(18,895	)		(18,895	)		-		(63	)		18,958			(18,895	)
Other comprehensive loss
Changes in retirement plans		(398	)		(398	)		-		-			398			(398	)
Realized and unrealized losses on derivatives		(282	)		(282	)		-		-			282			(282	)
Total other comprehensive loss		(680	)		(680	)		-		-			680			(680	)
Comprehensive loss	$	(19,575	)	$	(19,575	)	$	-	$	(63	)	$	19,638		$	(19,575	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	213,735		$	-	$	13,091		$	(12,925	)	$	213,901
Cost of sales		-			201,048			-		13,031			(12,822	)		201,257
Gross profit		-			12,687			-		60			(103	)		12,644
Selling, general and administrative expenses		-			41,643			-		533			-			42,176
Restructuring		-			1,036			-		-			-			1,036
Operating loss		-			(29,992	)		-		(473	)		(103	)		(30,568	)
Interest expense		-			15,165			-		-			(79	)		15,086
Interest income		-			-			-		(79	)		79			-
Loss in equity investments		46,950			883			-		-			(47,833	)		-
Other expense		-			880			-		449			(108	)		1,221
Loss before income taxes		(46,950	)		(46,920	)		-		(843	)		47,838			(46,875	)
Provision for income taxes		-			30			-		45			-			75
Net loss		(46,950	)		(46,950	)		-		(888	)		47,838			(46,950	)
Other comprehensive loss
Changes in retirement plans		(4,254	)		(4,254	)		-		-			4,254			(4,254	)
Realized and unrealized gains on derivatives		536			536			-		-			(536	)		536
Total other comprehensive loss		(3,718	)		(3,718	)		-		-			3,718			(3,718	)
Comprehensive loss	$	(50,668	)	$	(50,668	)	$	-	$	(888	)	$	51,556		$	(50,668)

Condensed Consolidating Statement Of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent						Subsidiary		Non-Guarantor
	Guarantor			Issuer			Guarantors		Subsidiary			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) income	$	(16,752	)	$	(16,752	)	$	-	$	31		$	16,721		$	(16,752	)
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:
Depreciation and amortization		-			15,214			-		1			-			15,215
Other		-			10,031			-		737			-			10,768
Change in assets and liabilities,    net		21,467			(41,510	)		-		(1,615	)		(16,721	)		(38,379	)
Net cash provided (used) by operating activities		4,715			(33,017	)		-		(846	)		-			(29,148	)
Cash flows from investing activities:
Proceeds from sale of equipment		-			6			-		-			-			6
Additions to property, plant and    equipment		-			(10,457	)		-		-			-			(10,457	)
Net cash used by investing    activities		-			(10,451	)		-		-			-			(10,451	)
Cash flows from financing activities:
Payments of senior secured first lien notes payable		-			(300,710	)		-		-			-			(300,710	)
Proceeds from first lien term loan		-			331,650			-		-			-			331,650
Debt acquisition costs		-			(6,364	)		-		-			-			(6,364	)
Payments relating to capital lease obligations		-			(44	)		-		-			-			(44	)
Proceeds from old revolving line of credit		-			155,300			-		-			-			155,300
Payments of old revolving line of    credit		-			(159,000	)		-		-			-			(159,000	)
Proceeds from new revolving line of credit		-			34,600			-		-			-			34,600
Payments of State of Ohio loans		-			(654	)		-		-			-			(654	)
Due to (from) parent and affiliated    companies, net		4,339			(5,397	)		-		1,058			-			-
Proceeds from issuance of redeemable common stock		1,651			-			-		-			-			1,651
Payments to redeem common    stock		(10,705	)		-			-		-			-			(10,705	)
Decrease in cash overdraft		-			(1,410	)		-		-			-			(1,410	)
Net cash (used) provided by    financing activities		(4,715	)		47,971			-		1,058			-			44,314
Effect of foreign exchange rate changes on cash and cash equivalents		-			(13	)		-		-			-			(13	)
Change in cash and cash equivalents		-			4,490			-		212			-			4,702
Cash and cash equivalents at beginning of period		-			1,593			-		258			-			1,851
Cash and cash equivalents at end of period	$	-		$	6,083		$	-	$	470		$	-		$	6,553

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent						Subsidiary		Non-Guarantor
	Guarantor			Issuer			Guarantors		Subsidiary			Eliminations			Consolidated
Cash flows from operating activities:
Net loss	$	(111,836	)	$	(111,836	)	$	-	$	(1,627	)	$	113,463		$	(111,836	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Depreciation and amortization		-			82,649			-		2			-			82,651
Other		-			14,828			-		140			-			14,968
Change in assets and liabilities, net		117,102			(7,643	)		-		(1,456	)		(113,463	)		(5,460	)
Net cash provided (used) by operating activities		5,266			(22,002	)		-		(2,941	)		-			(19,677	)
Cash flows from investing activities:
Proceeds from sale of equipment		-			2			-		-			-			2
Additions to property, plant and equipment		-			(4,385	)		-		-			-			(4,385	)
Net cash used by investing activities		-			(4,383	)		-		-			-			(4,383	)
Cash flows from financing activities:
Payments relating to capital lease obligation		-			(24	)		-		-			-			(24	)
Proceeds from revolving line of credit		-			136,150			-		-			-			136,150
Payments of revolving line of credit		-			(104,000	)		-		-			-			(104,000	)
Payments of State of Ohio loans		-			(620	)		-		-			-			(620	)
Proceeds from municipal debt		-			300			-		-			-			300
Due to (from) parent and affiliated companies, net		(1,729	)		(4,686	)		-		2,957			-			-
Proceeds from issuance of redeemable common stock		1,564			-			-		-			-			1,564
Payments to redeem common stock		(8,559	)		-			-		-			-			(8,559	)
Decrease in cash overdraft		-			(4,635	)		-		-			-			(4,635	)
Net cash (used) provided by financing activities		(5,266	)		22,485			-		2,957			-			20,176
Effect of foreign exchange rate changes on cash and cash equivalents		-			(7	)		-		-			-			(7	)
Change in cash and cash equivalents		-			(3,907	)		-		16			-			(3,891	)
Cash and cash equivalents at beginning of period		-			6,688			-		553			-			7,241
Cash and cash equivalents at end of period	$	-		$	2,781		$	-	$	569		$	-		$	3,350

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Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2013

Other Intangible Assets [Abstract]

Schedule Of Intangible Assets

	As of June 30, 2013				As of December 29, 2012
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable intangible assets:
Trademarks	$	44,665	$	27,324	$	44,665	$	26,275
Patents		7,808		7,808		7,808		7,808
Customer relationships		5,365		2,874		5,365		2,781
Subtotal		57,838	$	38,006		57,838	$	36,864
Unamortizable intangible assets:
Trademarks		22,865				22,865
Total	$	80,703			$	80,703

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Restructuring And Other Related Costs (Tables)

6 Months Ended

Jun. 30, 2013

Restructuring And Other Related Costs [Abstract]

Schedule Of Restructuring And Related Costs

	For the Three Months Ended July 1, 2012	For the Six Months Ended July 1, 2012	Location on Statement of Comprehensive Loss
Employee termination benefits	$ 95	$ 25,531	Restructuring
Decommissioning expense	941	941	Restructuring
Accelerated depreciation	36,873	62,253	Cost of sales
Revaluation of inventory	1,117	11,078	Cost of sales
Loss on disposal of fixed assets	-	572	Cost of sales
	$ 39,026	$ 100,375

Components Of Restructuring Reserve

	December 29, 2012 Reserve	2013 Additions to Reserve	2013 Utilization	June 30, 2013           Reserve
Exit costs – equipment decommissioning	$ 765	$                     -	$             (275)	$ 490
Employee termination benefits	18,454	-	(430)	18,024
	$ 19,219	$                     -	$ (705)	$ 18,514

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Inventories (Components Of Inventories) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Inventories [Abstract]
Finished goods	$ 55,175	$ 43,243
Raw materials, work in process, stores and spare parts	47,975	51,106
Inventories, Net	$ 103,150	$ 94,349

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Long-Term Obligations (Tables)

6 Months Ended

Jun. 30, 2013

Long-Term Obligations [Abstract]

Schedule Of Long-Term Obligations

	June 30, 2013			December 29, 2012
Old revolving credit facility at approximately 4.25%	$	-		$	3,700
New revolving credit facility at approximately 5.00%		34,600			-
Secured variable rate industrial development bonds, 0.3% average interest rate at June 30, 2013, $2,650 due in 2013 and $6,000 due in 2027		8,650			8,650
State of Ohio assistance loan at 6%, approximately $100 due monthly and final payment due May 2017		4,700			5,210
State of Ohio loan at 3%, approximately $30 due monthly and final payment due May 2019		1,857			2,002
Columbia County, Wisconsin municipal debt due December 2019		300			300
Senior subordinated notes payable at 9.75%, due June 2014		32,195			32,195
Senior secured first lien notes payable at 10.5%, due June 2015		4,290			305,000
Unamortized discount on 10.5% senior secured first lien notes payable, due June 2015		(37	)		(3,224	)
Second lien notes payable at 11.25%, due December 2015		161,766			161,766
First lien term loan at 5.75%, due June 2019		335,000			-
Unamortized discount on first lien term loan, due June 2019		(3,346	)		-
		579,975			515,599
Less obligations due within one year		(61,935	)		(3,975	)
	$	518,040		$	511,624

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Restructuring And Other Related Costs (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended	12 Months Ended	3 Months Ended		6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended
	Mar. 31, 2013	Jul. 01, 2012	Jul. 01, 2012	Dec. 29, 2012	Jun. 30, 2013 West Carrollton Mill [Member]	Jul. 01, 2012 West Carrollton Mill [Member]	Jul. 01, 2012 West Carrollton Mill [Member]	Jul. 01, 2012 Carbonless Papers [Member]	Jul. 01, 2012 Carbonless Papers [Member]	Jul. 01, 2012 Thermal Papers [Member]	Jul. 01, 2012 Thermal Papers [Member]	Jul. 01, 2012 Thermal Papers [Member] West Carrollton Mill [Member]	Jul. 01, 2012 Thermal Papers [Member] West Carrollton Mill [Member]	Jun. 30, 2013 Current Liabilities [Member]	Jun. 30, 2013 Other Long Term Liabilities [Member]	Jun. 30, 2013 Minimum [Member] West Carrollton Mill [Member]	Jun. 30, 2013 Maximum [Member] West Carrollton Mill [Member]	Mar. 31, 2013 Employee Termination [Member] West Carrollton Mill [Member] employee	Mar. 31, 2013 Employee Termination [Member] Appleton Facility [Member] employee
Restructuring Cost and Reserve [Line Items]
Purchase agreement term	15 years
Purchase agreement renewal term, years	5 years
Estimated positions eliminated (added) due to restructuring																		314	(68)
Restructuring and related charges		$ 39,026,000	$ 100,375,000	$ 106,000,000
Restructuring charges		1,036,000	26,472,000			39,000,000	100,400,000	21,500,000	55,200,000	17,500,000	45,200,000	17,500,000	45,200,000
Employee termination costs		95,000	25,531,000											1,500,000	17,000,000
Estimated remaining cash to be paid due to ceased operations					31,000,000
Estimated cash to be paid over next year due to ceased operations					1,000,000
Estimated cash to be paid over next five years due to ceased operations					12,000,000
Remaining cash to be paid over next five to 20 years due to ceased operations					$ 18,000,000
Period estimated amount of cash remains to be paid over																5 years	20 years

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Property, Plant And Equipment (Schedule Of Depreciation Expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Depreciation Expense [Line Items]
Depreciation Expense	$ 7,147	$ 46,367	$ 14,073	$ 81,508
Cost Of Sales [Member]
Depreciation Expense [Line Items]
Depreciation Expense	6,486	45,674	12,751	80,123
Selling, General And Administrative Expenses [Member]
Depreciation Expense [Line Items]
Depreciation Expense	$ 661	$ 693	$ 1,322	$ 1,385

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Other Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Other Accrued Liabilities [Abstract]

Schedule Of Accrued Liabilities

	June 30, 2013		December 29, 2012
Compensation	$	5,480	$	14,800
Trade discounts		12,614		16,796
Workers’ compensation		8,846		4,875
Accrued insurance		1,739		1,896
Other accrued taxes		1,432		1,494
Postretirement benefits other than pension		3,248		3,248
Fox River Liabilities		61,717		65,000
Restructuring reserve		1,486		1,219
Other		5,929		10,307
	$	102,491	$	119,635

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Long-Term Obligations (Schedule Of Long-Term Obligations) (Details) (USD $)			6 Months Ended			6 Months Ended					6 Months Ended				6 Months Ended			6 Months Ended		3 Months Ended	6 Months Ended		6 Months Ended		6 Months Ended
	Jun. 30, 2013	Dec. 29, 2012	Jun. 30, 2013 Revolving Credit Facility [Member]	Jun. 30, 2013 OldRevolvingCreditFacility[Member]	Dec. 29, 2012 OldRevolvingCreditFacility[Member]	Jun. 30, 2013 SeniorSecuredFirstLienNotesPayableDue2019 [Member]	Jun. 30, 2013 UnamortizedDiscountOnSeniorSecuredFirstLienNotesPayableDue2019 [Member]	Jun. 30, 2013 Industrial Development Bonds 2013 [Member]	Jun. 30, 2013 Industrial Development Bonds, Due 2027 [Member]	Dec. 29, 2012 Industrial Development Bonds, Due 2027 [Member]	Jun. 30, 2013 State Of Ohio Assistance Loan At 6% [Member]	Dec. 29, 2012 State Of Ohio Assistance Loan At 6% [Member]	Jun. 30, 2013 State Of Ohio Loan At 1% Until July 2011, Then 3% Until May 2019 [Member]	Dec. 29, 2012 State Of Ohio Loan At 1% Until July 2011, Then 3% Until May 2019 [Member]	Jun. 30, 2013 State Of Ohio Loan At 3% Until May 2019 [Member]	Jun. 30, 2013 Columbia County, Wisconsin Municipal Debt Due December 2019 [Member]	Dec. 29, 2012 Columbia County, Wisconsin Municipal Debt Due December 2019 [Member]	Jun. 30, 2013 Senior Subordinated Notes Payable, Due June 2014 [Member]	Dec. 29, 2012 Senior Subordinated Notes Payable, Due June 2014 [Member]	Jun. 30, 2013 Senior Secured First Lien Notes Payable At 10.5% [Member]	Jun. 30, 2013 Senior Secured First Lien Notes Payable At 10.5% [Member]	Dec. 29, 2012 Senior Secured First Lien Notes Payable At 10.5% [Member]	Jun. 30, 2013 Unamortized Discount On 10.5% Senior Secured First Lien Notes Payable [Member]	Dec. 29, 2012 Unamortized Discount On 10.5% Senior Secured First Lien Notes Payable [Member]	Jun. 30, 2013 Second Lien Notes Payable [Member]	Mar. 31, 2013 Second Lien Notes Payable [Member]	Dec. 29, 2012 Second Lien Notes Payable [Member]
Debt Instrument [Line Items]
Revolving credit facility			$ 34,600,000
Long-term debt	579,975,000	515,599,000			3,700,000	335,000,000	(3,346,000)		8,650,000	8,650,000	4,700,000	5,210,000	1,857,000	2,002,000		300,000	300,000	32,195,000	32,195,000	4,290,000	4,290,000	305,000,000			161,766,000		161,766,000
Unamortized discount																							(37,000)	(3,224,000)
Less obligations due within one year	(61,935,000)	(3,975,000)
Long-term obligations, excluding the capital lease obligation	518,040,000	511,624,000
Revolving credit facility, interest rate			5.00%	4.25%
Debt instrument interest rate						5.75%					6.00%				3.00%			9.75%		10.50%	10.50%		10.50%		11.25%	11.25%
Long-term debt average interest rate								0.30%
Debt instrument, maturity year						June 2019	June 2019	2013	2027		May 2017				May 2019	December 2019				June 2015	June 2015		June 2015		December 2015
Debt instrument, maturity date																		Jun. 01, 2014
Debt instrument, payment								$ 2,650,000	$ 6,000,000		$ 100,000				$ 30,000

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Guarantor Financial Information (Condensed Consolidating Statement Of Comprehensive (Loss) Income) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Guarantor Obligations [Line Items]
Net sales	$ 201,500,000	$ 213,901,000	$ 412,334,000	$ 433,531,000
Cost of sales	148,717,000	201,257,000	311,313,000	411,432,000
Gross profit	52,783,000	12,644,000	101,021,000	22,099,000
Selling, general and administrative expenses	32,344,000	42,176,000	62,700,000	76,176,000
Restructuring		1,036,000		26,472,000
Operating income (loss)	20,439,000	(30,568,000)	38,321,000	(80,549,000)
Interest expense	14,788,000	15,086,000	29,749,000	30,093,000
Debt extinguishment expense	24,767,000		24,767,000
Interest income				(12,000)
Other (income) expense	(331,000)	1,221,000		1,066,000
(Loss) income before income taxes	(18,785,000)	(46,875,000)	(16,575,000)	(111,696,000)
Provision for income taxes	110,000	75,000	177,000	140,000
Net (loss) income	(18,895,000)	(46,950,000)	(16,752,000)	(111,836,000)
Other comprehensive income
Changes in retirement plans	(398,000)	(4,254,000)	(795,000)	(4,782,000)
Realized and unrealized (losses) gains on derivatives	(282,000)	536,000	1,012,000	(769,000)
Total other comprehensive income	(680,000)	(3,718,000)	217,000	(5,551,000)
Comprehensive (loss) income	(19,575,000)	(50,668,000)	(16,535,000)	(117,387,000)
Paperweight Development Corp. [Member]
Guarantor Obligations [Line Items]
Loss (income) in equity investments	18,895,000	46,950,000		111,836,000
(Loss) income before income taxes	(18,895,000)	(46,950,000)		(111,836,000)
Net (loss) income	(18,895,000)	(46,950,000)	(16,752,000)	(111,836,000)
Other comprehensive income
Changes in retirement plans	(398,000)	(4,254,000)		(4,782,000)
Realized and unrealized (losses) gains on derivatives	(282,000)	536,000		(769,000)
Total other comprehensive income	(680,000)	(3,718,000)		(5,551,000)
Comprehensive (loss) income	(19,575,000)	(50,668,000)		(117,387,000)
Issuer [Member]
Guarantor Obligations [Line Items]
Net sales	200,633,000	213,735,000		434,114,000
Cost of sales	148,558,000	201,048,000		411,245,000
Gross profit	52,075,000	12,687,000		22,869,000
Selling, general and administrative expenses	31,871,000	41,643,000		75,145,000
Restructuring		1,036,000		26,472,000
Operating income (loss)	20,204,000	(29,992,000)		(78,748,000)
Interest expense	14,788,000	15,165,000		30,267,000
Debt extinguishment expense	24,767,000
Interest income				(12,000)
Loss (income) in equity investments	(392,000)	883,000		1,779,000
Other (income) expense	(868,000)	880,000		1,002,000
(Loss) income before income taxes	(18,875,000)	(46,920,000)		(111,784,000)
Provision for income taxes	20,000	30,000		52,000
Net (loss) income	(18,895,000)	(46,950,000)	(16,752,000)	(111,836,000)
Other comprehensive income
Changes in retirement plans	(398,000)	(4,254,000)		(4,782,000)
Realized and unrealized (losses) gains on derivatives	(282,000)	536,000		(769,000)
Total other comprehensive income	(680,000)	(3,718,000)		(5,551,000)
Comprehensive (loss) income	(19,575,000)	(50,668,000)		(117,387,000)
Non-Guarantor Subsidiary [Member]
Guarantor Obligations [Line Items]
Net sales	10,630,000	13,091,000		25,556,000
Cost of sales	9,690,000	13,031,000		26,098,000
Gross profit	940,000	60,000		(542,000)
Selling, general and administrative expenses	473,000	533,000		1,031,000
Operating income (loss)	467,000	(473,000)		(1,573,000)
Interest income		(79,000)		(174,000)
Other (income) expense	440,000	449,000		140,000
(Loss) income before income taxes	27,000	(843,000)		(1,539,000)
Provision for income taxes	90,000	45,000		88,000
Net (loss) income	(63,000)	(888,000)	31,000	(1,627,000)
Other comprehensive income
Comprehensive (loss) income	(63,000)	(888,000)		(1,627,000)
Eliminations [Member]
Guarantor Obligations [Line Items]
Net sales	(9,763,000)	(12,925,000)		(26,139,000)
Cost of sales	(9,531,000)	(12,822,000)		(25,911,000)
Gross profit	(232,000)	(103,000)		(228,000)
Operating income (loss)	(232,000)	(103,000)		(228,000)
Interest expense		(79,000)		(174,000)
Interest income		79,000		174,000
Loss (income) in equity investments	(19,287,000)	(47,833,000)		(113,615,000)
Other (income) expense	97,000	(108,000)		(76,000)
(Loss) income before income taxes	18,958,000	47,838,000		113,463,000
Net (loss) income	18,958,000	47,838,000	16,721,000	113,463,000
Other comprehensive income
Changes in retirement plans	398,000	4,254,000		4,782,000
Realized and unrealized (losses) gains on derivatives	282,000	(536,000)		769,000
Total other comprehensive income	680,000	3,718,000		5,551,000
Comprehensive (loss) income	$ 19,638,000	$ 51,556,000		$ 119,014,000

