8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 5, 2020

_____________________

VERSO CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-34056	75-3217389
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

8540 Gander Creek Drive

Miamisburg, Ohio 45342

(Address, including zip code, of principal executive offices)

(877) 855-7243

(Registrants’ telephone number, including area code)

_______________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.01 per share	VRS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02        Results of Operations and Financial Condition.

On August 6, 2020, Verso Corporation (“Verso”) issued a press release announcing its financial results for the second quarter ended June 30, 2020, and the declaration of a quarterly cash dividend of $0.10 per share of Verso’s Class A Common Stock (“Common Stock”) and the declaration of a special cash dividend of $3.00 per share of Common Stock. A copy of the press release is included as Exhibit 99.1 to this report.  The press release, including the information contained therein, is furnished pursuant to Item 2.02, is not to be considered “filed” under the Securities Exchange Act of 1934 (“Exchange Act”), as amended, and shall not be incorporated by reference into any of Verso’s previous or future filings under the Securities Act of 1933, as amended (“Securities Act”).

Item 5.07            Submission of Matters to a Vote of Security Holders.

              Verso held its 2020 Annual Meeting of Stockholders (“Annual Meeting”) on August 5, 2020.  At the Annual Meeting, Verso’s stockholders: (1) elected by a majority of votes cast at the Annual Meeting seven persons – Dr. Robert K. Beckler, Marvin Cooper, Sean T. Erwin, Jeffrey E. Kirt, Randy J. Nebel, Adam St. John and Nancy M. Taylor – to serve as directors of Verso until its 2021 Annual Meeting of Stockholders and until their respective successors are elected and qualified; (2) approved, on an advisory basis, the compensation of Verso’s named executive officers as disclosed in the Proxy Statement dated June 29, 2020 (“Proxy Statement”) pursuant to the compensation disclosure rules of the Securities and Exchange Commission; and (3) ratified the appointment of Deloitte & Touche LLP to serve as Verso’s independent registered public accounting firm for the year ending December 31, 2020.  The proposals considered and acted upon by Verso’s stockholders at the Annual Meeting are described in detail in the Proxy Statement.  The tabulations of the stockholders’ votes cast at the Annual Meeting with respect to the proposals are as follows:

Proposal 1: Election of seven persons to serve as directors of Verso until its 2021 Annual Meeting of Stockholders and until their respective successors are elected and qualified:

Nominees	For	Against	Abstain	Broker Non-Votes
Dr. Robert K. Beckler	27,173,271	1,361,246	243,543	2,129,254
Marvin Cooper	27,412,398	1,360,752	4,910	2,129,254
Sean T. Erwin	27,403,534	1,369,616	4,910	2,129,254
Jeffrey E. Kirt	27,212,303	1,560,847	4,910	2,129,254
Randy J. Nebel	27,142,804	1,391,533	243,723	2,129,254
Adam St. John	21,565,860	7,207,290	4,910	2,129,254
Nancy M. Taylor	27,175,373	1,359,014	243,673	2,129,254

Proposal 2: Approval, on an advisory basis, of the compensation of Verso’s named executive officers as disclosed in the Proxy Statement:

For	Against	Abstain	Broker Non-Votes
27,360,678	1,399,682	17,770	2,129,254

Proposal 3: Ratification of the appointment of Deloitte & Touche LLP to serve as Verso’s independent registered public accounting firm for the year ending December 31, 2020.

For	Against	Abstain
30,190,524	716,622	168

Item 7.01.        Regulation FD Disclosure.

Verso has prepared presentation materials (“Investor Presentation”) that management intends to use with its earnings conference call for its second quarter ended June 30, 2020 financial results, to be held at 11:30 a.m. Eastern Daylight Time on August 6, 2020. The Investor Presentation is furnished as Exhibit 99.2 hereto and is incorporated herein by reference.

The information furnished pursuant to this Item 7.01, including Exhibit 99.2, is not to be considered “filed” under the Exchange Act and shall not be incorporated by reference into any of Verso’s previous or future filings under the Securities Act

Item 8.01.        Other Events.

On August 6, 2020, Verso announced that it will pay a special cash dividend of $3.00 per share of common stock and a quarterly cash dividend of $0.10 per share of common stock, each with a record date of September 18, 2020 and each to be paid on September 28, 2020.