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Long-Term Obligations (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended					3 Months Ended			3 Months Ended		6 Months Ended			3 Months Ended	6 Months Ended	0 Months Ended	3 Months Ended	6 Months Ended		6 Months Ended					3 Months Ended
	Jun. 30, 2013	Mar. 31, 2012	Jun. 30, 2013 item	Jul. 01, 2012	Dec. 29, 2012	Jul. 31, 2013 Interest Swap Fixed Rate [Member]	Jun. 30, 2013 Swing Line Sub-Facility [Member]	Mar. 31, 2013 Revolving Credit Facility [Member]	Jun. 30, 2013 Revolving Credit Facility [Member]	Jun. 30, 2013 Letter Of Credit Sub-Facility [Member]	Mar. 31, 2013 State Of Ohio Loans [Member]	Jun. 30, 2013 Letter Of Credit [Member]	Jun. 30, 2013 Second Lien Notes Payable [Member]	Mar. 31, 2013 Second Lien Notes Payable [Member]	Dec. 29, 2012 Second Lien Notes Payable [Member]	Jun. 30, 2013 SeniorSecuredFirstLienNotesPayableDue2019 [Member]	Jun. 30, 2013 SeniorSecuredFirstLienNotesPayableDue2019 [Member]	Jul. 31, 2013 Senior Secured First Lien Notes Payable At 10.5% [Member]	Jun. 30, 2013 Senior Secured First Lien Notes Payable At 10.5% [Member]	Jun. 30, 2013 Senior Secured First Lien Notes Payable At 10.5% [Member]	Dec. 29, 2012 Senior Secured First Lien Notes Payable At 10.5% [Member]	Jun. 30, 2013 Minimum [Member] item	Jun. 30, 2013 Maximum [Member] item	Jun. 30, 2013 Base Rate [Member] SeniorSecuredFirstLienNotesPayableDue2019 [Member]	Jun. 30, 2013 London Interbank Offered Rate (LIBOR) [Member] SeniorSecuredFirstLienNotesPayableDue2019 [Member]	Jun. 30, 2013 London Interbank Offered Rate (LIBOR) [Member] Minimum [Member]	Jun. 30, 2013 Funds Used From Refinance [Member] Revolving Credit Facility [Member]	Jun. 30, 2013 Funds Used From Refinance [Member] Senior Secured First Lien Notes Payable At 10.5% [Member]
Debt Instrument [Line Items]
Long-term debt	$ 579,975,000		$ 579,975,000		$ 515,599,000								$ 161,766,000		$ 161,766,000	$ 335,000,000	$ 335,000,000		$ 4,290,000	$ 4,290,000	$ 305,000,000
Payments of Long-term Debt			654,000	620,000							700,000							4,300,000										300,700,000
Proceeds from revolving line of credit			34,600,000
Proceeds from Other Debt		300,000														326,300,000
Increase in revolving credit facility								36,900,000
Repayment on revolving credit facility																											6,000,000
Revolving line of credit, amount outstanding									34,600,000
Revolving credit facility, maximum borrowing capacity	100,000,000		100,000,000				5,000,000			15,700,000		25,000,000
Debt instrument interest rate													11.25%	11.25%		5.75%	5.75%		10.50%	10.50%
Basis spread on variable rate																								3.50%	4.50%	1.25%
Debt instrument, maturity year													December 2015				June 2019		June 2015	June 2015
Line of Credit Facility, Maximum Borrowing Capacity	100,000,000		100,000,000				5,000,000			15,700,000		25,000,000
Debt Instrument, Basis Spread on Variable Rate																								3.50%	4.50%	1.25%
Debt Instrument, Periodic Payment, Interest																											400,000	1,100,000
Redemption Premium																												18,100,000
Write off of Deferred Debt Issuance Cost																			6,700,000
Debt extinguishment expense	24,767,000		24,767,000															300,000										18,100,000
Derivative, Fixed Interest Rate						7.24%
Derivative, Amount of Hedged Item						$ 100,000,000
Amortization of term loan in aggregate annual amounts equal to percentage of original principal amount			1.00%
Percentage of excess cash flow			50.00%
Percentage of excess cash flow upon achieving specified consolidated leverage ratio			25.00%
Leverage ratio																						3.50	2.50
Percentage of excess cash flow upon achieving second specified consolidated leverage ratio			0.00%
Second specified leverage ratio			2.50

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Other Intangible Assets (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Other Intangible Assets [Abstract]
Amortization expense	$ 500	$ 500	$ 1,142	$ 1,143

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Accumulated Other Comprehensive Income (Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Net sales	$ 201,500	$ 213,901	$ 412,334	$ 433,531
Cost of sales	148,717	201,257	311,313	411,432
Net (loss) income	(18,895)	(46,950)	(16,752)	(111,836)
Hedging Activities [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Net (loss) income	(184)	790	(488)	1,189
Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Net (loss) income	214	5,044	307	5,971
Reclassification Out Of Accumulated Other Comprehensive Income [Member] | Change In Retiree Plans [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Amortization of prior service cost	398	4,254	795	4,782	[1]
Reclassification Out Of Accumulated Other Comprehensive Income [Member] | Hedging Activities [Member] | Foreign Currency Exchange Derivatives [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Net sales	(184)	987	(291)	1,583
Reclassification Out Of Accumulated Other Comprehensive Income [Member] | Hedging Activities [Member] | Commodity Contracts [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Cost of sales		$ (197)	$ (197)	$ (394)

[1] These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See Note 9, Employee Benefits, and Note 10, Postretirement Benefit Plans other than Pensions.

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Guarantor Financial Information

6 Months Ended

Jun. 30, 2013

Guarantor Financial Information

19.      GUARANTOR FINANCIAL INFORMATION

Appvion (the “Issuer”) has issued senior subordinated notes, as amended, which are guaranteed by PDC (the “Parent Guarantor”), as well as by Rose Holdings Limited, a 100%-owned subsidiary of Appvion (the “Subsidiary Guarantor”).

Presented below is condensed consolidating financial information for the Parent Guarantor, the Issuer, the Subsidiary Guarantor and a 100%-owned non-guarantor subsidiary (the “Non-Guarantor Subsidiary”) as of June 30, 2013 and December 29, 2012, and for the three and six months ended June 30, 2013 and July 1, 2012. This financial information should be read in conjunction with the consolidated financial statements and other notes related thereto.

The first lien notes and the second lien notes, as amended, place restrictions on the subsidiaries of the Issuer that would limit dividend distributions by these subsidiaries.

CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	-		$	6,083		$	-	$	470		$	-		$	6,553
Accounts receivable, net		-			86,426			-		4,571			-			90,997
Inventories		-			101,802			-		1,348			-			103,150
Due from parent		-			61,717			-		-			(61,717	)		-
Other current assets		61,717			7,716			-		243			-			69,676
Total current assets		61,717			263,744			-		6,632			(61,717	)		270,376
Property, plant and equipment, net		-			242,116			-		10			-			242,126
Investment in subsidiaries		(377,066	)		14,247			-		-			362,819			-
Other assets		12			59,884			-		14			-			59,910
Total assets	$	(315,337	)	$	579,991		$	-	$	6,656		$	301,102		$	572,412
LIABILITIES, REDEEMABLE COMMON STOCK, COMMON STOCK, PAID-IN CAPITAL, DUE FROM PARENT, ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Current liabilities
Current portion of long-term debt	$	-		$	61,935		$	-	$	-		$	-		$	61,935
Accounts payable		-			65,738			-		69			-			65,807
Due to (from) parent and affiliated companies		61,717			9,741			-		(9,741	)		(61,717	)		-
Other accrued liabilities		-			101,579			-		2,081			-			103,660
Total current liabilities		61,717			238,993			-		(7,591	)		(61,717	)		231,402
Long-term debt		-			518,040			-		-			-			518,040
Other long-term liabilities		-			200,024			-		-			-			200,024
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income		(377,054	)		(377,066	)		-		14,247			362,819			(377,054	)
Total liabilities, redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	$	(315,337	)	$	579,991		$	-	$	6,656		$	301,102		$	572,412

CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 29, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	-		$	1,593		$	-	$	258		$	-		$	1,851
Accounts receivable, net		-			88,111			-		4,569			-			92,680
Inventories		-			92,939			-		1,410			-			94,349
Due from parent		-			65,000			-		-			(65,000	)		-
Other current assets		65,000			5,570			-		50			-			70,620
Total current assets		65,000			253,213			-		6,287			(65,000	)		259,500
Property, plant and equipment, net		-			243,254			-		11			-			243,265
Investment in subsidiaries		(352,909	)		14,216			-		-			338,693			-
Other assets		12			58,298			-		15			-			58,325
Total assets	$	(287,897	)	$	568,981		$	-	$	6,313		$	273,693		$	561,090
LIABILITIES, REDEEMABLE COMMON STOCK, COMMON STOCK, PAID-IN CAPITAL, DUE FROM PARENT, ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Current liabilities
Current portion of long-term debt	$	-		$	3,975		$	-	$	-		$	-		$	3,975
Accounts payable		-			68,574			-		26			-			68,600
Due to (from) parent and affiliated companies		65,000			10,799			-		(10,799	)		(65,000	)		-
Other accrued liabilities		-			119,690			-		2,412			-			122,102
Total current liabilities		65,000			203,038			-		(8,361	)		(65,000	)		194,677
Long-term debt		-			511,624			-		-			-			511,624
Other long-term liabilities		-			207,228			-		458			-			207,686
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income		(352,897	)		(352,909	)		-		14,216			338,693			(352,897	)
Total liabilities, redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	$	(287,897	)	$	568,981		$	-	$	6,313		$	273,693		$	561,090

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary		Eliminations			Consolidated
Net sales	$	-		$	410,157		$	-	$	21,837	$	(19,660	)	$	412,334
Cost of sales		-			311,016			-		19,927		(19,630	)		311,313
Gross profit		-			99,141			-		1,910		(30	)		101,021
Selling, general and administrative expenses		-			61,689			-		1,011		-			62,700
Operating income		-			37,452			-		899		(30	)		38,321
Interest expense		-			29,749			-		-		-			29,749
Debt extinguishment expense		-			24,767			-		-		-			24,767
Interest income		-			-			-		-		-			-
Loss in equity investments		16,752			24			-		-		(16,776	)		-
Other (income) expense		-			(382	)		-		737		25			380
(Loss) income before income taxes		(16,752	)		(16,706	)		-		162		16,721			(16,575	)
Provision for income taxes		-			46			-		131		-			177
Net (loss) income		(16,752	)		(16,752	)		-		31		16,721			(16,752	)
Other comprehensive income
Changes in retirement plans		(795	)		(795	)		-		-		795			(795	)
Realized and unrealized gains on derivatives		1,012			1,012			-		-		(1,012	)		1,012
Total other comprehensive income		217			217			-		-		(217	)		217
Comprehensive (loss) income	$	(16,535	)	$	(16,535	)	$	-	$	31	$	16,504		$	(16,535	)

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE SIX MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	434,114		$	-	$	25,556		$	(26,139	)	$	433,531
Cost of sales		-			411,245			-		26,098			(25,911	)		411,432
Gross profit (loss)		-			22,869			-		(542	)		(228	)		22,099
Selling, general and administrative expenses		-			75,145			-		1,031			-			76,176
Restructuring		-			26,472			-		-			-			26,472
Operating loss		-			(78,748	)		-		(1,573	)		(228	)		(80,549	)
Interest expense		-			30,267			-		-			(174	)		30,093
Interest income		-			(12	)		-		(174	)		174			(12	)
Loss in equity investments		111,836			1,779			-		-			(113,615	)		-
Other expense		-			1,002			-		140			(76	)		1,066
Loss before income taxes		(111,836	)		(111,784	)		-		(1,539	)		113,463			(111,696	)
Provision for income taxes		-			52			-		88			-			140
Net loss		(111,836	)		(111,836	)		-		(1,627	)		113,463			(111,836	)
Other comprehensive loss
Changes in retirement plans		(4,782	)		(4,782	)		-		-			4,782			(4,782	)
Realized and unrealized losses on derivatives		(769	)		(769	)		-		-			769			(769	)
Total other comprehensive loss		(5,551	)		(5,551	)		-		-			5,551			(5,551	)
Comprehensive loss	$	(117,387	)	$	(117,387	)	$	-	$	(1,627	)	$	119,014		$	(117,387	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	200,633		$	-	$	10,630		$	(9,763	)	$	201,500
Cost of sales		-			148,558			-		9,690			(9,531	)		148,717
Gross profit		-			52,075			-		940			(232	)		52,783
Selling, general and administrative expenses		-			31,871			-		473			-			32,344
Operating income		-			20,204			-		467			(232	)		20,439
Interest expense		-			14,788			-		-			-			14,788
Debt extinguishment expense		-			24,767			-		-			-			24,767
Loss in equity investments		18,895			(392	)		-		-			(19,287	)		-
Other (income) expense		-			(868	)		-		440			97			(331	)
(Loss) income before income taxes		(18,895	)		(18,875	)		-		27			18,958			(18,785	)
Provision for income taxes		-			20			-		90			-			110
Net loss		(18,895	)		(18,895	)		-		(63	)		18,958			(18,895	)
Other comprehensive loss
Changes in retirement plans		(398	)		(398	)		-		-			398			(398	)
Realized and unrealized losses on derivatives		(282	)		(282	)		-		-			282			(282	)
Total other comprehensive loss		(680	)		(680	)		-		-			680			(680	)
Comprehensive loss	$	(19,575	)	$	(19,575	)	$	-	$	(63	)	$	19,638		$	(19,575	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	213,735		$	-	$	13,091		$	(12,925	)	$	213,901
Cost of sales		-			201,048			-		13,031			(12,822	)		201,257
Gross profit		-			12,687			-		60			(103	)		12,644
Selling, general and administrative expenses		-			41,643			-		533			-			42,176
Restructuring		-			1,036			-		-			-			1,036
Operating loss		-			(29,992	)		-		(473	)		(103	)		(30,568	)
Interest expense		-			15,165			-		-			(79	)		15,086
Interest income		-			-			-		(79	)		79			-
Loss in equity investments		46,950			883			-		-			(47,833	)		-
Other expense		-			880			-		449			(108	)		1,221
Loss before income taxes		(46,950	)		(46,920	)		-		(843	)		47,838			(46,875	)
Provision for income taxes		-			30			-		45			-			75
Net loss		(46,950	)		(46,950	)		-		(888	)		47,838			(46,950	)
Other comprehensive loss
Changes in retirement plans		(4,254	)		(4,254	)		-		-			4,254			(4,254	)
Realized and unrealized gains on derivatives		536			536			-		-			(536	)		536
Total other comprehensive loss		(3,718	)		(3,718	)		-		-			3,718			(3,718	)
Comprehensive loss	$	(50,668	)	$	(50,668	)	$	-	$	(888	)	$	51,556		$	(50,668)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent						Subsidiary		Non-Guarantor
	Guarantor			Issuer			Guarantors		Subsidiary			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) income	$	(16,752	)	$	(16,752	)	$	-	$	31		$	16,721		$	(16,752	)
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:
Depreciation and amortization		-			15,214			-		1			-			15,215
Other		-			10,031			-		737			-			10,768
Change in assets and liabilities,    net		21,467			(41,510	)		-		(1,615	)		(16,721	)		(38,379	)
Net cash provided (used) by operating activities		4,715			(33,017	)		-		(846	)		-			(29,148	)
Cash flows from investing activities:
Proceeds from sale of equipment		-			6			-		-			-			6
Additions to property, plant and    equipment		-			(10,457	)		-		-			-			(10,457	)
Net cash used by investing    activities		-			(10,451	)		-		-			-			(10,451	)
Cash flows from financing activities:
Payments of senior secured first lien notes payable		-			(300,710	)		-		-			-			(300,710	)
Proceeds from first lien term loan		-			331,650			-		-			-			331,650
Debt acquisition costs		-			(6,364	)		-		-			-			(6,364	)
Payments relating to capital lease obligations		-			(44	)		-		-			-			(44	)
Proceeds from old revolving line of credit		-			155,300			-		-			-			155,300
Payments of old revolving line of    credit		-			(159,000	)		-		-			-			(159,000	)
Proceeds from new revolving line of credit		-			34,600			-		-			-			34,600
Payments of State of Ohio loans		-			(654	)		-		-			-			(654	)
Due to (from) parent and affiliated    companies, net		4,339			(5,397	)		-		1,058			-			-
Proceeds from issuance of redeemable common stock		1,651			-			-		-			-			1,651
Payments to redeem common    stock		(10,705	)		-			-		-			-			(10,705	)
Decrease in cash overdraft		-			(1,410	)		-		-			-			(1,410	)
Net cash (used) provided by    financing activities		(4,715	)		47,971			-		1,058			-			44,314
Effect of foreign exchange rate changes on cash and cash equivalents		-			(13	)		-		-			-			(13	)
Change in cash and cash equivalents		-			4,490			-		212			-			4,702
Cash and cash equivalents at beginning of period		-			1,593			-		258			-			1,851
Cash and cash equivalents at end of period	$	-		$	6,083		$	-	$	470		$	-		$	6,553

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent						Subsidiary		Non-Guarantor
	Guarantor			Issuer			Guarantors		Subsidiary			Eliminations			Consolidated
Cash flows from operating activities:
Net loss	$	(111,836	)	$	(111,836	)	$	-	$	(1,627	)	$	113,463		$	(111,836	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Depreciation and amortization		-			82,649			-		2			-			82,651
Other		-			14,828			-		140			-			14,968
Change in assets and liabilities, net		117,102			(7,643	)		-		(1,456	)		(113,463	)		(5,460	)
Net cash provided (used) by operating activities		5,266			(22,002	)		-		(2,941	)		-			(19,677	)
Cash flows from investing activities:
Proceeds from sale of equipment		-			2			-		-			-			2
Additions to property, plant and equipment		-			(4,385	)		-		-			-			(4,385	)
Net cash used by investing activities		-			(4,383	)		-		-			-			(4,383	)
Cash flows from financing activities:
Payments relating to capital lease obligation		-			(24	)		-		-			-			(24	)
Proceeds from revolving line of credit		-			136,150			-		-			-			136,150
Payments of revolving line of credit		-			(104,000	)		-		-			-			(104,000	)
Payments of State of Ohio loans		-			(620	)		-		-			-			(620	)
Proceeds from municipal debt		-			300			-		-			-			300
Due to (from) parent and affiliated companies, net		(1,729	)		(4,686	)		-		2,957			-			-
Proceeds from issuance of redeemable common stock		1,564			-			-		-			-			1,564
Payments to redeem common stock		(8,559	)		-			-		-			-			(8,559	)
Decrease in cash overdraft		-			(4,635	)		-		-			-			(4,635	)
Net cash (used) provided by financing activities		(5,266	)		22,485			-		2,957			-			20,176
Effect of foreign exchange rate changes on cash and cash equivalents		-			(7	)		-		-			-			(7	)
Change in cash and cash equivalents		-			(3,907	)		-		16			-			(3,891	)
Cash and cash equivalents at beginning of period		-			6,688			-		553			-			7,241
Cash and cash equivalents at end of period	$	-		$	2,781		$	-	$	569		$	-		$	3,350

Appvion, Inc. [Member]

Guarantor Financial Information

19.      GUARANTOR FINANCIAL INFORMATION

Appvion (the “Issuer”) has issued senior subordinated notes, as amended, which are guaranteed by PDC (the “Parent Guarantor”), as well as by Rose Holdings Limited, a 100%-owned subsidiary of Appvion (the “Subsidiary Guarantor”).