Item 9.01       Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description of Exhibit
99.1	Press release issued by Verso on August 6, 2020.
99.2	Investor Presentation dated August 6, 2020.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

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 hereunto duly authorized.

Date: August 6, 2020
	VERSO CORPORATION
	By:	/s/ Allen J. Campbell
		Allen J. Campbell
		Senior Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

Verso Corporation Announces $3.00 Special Cash Dividend and Reports Second Quarter 2020 Financial Results

MIAMISBURG, Ohio, Aug. 6, 2020 /PRNewswire/ -- Verso Corporation (NYSE: VRS) today reported financial results for the second quarter of 2020 and announced that it will pay a special cash dividend of $3.00 per share of common stock and a quarterly cash dividend of $0.10 per share of common stock, each to be paid on September 28, 2020.

Second Quarter 2020 Highlights:

• Net sales of $268 million, down $334 million compared to second quarter 2019
• Net loss of $(34) million or $(0.99) per diluted share, compared to net loss of $(112) million or $(3.23) per diluted share in second quarter 2019
• Adjusted EBITDA of $(9) million, compared to $44 million in second quarter 2019

Overview
"As expected, the second quarter was extremely challenging for Verso. The rapidly-evolving COVID-19 pandemic continues to force many of our end use customer segments to significantly reduce their print advertising, therefore decreasing demand for our graphic papers, and impacting our financial performance," said Verso President and Chief Executive Officer Adam St. John. "During these uncertain and unprecedented times, the safety and health of our essential employees remain our top concern as we take decisive, proactive actions to respond to the economic environment and adverse market conditions. Strategically, the decision to idle our Duluth and Wisconsin Rapids mills allows us to streamline our business and build a stronger, more flexible operating model and product strategy around our remaining two high performing mills. We believe this strategy, together with our cost reduction efforts, including managing SG&A under 5% of revenues and controlling capital spending, will create a cash generating platform and long-term value for all of our stakeholders. As we navigate this ever changing environment, we remain steadfast in positioning our business for long-term stockholder value, including returning considerable capital to our stockholders through means such as cash dividends and share repurchases. With this additional special cash dividend, we have ramped up delivery on our commitment to return to our stockholders a substantial portion of the net cash proceeds from the sale of our Androscoggin and Stevens Point mills."

Dividends
The special cash dividend of $3.00 per share will return approximately $100 million of the net cash proceeds from the sale of Verso's Androscoggin and Stevens Point mills to Verso's stockholders. Verso has made a corresponding reduction of its previously announced authorization to repurchase shares of Verso's outstanding common stock, from $250 million to $150 million, leaving approximately $127 million authorized for the repurchase of shares after giving effect to prior repurchases.

Results of Operations – Comparison of Three Months Ended June 30, 2020 to Three Months Ended June 30, 2019

	Three Months Ended June 30,		Three Month
(Dollars in millions)	2019	2020	$ Change
Net sales	$       602	$       268	$      (334)
Costs and expenses:
Cost of products sold (exclusive of depreciation and amortization)	540	271	(269)
Depreciation and amortization	104	22	(82)
Selling, general and administrative expenses	29	16	(13)
Restructuring charges	40	-	(40)
Other operating (income) expense	1	1	-
Operating income (loss)	(112)	(42)	70
Interest expense	1	-	(1)
Other (income) expense	(1)	(5)	(4)
Income (loss) before income taxes	(112)	(37)	75
Income tax expense (benefit)	-	(3)	(3)
Net income (loss)	$      (112)	$        (34)	$         78

Comments to Results of Operations - Comparison of Three Months Ended June 30, 2020 to Three Months Ended June 30, 2019

Net sales
Net sales for the second quarter of 2020 decreased by $334 million compared to the second quarter of 2019, as a result of significant declines in sales volume and unfavorable price/mix. Of the $334 million, or 55%, net sales decline, $65 million, or 11%, was attributable to the closure of our Luke Mill in June 2019 and $134 million, or 22%, was a result of the sale of our Androscoggin and Stevens Point mills in February 2020. Total company sales volume was down from 646 thousand tons during the second quarter of 2019, to 346 thousand tons during the same period of the current year. Of the 300 thousand ton volume decline, 66 thousand tons were attributable to the closure of our Luke Mill in June 2019, 131 thousand tons were a result of the sale of our Androscoggin and Stevens Point mills in February 2020 and the additional decline in volume resulted from lower customer demand driven by the COVID-19 pandemic. We expect the COVID-19 pandemic to continue to have a negative impact on our net sales in the third quarter of 2020.