Presented below is condensed consolidating financial information for the Parent Guarantor, the Issuer, the Subsidiary Guarantor and a 100%-owned non-guarantor subsidiary (the “Non-Guarantor Subsidiary”) as of June 30, 2013 and December 29, 2012, and for the three and six months ended June 30, 2013 and July 1, 2012. This financial information should be read in conjunction with the consolidated financial statements and other notes related thereto.

The first lien notes and the second lien notes, as amended, place restrictions on the subsidiaries of the Issuer that would limit dividend distributions by these subsidiaries.

CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	-		$	6,083		$	-	$	470		$	-		$	6,553
Accounts receivable, net		-			86,426			-		4,571			-			90,997
Inventories		-			101,802			-		1,348			-			103,150
Due from parent		-			61,717			-		-			(61,717	)		-
Other current assets		61,717			7,716			-		243			-			69,676
Total current assets		61,717			263,744			-		6,632			(61,717	)		270,376
Property, plant and equipment, net		-			242,116			-		10			-			242,126
Investment in subsidiaries		(377,066	)		14,247			-		-			362,819			-
Other assets		12			59,884			-		14			-			59,910
Total assets	$	(315,337	)	$	579,991		$	-	$	6,656		$	301,102		$	572,412
LIABILITIES, REDEEMABLE COMMON STOCK, COMMON STOCK, PAID-IN CAPITAL, DUE FROM PARENT, ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Current liabilities
Current portion of long-term debt	$	-		$	61,935		$	-	$	-		$	-		$	61,935
Accounts payable		-			65,738			-		69			-			65,807
Due to (from) parent and affiliated companies		61,717			9,741			-		(9,741	)		(61,717	)		-
Other accrued liabilities		-			101,579			-		2,081			-			103,660
Total current liabilities		61,717			238,993			-		(7,591	)		(61,717	)		231,402
Long-term debt		-			518,040			-		-			-			518,040
Other long-term liabilities		-			200,024			-		-			-			200,024
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income		(377,054	)		(377,066	)		-		14,247			362,819			(377,054	)
Total liabilities, redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	$	(315,337	)	$	579,991		$	-	$	6,656		$	301,102		$	572,412

CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 29, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	-		$	1,593		$	-	$	258		$	-		$	1,851
Accounts receivable, net		-			88,111			-		4,569			-			92,680
Inventories		-			92,939			-		1,410			-			94,349
Due from parent		-			65,000			-		-			(65,000	)		-
Other current assets		65,000			5,570			-		50			-			70,620
Total current assets		65,000			253,213			-		6,287			(65,000	)		259,500
Property, plant and equipment, net		-			243,254			-		11			-			243,265
Investment in subsidiaries		(352,909	)		14,216			-		-			338,693			-
Other assets		12			58,298			-		15			-			58,325
Total assets	$	(287,897	)	$	568,981		$	-	$	6,313		$	273,693		$	561,090
LIABILITIES, REDEEMABLE COMMON STOCK, COMMON STOCK, PAID-IN CAPITAL, DUE FROM PARENT, ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Current liabilities
Current portion of long-term debt	$	-		$	3,975		$	-	$	-		$	-		$	3,975
Accounts payable		-			68,574			-		26			-			68,600
Due to (from) parent and affiliated companies		65,000			10,799			-		(10,799	)		(65,000	)		-
Other accrued liabilities		-			119,690			-		2,412			-			122,102
Total current liabilities		65,000			203,038			-		(8,361	)		(65,000	)		194,677
Long-term debt		-			511,624			-		-			-			511,624
Other long-term liabilities		-			207,228			-		458			-			207,686
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income		(352,897	)		(352,909	)		-		14,216			338,693			(352,897	)
Total liabilities, redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	$	(287,897	)	$	568,981		$	-	$	6,313		$	273,693		$	561,090

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary		Eliminations			Consolidated
Net sales	$	-		$	410,157		$	-	$	21,837	$	(19,660	)	$	412,334
Cost of sales		-			311,016			-		19,927		(19,630	)		311,313
Gross profit		-			99,141			-		1,910		(30	)		101,021
Selling, general and administrative expenses		-			61,689			-		1,011		-			62,700
Operating income		-			37,452			-		899		(30	)		38,321
Interest expense		-			29,749			-		-		-			29,749
Debt extinguishment expense		-			24,767			-		-		-			24,767
Interest income		-			-			-		-		-			-
Loss in equity investments		16,752			24			-		-		(16,776	)		-
Other (income) expense		-			(382	)		-		737		25			380
(Loss) income before income taxes		(16,752	)		(16,706	)		-		162		16,721			(16,575	)
Provision for income taxes		-			46			-		131		-			177
Net (loss) income		(16,752	)		(16,752	)		-		31		16,721			(16,752	)
Other comprehensive income
Changes in retirement plans		(795	)		(795	)		-		-		795			(795	)
Realized and unrealized gains on derivatives		1,012			1,012			-		-		(1,012	)		1,012
Total other comprehensive income		217			217			-		-		(217	)		217
Comprehensive (loss) income	$	(16,535	)	$	(16,535	)	$	-	$	31	$	16,504		$	(16,535	)

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
AND APPVION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE SIX MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	434,114		$	-	$	25,556		$	(26,139	)	$	433,531
Cost of sales		-			411,245			-		26,098			(25,911	)		411,432
Gross profit (loss)		-			22,869			-		(542	)		(228	)		22,099
Selling, general and administrative expenses		-			75,145			-		1,031			-			76,176
Restructuring		-			26,472			-		-			-			26,472
Operating loss		-			(78,748	)		-		(1,573	)		(228	)		(80,549	)
Interest expense		-			30,267			-		-			(174	)		30,093
Interest income		-			(12	)		-		(174	)		174			(12	)
Loss in equity investments		111,836			1,779			-		-			(113,615	)		-
Other expense		-			1,002			-		140			(76	)		1,066
Loss before income taxes		(111,836	)		(111,784	)		-		(1,539	)		113,463			(111,696	)
Provision for income taxes		-			52			-		88			-			140
Net loss		(111,836	)		(111,836	)		-		(1,627	)		113,463			(111,836	)
Other comprehensive loss
Changes in retirement plans		(4,782	)		(4,782	)		-		-			4,782			(4,782	)
Realized and unrealized losses on derivatives		(769	)		(769	)		-		-			769			(769	)
Total other comprehensive loss		(5,551	)		(5,551	)		-		-			5,551			(5,551	)
Comprehensive loss	$	(117,387	)	$	(117,387	)	$	-	$	(1,627	)	$	119,014		$	(117,387	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	200,633		$	-	$	10,630		$	(9,763	)	$	201,500
Cost of sales		-			148,558			-		9,690			(9,531	)		148,717
Gross profit		-			52,075			-		940			(232	)		52,783
Selling, general and administrative expenses		-			31,871			-		473			-			32,344
Operating income		-			20,204			-		467			(232	)		20,439
Interest expense		-			14,788			-		-			-			14,788
Debt extinguishment expense		-			24,767			-		-			-			24,767
Loss in equity investments		18,895			(392	)		-		-			(19,287	)		-
Other (income) expense		-			(868	)		-		440			97			(331	)
(Loss) income before income taxes		(18,895	)		(18,875	)		-		27			18,958			(18,785	)
Provision for income taxes		-			20			-		90			-			110
Net loss		(18,895	)		(18,895	)		-		(63	)		18,958			(18,895	)
Other comprehensive loss
Changes in retirement plans		(398	)		(398	)		-		-			398			(398	)
Realized and unrealized losses on derivatives		(282	)		(282	)		-		-			282			(282	)
Total other comprehensive loss		(680	)		(680	)		-		-			680			(680	)
Comprehensive loss	$	(19,575	)	$	(19,575	)	$	-	$	(63	)	$	19,638		$	(19,575	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent Guarantor			Issuer			Subsidiary Guarantors		Non-Guarantor  Subsidiary			Eliminations			Consolidated
Net sales	$	-		$	213,735		$	-	$	13,091		$	(12,925	)	$	213,901
Cost of sales		-			201,048			-		13,031			(12,822	)		201,257
Gross profit		-			12,687			-		60			(103	)		12,644
Selling, general and administrative expenses		-			41,643			-		533			-			42,176
Restructuring		-			1,036			-		-			-			1,036
Operating loss		-			(29,992	)		-		(473	)		(103	)		(30,568	)
Interest expense		-			15,165			-		-			(79	)		15,086
Interest income		-			-			-		(79	)		79			-
Loss in equity investments		46,950			883			-		-			(47,833	)		-
Other expense		-			880			-		449			(108	)		1,221
Loss before income taxes		(46,950	)		(46,920	)		-		(843	)		47,838			(46,875	)
Provision for income taxes		-			30			-		45			-			75
Net loss		(46,950	)		(46,950	)		-		(888	)		47,838			(46,950	)
Other comprehensive loss
Changes in retirement plans		(4,254	)		(4,254	)		-		-			4,254			(4,254	)
Realized and unrealized gains on derivatives		536			536			-		-			(536	)		536
Total other comprehensive loss		(3,718	)		(3,718	)		-		-			3,718			(3,718	)
Comprehensive loss	$	(50,668	)	$	(50,668	)	$	-	$	(888	)	$	51,556		$	(50,668)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(unaudited)
(dollars in thousands)
	Parent						Subsidiary		Non-Guarantor
	Guarantor			Issuer			Guarantors		Subsidiary			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) income	$	(16,752	)	$	(16,752	)	$	-	$	31		$	16,721		$	(16,752	)
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:
Depreciation and amortization		-			15,214			-		1			-			15,215
Other		-			10,031			-		737			-			10,768
Change in assets and liabilities,    net		21,467			(41,510	)		-		(1,615	)		(16,721	)		(38,379	)
Net cash provided (used) by operating activities		4,715			(33,017	)		-		(846	)		-			(29,148	)
Cash flows from investing activities:
Proceeds from sale of equipment		-			6			-		-			-			6
Additions to property, plant and    equipment		-			(10,457	)		-		-			-			(10,457	)
Net cash used by investing    activities		-			(10,451	)		-		-			-			(10,451	)
Cash flows from financing activities:
Payments of senior secured first lien notes payable		-			(300,710	)		-		-			-			(300,710	)
Proceeds from first lien term loan		-			331,650			-		-			-			331,650
Debt acquisition costs		-			(6,364	)		-		-			-			(6,364	)
Payments relating to capital lease obligations		-			(44	)		-		-			-			(44	)
Proceeds from old revolving line of credit		-			155,300			-		-			-			155,300
Payments of old revolving line of    credit		-			(159,000	)		-		-			-			(159,000	)
Proceeds from new revolving line of credit		-			34,600			-		-			-			34,600
Payments of State of Ohio loans		-			(654	)		-		-			-			(654	)
Due to (from) parent and affiliated    companies, net		4,339			(5,397	)		-		1,058			-			-
Proceeds from issuance of redeemable common stock		1,651			-			-		-			-			1,651
Payments to redeem common    stock		(10,705	)		-			-		-			-			(10,705	)
Decrease in cash overdraft		-			(1,410	)		-		-			-			(1,410	)
Net cash (used) provided by    financing activities		(4,715	)		47,971			-		1,058			-			44,314
Effect of foreign exchange rate changes on cash and cash equivalents		-			(13	)		-		-			-			(13	)
Change in cash and cash equivalents		-			4,490			-		212			-			4,702
Cash and cash equivalents at beginning of period		-			1,593			-		258			-			1,851
Cash and cash equivalents at end of period	$	-		$	6,083		$	-	$	470		$	-		$	6,553

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 1, 2012
(unaudited)
(dollars in thousands)
	Parent						Subsidiary		Non-Guarantor
	Guarantor			Issuer			Guarantors		Subsidiary			Eliminations			Consolidated
Cash flows from operating activities:
Net loss	$	(111,836	)	$	(111,836	)	$	-	$	(1,627	)	$	113,463		$	(111,836	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Depreciation and amortization		-			82,649			-		2			-			82,651
Other		-			14,828			-		140			-			14,968
Change in assets and liabilities, net		117,102			(7,643	)		-		(1,456	)		(113,463	)		(5,460	)
Net cash provided (used) by operating activities		5,266			(22,002	)		-		(2,941	)		-			(19,677	)
Cash flows from investing activities:
Proceeds from sale of equipment		-			2			-		-			-			2
Additions to property, plant and equipment		-			(4,385	)		-		-			-			(4,385	)
Net cash used by investing activities		-			(4,383	)		-		-			-			(4,383	)
Cash flows from financing activities:
Payments relating to capital lease obligation		-			(24	)		-		-			-			(24	)
Proceeds from revolving line of credit		-			136,150			-		-			-			136,150
Payments of revolving line of credit		-			(104,000	)		-		-			-			(104,000	)
Payments of State of Ohio loans		-			(620	)		-		-			-			(620	)
Proceeds from municipal debt		-			300			-		-			-			300
Due to (from) parent and affiliated companies, net		(1,729	)		(4,686	)		-		2,957			-			-
Proceeds from issuance of redeemable common stock		1,564			-			-		-			-			1,564
Payments to redeem common stock		(8,559	)		-			-		-			-			(8,559	)
Decrease in cash overdraft		-			(4,635	)		-		-			-			(4,635	)
Net cash (used) provided by financing activities		(5,266	)		22,485			-		2,957			-			20,176
Effect of foreign exchange rate changes on cash and cash equivalents		-			(7	)		-		-			-			(7	)
Change in cash and cash equivalents		-			(3,907	)		-		16			-			(3,891	)
Cash and cash equivalents at beginning of period		-			6,688			-		553			-			7,241
Cash and cash equivalents at end of period	$	-		$	2,781		$	-	$	569		$	-		$	3,350

XML

Condensed Consolidated Statements Of Equity, Redeemable Common Stock, Accumulated Deficit And Accumulated Other Comprehensive Income (USD $) In Thousands, except Share data	Appvion, Inc. [Member] Redeemable Common Stock [Member]	Appvion, Inc. [Member] Paid-In Capital [Member]	Appvion, Inc. [Member] Due From Parent [Member]	Appvion, Inc. [Member] Accumulated Deficit [Member]	Appvion, Inc. [Member] Accumulated Other Comprehensive Income [Member]	Appvion, Inc. [Member]	Redeemable Common Stock [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Dec. 31, 2011	$ 10,500	$ 623,305							$ 13,024
Balance, shares at Dec. 31, 2011	100
Other comprehensive income (loss)									(5,551)
Balance at Apr. 01, 2012
Balance at Dec. 31, 2011	10,500	623,305	(229,100)	(606,328)	13,024		97,615	(299,226)
Balance, shares at Dec. 31, 2011	100						9,212,808
Net loss				(111,836)		(111,836)		(111,836)		(111,836)
Other comprehensive income (loss)					(5,551)	(117,387)				(117,387)
Redemption of redeemable common stock							(8,559)			(8,600)
Redemption of redeemable common stock, shares							(526,234)			(526,234)
Accretion of redeemable common stock							(2,563)	2,563		(2,600)
Change in due from Parent			(5,207)			(1,729)
Stock Issued During Period, Value, Employee Stock Ownership Plan							3,352
Stock Issued During Period, Shares, Employee Stock Ownership Plan							218,748
Balance at Jul. 01, 2012	10,500	623,305	(234,307)	(718,164)	7,473		89,845	(408,499)	7,473
Balance, shares at Jul. 01, 2012	100						8,905,322
Balance at Apr. 01, 2012
Net loss						(46,950)				(46,950)
Other comprehensive income (loss)						(50,668)				(50,668)
Balance at Jul. 01, 2012	10,500	623,305							7,473
Balance, shares at Jul. 01, 2012	100
Balance at Dec. 29, 2012	10,500	623,305	(237,257)	(754,779)	5,322		81,704	(439,923)	5,322	(352,897)
Balance, shares at Dec. 29, 2012	100					100	8,730,118			8,730,118
Net loss				(16,752)		(16,752)		(16,752)		(16,752)
Other comprehensive income (loss)					217	(16,535)			217	(16,535)
Redemption of redeemable common stock							(10,705)			(10,700)
Redemption of redeemable common stock, shares							(605,943)			(605,943)
Accretion of redeemable common stock							(2,142)	2,142		(2,100)
Change in due from Parent			(7,622)			(4,339)
Stock Issued During Period, Value, Employee Stock Ownership Plan							3,083
Stock Issued During Period, Shares, Employee Stock Ownership Plan							175,659
Balance at Jun. 30, 2013	10,500	623,305	(244,879)	(771,531)	5,539		71,940	(454,533)	5,539	(377,054)
Balance, shares at Jun. 30, 2013	100					100	8,299,834			8,299,834
Balance at Mar. 31, 2013
Net loss						(18,895)				(18,895)
Other comprehensive income (loss)						(19,575)				(19,575)
Balance at Jun. 30, 2013	$ 10,500	$ 623,305								$ (377,054)
Balance, shares at Jun. 30, 2013	100					100				8,299,834

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Restructuring And Other Related Costs

6 Months Ended

Jun. 30, 2013

Restructuring And Other Related Costs

2.       RESTRUCTURING AND OTHER RELATED COSTS

On February 22, 2012, the Company entered into a long-term supply agreement for the purchase of carbonless and thermal base stock for coating at the Company’s converting facilities. Under the terms of the agreement, the supplier will be the exclusive supplier of certain thermal and carbonless base stock used by the Company. The term of the agreement is 15 years and includes successive five-year renewal terms unless either party gives notice of non-renewal.

In connection with its approval of this supply agreement, the Company’s Board of Directors authorized a plan for the Company to dispose of papermaking assets at its West Carrollton, Ohio facility and move its carbonless coating to the Company’s converting plant in Appleton, Wisconsin. As a result, 314 jobs were eliminated at West Carrollton and 68 jobs added at the Appleton facility. The Company maintains its thermal coating operations at the West Carrollton facility. The Company recorded all associated restructuring expense and other related costs, totaling $106.0 million, during 2012. These include the following for the three and six months ended July 1, 2012 (dollars in thousands):

	For the Three Months Ended July 1, 2012	For the Six Months Ended July 1, 2012	Location on Statement of Comprehensive Loss
Employee termination benefits	$ 95	$ 25,531	Restructuring
Decommissioning expense	941	941	Restructuring
Accelerated depreciation	36,873	62,253	Cost of sales
Revaluation of inventory	1,117	11,078	Cost of sales
Loss on disposal of fixed assets	-	572	Cost of sales
	$ 39,026	$ 100,375

Of the costs recorded during second quarter 2012, $21.5 million were allocated to the carbonless papers segment and $17.5 million were allocated to the thermal papers segment. Of the costs recorded during the first six months of 2012, $55.2 million were allocated to the carbonless papers segment and $45.2 million were allocated to the thermal papers segment.

The table below summarizes the components of the restructuring reserve included in the Condensed Consolidated Balance Sheets as of June 30, 2013 and December 29, 2012.

	December 29, 2012 Reserve	2013 Additions to Reserve	2013 Utilization	June 30, 2013           Reserve
Exit costs – equipment decommissioning	$ 765	$                     -	$             (275)	$ 490
Employee termination benefits	18,454	-	(430)	18,024
	$ 19,219	$                     -	$ (705)	$ 18,514

Employee termination benefits include severance as well as related benefits and pension costs. At June 30, 2013, $1.5 million of the total restructuring reserve was included in current liabilities and $17.0 million was included in other long-term liabilities. The Company expects any remaining charges for exit costs to be immaterial. It is estimated that cash of approximately $31 million remains to be paid as a result of ceasing papermaking operations at West Carrollton. Of this amount, it is expected that approximately $1 million will be paid during 2013. In addition, approximately $12 million will be disbursed over the next five years as a result of distributions from the Company’s stock fund to former West Carrollton employees terminated as a result of the restructuring. The remaining $18 million may be paid over the next five to 20 years.

Appvion, Inc. [Member]

Restructuring And Other Related Costs

2.       RESTRUCTURING AND OTHER RELATED COSTS

On February 22, 2012, the Company entered into a long-term supply agreement for the purchase of carbonless and thermal base stock for coating at the Company’s converting facilities. Under the terms of the agreement, the supplier will be the exclusive supplier of certain thermal and carbonless base stock used by the Company. The term of the agreement is 15 years and includes successive five-year renewal terms unless either party gives notice of non-renewal.