Operating income
Operating loss was $42 million for the second quarter of 2020, an improvement of $70 million when compared to operating loss of $112 million for the second quarter of 2019.

Operating results for the second quarter of 2020 were positively impacted by:

• Lower input costs of $6 million, driven by lower chemical, energy and purchased pulp costs, partially offset by higher wood costs
• Lower depreciation expense of $82 million due primarily to $76 million in accelerated depreciation associated with the closure of our Luke Mill in June 2019
• Reduced planned major maintenance costs of $14 million, driven primarily by the deferral of the annual outage at our Wisconsin Rapids Mill
• Lower Selling, general and administrative expenses of $13 million, driven primarily by cost reduction initiatives in connection with the sale of our Androscoggin and Stevens Point mills in February 2020, lower equity compensation expense and lower severance costs
• Lower restructuring charges of $40 million associated with the closure of our Luke Mill in June 2019

Operating results for the second quarter of 2020 were negatively impacted by:

• Unfavorable net selling price and product mix of $36 million
• Lower sales volume resulting in a decrease of $45 million in net operating income, driven by the impact of the COVID-19 pandemic, the sale of our Androscoggin and Stevens Point mills in February 2020 and the closure of our Luke Mill in June 2019
• Higher net operating expenses of $4 million driven primarily by market downtime and a necessary extension of the planned outage at our Quinnesec Mill, partially offset by improved performance and cost reduction initiatives across our mill system

Other income
Other income for the second quarter of 2020 and 2019 includes income of $5 million and $1 million, respectively, associated with the non-operating components of net periodic pension cost (income).

Income tax expense
Income tax benefit of $3 million for the second quarter of 2020 primarily reflects the estimated taxes for the period and $1 million of valuation allowance recognized against state tax credits. The second quarter of 2020 includes $7 million of income tax expense related to the year ended December 31, 2019. This resulted from recording an adjustment for the federal tax effect on deferred tax assets for state net operating losses and state tax credits established in 2019 without a federal tax effect. Income tax benefit for the second quarter of 2019 was primarily offset by the valuation allowance adjustment.

Results of Operations – Comparison of Six Months Ended June 30, 2020 to Six Months Ended June 30, 2019

	Six Months Ended June 30,		Six Month
(Dollars in millions)	2019	2020	$ Change
Net sales	$     1,241	$       739	$      (502)
Costs and expenses:
Cost of products sold (exclusive of depreciation and amortization)	1,089	698	(391)
Depreciation and amortization	132	45	(87)
Selling, general and administrative expenses	53	43	(10)
Restructuring charges	40	6	(34)
Other operating (income) expense	2	(87)	(89)
Operating income (loss)	(75)	34	109
Interest expense	2	-	(2)
Other (income) expense	(2)	(9)	(7)
Income (loss) before income taxes	(75)	43	118
Income tax expense (benefit)	1	23	22
Net income (loss)	$       (76)	$         20	$         96

Comments to Results of Operations - Comparison of Six Months Ended June 30, 2020 to Six Months Ended June 30, 2019

Net sales
Net sales for the first half of 2020 decreased $502 million compared to the first half of 2019, as a result of significant declines in sales volume and unfavorable price/mix. Of the $502 million, or 40%, net sales decline, $132 million, or 11%, was attributable to the closure of our Luke Mill in June 2019 and $206 million, or 17%, was a result of the sale of our Androscoggin and Stevens Point mills in February 2020. Total company sales volume was down from 1,311 thousand tons during the first half of 2019, to 900 thousand tons during the same period of the current year. Of the 411 thousand ton volume decline, 132 thousand tons were attributable to the closure of our Luke Mill in June 2019, 193 thousand tons were a result of the sale of our Androscoggin and Stevens Point mills in February 2020 and the additional decline in volume resulted from lower customer demand driven by the COVID-19 pandemic.

Operating income
Operating income was $34 million for the first half of 2020, an increase of $109 million when compared to operating loss of $75 million for the first half of 2019

Operating results for the first half of 2020 were positively impacted by:

• Lower input costs of $16 million, driven by lower chemical, energy and purchased pulp costs, partially offset by higher wood costs
• Lower freight costs of $6 million
• Lower depreciation expense of $87 million due primarily to $76 million in accelerated depreciation associated with the closure of our Luke Mill in June 2019
• Reduced planned major maintenance costs of $16 million, driven primarily by the deferral of the annual outage at our Wisconsin Rapids Mill
• Lower Selling, general and administrative costs of $10 million driven primarily by cost reduction initiatives in connection with the sale of our Androscoggin and Stevens Point mills in February 2020 and lower equity compensation expense, partially offset by increased severance costs incurred due to our headcount reduction initiatives and costs associated with the proxy solicitation contest
• Lower restructuring charges of $34 million primarily associated with the closure of our Luke Mill in June 2019
• Higher other operating income of $89 million, primarily as a result of the $88 million gain on the sale of our Androscoggin and Stevens Point mills

Operating results for the first half of 2020 were negatively impacted by:

• Unfavorable price/mix of $82 million
• Lower sales volume resulting in a decrease of $57 million in net operating income, driven by the impact of the COVID-19 pandemic, the sale of our Androscoggin and Stevens Point mills in February 2020 and the closure of our Luke Mill in June 2019
• Higher net operating expenses of $10 million driven primarily by market downtime, a necessary extension of the planned outage at our Quinnesec Mill and sell through of higher cost inventory produced in 2019, partially offset by improved performance and cost reduction initiatives across our mill system, reduced corporate overhead and union ratification expense for signing bonuses and for the settlement of various work arrangement issues in the first quarter of 2019 that did not recur in 2020

Other income
Other income for the first half of 2020 and 2019 includes income of $10 million and $2 million, respectively, associated with the non-operating components of net periodic pension cost (income).

Income tax expense
Income tax expense of $23 million for the first half of 2020 primarily reflects estimated taxes for the period and $7 million of additional valuation allowance recognized against state tax credits. The first half of 2020 includes $7 million of income tax expense related to the year ended December 31, 2019. This resulted from recording an adjustment for the federal tax effect on deferred tax assets for state net operating losses and state tax credits established in 2019 without a federal tax effect. Income tax benefit for the first half of 2019 was primarily offset by the valuation allowance adjustment.

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
EBITDA consists of earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA reflects adjustments to EBITDA to eliminate the impact of certain items that we do not consider to be indicative of our ongoing performance. We use EBITDA and Adjusted EBITDA as a way of evaluating our performance relative to that of our peers and to assess compliance with our credit facilities. We believe that EBITDA and Adjusted EBITDA are non-GAAP operating performance measures commonly used in our industry that provide investors and analysts with measures of ongoing operating results, unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies.

We believe that the supplemental adjustments applied in calculating Adjusted EBITDA are reasonable and appropriate to provide additional information to investors.

Because EBITDA and Adjusted EBITDA are not measurements determined in accordance with Generally Accepted Accounting Principles (GAAP) and are susceptible to varying calculations, EBITDA and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. You should consider our EBITDA and Adjusted EBITDA in addition to, and not as a substitute for, or superior to, our operating or net income (loss), which are determined in accordance with GAAP.

The following table reconciles Net income (loss) to EBITDA and Adjusted EBITDA for the periods presented:

		Three Months Ended June 30,		Six Months Ended June 30,
(Dollars in millions)		2019	2020	2019	2020
Net income (loss)		$     (112)	$      (34)	$      (76)	$        20
Income tax expense (benefit)		-	(3)	1	23
Interest expense		1	-	2	-
Depreciation and amortization		104	22	132	45
EBITDA		$        (7)	$      (15)	$        59	$        88
Adjustments to EBITDA:
	Restructuring charges (1)	40	-	40	6
	Luke Mill post-closure costs (2)	1	3	1	6
	Non-cash equity award compensation (3)	6	2	8	4
	Gain on Sale of the Androscoggin/Stevens Point Mills (4)	-	-	-	(88)
	(Gain) loss on sale or disposal of assets (5)	-	-	1	-
	Stockholders proxy solicitation costs (6)	-	-	-	4
	Other severance costs (7)	2	1	2	5
	Other items, net (8)	2	-	2	1
Adjusted EBITDA		$        44	$        (9)	$      113	$        26