In connection with its approval of this supply agreement, the Company’s Board of Directors authorized a plan for the Company to dispose of papermaking assets at its West Carrollton, Ohio facility and move its carbonless coating to the Company’s converting plant in Appleton, Wisconsin. As a result, 314 jobs were eliminated at West Carrollton and 68 jobs added at the Appleton facility. The Company maintains its thermal coating operations at the West Carrollton facility. The Company recorded all associated restructuring expense and other related costs, totaling $106.0 million, during 2012. These include the following for the three and six months ended July 1, 2012 (dollars in thousands):

	For the Three Months Ended July 1, 2012	For the Six Months Ended July 1, 2012	Location on Statement of Comprehensive Loss
Employee termination benefits	$ 95	$ 25,531	Restructuring
Decommissioning expense	941	941	Restructuring
Accelerated depreciation	36,873	62,253	Cost of sales
Revaluation of inventory	1,117	11,078	Cost of sales
Loss on disposal of fixed assets	-	572	Cost of sales
	$ 39,026	$ 100,375

Of the costs recorded during second quarter 2012, $21.5 million were allocated to the carbonless papers segment and $17.5 million were allocated to the thermal papers segment. Of the costs recorded during the first six months of 2012, $55.2 million were allocated to the carbonless papers segment and $45.2 million were allocated to the thermal papers segment.

The table below summarizes the components of the restructuring reserve included in the Condensed Consolidated Balance Sheets as of June 30, 2013 and December 29, 2012.

	December 29, 2012 Reserve	2013 Additions to Reserve	2013 Utilization	June 30, 2013           Reserve
Exit costs – equipment decommissioning	$ 765	$                     -	$             (275)	$ 490
Employee termination benefits	18,454	-	(430)	18,024
	$ 19,219	$                     -	$ (705)	$ 18,514

Employee termination benefits include severance as well as related benefits and pension costs. At June 30, 2013, $1.5 million of the total restructuring reserve was included in current liabilities and $17.0 million was included in other long-term liabilities. The Company expects any remaining charges for exit costs to be immaterial. It is estimated that cash of approximately $31 million remains to be paid as a result of ceasing papermaking operations at West Carrollton. Of this amount, it is expected that approximately $1 million will be paid during 2013. In addition, approximately $12 million will be disbursed over the next five years as a result of distributions from the Company’s stock fund to former West Carrollton employees terminated as a result of the restructuring. The remaining $18 million may be paid over the next five to 20 years.

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Property, Plant And Equipment

6 Months Ended

Jun. 30, 2013

Property, Plant And Equipment

5.       PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment balances consist of the following (dollars in thousands):

	June 30, 2013			December 29, 2012
Land and improvements	$	9,634		$	9,634
Buildings and improvements		135,268			134,144
Machinery and equipment		668,257			663,915
Software		36,701			33,643
Capital leases		309			304
Construction in progress		12,304			8,631
		862,473			850,271
Accumulated depreciation		(620,347	)		(607,006	)
	$	242,126		$	243,265

Depreciation expense for the three and six months ended June 30, 2013 and July 1, 2012 consists of the following (dollars in thousands):

	For the Three		For the Three		For the Six		For the Six
	Months Ended		Months Ended		Months Ended		Months Ended
Depreciation Expense	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Cost of sales	$	6,486	$	45,674	$	12,751	$	80,123
Selling, general and administrative expenses		661		693		1,322		1,385
	$	7,147	$	46,367	$	14,073	$	81,508

Included in the depreciation expense above for the three and six months ended July 1, 2012, the Company recorded $36.9 million and $62.2 million of accelerated depreciation related to the decommissioning of papermaking assets at the West Carrollton, Ohio facility, respectively.  These amounts were included in cost of sales on the Company’s Condensed Consolidated Statement of Comprehensive Loss for the three months and six months ended July 1, 2012 and in accumulated depreciation as presented above.

Appvion, Inc. [Member]

Property, Plant And Equipment

5.       PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment balances consist of the following (dollars in thousands):

	June 30, 2013			December 29, 2012
Land and improvements	$	9,634		$	9,634
Buildings and improvements		135,268			134,144
Machinery and equipment		668,257			663,915
Software		36,701			33,643
Capital leases		309			304
Construction in progress		12,304			8,631
		862,473			850,271
Accumulated depreciation		(620,347	)		(607,006	)
	$	242,126		$	243,265

Depreciation expense for the three and six months ended June 30, 2013 and July 1, 2012 consists of the following (dollars in thousands):

	For the Three		For the Three		For the Six		For the Six
	Months Ended		Months Ended		Months Ended		Months Ended
Depreciation Expense	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Cost of sales	$	6,486	$	45,674	$	12,751	$	80,123
Selling, general and administrative expenses		661		693		1,322		1,385
	$	7,147	$	46,367	$	14,073	$	81,508

Included in the depreciation expense above for the three and six months ended July 1, 2012, the Company recorded $36.9 million and $62.2 million of accelerated depreciation related to the decommissioning of papermaking assets at the West Carrollton, Ohio facility, respectively.  These amounts were included in cost of sales on the Company’s Condensed Consolidated Statement of Comprehensive Loss for the three months and six months ended July 1, 2012 and in accumulated depreciation as presented above.

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Guarantor Financial Information (Condensed Consolidating Statement Of Cash Flows) (Details) (USD $)	6 Months Ended				12 Months Ended
	Jun. 30, 2013		Jul. 01, 2012		Dec. 29, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net (loss) income	$ (16,752,000)		$ (111,836,000)
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:
Depreciation and amortization	15,215,000	[1]	82,651,000	[1]
Other	10,768,000		14,968,000
Change in assets and liabilities, net	(38,379,000)		(5,460,000)
Net cash provided (used) by operating activities	(29,148,000)		(19,677,000)
Cash flows from investing activities:
Proceeds from sale of equipment	6,000		2,000
Additions to property, plant and equipment	(10,457,000)		(4,385,000)
Net cash used by investing activities	(10,451,000)		(4,383,000)
Cash flows from financing activities:
Repayments of senior secured first lien notes payable	(300,710,000)
Proceeds from Issuance of Senior Long-term Debt	331,650,000
Payments of Debt Issuance Costs	(6,364,000)
Payments of old revolving line of credit	(159,000,000)		(104,000,000)
Proceeds from old revolving line of credit	155,300,000		136,150,000
Payments relating to capital lease obligations	(44,000)		(24,000)
Proceeds from revolving line of credit	34,600,000
Payments of State of Ohio loans	(654,000)		(620,000)
Proceeds from municipal debt			300,000
Proceeds from issuance of redeemable common stock	1,651,000		1,564,000
Payments to redeem common stock	(10,705,000)		(8,559,000)
Decrease in cash overdraft	(1,410,000)		(4,635,000)
Net cash (used) provided by financing activities	44,314,000		20,176,000
Effect of foreign exchange rate changes on cash and cash equivalents	(13,000)		(7,000)		(13,000)	(7,000)
Change in cash and cash equivalents	4,702,000		(3,891,000)
Cash and cash equivalents at beginning of period	1,851,000		7,241,000		7,241,000
Cash and cash equivalents at end of period	6,553,000		3,350,000		1,851,000	7,241,000
Paperweight Development Corp. [Member]
Cash flows from operating activities:
Net (loss) income	(16,752,000)		(111,836,000)
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:
Change in assets and liabilities, net	21,467,000		117,102,000
Net cash provided (used) by operating activities	4,715,000		5,266,000
Cash flows from financing activities:
Due to (from) parent and affiliated companies, net	4,339,000		(1,729,000)
Proceeds from issuance of redeemable common stock	1,651,000
Payments to redeem common stock	(10,705,000)		(8,559,000)
Net cash (used) provided by financing activities	(4,715,000)		(5,266,000)
Issuer [Member]
Cash flows from operating activities:
Net (loss) income	(16,752,000)		(111,836,000)
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:
Depreciation and amortization	15,214,000		82,649,000
Other	10,031,000		14,828,000
Change in assets and liabilities, net	(41,510,000)		(7,643,000)
Net cash provided (used) by operating activities	(33,017,000)		(22,002,000)
Cash flows from investing activities:
Proceeds from sale of equipment	6,000		2,000
Additions to property, plant and equipment	(10,457,000)		(4,385,000)
Net cash used by investing activities	(10,451,000)		(4,383,000)
Cash flows from financing activities:
Repayments of senior secured first lien notes payable	(300,710,000)
Proceeds from Issuance of Senior Long-term Debt	331,650,000
Payments of Debt Issuance Costs	(6,364,000)
Payments of old revolving line of credit	(159,000,000)		(104,000,000)
Proceeds from old revolving line of credit	155,300,000		136,150,000
Payments relating to capital lease obligations	(44,000)		(24,000)
Proceeds from revolving line of credit	34,600,000
Payments of State of Ohio loans	(654,000)		(620,000)
Proceeds from municipal debt			300,000
Due to (from) parent and affiliated companies, net	(5,397,000)		(4,686,000)
Decrease in cash overdraft	(1,410,000)		(4,635,000)
Net cash (used) provided by financing activities	47,971,000		22,485,000
Effect of foreign exchange rate changes on cash and cash equivalents	(13,000)		(7,000)
Change in cash and cash equivalents	4,490,000		(3,907,000)
Cash and cash equivalents at beginning of period	1,593,000		6,688,000		6,688,000
Cash and cash equivalents at end of period	6,083,000		2,781,000
Non-Guarantor Subsidiary [Member]
Cash flows from operating activities:
Net (loss) income	31,000		(1,627,000)
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:
Depreciation and amortization	1,000		2,000
Other	737,000		140,000
Change in assets and liabilities, net	(1,615,000)		(1,456,000)
Net cash provided (used) by operating activities	(846,000)		(2,941,000)
Cash flows from financing activities:
Due to (from) parent and affiliated companies, net	1,058,000		2,957,000
Net cash (used) provided by financing activities	1,058,000		2,957,000
Change in cash and cash equivalents	212,000		16,000
Cash and cash equivalents at beginning of period	258,000		553,000		553,000
Cash and cash equivalents at end of period	470,000		569,000
Eliminations [Member]
Cash flows from operating activities:
Net (loss) income	16,721,000		113,463,000
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:
Change in assets and liabilities, net	$ (16,721,000)		$ (113,463,000)

[1] Depreciation and amortization are allocated to the reportable segments based on the amount of activity provided by departments to the respective product lines in each reportable segment.

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Other Intangible Assets

6 Months Ended

Jun. 30, 2013

Other Intangible Assets

3.       OTHER INTANGIBLE ASSETS

The Company’s intangible assets consist of the following (dollars in thousands):

	As of June 30, 2013				As of December 29, 2012
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable intangible assets:
Trademarks	$	44,665	$	27,324	$	44,665	$	26,275
Patents		7,808		7,808		7,808		7,808
Customer relationships		5,365		2,874		5,365		2,781
Subtotal		57,838	$	38,006		57,838	$	36,864
Unamortizable intangible assets:
Trademarks		22,865				22,865
Total	$	80,703			$	80,703

Amortization expense for the three and six months ended June 30, 2013 was $0.5 million and $1.1 million, respectively. Amortization expense for the three and six months ended July 1, 2012 was $0.5 million and $1.1 million, respectively.

Appvion, Inc. [Member]

Other Intangible Assets

3.       OTHER INTANGIBLE ASSETS

The Company’s intangible assets consist of the following (dollars in thousands):

	As of June 30, 2013				As of December 29, 2012
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable intangible assets:
Trademarks	$	44,665	$	27,324	$	44,665	$	26,275
Patents		7,808		7,808		7,808		7,808
Customer relationships		5,365		2,874		5,365		2,781
Subtotal		57,838	$	38,006		57,838	$	36,864
Unamortizable intangible assets:
Trademarks		22,865				22,865
Total	$	80,703			$	80,703

Amortization expense for the three and six months ended June 30, 2013 was $0.5 million and $1.1 million, respectively. Amortization expense for the three and six months ended July 1, 2012 was $0.5 million and $1.1 million, respectively.

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Restructuring And Other Related Costs (Schedule Of Restructuring And Related Costs) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended	12 Months Ended
	Jul. 01, 2012	Jul. 01, 2012	Dec. 29, 2012
Restructuring And Other Related Costs [Abstract]
Employee termination benefits	$ 95	$ 25,531
Decommissioning Expense	941	941
Accelerated depreciation	36,873	62,253
Revaluation of inventory	1,117	11,078
Loss on disposal of fixed assets		572
Total restructuring charges	$ 39,026	$ 100,375	$ 106,000

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Inventories (Tables)

6 Months Ended

Jun. 30, 2013

Inventories [Abstract]

Components Of Inventories

	June 30, 2013		December 29, 2012
Finished goods	$	55,175	$	43,243
Raw materials, work in process, stores and spare parts		47,975		51,106
	$	103,150	$	94,349

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Employee Benefits (Tables) (Pension Benefits [Member])

6 Months Ended

Jun. 30, 2013

Pension Benefits [Member]

Defined Benefit Plan Disclosure [Line Items]

Components Of Net Periodic Pension Cost

Pension Benefits	For the Three Months Ended June 30, 2013			For the Three Months Ended July 1, 2012			For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net periodic benefit cost
Service cost	$	1,299		$	977		$	2,598		$	1,954
Interest cost		4,618			4,867	,		9,236			9,734
Expected return on plan assets		(6,029	)		(5,443	)		(12,058	)		(10,886)
Amortization of prior service cost		121			122			243			244
Net periodic benefit cost	$	9		$	523		$	19		$	1,046

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Guarantor Financial Information (Condensed Consolidating Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012	Jul. 01, 2012	Dec. 31, 2011
Current assets
Cash and cash equivalents	$ 6,553	$ 1,851	$ 3,350	$ 7,241
Accounts receivable, net	90,997	92,680
Inventories	103,150	94,349
Other current assets	69,676	70,620
Total current assets	270,376	259,500
Property, plant and equipment, net	242,126	243,265
Other assets	59,910	58,325
Total assets	572,412	561,090
Current liabilities
Current portion of long-term debt	61,935	3,975
Accounts payable	65,807	68,600
Other accrued liabilities	103,660	122,102
Total current liabilities	231,402	194,677
Long-term debt	518,040	511,624
Other long-term liabilities	200,024	207,686
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	(377,054)	(352,897)
Total liabilities, redeemable common stock, accumulated deficit and accumulated other comprehensive income	572,412	561,090
Paperweight Development Corp. [Member]
Current assets
Other current assets	61,717	65,000
Total current assets	61,717	65,000
Investment in subsidiaries	(377,066)	(352,909)
Other assets	12	12
Total assets	(315,337)	(287,897)
Current liabilities
Due to (from) parent and affiliated companies	61,717	65,000
Total current liabilities	61,717	65,000
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	(377,054)	(352,897)
Total liabilities, redeemable common stock, accumulated deficit and accumulated other comprehensive income	(315,337)	(287,897)
Issuer [Member]
Current assets
Cash and cash equivalents	6,083	1,593	2,781	6,688
Accounts receivable, net	86,426	88,111
Inventories	101,802	92,939
Due from parent	61,717	65,000
Other current assets	7,716	5,570
Total current assets	263,744	253,213
Property, plant and equipment, net	242,116	243,254
Investment in subsidiaries	14,247	14,216
Other assets	59,884	58,298
Total assets	579,991	568,981
Current liabilities
Current portion of long-term debt	61,935	3,975
Accounts payable	65,738	68,574
Due to (from) parent and affiliated companies	9,741	10,799
Other accrued liabilities	101,579	119,690
Total current liabilities	238,993	203,038
Long-term debt	518,040	511,624
Other long-term liabilities	200,024	207,228
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	(377,066)	(352,909)
Total liabilities, redeemable common stock, accumulated deficit and accumulated other comprehensive income	579,991	568,981
Non-Guarantor Subsidiary [Member]
Current assets
Cash and cash equivalents	470	258	569	553
Accounts receivable, net	4,571	4,569
Inventories	1,348	1,410
Other current assets	243	50
Total current assets	6,632	6,287
Property, plant and equipment, net	10	11
Other assets	14	15
Total assets	6,656	6,313
Current liabilities
Accounts payable	69	26
Due to (from) parent and affiliated companies	(9,741)	(10,799)
Other accrued liabilities	2,081	2,412
Total current liabilities	(7,591)	(8,361)
Other long-term liabilities		458
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	14,247	14,216
Total liabilities, redeemable common stock, accumulated deficit and accumulated other comprehensive income	6,656	6,313
Eliminations [Member]
Current assets
Due from parent	(61,717)	(65,000)
Total current assets	(61,717)	(65,000)
Investment in subsidiaries	362,819	338,693
Total assets	301,102	273,693
Current liabilities
Due to (from) parent and affiliated companies	(61,717)	(65,000)
Total current liabilities	(61,717)	(65,000)
Redeemable common stock, common stock, paid-in capital, due from parent, accumulated deficit and accumulated other comprehensive income	362,819	338,693
Total liabilities, redeemable common stock, accumulated deficit and accumulated other comprehensive income	$ 301,102	$ 273,693

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2013

Accumulated Other Comprehensive Income [Abstract]

Schedule Of Changes In Accumulated Other Comprehensive Income By Component

	Change in	Hedging
	Retiree Plans	Activities	Total
Balance, December 29, 2012	$ 6,453	$ (1,131)	$ 5,322
Other comprehensive income before reclassifications	-	990	990
Amounts reclassified from accumulated other comprehensive income (loss)	(397)	304	(93)
Net other comprehensive (loss) income	(397)	1,294	897
Balance, March 31, 2013	$ 6,056	$ 163	$ 6,219

	Change in	Hedging
	Retiree Plans	Activities	Total
Balance, December 31, 2011	$ 11,265	$ 1,759	$ 13,024
Other comprehensive loss before reclassifications	-	(906)	(906)
Amounts reclassified from accumulated other comprehensive income	(528)	(399)	(927)
Net other comprehensive loss	(528)	(1,305)	(1,833)
Balance, April 1, 2012	$ 10,737	$ 454	$ 11,191

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Guarantor Financial Information (Narrative) (Details)	6 Months Ended
	Jun. 30, 2013
Quantifying Misstatement in Current Year Financial Statements [Line Items]
Ownership percentage in subsidiaries	100.00%
Rose Holdings Limited [Member]
Quantifying Misstatement in Current Year Financial Statements [Line Items]
Ownership percentage in subsidiaries	100.00%
Non-Guarantor Subsidiary [Member]
Quantifying Misstatement in Current Year Financial Statements [Line Items]
Ownership percentage in subsidiaries	100.00%

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Postretirement Benefit Plans Other Than Pensions (Narrative) (Details) (Other Postretirement Benefits [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jul. 01, 2012	Jul. 01, 2012
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Curtailment gain	$ 3,726	$ 3,726

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Other Current And Noncurrent Assets (Schedule Of Other Current Assets) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Other Current Assets [Line Items]
Other	$ 7,959	$ 5,620
Other current assets	69,676	70,620
Windward Prospects Ltd [Member]
Other Current Assets [Line Items]
Environmental indemnification receivable	$ 61,717	$ 65,000

XML

Inventories (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Inventories [Abstract]
Stores and spare parts inventory	$ 15.6	$ 15.9

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Accounts receivable, allowance for doubtful accounts	$ 1,069	$ 1,077
Property, plant and equipment, accumulated depreciation	620,347	607,006
Redeemable common stock, par value	$ 0.01	$ 0.01
Redeemable common stock, shares authorized	30,000,000	30,000,000
Redeemable common stock, shares issued	8,299,834	8,730,118
Redeemable common stock, shares outstanding	8,299,834	8,730,118
Appvion, Inc. [Member]
Accounts receivable, allowance for doubtful accounts	1,069	1,077
Property, plant and equipment, accumulated depreciation	$ 620,347	$ 607,006
Redeemable common stock, par value	$ 100	$ 100
Redeemable common stock, shares authorized	130,000	130,000
Redeemable common stock, shares issued	100	100
Redeemable common stock, shares outstanding	100	100

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New Accounting Pronouncements

6 Months Ended

Jun. 30, 2013

New Accounting Pronouncements

8.       NEW ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-04, "Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date." This guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of the following: (a) The amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance also requires an entity to disclose the nature and amount of the obligation. ASU 2013-04 is effective for the Company's annual and interim periods beginning after December 15, 2013, though early adoption is permitted, and retrospective application is required for all prior periods presented. The Company is currently evaluating the effects, if any, the adoption will have on its consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This update adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. The updated standard is effective prospectively for the Company's annual and interim periods beginning after December 15, 2012. As required, the Company adopted this guidance beginning in the first quarter ended March 31, 2013 and the disclosures have been included in its condensed consolidated financial statements in Note 18, Accumulated other Comprehensive Income.