(1)	Charges associated with the closure of our Luke Mill in June 2019.
(2)	Costs recorded after production ceased at our Luke Mill that are not associated with product sales or restructuring activities.
(3)	Amortization of non-cash incentive compensation.
(4)	Gain on the sale of the outstanding membership interests in Verso Androscoggin, LLC in February 2020, which included our Androscoggin Mill and Stevens Point Mill.
(5)	Realized (gain) loss on the sale or disposal of assets.
(6)	Costs incurred in connection with the stockholders proxy solicitation contest.
(7)	Severance and related benefit costs not associated with restructuring activities.
(8)	Other miscellaneous adjustments.

About Verso
Verso Corporation is the turn-to company for those looking to successfully navigate the complexities of paper sourcing and performance. A leading North American producer of graphic and specialty papers, packaging papers and pulp, Verso provides insightful solutions that help drive improved customer efficiency, productivity, brand awareness and business results. Verso's long-standing reputation for quality and reliability is directly tied to our vision to be a company with passion that is respected and trusted by all. Verso's passion is rooted in ethical business practices that demand safe workplaces for our employees and sustainable wood sourcing for our products. This passion, combined with our flexible manufacturing capabilities and an unmatched commitment to product performance, delivery and service, make Verso a preferred choice among commercial printers, paper merchants and brokers, converters, publishers and other end users. For more information, visit us online at versoco.com.

Forward-Looking Statements
In this press release, all statements that are not purely historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "project," "plan," "estimate," "intend," "potential" and other similar expressions. They include, for example, statements relating to our business and operating outlook; the potential impact of the COVID-19 pandemic; assessment of market conditions; and the growth potential of the industry in which we operate. Forward-looking statements are based on currently available business, economic, financial, and other information and reflect management's current beliefs, expectations, and views with respect to future developments and their potential effects on Verso. Actual results could vary materially depending on risks and uncertainties that may affect Verso and its business. Verso's actual actions and results may differ materially from what is expressed or implied by these statements due to a variety of factors, including: uncertainties regarding the duration and severity of the COVID-19 pandemic and measures intended to reduce its spread; the long-term structural decline and general softening of demand facing the paper industry; adverse developments in general business and economic conditions; developments in alternative media, which are expected to adversely affect the demand for some of Verso's key products, and the effectiveness of Verso's responses to these developments; intense competition in the paper manufacturing industry; Verso's ability to compete with respect to certain specialty paper products for a period of two years after the closing of the Pixelle Sale; Verso's business being less diversified following the sale of two mills after the closing of the Pixelle Sale; Verso's dependence on a small number of customers for a significant portion of its business; Verso's limited ability to control the pricing of its products or pass through increases in its costs to its customers; changes in the costs of raw materials and purchased energy; negative publicity, even if unjustified; any failure to comply with environmental or other laws or regulations, even if inadvertent; legal proceedings or disputes; any labor disputes; and the potential risks and uncertainties described under the caption "Risk Factors" in Verso's Form 10-K for the fiscal year ended December 31, 2019, Verso's Quarterly Report on Form 10-Q for the three months ended March 31, 2020, and from time to time in Verso's other filings with the Securities and Exchange Commission. Verso assumes no obligation to update any forward-looking statement made in this press release to reflect subsequent events or circumstances or actual outcomes.

Conference Call
Verso will host a conference call and webcast for analysts and investors on Thursday, August 6, 2020 at 11:30 a.m. (EDT) to discuss second quarter 2020 financial results.

Analysts and investors may access the live conference call only by dialing 888-317-6003 (U.S. toll-free), 866-284-3684 (Canada toll-free) or 412-317-6061 (international) and referencing elite entry number 4187035 and Verso Corporation. To register, please dial in 10 minutes before the conference call begins. The news release and second quarter 2020 results will be available on Verso's website at http://investor.versoco.com by navigating to the Financial Information page.

Analysts and investors may also access the live conference call and webcast by clicking on the event link https://www.webcaster4.com/Webcast/Page/1524/36301 or by visiting Verso's website at http://investor.versoco.com and navigating to the Events page. Please go to this link at least one hour before the call and follow the instructions to register, download and install any necessary audio/video software.