In July 2012, the FASB issued ASU No. 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment.” It provides the option to perform a qualitative, rather than quantitative, assessment to determine whether it is more likely than not an indefinite-lived intangible asset is impaired. ASU 2012‑02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, though early adoption is permitted. As required, the Company adopted this guidance beginning in the first quarter ended March 31, 2013, and there was no impact to the Company’s condensed consolidated financial statements as a result of adoption.

In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities”. It expands required disclosures related to the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. It requires disclosure of net and gross positions in covered financial instruments and derivative instruments which are either (1) offset in accordance with ASC Sections 210-20-45 or 815-10-45, or (2) subject to an enforceable netting or other similar arrangement. To clarify the guidance provided in ASU 2011-11, the FASB issued

ASU No. 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" in January 2013. It clarifies the scope of the guidance to include derivatives, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to master netting or similar arrangements. The amendments are effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. The Company will be required to adopt this guidance as of its fiscal year beginning December 29, 2013 and is evaluating the effects, if any, the adoption will have on its consolidated financial statements.

Appvion, Inc. [Member]

New Accounting Pronouncements

8.       NEW ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-04, "Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date." This guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of the following: (a) The amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance also requires an entity to disclose the nature and amount of the obligation. ASU 2013-04 is effective for the Company's annual and interim periods beginning after December 15, 2013, though early adoption is permitted, and retrospective application is required for all prior periods presented. The Company is currently evaluating the effects, if any, the adoption will have on its consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This update adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. The updated standard is effective prospectively for the Company's annual and interim periods beginning after December 15, 2012. As required, the Company adopted this guidance beginning in the first quarter ended March 31, 2013 and the disclosures have been included in its condensed consolidated financial statements in Note 18, Accumulated other Comprehensive Income.

In July 2012, the FASB issued ASU No. 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment.” It provides the option to perform a qualitative, rather than quantitative, assessment to determine whether it is more likely than not an indefinite-lived intangible asset is impaired. ASU 2012‑02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, though early adoption is permitted. As required, the Company adopted this guidance beginning in the first quarter ended March 31, 2013, and there was no impact to the Company’s condensed consolidated financial statements as a result of adoption.

In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities”. It expands required disclosures related to the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. It requires disclosure of net and gross positions in covered financial instruments and derivative instruments which are either (1) offset in accordance with ASC Sections 210-20-45 or 815-10-45, or (2) subject to an enforceable netting or other similar arrangement. To clarify the guidance provided in ASU 2011-11, the FASB issued

ASU No. 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" in January 2013. It clarifies the scope of the guidance to include derivatives, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to master netting or similar arrangements. The amendments are effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. The Company will be required to adopt this guidance as of its fiscal year beginning December 29, 2013 and is evaluating the effects, if any, the adoption will have on its consolidated financial statements.

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Condensed Consolidated Statements Of Cash Flows (USD $)	6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012
Cash flows from operating activities:
Net loss	$ (16,752,000)	$ (111,836,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	14,073,000	81,508,000
Amortization of intangible assets	1,142,000	1,143,000
Impaired inventory revaluation		11,078,000
Amortization of financing fees	1,408,000	1,292,000
Amortization of bond discount	572,000	519,000
Employer 401(k) non-cash matching contributions	1,447,000	1,798,000
Foreign exchange loss	393,000	1,001,000
Non-cash loss (gain) on hedging	197,000	(1,350,000)
Loss on disposals of equipment	83,000	630,000
Non-Cash Debt Refinancing Costs	6,668,000
(Increase)/decrease in assets and increase/(decrease) in liabilities:
Accounts receivable	1,760,000	(6,126,000)
Inventories	(8,897,000)	(14,282,000)
Other current assets	(2,342,000)	1,942,000
Accounts payable and other accrued liabilities	(18,593,000)	13,259,000
Accrued pension	(9,014,000)	(16,197,000)
Other, net	(1,293,000)	15,944,000
Net cash provided (used) by operating activities	(29,148,000)	(19,677,000)
Cash flows from investing activities:
Proceeds from sale of equipment	6,000	2,000
Additions to property, plant and equipment	(10,457,000)	(4,385,000)
Net cash used by investing activities	(10,451,000)	(4,383,000)
Cash flows from financing activities:
Repayments Of Senior Secured Debt	(300,710,000)
Proceeds from Issuance of Senior Long-term Debt	331,650,000
Payments of Debt Issuance Costs	(6,364,000)
Payments relating to capital lease obligations	(44,000)	(24,000)
Proceeds From Old Long Term Lines Of Credit	155,300,000	136,150,000
Repayments Of Old Long Term Lines Of Credit	(159,000,000)	(104,000,000)
Proceeds from revolving line of credit	34,600,000
Payments of State of Ohio loans	(654,000)	(620,000)
Proceeds from Issuance of Common Stock	1,651,000	1,564,000
Proceeds from municipal debt		300,000
Payments to redeem common stock	(10,705,000)	(8,559,000)
Decrease in cash overdraft	(1,410,000)	(4,635,000)
Net cash (used) provided by financing activities	44,314,000	20,176,000
Effect of foreign exchange rate changes on cash and cash equivalents	(13,000)	(7,000)
Change in cash and cash equivalents	4,702,000	(3,891,000)
Cash and cash equivalents at beginning of period	1,851,000	7,241,000
Cash and cash equivalents at end of period	6,553,000	3,350,000
Appvion, Inc. [Member]
Cash flows from operating activities:
Net loss	(16,752,000)	(111,836,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	14,073,000	81,508,000
Amortization of intangible assets	1,142,000	1,143,000
Impaired inventory revaluation		11,078,000
Amortization of financing fees	1,408,000	1,292,000
Amortization of bond discount	572,000	519,000
Employer 401(k) non-cash matching contributions	1,447,000	1,798,000
Foreign exchange loss	393,000	1,001,000
Non-cash loss (gain) on hedging	197,000	(1,350,000)
Loss on disposals of equipment	83,000	630,000
Loss on debt extinguishment	6,668,000
(Increase)/decrease in assets and increase/(decrease) in liabilities:
Accounts receivable	1,760,000	(6,126,000)
Inventories	(8,897,000)	(14,282,000)
Other current assets	(2,342,000)	1,942,000
Accounts payable and other accrued liabilities	(21,876,000)	9,781,000
Accrued pension	(9,014,000)	(16,197,000)
Other, net	(2,725,000)	14,156,000
Net cash provided (used) by operating activities	(33,863,000)	(24,943,000)
Cash flows from investing activities:
Proceeds from sale of equipment	6,000	2,000
Additions to property, plant and equipment	(10,457,000)	(4,385,000)
Net cash used by investing activities	(10,451,000)	(4,383,000)
Cash flows from financing activities:
Repayments Of Senior Secured Debt	(300,710,000)
Proceeds from Issuance of Senior Long-term Debt	331,650,000
Payments of Debt Issuance Costs	(6,364,000)
Payments relating to capital lease obligations	(44,000)	(24,000)
Proceeds From Old Long Term Lines Of Credit	(155,300,000)	(136,150,000)
Repayments Of Old Long Term Lines Of Credit	159,000,000	104,000,000
Proceeds from revolving line of credit	34,600,000
Payments of State of Ohio loans	(654,000)	(620,000)
Proceeds from municipal debt		(300,000)
Change in due from Parent	(4,339,000)	(1,729,000)
Decrease in cash overdraft	(1,410,000)	(4,635,000)
Net cash (used) provided by financing activities	49,029,000	25,442,000
Effect of foreign exchange rate changes on cash and cash equivalents	(13,000)	(7,000)
Change in cash and cash equivalents	4,702,000	(3,891,000)
Cash and cash equivalents at beginning of period	1,851,000	7,241,000
Cash and cash equivalents at end of period	$ 6,553,000	$ 3,350,000

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Commitments And Contingencies (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended				12 Months Ended				3 Months Ended
	Sep. 30, 2012	Jun. 30, 2013 Minimum [Member]	Jun. 30, 2013 Maximum [Member]	Jun. 30, 2013 West Carrollton Mill [Member]	Jun. 30, 2013 Lower Fox River [Member]	Dec. 31, 2011 Lower Fox River [Member]	Dec. 31, 2008 Lower Fox River [Member]	Mar. 31, 2013 Lower Fox River [Member]	Jun. 30, 2013 Lower Fox River [Member] Appvion, Inc. [Member]	Mar. 31, 2013 Lower Fox River [Member] Minimum [Member]	Mar. 31, 2013 Lower Fox River [Member] Maximum [Member]	Dec. 31, 2012 Lower Fox River [Member] NCR And Appleton's Independent Analysis And Estimate [Member]	Jun. 30, 2013 Lower Fox River [Member] Windward Prospects Ltd (AWA) [Member]	Jan. 01, 2011 Lower Fox River [Member] Windward Prospects Ltd (AWA) [Member] Appvion, Inc. [Member]
Loss Contingencies [Line Items]
Current carrying amount of liability under the Arbitration									$ 61.7
Natural resource damages, value										10	310
Natural resource damages, payment period										10 years
Estimated liability								61.7				115.0
Responsibility for PCB discharged, percentage		8.00%	10.00%
Idemnification Amount, Up To					75
Idemnification Amount, In Excess Of					100
Amount paid in satisfaction of amounts not covered by indemnification							25
Loss contingency, aggregate amount paid													276.8
Indemnification receivable									61.7				61.7
Amount receivable in excess of amount reimbursable														8.9
Funds received from AWA						6.2
Environmental expense insurance recovery	2.2
Loss contingency range of possible loss maximum				10.5
Loss contingency short-term capital cost estimate				3
Period of incurrence of environmental cost				30 years
Percentage of indemnification below basis				50.00%
Basis amount for determination of indemnification amount				$ 5.0
Percentage of indemnification above basis				100.00%

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Current assets
Cash and cash equivalents	$ 6,553	$ 1,851
Accounts receivable, less allowance for doubtful accounts of $1,042 and $1,077, respectively	90,997	92,680
Inventories	103,150	94,349
Other current assets	69,676	70,620
Total current assets	270,376	259,500
Property, plant and equipment, net of accumulated depreciation of $613,726 and $607,006, respectively	242,126	243,265
Intangible assets, net	42,697	43,839
Other assets	17,213	14,486
Total assets	572,412	561,090
Current liabilities
Current portion of long-term debt	61,935	3,975
Accounts payable	65,807	68,600
Accrued interest	1,169	2,467
Other accrued liabilities	102,491	119,635
Total current liabilities	231,402	194,677
Long-term debt	518,040	511,624
Postretirement benefits other than pension	38,479	38,440
Accrued pension	127,824	137,081
Other long-term liabilities	33,721	32,165
Commitments and contingencies (Note 12)
Common stock	71,940	81,704
Accumulated deficit	(454,533)	(439,923)
Accumulated other comprehensive income	5,539	5,322
Total liabilities, redeemable common stock, accumulated deficit and accumulated other comprehensive income	572,412	561,090
Appvion, Inc. [Member]
Current assets
Cash and cash equivalents	6,553	1,851
Accounts receivable, less allowance for doubtful accounts of $1,042 and $1,077, respectively	90,997	92,680
Inventories	103,150	94,349
Other current assets	69,676	70,620
Total current assets	270,376	259,500
Property, plant and equipment, net of accumulated depreciation of $613,726 and $607,006, respectively	242,126	243,265
Intangible assets, net	42,697	43,839
Other assets	17,201	14,474
Total assets	572,400	561,078
Current liabilities
Current portion of long-term debt	61,935	3,975
Accounts payable	65,807	68,600
Accrued interest	1,169	2,467
Other accrued liabilities	102,491	119,635
Total current liabilities	231,402	194,677
Long-term debt	518,040	511,624
Postretirement benefits other than pension	38,479	38,440
Accrued pension	127,824	137,081
Other long-term liabilities	33,721	32,165
Total liabilities	949,466	913,987
Commitments and contingencies (Note 12)
Common stock	10,500	10,500
Paid in capital	623,305	623,305
Due from parent	(244,879)	(237,257)
Accumulated deficit	(771,531)	(754,779)
Accumulated other comprehensive income	5,539	5,322
Total equity	(377,066)	(352,909)
Total liabilities, redeemable common stock, accumulated deficit and accumulated other comprehensive income	$ 572,400	$ 561,078

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Other Current And Noncurrent Assets (Schedule Of Other Noncurrent Assets) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Other Noncurrent Assets [Line Items]
Deferred debt issuance costs	$ 8,642	$ 7,736
Other	8,571	6,750
Other noncurrent assets	17,213	14,486
Appvion, Inc. [Member]
Other Noncurrent Assets [Line Items]
Deferred debt issuance costs	8,642	7,736
Other	8,559	6,738
Other noncurrent assets	$ 17,201	$ 14,474

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Property, Plant And Equipment (Tables)

6 Months Ended

Jun. 30, 2013

Property, Plant And Equipment [Abstract]

Components Of Property, Plant And Equipment

	June 30, 2013			December 29, 2012
Land and improvements	$	9,634		$	9,634
Buildings and improvements		135,268			134,144
Machinery and equipment		668,257			663,915
Software		36,701			33,643
Capital leases		309			304
Construction in progress		12,304			8,631
		862,473			850,271
Accumulated depreciation		(620,347	)		(607,006	)
	$	242,126		$	243,265

Schedule Of Depreciation Expense

	For the Three		For the Three		For the Six		For the Six
	Months Ended		Months Ended		Months Ended		Months Ended
Depreciation Expense	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Cost of sales	$	6,486	$	45,674	$	12,751	$	80,123
Selling, general and administrative expenses		661		693		1,322		1,385
	$	7,147	$	46,367	$	14,073	$	81,508

XML

Segment Information

6 Months Ended

Jun. 30, 2013

Segment Information

17.      SEGMENT INFORMATION

The Company’s reportable segments are as follows: carbonless papers, thermal papers and Encapsys®. Management evaluates the performance of the segments based primarily on operating income (loss). Items excluded from the determination of segment operating income (loss) are unallocated corporate charges, interest income, interest expense, debt extinguishment expense, foreign exchange (gain) loss, and other (income) expense. The Company does not allocate total assets internally in assessing operating performance and does not track capital expenditures by segment. Net sales, operating income (loss) and depreciation and amortization, as determined by the Company for its reportable segments, are as follows (dollars in thousands):

	For the Three Months Ended June 30, 2013	For the Three Months Ended July 1, 2012	For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net sales
Carbonless papers	$ 88,287	$ 106,329	$	178,027		$	219,876
Thermal papers	104,828	99,579		217,394			198,412
	193,115	205,908		395,421			418,288
Encapsys	12,950	12,865		26,068			26,194
Intersegment (A)	(4,565)	(4,872)		(9,155	)		(10,951	)
Total	$ 201,500	$ 213,901	$	412,334		$	433,531
Operating income (loss)
Carbonless papers	$ 8,889	$ (13,495)	$	19,683		$	(40,750	)
Thermal papers	12,104	(8,279)		18,530			(30,061	)
	20,993	(21,774)		38,213			(70,811	)
Encapsys	3,254	2,932		6,690			5,074
Unallocated corporate charges	(3,127)	(11,026)		(5,191	)		(13,171	)
Intersegment (A)	(681)	(700)		(1,391	)		(1,641	)
Total	$ 20,439	$         (30,568)	$	38,321		$	(80,549	)
Depreciation and amortization (B)
Carbonless papers	$ 3,851	$ 25,603	$	7,506		$	44,879
Thermal papers	3,354	20,577		6,709			35,982
	7,205	46,180		14,215			80,861
Encapsys	497	743		964			1,754
Unallocated corporate charges	17	16		36			36
Total	$ 7,719	$ 46,939	$	15,215		$	82,651

(A) Intersegment represents the portion of the Encapsys segment financial results relating to microencapsulated products provided internally for the production of carbonless papers.

(B) Depreciation and amortization are allocated to the reportable segments based on the amount of activity provided by departments to the respective product lines in each reportable segment.

During the three and six months ended July 1, 2012, the Company recorded $39.0 million and $100.4 million in restructuring expense and other costs related to the ceasing of papermaking operations at the West Carrollton, Ohio facility (see Note 2, Restructuring and Other Related Costs). The operating loss of the carbonless papers segment for the three and six months ended July 1, 2012 included $21.5 million and $55.2 million, respectively, of restructuring and other related charges and $17.5 million and $45.2 million, respectively, was allocated to the thermal papers segment. Unallocated corporate charges for the three and six months ended July 1, 2012 included $6.5 million and $6.9 million, respectively, of transaction costs for a discontinued business combination.

Of the $39.0 million and $100.4 million of restructuring and other related charges recorded during the three and six months ended July 1, 2012, $36.9 million and $62.2 million, respectively, was related to accelerated depreciation of the decommissioned papermaking assets. The carbonless papers segment was charged with $20.3 million and $34.2 million of this depreciation, respectively. The thermal papers segment was charged with $16.6 million and $28.0 million of this depreciation, respectively.

Appvion, Inc. [Member]

Segment Information

17.      SEGMENT INFORMATION

The Company’s reportable segments are as follows: carbonless papers, thermal papers and Encapsys®. Management evaluates the performance of the segments based primarily on operating income (loss). Items excluded from the determination of segment operating income (loss) are unallocated corporate charges, interest income, interest expense, debt extinguishment expense, foreign exchange (gain) loss, and other (income) expense. The Company does not allocate total assets internally in assessing operating performance and does not track capital expenditures by segment. Net sales, operating income (loss) and depreciation and amortization, as determined by the Company for its reportable segments, are as follows (dollars in thousands):

	For the Three Months Ended June 30, 2013	For the Three Months Ended July 1, 2012	For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net sales
Carbonless papers	$ 88,287	$ 106,329	$	178,027		$	219,876
Thermal papers	104,828	99,579		217,394			198,412
	193,115	205,908		395,421			418,288
Encapsys	12,950	12,865		26,068			26,194
Intersegment (A)	(4,565)	(4,872)		(9,155	)		(10,951	)
Total	$ 201,500	$ 213,901	$	412,334		$	433,531
Operating income (loss)
Carbonless papers	$ 8,889	$ (13,495)	$	19,683		$	(40,750	)
Thermal papers	12,104	(8,279)		18,530			(30,061	)
	20,993	(21,774)		38,213			(70,811	)
Encapsys	3,254	2,932		6,690			5,074
Unallocated corporate charges	(3,127)	(11,026)		(5,191	)		(13,171	)
Intersegment (A)	(681)	(700)		(1,391	)		(1,641	)
Total	$ 20,439	$         (30,568)	$	38,321		$	(80,549	)
Depreciation and amortization (B)
Carbonless papers	$ 3,851	$ 25,603	$	7,506		$	44,879
Thermal papers	3,354	20,577		6,709			35,982
	7,205	46,180		14,215			80,861
Encapsys	497	743		964			1,754
Unallocated corporate charges	17	16		36			36
Total	$ 7,719	$ 46,939	$	15,215		$	82,651

(A) Intersegment represents the portion of the Encapsys segment financial results relating to microencapsulated products provided internally for the production of carbonless papers.

(B) Depreciation and amortization are allocated to the reportable segments based on the amount of activity provided by departments to the respective product lines in each reportable segment.

During the three and six months ended July 1, 2012, the Company recorded $39.0 million and $100.4 million in restructuring expense and other costs related to the ceasing of papermaking operations at the West Carrollton, Ohio facility (see Note 2, Restructuring and Other Related Costs). The operating loss of the carbonless papers segment for the three and six months ended July 1, 2012 included $21.5 million and $55.2 million, respectively, of restructuring and other related charges and $17.5 million and $45.2 million, respectively, was allocated to the thermal papers segment. Unallocated corporate charges for the three and six months ended July 1, 2012 included $6.5 million and $6.9 million, respectively, of transaction costs for a discontinued business combination.

Of the $39.0 million and $100.4 million of restructuring and other related charges recorded during the three and six months ended July 1, 2012, $36.9 million and $62.2 million, respectively, was related to accelerated depreciation of the decommissioned papermaking assets. The carbonless papers segment was charged with $20.3 million and $34.2 million of this depreciation, respectively. The thermal papers segment was charged with $16.6 million and $28.0 million of this depreciation, respectively.

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Other Intangible Assets (Schedule Of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	$ 57,838	$ 57,838
Amortizable intangible assets, Accumulated Amortization	38,006	36,864
Total intangible assets gross	80,703	80,703
Trademarks [Member]
Intangible Assets [Line Items]
Unamortizable intangible assets, Gross Carrying Amount	22,865	22,865
Trademarks [Member]
Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	44,665	44,665
Amortizable intangible assets, Accumulated Amortization	27,324	26,275
Patents [Member]
Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	7,808	7,808
Amortizable intangible assets, Accumulated Amortization	7,808	7,808
Customer Relationships [Member]
Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	5,365	5,365
Amortizable intangible assets, Accumulated Amortization	$ 2,874	$ 2,781

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Employee Benefits (Components Of Net Periodic Pension Cost) (Details) (Pension Benefits [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1,299	$ 977	$ 2,598	$ 1,954
Interest cost	4,618	4,867	9,236	9,734
Expected return on plan assets	(6,029)	(5,443)	(12,058)	(10,886)
Amortization of prior service cost	121	122	243	244
Net periodic benefit income	$ 9	$ 523	$ 19	$ 1,046

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Fair Value Measurements (Schedule Of Carrying Amount And Fair Value Of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	$ 579,975	$ 515,599
Carrying Amount [Member] | cik_SeniorSubordinatedNotesDue2019[Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	331,654
Carrying Amount [Member] | Senior Subordinated Notes Payable, Due June 2014 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	32,195	32,195
Carrying Amount [Member] | Senior Secured First Lien Notes Payable [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	4,253	301,776
Carrying Amount [Member] | Second Lien Notes Payable [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	161,766	161,766
Carrying Amount [Member] | Revolving Credit Facility [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	34,600	3,700
Carrying Amount [Member] | State Of Ohio Loans [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	6,557	7,212
Carrying Amount [Member] | Columbia County, Wisconsin Municipal Debt [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	300	300
Carrying Amount [Member] | Industrial Development Bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	8,650	8,650
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	598,031	547,617
Fair Value [Member] | cik_SeniorSubordinatedNotesDue2019[Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	331,654
Fair Value [Member] | Senior Subordinated Notes Payable, Due June 2014 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	32,195	32,356
Fair Value [Member] | Senior Secured First Lien Notes Payable [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	4,515	319,883
Fair Value [Member] | Second Lien Notes Payable [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	179,560	175,516
Fair Value [Member] | Revolving Credit Facility [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	34,600	3,700
Fair Value [Member] | State Of Ohio Loans [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	6,557	7,212
Fair Value [Member] | Columbia County, Wisconsin Municipal Debt [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	300	300
Fair Value [Member] | Industrial Development Bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments, Fair Value	$ 8,650	$ 8,650

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Basis Of Presentation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Ownership percentage by parent			100.00%
Net loss	$ (18,895)	$ (46,950)	$ (16,752)	$ (111,836)
Effect Of Change [Member]
Net loss	1,900		1,700
Appvion, Inc. [Member]
Ownership percentage by parent			100.00%
Net loss	$ (18,895)	$ (46,950)	$ (16,752)	$ (111,836)

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Measurements [Abstract]

Schedule Of Carrying Amount And Fair Value Of Financial Instruments

	June 30, 2013				December 29, 2012
	Carrying		Fair		Carrying		Fair
Financial Instruments	Amount		Value		Amount		Value
Senior subordinated notes payable	$	32,195	$	32,195	$	32,195	$	32,356
Senior secured first lien notes payable		4,253		4,515		301,776		319,883
Second lien notes payable		161,766		179,560		161,766		175,516
First lien term loan		331,654		331,654		-		-
Revolving credit facility		34,600		34,600		3,700		3,700
State of Ohio loans		6,557		6,557		7,212		7,212
Columbia County, Wisconsin municipal debt		300		300		300		300
Industrial development bonds		8,650		8,650		8,650		8,650
	$	579,975	$	598,031	$	515,599	$	547,617

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Information [Abstract]

Schedule Of Segment Reporting Information

	For the Three Months Ended June 30, 2013	For the Three Months Ended July 1, 2012	For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net sales
Carbonless papers	$ 88,287	$ 106,329	$	178,027		$	219,876
Thermal papers	104,828	99,579		217,394			198,412
	193,115	205,908		395,421			418,288
Encapsys	12,950	12,865		26,068			26,194
Intersegment (A)	(4,565)	(4,872)		(9,155	)		(10,951	)
Total	$ 201,500	$ 213,901	$	412,334		$	433,531
Operating income (loss)
Carbonless papers	$ 8,889	$ (13,495)	$	19,683		$	(40,750	)
Thermal papers	12,104	(8,279)		18,530			(30,061	)
	20,993	(21,774)		38,213			(70,811	)
Encapsys	3,254	2,932		6,690			5,074
Unallocated corporate charges	(3,127)	(11,026)		(5,191	)		(13,171	)
Intersegment (A)	(681)	(700)		(1,391	)		(1,641	)
Total	$ 20,439	$         (30,568)	$	38,321		$	(80,549	)
Depreciation and amortization (B)
Carbonless papers	$ 3,851	$ 25,603	$	7,506		$	44,879
Thermal papers	3,354	20,577		6,709			35,982
	7,205	46,180		14,215			80,861
Encapsys	497	743		964			1,754
Unallocated corporate charges	17	16		36			36
Total	$ 7,719	$ 46,939	$	15,215		$	82,651

(A) Intersegment represents the portion of the Encapsys segment financial results relating to microencapsulated products provided internally for the production of carbonless papers.

(B) Depreciation and amortization are allocated to the reportable segments based on the amount of activity provided by departments to the respective product lines in each reportable segment.

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Other Accrued Liabilities

6 Months Ended

Jun. 30, 2013

Other Accrued Liabilities

7.      OTHER ACCRUED LIABILITIES

Other accrued liabilities, as presented in the current liabilities section of the balance sheet, consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Compensation	$	5,480	$	14,800
Trade discounts		12,614		16,796
Workers’ compensation		8,846		4,875
Accrued insurance		1,739		1,896
Other accrued taxes		1,432		1,494
Postretirement benefits other than pension		3,248		3,248
Fox River Liabilities		61,717		65,000
Restructuring reserve		1,486		1,219
Other		5,929		10,307
	$	102,491	$	119,635

Appvion, Inc. [Member]

Other Accrued Liabilities

7.      OTHER ACCRUED LIABILITIES

Other accrued liabilities, as presented in the current liabilities section of the balance sheet, consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Compensation	$	5,480	$	14,800
Trade discounts		12,614		16,796
Workers’ compensation		8,846		4,875
Accrued insurance		1,739		1,896
Other accrued taxes		1,432		1,494
Postretirement benefits other than pension		3,248		3,248
Fox River Liabilities		61,717		65,000
Restructuring reserve		1,486		1,219
Other		5,929		10,307
	$	102,491	$	119,635

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Derivative Instruments And Hedging Activities (Schedule Of Amount Of Losses (Gains) On Derivative Instruments) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Losses (Gains) Recognized In Accumulated Other Comprehensive Loss [Member] | Designated As A Hedge [Member]
Derivative [Line Items]
Losses (gains) recognized in accumulated other comprehensive loss			$ 119	$ (1,549)
Losses (Gains) Recognized In Accumulated Other Comprehensive Loss [Member] | Not Designated As A Hedge [Member]
Derivative [Line Items]
Losses (gains) recognized in accumulated other comprehensive loss				558
Net Sales [Member] | Foreign Currency Exchange Derivatives [Member] | Designated As A Hedge [Member]
Derivative [Line Items]
Losses (gains) included in the Statement of Operations	184	(987)	291	(1,583)
Cost Of Sales [Member] | Natural Gas Fixed Swap [Member] | Not Designated As A Hedge [Member]
Derivative [Line Items]
Losses (gains) included in the Statement of Operations	144	(83)	(20)	268
Cost Of Sales [Member] | Pulp Fixed Swap [Member] | Designated As A Hedge [Member]
Derivative [Line Items]
Losses (gains) recognized in accumulated other comprehensive loss		197	197	394
Cost Of Sales [Member] | Pulp Fixed Swap [Member] | Not Designated As A Hedge [Member]
Derivative [Line Items]
Losses (gains) included in the Statement of Operations				10
Other Expense [Member] | Pulp Fixed Swap [Member] | Designated As A Hedge [Member]
Derivative [Line Items]
Losses (gains) recognized in accumulated other comprehensive loss		$ (40)		$ 72

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Other Current And Noncurrent Assets (Tables)

6 Months Ended

Jun. 30, 2013

Schedule Of Other Current Assets

	June 30, 2013		December 29, 2012
Environmental indemnification receivable	$	61,717	$	65,000
Other		7,959		5,620
	$	69,676	$	70,620

Schedule Of Other Noncurrent Assets

	June 30, 2013		December 29, 2012
Deferred debt issuance costs	$	8,642	$	7,736
Other		8,571		6,750
	$	17,213	$	14,486

Appvion, Inc. [Member]

Schedule Of Other Noncurrent Assets

	June 30, 2013		December 29, 2012
Deferred debt issuance costs	$	8,642	$	7,736
Other		8,559		6,738
	$	17,201	$	14,474

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Restructuring And Other Related Costs (Components Of Restructuring Reserve) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Restructuring Cost and Reserve [Line Items]
Reserve, Beginning Balance	$ 19,219
Additions to Reserve
Utilization	(705)
Reserve, Ending Balance	18,514
Exit Costs - Equipment Decommissioning [Member]
Restructuring Cost and Reserve [Line Items]
Reserve, Beginning Balance	765
Additions to Reserve
Utilization	(275)
Reserve, Ending Balance	490
Employee Termination Benefits [Member]
Restructuring Cost and Reserve [Line Items]
Reserve, Beginning Balance	18,454
Additions to Reserve
Utilization	(430)
Reserve, Ending Balance	$ 18,024

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Postretirement Benefit Plans Other Than Pensions

3 Months Ended

Mar. 31, 2013

Postretirement Benefit Plans Other Than Pensions

10.      POSTRETIREMENT BENEFIT PLANS OTHER THAN PENSIONS

The components of other postretirement benefit cost include the following (dollars in thousands):

Other Postretirement Benefits	For the Three Months Ended June 30, 2013			For the Three Months Ended July 1, 2012			For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net periodic benefit cost
Service cost	$	81		$	94		$	162		$	187
Interest cost		375			470			750			940
Amortization of prior service credit		(519	)		(650	)		(1,038	)		(1,300)
Curtailment gain		-			(3,726)			-			(3,726)
Net periodic benefit income	$	(63)		$	(3,812)		$	(126)		$	(3,899)

Appvion, Inc. [Member]

Postretirement Benefit Plans Other Than Pensions

10.      POSTRETIREMENT BENEFIT PLANS OTHER THAN PENSIONS

The components of other postretirement benefit cost include the following (dollars in thousands):

Other Postretirement Benefits	For the Three Months Ended June 30, 2013			For the Three Months Ended July 1, 2012			For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net periodic benefit cost
Service cost	$	81		$	94		$	162		$	187
Interest cost		375			470			750			940
Amortization of prior service credit		(519	)		(650	)		(1,038	)		(1,300)
Curtailment gain		-			(3,726)			-			(3,726)
Net periodic benefit income	$	(63)		$	(3,812)		$	(126)		$	(3,899)

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Other Current And Noncurrent Assets

6 Months Ended

Jun. 30, 2013

Other Current And Noncurrent Assets

6.       OTHER CURRENT AND NONCURRENT ASSETS

Other current assets consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Environmental indemnification receivable	$	61,717	$	65,000
Other		7,959		5,620
	$	69,676	$	70,620

The environmental indemnification receivables of $61.7 million and $65.0 million, noted above for the periods ended June 30, 2013 and December 29, 2012, respectively, represent an indemnification receivable from Arjo Wiggins Appleton Ltd, now known as Windward Prospects Ltd (“AWA”), as recorded on the Condensed Consolidated Balance Sheet of Paperweight Development Corp. and Subsidiaries and an indemnification receivable from PDC as recorded on the Condensed Consolidated Balance Sheet of Appvion, Inc. and Subsidiaries.

Other noncurrent assets for Paperweight Development Corp. and Subsidiaries consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Deferred debt issuance costs	$	8,642	$	7,736
Other		8,571		6,750
	$	17,213	$	14,486

Other noncurrent assets for Appvion, Inc. and Subsidiaries consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Deferred debt issuance costs	$	8,642	$	7,736
Other		8,559		6,738
	$	17,201	$	14,474

Appvion, Inc. [Member]

Other Current And Noncurrent Assets

6.       OTHER CURRENT AND NONCURRENT ASSETS

Other current assets consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Environmental indemnification receivable	$	61,717	$	65,000
Other		7,959		5,620
	$	69,676	$	70,620

The environmental indemnification receivables of $61.7 million and $65.0 million, noted above for the periods ended June 30, 2013 and December 29, 2012, respectively, represent an indemnification receivable from Arjo Wiggins Appleton Ltd, now known as Windward Prospects Ltd (“AWA”), as recorded on the Condensed Consolidated Balance Sheet of Paperweight Development Corp. and Subsidiaries and an indemnification receivable from PDC as recorded on the Condensed Consolidated Balance Sheet of Appvion, Inc. and Subsidiaries.

Other noncurrent assets for Paperweight Development Corp. and Subsidiaries consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Deferred debt issuance costs	$	8,642	$	7,736
Other		8,571		6,750
	$	17,213	$	14,486

Other noncurrent assets for Appvion, Inc. and Subsidiaries consist of the following (dollars in thousands):

	June 30, 2013		December 29, 2012
Deferred debt issuance costs	$	8,642	$	7,736
Other		8,559		6,738
	$	17,201	$	14,474

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Basis Of Presentation

6 Months Ended

Jun. 30, 2013

Basis Of Presentation

1.       BASIS OF PRESENTATION

In the opinion of management, all adjustments necessary for the fair statement of comprehensive loss for the three and six months ended June 30, 2013 and July 1, 2012, the cash flows for the six months ended June 30, 2013 and July 1, 2012 and financial position at June 30, 2013 and December 29, 2012 have been made. All adjustments made were of a normal recurring nature.

These condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes of Paperweight Development Corp. (“PDC”) and its 100%-owned subsidiaries (collectively the “Company”), which includes the consolidated financial statements of Appvion, Inc., formally known as Appleton Papers Inc, and its 100%-owned subsidiaries (collectively “Appvion”) for each of the three years in the period ended December 29, 2012, which are included in the annual report on Form 10-K for the year ended December 29, 2012. The consolidated balance sheet data as of December 29, 2012, contained within these condensed financial statements, was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

During fourth quarter 2012, the Company adopted mark-to-market accounting for its pension and other postretirement benefit plans. Under mark-to-market accounting, all actuarial gains and losses are immediately recognized in net periodic cost annually in the fourth quarter of each year and whenever a plan is determined to qualify for a remeasurement during a fiscal year and, the market-related value of plan assets used in the cost calculations is equal to fair value. Under the Company’s previous accounting method, a portion of the actuarial gains and losses was deferred in accumulated other comprehensive loss on the Condensed Consolidated Balance Sheet and amortized into future periods. In addition, the previous method smoothed the investment gains and losses of the plan assets over a period of five years. While the Company’s historical policy of recognizing pension and other postretirement benefits expense was considered acceptable under accounting principles generally accepted in the United States, the Company believes this new policy to be preferable as it eliminates the delay in recognizing actuarial gains and losses within operating results. This change will also improve the transparency within the Company’s operating results by immediately recognizing the effects of economic and interest rate trends on plan investments and assumptions in the year these actuarial gains and losses are actually incurred. All prior periods presented were retrospectively adjusted to reflect the period-specific effects of applying the new accounting policy.

In connection with this change in accounting policy for pension and other postretirement benefit plans, the Company also elected to change its method of accounting for certain costs included in inventory. The Company elected to exclude the amount of its pension and other postretirement benefit costs applicable to former employees from inventoriable costs. While the Company’s historical policy of including all pension and other postretirement benefits costs, excluding those charged directly to selling, general and administrative (“SG&A”) expenses, as a component of inventoriable costs was acceptable, it believes the new policy is preferable as inventoriable costs will only include costs that are directly attributable to current employees involved in the production of inventory. All prior periods presented were retrospectively adjusted to reflect the period-specific effects of applying the new accounting policy.

The effect of the accounting policy changes on the previously-reported results for the three and six months ended July 1, 2012, was a $1.9million reduction in net loss and a $1.7 million reduction in net loss, respectively.

Appvion, Inc. [Member]

Basis Of Presentation

1.       BASIS OF PRESENTATION

In the opinion of management, all adjustments necessary for the fair statement of comprehensive loss for the three and six months ended June 30, 2013 and July 1, 2012, the cash flows for the six months ended June 30, 2013 and July 1, 2012 and financial position at June 30, 2013 and December 29, 2012 have been made. All adjustments made were of a normal recurring nature.

These condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes of Paperweight Development Corp. (“PDC”) and its 100%-owned subsidiaries (collectively the “Company”), which includes the consolidated financial statements of Appvion, Inc., formally known as Appleton Papers Inc, and its 100%-owned subsidiaries (collectively “Appvion”) for each of the three years in the period ended December 29, 2012, which are included in the annual report on Form 10-K for the year ended December 29, 2012. The consolidated balance sheet data as of December 29, 2012, contained within these condensed financial statements, was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

During fourth quarter 2012, the Company adopted mark-to-market accounting for its pension and other postretirement benefit plans. Under mark-to-market accounting, all actuarial gains and losses are immediately recognized in net periodic cost annually in the fourth quarter of each year and whenever a plan is determined to qualify for a remeasurement during a fiscal year and, the market-related value of plan assets used in the cost calculations is equal to fair value. Under the Company’s previous accounting method, a portion of the actuarial gains and losses was deferred in accumulated other comprehensive loss on the Condensed Consolidated Balance Sheet and amortized into future periods. In addition, the previous method smoothed the investment gains and losses of the plan assets over a period of five years. While the Company’s historical policy of recognizing pension and other postretirement benefits expense was considered acceptable under accounting principles generally accepted in the United States, the Company believes this new policy to be preferable as it eliminates the delay in recognizing actuarial gains and losses within operating results. This change will also improve the transparency within the Company’s operating results by immediately recognizing the effects of economic and interest rate trends on plan investments and assumptions in the year these actuarial gains and losses are actually incurred. All prior periods presented were retrospectively adjusted to reflect the period-specific effects of applying the new accounting policy.

In connection with this change in accounting policy for pension and other postretirement benefit plans, the Company also elected to change its method of accounting for certain costs included in inventory. The Company elected to exclude the amount of its pension and other postretirement benefit costs applicable to former employees from inventoriable costs. While the Company’s historical policy of including all pension and other postretirement benefits costs, excluding those charged directly to selling, general and administrative (“SG&A”) expenses, as a component of inventoriable costs was acceptable, it believes the new policy is preferable as inventoriable costs will only include costs that are directly attributable to current employees involved in the production of inventory. All prior periods presented were retrospectively adjusted to reflect the period-specific effects of applying the new accounting policy.

The effect of the accounting policy changes on the previously-reported results for the three and six months ended July 1, 2012, was a $1.9million reduction in net loss and a $1.7 million reduction in net loss, respectively.