A telephonic replay of the call can be accessed at 877-344-7529 (U.S. toll-free), 855-669-9658 (Canada toll-free) or 412-317-0088 (international), access code 10146931. The replay will be available starting at 1:30 p.m. (EDT) Thursday, August 6, 2020, and will remain available until September 6, 2020. An archive of the conference call and webcast will be available at http://investor.versoco.com starting at 1:30 p.m. (EDT) Thursday, August 6, 2020, and will remain available for 120 days.

CONTACT: Investor contact: investor.relations@versoco.com, 937-528-3220; Media contact: Shawn Hall, Director, Communications, 937-528-3700, shawn.hall@versoco.com

EX-99.2

Second Quarter 2020 Results NYSE: VRS Exhibit 99.2

Forward Looking Statements  Non-GAAP Financial Information In this presentation, all statements that are not purely historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this presentation include, but are not limited to our expectations for pricing and input costs. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "project," "plan," "estimate," "intend," “potential” and other similar expressions. Forward-looking statements are based on currently available business, economic, financial, and other information and reflect management's current beliefs, expectations, and views with respect to future developments and their potential effects on Verso. Actual results could vary materially depending on risks and uncertainties that may affect Verso and its business. Verso’s actual actions and results may differ materially from what is expressed or implied by these statements due to a variety of factors, including: uncertainties regarding the duration and severity of the COVID-19 pandemic and measures intended to reduce its spread; the long-term structural decline and general softening of demand facing the paper industry; adverse developments in general business and economic conditions; developments in alternative media, which are expected to adversely affect the demand for some of Verso's key products, and the effectiveness of Verso's responses to these developments; intense competition in the paper manufacturing industry; Verso's ability to compete with respect to certain specialty paper products for a period of two years after the closing of the Pixelle Sale; Verso's business being less diversified following the sale of two mills after the closing of the Pixelle Sale; Verso's dependence on a small number of customers for a significant portion of its business; Verso's limited ability to control the pricing of its products or pass through increases in its costs to its customers; changes in the costs of raw materials and purchased energy; negative publicity, even if unjustified; any failure to comply with environmental or other laws or regulations, even if inadvertent; legal proceedings or disputes; any labor disputes; and the potential risks and uncertainties described under the caption “Risk Factors” in Verso's Form 10-K for the fiscal year ended December 31, 2019, Verso's Quarterly Report on Form 10-Q for the three months ended March 31, 2020, and from time to time in Verso's other filings with the Securities and Exchange Commission. Verso assumes no obligation to update any forward-looking statement made in this presentation to reflect subsequent events or circumstances or actual outcomes. This presentation contains certain non-GAAP financial information relating to Verso, including EBITDA, Adjusted EBITDA, Gross profit (excl. D&A) and related margins. Definitions and reconciliations of these non-GAAP measures are included in this presentation. Because EBITDA, Adjusted EBITDA and Gross profit (excl. D&A) are not measurements determined in accordance with GAAP and are susceptible to varying calculations, EBITDA, Adjusted EBITDA and Gross profit (excl. D&A) as presented, may not be comparable to similarly titled measures of other companies. You should consider our EBITDA, Adjusted EBITDA and Gross profit (excl. D&A) in addition to, and not as a substitute for, or superior to, our operating or net income or cash flows from operating activities, which are determined in accordance with GAAP. See the Appendix in this presentation for additional information on EBITDA, Adjusted EBITDA and Gross profit (excl. D&A) .

BUSINESS UPDATE ADAM ST. JOHN President & CEO

Q2 2020 HIGHLIGHTS DECISIVE ACTIONS TO POSITION BUSINESS FOR LONG-TERM SUCCESS RETURNED CAPITAL TO STOCKHOLDERS Operating rates and pricing at recent lows Adjusted EBITDA1 for Q2: $(9)M Idling of Duluth and Wisconsin Rapids mills Sharpened operating focus at our most profitable mills Executing on strategy for diverse product offerings SG&A and overhead reductions Initiated quarterly dividend Continued share repurchase program STRONG BALANCE SHEET + LIQUIDITY $209M in cash $423M in liquidity2 No debt COVID-19 CONTINUED TO IMPACT DEMAND 1 See Appendix for definitions of EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA are non-GAAP Measures. 2 Includes ABL facility limited by quarter end borrowing base of $214M and inclusive of cash