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Other Accrued Liabilities (Schedule Of Accrued Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Other Accrued Liabilities [Abstract]
Compensation	$ 5,480	$ 14,800
Trade discounts	12,614	16,796
Workers' compensation	8,846	4,875
Accrued insurance	1,739	1,896
Other accrued taxes	1,432	1,494
Postretirement benefits other than pension	3,248	3,248
Fox River Liabilities	61,717	65,000
Restructuring reserve	1,486	1,219
Other	5,929	10,307
Other accrued liabilities	$ 102,491	$ 119,635

XML

Property, Plant And Equipment (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jul. 01, 2012	Jul. 01, 2012
Restructuring Cost and Reserve [Line Items]
Accelerated depreciation	$ 36,873	$ 62,253
West Carrollton Mill [Member]
Restructuring Cost and Reserve [Line Items]
Accelerated depreciation	$ 36,900	$ 62,200

XML

Derivative Instruments And Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities [Abstract]

Schedule Of Fair Values Of Derivative Instruments Included In Company's Condensed Consolidated Balance Sheets

Designated as a Hedge	Balance Sheet Location	June 30, 2013		December 29, 2012
Foreign currency exchange derivatives	Other current liabilities	$	141	$	1,014
Not Designated as a Hedge
Natural gas collar	Other current liabilities		23		43

Schedule Of Amount Of Losses (Gains) On Derivative Instruments

Designated as a Hedge	Statement of Comprehensive Loss Location	For the Three Months Ended June 30, 2013		For the Three Months Ended July 1, 2012		For the Six Months Ended June 30, 2013		For the Six Months Ended July 1, 2012
Foreign currency exchange derivatives	Net sales	$	184	$	(987)	$	291	$	(1,583	)
Losses (gains) recognized in accumulated other comprehensive income							119		(1,549	)
Pulp fixed swap	Cost of sales		-		197		197		394
Pulp fixed swap	Other (income) expense		-		(40)		-		72
Losses recognized in accumulated other comprehensive income							-		558
Not Designated as a Hedge
Natural gas collar/fixed swap	Cost of sales		144		(83)		(20)		268
Pulp fixed swap	Cost of sales		-		-		-		10

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Segment Information (Narrative) (Details) (USD $)	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
	Jul. 01, 2012	Jul. 01, 2012	Jul. 01, 2012 West Carrollton Mill [Member]	Jul. 01, 2012 West Carrollton Mill [Member]	Apr. 01, 2012 Carbonless Paper [Member]	Jul. 01, 2012 Carbonless Paper [Member] West Carrollton Mill [Member]	Jul. 01, 2012 Carbonless Paper [Member] West Carrollton Mill [Member]	Jul. 01, 2012 Thermal Papers [Member]	Jul. 01, 2012 Thermal Papers [Member]	Jul. 01, 2012 Thermal Papers [Member] West Carrollton Mill [Member]	Jul. 01, 2012 Thermal Papers [Member] West Carrollton Mill [Member]
Segment Reporting Information [Line Items]
Transaction costs for discontinued business combination	$ 6,500,000	$ 6,900,000
Restructuring charges	1,036,000	26,472,000	39,000,000	100,400,000		21,500,000	55,200,000	17,500,000	45,200,000	17,500,000	45,200,000
Accelerated depreciation	$ 36,873,000	$ 62,253,000	$ 36,900,000	$ 62,200,000	$ 20,300,000	$ 20,300,000	$ 34,200,000			$ 16,600,000	$ 28,000,000

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Employee Stock Ownership Plan (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Employee Stock Ownership Plan [Abstract]
Contributions charged to expense	$ 0.6	$ 1.1	$ 1.4	$ 1.8
Redeemable common stock repurchased, shares			605,943	526,234
Redeemable common stock repurchased, value			10.7	8.6
ESOP shares matched by Company			81,592	114,547
ESOP shares purchased with pre-tax dollars			94,067	104,201
Pre-tax deferals, rollovers and loan payment made by employees for ESOP			1.6	1.6
Ultimate redemption liability	148	167	148	167
Recorded book value of redeemable common stock	72	90	72	90
Accretion of redeemable common stock			$ (2.1)	$ (2.6)
Share Price	$ 17.85		$ 17.85

XML

Employee Stock Ownership Plan

6 Months Ended

Jun. 30, 2013

Employee Stock Ownership Plan

13.      EMPLOYEE STOCK OWNERSHIP PLAN

The Company’s matching contributions charged to expense were $0.6 million and $1.1 million for the three-month periods ended June 30, 2013 and July 1, 2012, respectively. The Company’s matching contributions charged to expense were $1.4 million and $1.8 million for the six-month periods ended June 30, 2013 and July 1, 2012, respectively.  As a result of hardship withdrawals, required diversifications and employee terminations, 605,943 shares of PDC redeemable common stock were repurchased during the first six months of 2013 at an aggregate price of approximately $10.7 million. During the same period, the ESOP trustee purchased 94,067 shares of PDC redeemable common stock for an aggregate price of $1.6 million using pre-tax deferrals, rollovers and loan payments made by employees, while the Company’s matching contributions for this same period resulted in an additional 81,592 shares of redeemable common stock being issued. As a result of hardship withdrawals, required diversifications and employee terminations, 526,234 shares of PDC redeemable common stock were repurchased during the first six months of 2012 at an aggregate price of approximately $8.6 million. During the same period, the ESOP trustee purchased 104,201 shares of PDC redeemable common stock for an aggregate price of $1.6 million using pre-tax deferrals, rollovers and loan payments made by employees, while the Company’s matching contributions for this same period resulted in an additional 114,547 shares of redeemable common stock being issued.

In accordance with ASC 480, “Distinguishing Liabilities from Equity,” redeemable equity securities are required to be accreted so the amount in the balance sheet reflects the estimated amount redeemable at the earliest redemption date based upon the redemption value at each period-end. Redeemable common stock is being accreted to the earliest redemption date, mandated by federal law, based upon the estimated fair market value of the redeemable common stock as of June 30, 2013. As of this date, the fair market value of one share of PDC common stock was $17.85.  For several semi-annual periods prior to year-end 2010, stock valuations resulted in decreases to the stock price. The impact of these reductions caused the Company to reduce redeemable common stock accretion by $2.1 million for the six months ended June 30, 2013. Based upon the estimated fair value of the redeemable common stock, an ultimate redemption liability of approximately $148 million has been determined. The redeemable common stock recorded book value as of June 30, 2013, was $72 million.

Similarly, redeemable common stock accretion was reduced by $2.6 million for the six months ended July 1, 2012. Based upon the estimated fair value of the redeemable common stock, an ultimate redemption liability of approximately $167 million was determined. The recorded book value of the redeemable common stock as of July 1, 2012 was $90 million.

Appvion, Inc. [Member]

Employee Stock Ownership Plan

13.      EMPLOYEE STOCK OWNERSHIP PLAN

The Company’s matching contributions charged to expense were $0.6 million and $1.1 million for the three-month periods ended June 30, 2013 and July 1, 2012, respectively. The Company’s matching contributions charged to expense were $1.4 million and $1.8 million for the six-month periods ended June 30, 2013 and July 1, 2012, respectively.  As a result of hardship withdrawals, required diversifications and employee terminations, 605,943 shares of PDC redeemable common stock were repurchased during the first six months of 2013 at an aggregate price of approximately $10.7 million. During the same period, the ESOP trustee purchased 94,067 shares of PDC redeemable common stock for an aggregate price of $1.6 million using pre-tax deferrals, rollovers and loan payments made by employees, while the Company’s matching contributions for this same period resulted in an additional 81,592 shares of redeemable common stock being issued. As a result of hardship withdrawals, required diversifications and employee terminations, 526,234 shares of PDC redeemable common stock were repurchased during the first six months of 2012 at an aggregate price of approximately $8.6 million. During the same period, the ESOP trustee purchased 104,201 shares of PDC redeemable common stock for an aggregate price of $1.6 million using pre-tax deferrals, rollovers and loan payments made by employees, while the Company’s matching contributions for this same period resulted in an additional 114,547 shares of redeemable common stock being issued.

In accordance with ASC 480, “Distinguishing Liabilities from Equity,” redeemable equity securities are required to be accreted so the amount in the balance sheet reflects the estimated amount redeemable at the earliest redemption date based upon the redemption value at each period-end. Redeemable common stock is being accreted to the earliest redemption date, mandated by federal law, based upon the estimated fair market value of the redeemable common stock as of June 30, 2013. As of this date, the fair market value of one share of PDC common stock was $17.85.  For several semi-annual periods prior to year-end 2010, stock valuations resulted in decreases to the stock price. The impact of these reductions caused the Company to reduce redeemable common stock accretion by $2.1 million for the six months ended June 30, 2013. Based upon the estimated fair value of the redeemable common stock, an ultimate redemption liability of approximately $148 million has been determined. The redeemable common stock recorded book value as of June 30, 2013, was $72 million.

Similarly, redeemable common stock accretion was reduced by $2.6 million for the six months ended July 1, 2012. Based upon the estimated fair value of the redeemable common stock, an ultimate redemption liability of approximately $167 million was determined. The recorded book value of the redeemable common stock as of July 1, 2012 was $90 million.

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Employee Benefits

6 Months Ended

Jun. 30, 2013

Employee Benefits

9.      EMPLOYEE BENEFITS

The components of net periodic pension cost associated with the defined benefit pension plans include the following (dollars in thousands):

Pension Benefits	For the Three Months Ended June 30, 2013			For the Three Months Ended July 1, 2012			For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net periodic benefit cost
Service cost	$	1,299		$	977		$	2,598		$	1,954
Interest cost		4,618			4,867	,		9,236			9,734
Expected return on plan assets		(6,029	)		(5,443	)		(12,058	)		(10,886)
Amortization of prior service cost		121			122			243			244
Net periodic benefit cost	$	9		$	523		$	19		$	1,046

The Company expects to contribute $12.5 million to its defined benefit pension plan in 2013. The Company contributed  $8.8 million to the plan during the first six months of 2013.

Certain of the Company’s hourly employees participated in a multi-employer defined benefit plan, the Pace Industry Union-Management Pension Plan (EIN #11-6166763). Participants in this plan included the West Carrollton, Ohio represented manufacturing employees, where the collective bargaining agreement expired April 1, 2012, as well as the represented employees at the Kansas City, Kansas distribution center, where the collective bargaining agreement expired December 31, 2011. As a result of labor contracts ratified in June 2012 and September 2012, by the bargaining employees in Kansas City and West Carrollton, respectively, both groups elected to end their participation in this multi-employer plan and instead participate in the defined benefit pension plan sponsored by the Company. This resulted in a full withdrawal from the multi-employer plan, for which, the Company recorded a $7.0 million expense in third quarter 2012 representing its estimated cost to satisfy its complete withdrawal liability under the terms of the plan’s trust agreement. This was in addition to the $18.0 million partial withdrawal liability recorded during first quarter 2012 due to the workforce reduction at the West Carrollton, Ohio plant resulting from the cessation of papermaking activities. The estimated obligation for the complete withdrawal liability was derived from available information, including but not limited to collective bargaining agreements, plan trust agreements, participation agreements, ERISA statutes, regulations and rulings, discussions with the plan trustee and discussions with legal counsel. Based on the analysis of available information, it is reasonably possible that the Company’s costs to satisfy its withdrawal liability, when ultimately settled with the plan, could range from $16 million up to $54 million, with a payment period extending up to 20 years. The likelihood of an outcome in excess of the $25 million accrued amount is significantly less than other possible outcomes within the range primarily due to plan provisions that implement statutory limits on the amount of annual payments and the maximum number of payment periods.

Appvion, Inc. [Member]

Employee Benefits

9.      EMPLOYEE BENEFITS

The components of net periodic pension cost associated with the defined benefit pension plans include the following (dollars in thousands):

Pension Benefits	For the Three Months Ended June 30, 2013			For the Three Months Ended July 1, 2012			For the Six Months Ended June 30, 2013			For the Six Months Ended July 1, 2012
Net periodic benefit cost
Service cost	$	1,299		$	977		$	2,598		$	1,954
Interest cost		4,618			4,867	,		9,236			9,734
Expected return on plan assets		(6,029	)		(5,443	)		(12,058	)		(10,886)
Amortization of prior service cost		121			122			243			244
Net periodic benefit cost	$	9		$	523		$	19		$	1,046

The Company expects to contribute $12.5 million to its defined benefit pension plan in 2013. The Company contributed  $8.8 million to the plan during the first six months of 2013.

Certain of the Company’s hourly employees participated in a multi-employer defined benefit plan, the Pace Industry Union-Management Pension Plan (EIN #11-6166763). Participants in this plan included the West Carrollton, Ohio represented manufacturing employees, where the collective bargaining agreement expired April 1, 2012, as well as the represented employees at the Kansas City, Kansas distribution center, where the collective bargaining agreement expired December 31, 2011. As a result of labor contracts ratified in June 2012 and September 2012, by the bargaining employees in Kansas City and West Carrollton, respectively, both groups elected to end their participation in this multi-employer plan and instead participate in the defined benefit pension plan sponsored by the Company. This resulted in a full withdrawal from the multi-employer plan, for which, the Company recorded a $7.0 million expense in third quarter 2012 representing its estimated cost to satisfy its complete withdrawal liability under the terms of the plan’s trust agreement. This was in addition to the $18.0 million partial withdrawal liability recorded during first quarter 2012 due to the workforce reduction at the West Carrollton, Ohio plant resulting from the cessation of papermaking activities. The estimated obligation for the complete withdrawal liability was derived from available information, including but not limited to collective bargaining agreements, plan trust agreements, participation agreements, ERISA statutes, regulations and rulings, discussions with the plan trustee and discussions with legal counsel. Based on the analysis of available information, it is reasonably possible that the Company’s costs to satisfy its withdrawal liability, when ultimately settled with the plan, could range from $16 million up to $54 million, with a payment period extending up to 20 years. The likelihood of an outcome in excess of the $25 million accrued amount is significantly less than other possible outcomes within the range primarily due to plan provisions that implement statutory limits on the amount of annual payments and the maximum number of payment periods.

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Accumulated Other Comprehensive Income (Schedule Of Changes In Accumulated Other Comprehensive Income By Component) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income, Beginning balance			$ 5,322	$ 13,024
Other comprehensive income before reclassifications			524	420
Amounts reclassified from accumulated other comprehensive income (loss)			(307)	(5,971)
Net other comprehensive (loss) income	(680)	(3,718)	217	(5,551)
Accumulated other comprehensive income, Ending balance	5,539	7,473	5,539	7,473
Change In Retiree Plans [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income, Beginning balance			6,453	11,265
Amounts reclassified from accumulated other comprehensive income (loss)			(795)	(4,782)
Net other comprehensive (loss) income			(795)	(4,782)
Accumulated other comprehensive income, Ending balance	5,658	6,483	5,658	6,483
Hedging Activities [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income, Beginning balance			(1,131)	1,759
Other comprehensive income before reclassifications			524	420
Amounts reclassified from accumulated other comprehensive income (loss)			488	(1,189)
Net other comprehensive (loss) income			1,012	(769)
Accumulated other comprehensive income, Ending balance	$ (119)	$ 990	$ (119)	$ 990

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Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Measurements

16.      FAIR VALUE MEASUREMENTS

The carrying amount (including current portions) and estimated fair value of certain of the Company’s recorded financial instruments are as follows (dollars in thousands):

	June 30, 2013				December 29, 2012
	Carrying		Fair		Carrying		Fair
Financial Instruments	Amount		Value		Amount		Value
Senior subordinated notes payable	$	32,195	$	32,195	$	32,195	$	32,356
Senior secured first lien notes payable		4,253		4,515		301,776		319,883
Second lien notes payable		161,766		179,560		161,766		175,516
First lien term loan		331,654		331,654		-		-
Revolving credit facility		34,600		34,600		3,700		3,700
State of Ohio loans		6,557		6,557		7,212		7,212
Columbia County, Wisconsin municipal debt		300		300		300		300
Industrial development bonds		8,650		8,650		8,650		8,650
	$	579,975	$	598,031	$	515,599	$	547,617

The senior subordinated notes payable are not regularly traded in public markets so fair value was determined using Level 2 observable market inputs including pricing for similar debt. The senior secured first lien notes payable and the second lien notes payable are traded regularly in public markets and therefore, the fair value was determined using Level 1 inputs based on quoted market prices. The first lien term loan is not traded in public markets though, since it was executed on June 28, 2013, the fair value of this debt is equal to its carrying value. The fair value of the State of Ohio loans was determined using Level 2 observable market inputs including current rates for financial instruments of the same remaining maturity and similar terms. The industrial development bonds have a variable interest rate that reflects current market terms and conditions.

Due to their short-term nature, the carrying values of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of fair value as of June 30, 2013 and December 29, 2012.

Appvion, Inc. [Member]

Fair Value Measurements

16.      FAIR VALUE MEASUREMENTS

The carrying amount (including current portions) and estimated fair value of certain of the Company’s recorded financial instruments are as follows (dollars in thousands):

	June 30, 2013				December 29, 2012
	Carrying		Fair		Carrying		Fair
Financial Instruments	Amount		Value		Amount		Value
Senior subordinated notes payable	$	32,195	$	32,195	$	32,195	$	32,356
Senior secured first lien notes payable		4,253		4,515		301,776		319,883
Second lien notes payable		161,766		179,560		161,766		175,516
First lien term loan		331,654		331,654		-		-
Revolving credit facility		34,600		34,600		3,700		3,700
State of Ohio loans		6,557		6,557		7,212		7,212
Columbia County, Wisconsin municipal debt		300		300		300		300
Industrial development bonds		8,650		8,650		8,650		8,650
	$	579,975	$	598,031	$	515,599	$	547,617

The senior subordinated notes payable are not regularly traded in public markets so fair value was determined using Level 2 observable market inputs including pricing for similar debt. The senior secured first lien notes payable and the second lien notes payable are traded regularly in public markets and therefore, the fair value was determined using Level 1 inputs based on quoted market prices. The first lien term loan is not traded in public markets though, since it was executed on June 28, 2013, the fair value of this debt is equal to its carrying value. The fair value of the State of Ohio loans was determined using Level 2 observable market inputs including current rates for financial instruments of the same remaining maturity and similar terms. The industrial development bonds have a variable interest rate that reflects current market terms and conditions.

Due to their short-term nature, the carrying values of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of fair value as of June 30, 2013 and December 29, 2012.

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Derivative Instruments And Hedging Activities

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities

14.      DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company selectively uses financial instruments to manage some market risks from changes in foreign currency exchange rates or commodity prices. The fair values of all derivatives are recorded in the Condensed Consolidated Balance Sheets. The change in a derivative’s fair value is recorded each period in current earnings or accumulated other comprehensive income, depending on whether the derivative is designated and qualifies as part of a hedge transaction and, if so, the type of hedge transaction.

The Company selectively hedges forecasted transactions that are subject to foreign currency exchange exposure by using forward exchange contracts. These instruments are designated as cash flow hedges and are recorded in the Condensed Consolidated Balance Sheet at fair value using Level 2 observable market inputs. The fair value of foreign currency forward contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward note, also deemed to be categorized as Level 2. The effective portion of the contracts’ gains or losses due to changes in fair value is initially recorded as a component of accumulated other comprehensive income and is subsequently reclassified into earnings when the underlying transactions occur and affect earnings or if it becomes probable the forecasted transactions will not occur. These contracts are highly effective in hedging the variability in future cash flows attributable to changes in currency exchange rates. The notional amount of foreign exchange contracts used to hedge foreign currency transactions was $18.6 million as of June 30, 2013. These contracts have settlement dates extending through December 2013.

The Company selectively hedges forecasted commodity transactions that are subject to pricing fluctuations by using collar contracts to manage risks associated with market fluctuations in energy prices. These contracts are recorded in the Condensed Consolidated Balance Sheet at fair value using Level 2 observable market inputs based on the New York Mercantile Exchange as measured on the last trading day of the accounting period and compared to the collar price. The contracts’ gains or losses due to changes in fair value are recorded in current period earnings. At June 30, 2013, the hedged volumes of these contracts totaled 613,970 MMBTU (Million British Thermal Units) of natural gas. The contracts have settlement dates extending through December 2013.

The Company selectively hedges forecasted commodity transactions that are subject to pricing fluctuations by using swap contracts to manage risks associated with market fluctuations in pulp prices. During first quarter 2012, there were two pulp swap contracts in place. The first swap had a hedge volume of 2,000 tons of pulp and was settled in February 2012. It was not designated as a hedge, and therefore, gains or losses due to changes in fair value were recorded in current period earnings. The second pulp hedge was designated as a cash flow hedge of forecasted pulp purchases, and therefore, the change in the effective portion of the fair value of the hedge was deferred in accumulated other comprehensive income until the inventory containing the pulp was sold. This pulp hedge was settled as of September 30, 2012. As of June 30, 2013 there were no swap contracts in place.

The following table presents the location and fair values of derivative instruments included in the Company’s Condensed Consolidated Balance Sheets (dollars in thousands):

Designated as a Hedge	Balance Sheet Location	June 30, 2013		December 29, 2012
Foreign currency exchange derivatives	Other current liabilities	$	141	$	1,014
Not Designated as a Hedge
Natural gas collar	Other current liabilities		23		43

The following table presents the location and amount of losses (gains) on derivative instruments and related hedge items included in the Company’s Condensed Consolidated Statement of Comprehensive Loss for the three and six months ended June 30, 2013 and July 1, 2012 and (gains) losses initially recognized in accumulated other comprehensive income in the Condensed Consolidated Balance Sheets at the period-ends presented (dollars in thousands):

Designated as a Hedge	Statement of Comprehensive Loss Location	For the Three Months Ended June 30, 2013		For the Three Months Ended July 1, 2012		For the Six Months Ended June 30, 2013		For the Six Months Ended July 1, 2012
Foreign currency exchange derivatives	Net sales	$	184	$	(987)	$	291	$	(1,583	)
Losses (gains) recognized in accumulated other comprehensive income							119		(1,549	)
Pulp fixed swap	Cost of sales		-		197		197		394
Pulp fixed swap	Other (income) expense		-		(40)		-		72
Losses recognized in accumulated other comprehensive income							-		558
Not Designated as a Hedge
Natural gas collar/fixed swap	Cost of sales		144		(83)		(20)		268
Pulp fixed swap	Cost of sales		-		-		-		10

For a discussion of the fair value of financial instruments, see Note 16, Fair Value Measurements.