RESETTING BUSINESS FOR FUTURE SUCCESS Strengthened management with three new executive team members: Senior VP of Manufacturing & Energy Senior VP of Sales & Marketing Senior VP of HR & Communications Excellent safety performance with YTD TIR of 0.78 Implemented significant cost savings initiatives throughout the business NEW MANAGEMENT AND OPERATING EXCELLENCE

RESETTING BUSINESS FOR FUTURE SUCCESS Decisive action to address market conditions; reduces operating capacity by ~35% Creates leaner organization; reducing employee base by ~44% EXPECTED TO IMPROVE CASH POSITION Sell through of inventory is expected to offset the cash costs of idling the mills Maintaining operating flexibility: Restart if market conditions improve Sell/Close permanently Continued sheeting capacity IDLING OF DULUTH AND WISCONSIN RAPIDS MILLS

71% 9% CONSOLIDATED BUSINESS STRENGTHENS OUR POSITIONING TO DRIVE STOCKHOLDER RETURNS Net Sales: $959M Gross Profit (excl. D&A)1: $174M Gross Margin (excl. D&A)1: 18.2% DIVERSE PRODUCTS STRONG LTM1 FINANCIAL PROFILE OF TWO OPERATING MILLS GRAPHIC SPECIALTY PULP Quinnesec Mill World-class paper and pulp mill well-positioned in central region close to key markets Escanaba Mill Premier producer of graphic and specialty products 1 Last Twelve Months (LTM) Depreciation and Amortization (D&A) for the two mills is $44M

SPECIALTY: Key Growth Area Growing sector Loyal customer base Stable revenue stream Focused growth in niche products: Release liners Coated one-side labels Direct thermal Leveraging internal pulp production SPECIALTY1: ~21% 1 First half 2020 revenue mix for the Quinnesec and Escanaba mills

Low cost producer of high-quality hardwood pulp Moderate growth tied to diverse market applications Flexibility to increase pulp output: Capability at Quinnesec Mill PULP: Stable Performer With Growth Potential PULP1: ~11% 1 First half 2020 revenue mix for the Quinnesec and Escanaba mills

Strong operating low-cost mills are strategic advantage Maintaining sheet business Well-established brands: Sterling® Premium & Anthem Plus® Opportunity to gain customers and market share as capacity in sector decreases Focusing on most attractive niche areas to stabilize revenues Effectively managing CapEx and working capital GRAPHIC: Capitalize On Premium Supplier Positioning & Maximize Cash Generation Cash Generation Supports Investments in Specialty and Pulp

Positioned to Succeed as Industry Dynamics Improve NEAR/MID-TERM Capital efficient investments in specialty and pulp Drive cost savings Option to restart idled mills or divest TODAY Well-established brands with clear product strategy Tight expense control Strong balance sheet Returning capital MID/LONGER-TERM Financial strength and built-in operational flexibility to drive: Organic performance Strategic M&A focused on growth Sustainable returns Drive Shareholder Returns

FINANCIAL UPDATE ALLEN CAMPBELL Senior Vice President & CFO

Key Metrics Net sales impacted by the sale of Androscoggin and Stevens Point mills in February 2020, closure of Luke Mill in June 2019 and overall effect of the COVID-19 pandemic Implementing in excess of $30M of cost savings with more expected by the end of the year Incurred major maintenance of $10M during the quarter vs $20M prior year for four mills Built 96,000 tons inventory ahead of the idling of Duluth and Wisconsin Rapids mills to support customers’ needs Commentary ($ in Millions except per share data)     Q2 19   Q2 20   Net Sales  $ 602   $ 268   Operating Income / (Loss)  $ (112 ) $ (42 )   Net Income / (Loss)  $ (112 ) $ (34 )   Gross Margin (excl. D&A)1  $ 62   $ (3 )   Adjusted EBITDA2  $ 44   $ (9 )   Adjusted EBITDA Margin2 %   7.3%   (3.4% )   EPS – Diluted $/share  $ (3.23 )  $ (0.99 )   Total Company Q2 19 Q2 20 Shipments (000 tons) 646 346 Average Net Sales Price $/ton $932 $773 1 Depreciation and Amortization (D&A) for Q2 2020 of $22M and Q2 2019 of $104M. 2 See Appendix for definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP Measures