Appvion, Inc. [Member]

Derivative Instruments And Hedging Activities

14.      DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company selectively uses financial instruments to manage some market risks from changes in foreign currency exchange rates or commodity prices. The fair values of all derivatives are recorded in the Condensed Consolidated Balance Sheets. The change in a derivative’s fair value is recorded each period in current earnings or accumulated other comprehensive income, depending on whether the derivative is designated and qualifies as part of a hedge transaction and, if so, the type of hedge transaction.

The Company selectively hedges forecasted transactions that are subject to foreign currency exchange exposure by using forward exchange contracts. These instruments are designated as cash flow hedges and are recorded in the Condensed Consolidated Balance Sheet at fair value using Level 2 observable market inputs. The fair value of foreign currency forward contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward note, also deemed to be categorized as Level 2. The effective portion of the contracts’ gains or losses due to changes in fair value is initially recorded as a component of accumulated other comprehensive income and is subsequently reclassified into earnings when the underlying transactions occur and affect earnings or if it becomes probable the forecasted transactions will not occur. These contracts are highly effective in hedging the variability in future cash flows attributable to changes in currency exchange rates. The notional amount of foreign exchange contracts used to hedge foreign currency transactions was $18.6 million as of June 30, 2013. These contracts have settlement dates extending through December 2013.

The Company selectively hedges forecasted commodity transactions that are subject to pricing fluctuations by using collar contracts to manage risks associated with market fluctuations in energy prices. These contracts are recorded in the Condensed Consolidated Balance Sheet at fair value using Level 2 observable market inputs based on the New York Mercantile Exchange as measured on the last trading day of the accounting period and compared to the collar price. The contracts’ gains or losses due to changes in fair value are recorded in current period earnings. At June 30, 2013, the hedged volumes of these contracts totaled 613,970 MMBTU (Million British Thermal Units) of natural gas. The contracts have settlement dates extending through December 2013.

The Company selectively hedges forecasted commodity transactions that are subject to pricing fluctuations by using swap contracts to manage risks associated with market fluctuations in pulp prices. During first quarter 2012, there were two pulp swap contracts in place. The first swap had a hedge volume of 2,000 tons of pulp and was settled in February 2012. It was not designated as a hedge, and therefore, gains or losses due to changes in fair value were recorded in current period earnings. The second pulp hedge was designated as a cash flow hedge of forecasted pulp purchases, and therefore, the change in the effective portion of the fair value of the hedge was deferred in accumulated other comprehensive income until the inventory containing the pulp was sold. This pulp hedge was settled as of September 30, 2012. As of June 30, 2013 there were no swap contracts in place.

The following table presents the location and fair values of derivative instruments included in the Company’s Condensed Consolidated Balance Sheets (dollars in thousands):

Designated as a Hedge	Balance Sheet Location	June 30, 2013		December 29, 2012
Foreign currency exchange derivatives	Other current liabilities	$	141	$	1,014
Not Designated as a Hedge
Natural gas collar	Other current liabilities		23		43

The following table presents the location and amount of losses (gains) on derivative instruments and related hedge items included in the Company’s Condensed Consolidated Statement of Comprehensive Loss for the three and six months ended June 30, 2013 and July 1, 2012 and (gains) losses initially recognized in accumulated other comprehensive income in the Condensed Consolidated Balance Sheets at the period-ends presented (dollars in thousands):

Designated as a Hedge	Statement of Comprehensive Loss Location	For the Three Months Ended June 30, 2013		For the Three Months Ended July 1, 2012		For the Six Months Ended June 30, 2013		For the Six Months Ended July 1, 2012
Foreign currency exchange derivatives	Net sales	$	184	$	(987)	$	291	$	(1,583	)
Losses (gains) recognized in accumulated other comprehensive income							119		(1,549	)
Pulp fixed swap	Cost of sales		-		197		197		394
Pulp fixed swap	Other (income) expense		-		(40)		-		72
Losses recognized in accumulated other comprehensive income							-		558
Not Designated as a Hedge
Natural gas collar/fixed swap	Cost of sales		144		(83)		(20)		268
Pulp fixed swap	Cost of sales		-		-		-		10

For a discussion of the fair value of financial instruments, see Note 16, Fair Value Measurements.

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 01, 2013 Appvion, Inc. [Member]	Aug. 01, 2013 Paperweight Development Corp. [Member]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013
Entity Registrant Name	PAPERWEIGHT DEVELOPMENT CORP
Entity Central Index Key	0001166365
Current Fiscal Year End Date	--12-28
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		100	8,299,610

XML

Long-Term Obligations

6 Months Ended

Jun. 30, 2013

Long-Term Obligations

15.      LONG-TERM OBLIGATIONS

Long-term obligations, excluding capital lease obligations, consist of the following (dollars in thousands):

	June 30, 2013			December 29, 2012
Old revolving credit facility at approximately 4.25%	$	-		$	3,700
New revolving credit facility at approximately 5.00%		34,600			-
Secured variable rate industrial development bonds, 0.3% average interest rate at June 30, 2013, $2,650 due in 2013 and $6,000 due in 2027		8,650			8,650
State of Ohio assistance loan at 6%, approximately $100 due monthly and final payment due May 2017		4,700			5,210
State of Ohio loan at 3%, approximately $30 due monthly and final payment due May 2019		1,857			2,002
Columbia County, Wisconsin municipal debt due December 2019		300			300
Senior subordinated notes payable at 9.75%, due June 2014		32,195			32,195
Senior secured first lien notes payable at 10.5%, due June 2015		4,290			305,000
Unamortized discount on 10.5% senior secured first lien notes payable, due June 2015		(37	)		(3,224	)
Second lien notes payable at 11.25%, due December 2015		161,766			161,766
First lien term loan at 5.75%, due June 2019		335,000			-
Unamortized discount on first lien term loan, due June 2019		(3,346	)		-
		579,975			515,599
Less obligations due within one year		(61,935	)		(3,975	)
	$	518,040		$	511,624

On June 28, 2013, Appvion completed a voluntary refinancing of a portion of its debt to extend debt maturities, reduce interest costs and increase financial flexibility and liquidity options. The refinancing included the execution of a new credit agreement providing for a $100 million five-year revolving line of credit due June 2018 and a $335 million first lien term loan due June 2019. The new line of credit replaced the five-year, $100 million revolving credit facility due February 2015. The new revolving credit facility provides for up to $100 million of revolving loans including a letter of credit sub-facility of up to $25 million and a swing line sub-facility of up to $5 million. Appvion’s borrowings under the revolving credit facility will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum.

Proceeds from the $335 million first lien term loan, less expenses and discounts, were $326.3 million. These proceeds were used to redeem $300.7 million of the 10.5% senior secured first lien notes due June 2015, pay $1.1 million of interest due on the notes, pay $18.1 million of note premiums and costs associated with the note redemption, repay $6.0 million of the old revolver and pay $0.4 million of interest and fees due on the old revolver. The $18.1 million is included in debt extinguishment expense on the Condensed Consolidated Statement of Comprehensive Loss for the three and six months ended June 30, 2013. Also as a result of the refinancing, $6.7 million of unamortized deferred debt issuance costs and original issue discount associated with the redeemed senior secured first lien notes and old revolver were written off and included in debt extinguishment expense.

The first lien term loan will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum. On July 30, 2013, Appvion fixed the interest rate at 7.24%, on $100.0 million of this variable rate debt using an interest swap contract with a forward start date of September 14, 2014 and a maturity date of June 28, 2019. The term loan will amortize in equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal amount, with the balance payable on June 28, 2019. Also, within five business days after the year-end financial statements have been filed, Appvion shall prepay an aggregate principal amount of the term loan equal to the excess, if any, of (a) 50% of defined excess cash flow, provided that such percentage shall be reduced to (1) 25% based upon Appvion achieving a consolidated leverage ratio of less than 3.50 to 1.0 but greater than or equal to 2.50 to 1.0 and (2) 0% based upon Appvion achieving a consolidated leverage ratio of less than 2.50 to 1.0 minus (b) the aggregate amount of all prepayments of the revolving credit line which constitute permanent reductions of the revolving credit facility and all optional prepayments of the first lien term loan made during the year.

On July 31, 2013, Appvion redeemed the remaining $4.3 million of 10.5% senior secured first lien notes due June 2015, plus interest and $0.3 million of debt extinguishment expense.

The new credit agreement ranks senior in right of payment to all existing and future subordinated indebtedness of Appvion and is secured by security interests in substantially all of the property and assets of Appvion and the debt guarantors. As noted above, the maturity date of the revolving credit facility is June 28, 2018 and the maturity date of the first lien term loan is June 28, 2019. If any amount of the second lien notes remains outstanding on June 30, 2015, then the maturity date of the revolving credit facility shall automatically be deemed to be June 30, 2015 and if any amount of the second lien notes remains outstanding on September 15, 2015, the maturity date of the first lien term loan shall automatically be deemed to be September 15, 2015. The new credit agreement is unconditionally, and jointly and severally, guaranteed by PDC and Appvion Canada, Ltd. It contains affirmative and negative covenants customary for similar credit facilities, which among other things, requires Appvion to meet a minimum fixed charge coverage ratio under certain circumstances and restricts Appvion’s ability and the ability of Appvion’s subsidiaries, subject to certain exceptions, to incur additional indebtedness and liens, engage in sale and leaseback transactions, make investments, make loans and advances, transact certain asset sales, engage in mergers, acquisitions, consolidations, liquidations and dissolutions, pay dividends or make other payments in respect of equity interests and other restricted payments, engage in certain transactions with affiliates, limit capital expenditures and make prepayments, redemptions and repurchases of other indebtedness.

During the first six months of 2013, the Company made mandatory debt repayments of $0.7 million, plus interest, on its State of Ohio loans. Prior to the refinancing, Appvion had borrowed an additional $36.9 million,net, from the old revolving credit facility. This was repaid in full with $6.0 million of proceeds from the $335 million first lien term loan and $34.6 million of borrowing from the new revolving credit facility. As of June 30, 2013, the outstanding balance on the new revolving line of credit was $34.6 million. In addition, approximately $15.7 million of the new revolving credit facility was used to support outstanding letters of credit.

During March 2012, the Company received the proceeds of a $0.3 million note issued to Appvion., Inc. by Columbia County, Wisconsin.

The first lien notes and the second lien notes, as amended, contain covenants that restrict Appvion’s ability and the ability of Appvion’s other guarantors to sell assets or merge or consolidate with or into other companies; borrow money; incur liens; pay dividends or make other distributions; make other restricted payments and investments; place restrictions on the ability of certain subsidiaries to pay dividends or other payments to Appvion; enter into sale and leaseback transactions; amend particular agreements relating to the transaction with former parent AWA and the ESOP; and enter into transactions with certain affiliates. These covenants are subject to important exceptions and qualifications set forth in the indenture governing the 11.25% second lien notes due 2015, as amended.

The senior subordinated notes, as amended, are unconditionally guaranteed by PDC and Rose Holdings Limited, subject to certain limitations.

The Company was in compliance with all debt covenants at June 30, 2013, and is forecasted to remain compliant for the next 12 months. The Company’s ability to comply with the financial covenants in the future depends on achieving forecasted operating results and operating cash flows. The Company’s failure to comply with its covenants, or an assessment that it is likely to fail to comply with its covenants, could lead the Company to seek amendments to, or waivers of, the financial covenants. The Company cannot provide assurance that it would be able to obtain any amendments to or waivers of the covenants. In the event of non-compliance with debt covenants, if the lenders will not amend or waive the covenants, the debt would be due and the Company would need to seek alternative financing. The Company cannot provide assurance that it would be able to obtain alternative financing. If the Company were not able to secure alternative financing, this would have a material adverse impact on the Company.

Appvion, Inc. [Member]

Long-Term Obligations

15.      LONG-TERM OBLIGATIONS

Long-term obligations, excluding capital lease obligations, consist of the following (dollars in thousands):

	June 30, 2013			December 29, 2012
Old revolving credit facility at approximately 4.25%	$	-		$	3,700
New revolving credit facility at approximately 5.00%		34,600			-
Secured variable rate industrial development bonds, 0.3% average interest rate at June 30, 2013, $2,650 due in 2013 and $6,000 due in 2027		8,650			8,650
State of Ohio assistance loan at 6%, approximately $100 due monthly and final payment due May 2017		4,700			5,210
State of Ohio loan at 3%, approximately $30 due monthly and final payment due May 2019		1,857			2,002
Columbia County, Wisconsin municipal debt due December 2019		300			300
Senior subordinated notes payable at 9.75%, due June 2014		32,195			32,195
Senior secured first lien notes payable at 10.5%, due June 2015		4,290			305,000
Unamortized discount on 10.5% senior secured first lien notes payable, due June 2015		(37	)		(3,224	)
Second lien notes payable at 11.25%, due December 2015		161,766			161,766
First lien term loan at 5.75%, due June 2019		335,000			-
Unamortized discount on first lien term loan, due June 2019		(3,346	)		-
		579,975			515,599
Less obligations due within one year		(61,935	)		(3,975	)
	$	518,040		$	511,624

On June 28, 2013, Appvion completed a voluntary refinancing of a portion of its debt to extend debt maturities, reduce interest costs and increase financial flexibility and liquidity options. The refinancing included the execution of a new credit agreement providing for a $100 million five-year revolving line of credit due June 2018 and a $335 million first lien term loan due June 2019. The new line of credit replaced the five-year, $100 million revolving credit facility due February 2015. The new revolving credit facility provides for up to $100 million of revolving loans including a letter of credit sub-facility of up to $25 million and a swing line sub-facility of up to $5 million. Appvion’s borrowings under the revolving credit facility will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum.

Proceeds from the $335 million first lien term loan, less expenses and discounts, were $326.3 million. These proceeds were used to redeem $300.7 million of the 10.5% senior secured first lien notes due June 2015, pay $1.1 million of interest due on the notes, pay $18.1 million of note premiums and costs associated with the note redemption, repay $6.0 million of the old revolver and pay $0.4 million of interest and fees due on the old revolver. The $18.1 million is included in debt extinguishment expense on the Condensed Consolidated Statement of Comprehensive Loss for the three and six months ended June 30, 2013. Also as a result of the refinancing, $6.7 million of unamortized deferred debt issuance costs and original issue discount associated with the redeemed senior secured first lien notes and old revolver were written off and included in debt extinguishment expense.

The first lien term loan will bear interest at Appvion’s option at either base rate plus 3.5% or LIBOR, but not less than 1.25%, plus 4.5%, per annum. On July 30, 2013, Appvion fixed the interest rate at 7.24%, on $100.0 million of this variable rate debt using an interest swap contract with a forward start date of September 14, 2014 and a maturity date of June 28, 2019. The term loan will amortize in equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal amount, with the balance payable on June 28, 2019. Also, within five business days after the year-end financial statements have been filed, Appvion shall prepay an aggregate principal amount of the term loan equal to the excess, if any, of (a) 50% of defined excess cash flow, provided that such percentage shall be reduced to (1) 25% based upon Appvion achieving a consolidated leverage ratio of less than 3.50 to 1.0 but greater than or equal to 2.50 to 1.0 and (2) 0% based upon Appvion achieving a consolidated leverage ratio of less than 2.50 to 1.0 minus (b) the aggregate amount of all prepayments of the revolving credit line which constitute permanent reductions of the revolving credit facility and all optional prepayments of the first lien term loan made during the year.

On July 31, 2013, Appvion redeemed the remaining $4.3 million of 10.5% senior secured first lien notes due June 2015, plus interest and $0.3 million of debt extinguishment expense.

The new credit agreement ranks senior in right of payment to all existing and future subordinated indebtedness of Appvion and is secured by security interests in substantially all of the property and assets of Appvion and the debt guarantors. As noted above, the maturity date of the revolving credit facility is June 28, 2018 and the maturity date of the first lien term loan is June 28, 2019. If any amount of the second lien notes remains outstanding on June 30, 2015, then the maturity date of the revolving credit facility shall automatically be deemed to be June 30, 2015 and if any amount of the second lien notes remains outstanding on September 15, 2015, the maturity date of the first lien term loan shall automatically be deemed to be September 15, 2015. The new credit agreement is unconditionally, and jointly and severally, guaranteed by PDC and Appvion Canada, Ltd. It contains affirmative and negative covenants customary for similar credit facilities, which among other things, requires Appvion to meet a minimum fixed charge coverage ratio under certain circumstances and restricts Appvion’s ability and the ability of Appvion’s subsidiaries, subject to certain exceptions, to incur additional indebtedness and liens, engage in sale and leaseback transactions, make investments, make loans and advances, transact certain asset sales, engage in mergers, acquisitions, consolidations, liquidations and dissolutions, pay dividends or make other payments in respect of equity interests and other restricted payments, engage in certain transactions with affiliates, limit capital expenditures and make prepayments, redemptions and repurchases of other indebtedness.

During the first six months of 2013, the Company made mandatory debt repayments of $0.7 million, plus interest, on its State of Ohio loans. Prior to the refinancing, Appvion had borrowed an additional $36.9 million,net, from the old revolving credit facility. This was repaid in full with $6.0 million of proceeds from the $335 million first lien term loan and $34.6 million of borrowing from the new revolving credit facility. As of June 30, 2013, the outstanding balance on the new revolving line of credit was $34.6 million. In addition, approximately $15.7 million of the new revolving credit facility was used to support outstanding letters of credit.

During March 2012, the Company received the proceeds of a $0.3 million note issued to Appvion., Inc. by Columbia County, Wisconsin.

The first lien notes and the second lien notes, as amended, contain covenants that restrict Appvion’s ability and the ability of Appvion’s other guarantors to sell assets or merge or consolidate with or into other companies; borrow money; incur liens; pay dividends or make other distributions; make other restricted payments and investments; place restrictions on the ability of certain subsidiaries to pay dividends or other payments to Appvion; enter into sale and leaseback transactions; amend particular agreements relating to the transaction with former parent AWA and the ESOP; and enter into transactions with certain affiliates. These covenants are subject to important exceptions and qualifications set forth in the indenture governing the 11.25% second lien notes due 2015, as amended.

The senior subordinated notes, as amended, are unconditionally guaranteed by PDC and Rose Holdings Limited, subject to certain limitations.

The Company was in compliance with all debt covenants at June 30, 2013, and is forecasted to remain compliant for the next 12 months. The Company’s ability to comply with the financial covenants in the future depends on achieving forecasted operating results and operating cash flows. The Company’s failure to comply with its covenants, or an assessment that it is likely to fail to comply with its covenants, could lead the Company to seek amendments to, or waivers of, the financial covenants. The Company cannot provide assurance that it would be able to obtain any amendments to or waivers of the covenants. In the event of non-compliance with debt covenants, if the lenders will not amend or waive the covenants, the debt would be due and the Company would need to seek alternative financing. The Company cannot provide assurance that it would be able to obtain alternative financing. If the Company were not able to secure alternative financing, this would have a material adverse impact on the Company.

XML

Derivative Instruments And Hedging Activities (Schedule Of Fair Values Of Derivative Instruments Included In Company's Condensed Consolidated Balance Sheets) (Details) (Other Current Liabilities [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 29, 2012
Foreign Currency Exchange Derivatives [Member] | Designated As A Hedge [Member]
Derivatives, Fair Value [Line Items]
Foreign currency exchange derivatives, assets	$ (141)	$ (1,014)
Natural Gas Collar [Member] | Not Designated As A Hedge [Member]
Derivatives, Fair Value [Line Items]
Natural gas collar	$ (23)	$ (43)

XML

Derivative Instruments And Hedging Activities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Apr. 01, 2012 Pulp [Member] contract	Jun. 30, 2013 Designated As A Hedge [Member]	Jun. 30, 2013 Designated As A Hedge [Member] Natural Gas [Member] MMBTU	Feb. 29, 2012 Not Designated As A Hedge [Member] Pulp [Member] T
Derivative [Line Items]
Notional amount of foreign exchange contracts		$ 18.6
Notional nonmonetary amount of price risk derivatives			613,970
Notional nonmonetary amount of price risk derivatives, mass				2,000
Number of Price Risk Derivatives Held	2