Q2 2019 to Q2 2020 Adjusted EBITDA1 Bridge ($M) Sale of Androscoggin and Stevens Point mills impacted EBITDA by $11M Demand strained as a result of COVID-19 related closures resulting in price pressures and unfavorable mix Controlled costs and operations in response to revenue challenges Continue to maintain SG&A at industry low levels Major maintenance reduced due to Wisconsin Rapids Mill not taking outage in the second quarter, offset by higher Quinnesec Mill costs Commentary 1 See Appendix for definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP Measures 44

Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Improved Balance Sheet & Strong Liquidity CASH LIQUIDITY1 DEBT ($ in Millions) $6 $6 $276 $42 $209 $267 $294 $318 $498 $423 $47 $21 $0 $0 $0 1 Includes ABL facility limited by borrowing base and inclusive of cash. 2 See Appendix for definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP Measures. 3 Includes restructuring, severance, interest and taxes Change in Cash Q2 2020 Adjusted EBITDA2 $(9) CapEx (15) Net Pension (15) Cash from Operations $(39) Buyback / Dividend (23) Other3 (5) Total $(67) 15

Key Metrics: Two Operating Mills Quinnesec and Escanaba mills gross margin of 18.2% (excl. D&A) considerably higher than Company average The Quinnesec and Escanaba mills LTM for Major Maintenance and CapEx are: Major Maintenance of $24M CapEx of $44M, of which $10M was related to one-off events Planning to maintain SG&A at less than 5% of revenues Commentary ($ in Millions)   LTM1   Net Sales $ 959   Mill Gross Profit (excl. D&A)2 $ 174   Mill Gross Margin (excl. D&A)2 18.2 %   1 LTM as of June 30, 2020. 2 LTM Depreciation and Amortization (D&A) for the two mills is $44M

$3.4M Regular Dividend Declared quarterly dividend of $0.10 per share Payable on September 28, 2020 Initiated quarterly dividend of $0.10 per share during Q2 2020 Paid on June 29, 2020 Repurchased $19.7M or 1.4M shares in Q2 2020. Cumulative $22.4M or 1.6M shares Current shares outstanding at 33.7M Share Repurchase Return of Capital Special Dividend Declared special dividend of $3 per share Payable on September 28, 2020 $2.7M Q1 2020 Q2 2020 $3.4M $19.7M Q3 2020 Projected TBD ~$3.4M ~$100M Cumulative Return $2.7M $25.8M $130M+

Q&A

Q & A APPENDIX

EBITDA, Adjusted EBITDA, Mill Adjusted Net Sales and Mill Adjusted EBITDA Definitions EBITDA consists of earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA reflects adjustments to EBITDA to eliminate the impact of certain items that we do not consider to be indicative of our ongoing performance. Mill Adjusted Net Sales excludes sales from the Androscoggin and Stevens Point mills. Mill Adjusted EBITDA excludes adjustments from the Androscoggin and Stevens Point mills. We use EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Mill Adjusted Net Sales and Mill Adjusted EBITDA as a way of evaluating our performance relative to that of our peers and to assess compliance with our credit facilities. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP operating performance measures commonly used in our industry that provide investors and analysts with measures of ongoing operating results, unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. We believe that the supplemental adjustments applied in calculating Adjusted EBITDA , Adjusted EBITDA Margin, Mill Adjusted Net Sales and Mill Adjusted EBITDA are reasonable and appropriate to provide additional information to investors.

Major Maintenance - Current Operating Platform Major Outage Timing Q1 Q2 Q3 Q4 2018 No Major Outage Quinnesec Wisconsin Rapids No Major Outage Escanaba 2019 No Major Outage Wisconsin Rapids Escanaba No Major Outage 2020F No Major Outage Quinnesec Escanaba No Major Outage

Q2 2019 & Q2 2020 Adjusted EBITDA Reconciliation

YTD 2019 & YTD 2020 Adjusted EBITDA Reconciliation

Q2 and YTD 2020 P&L Adjusted EBITDA Add Back Items

Q2 and YTD 2019 P&L Adjusted EBITDA Add Back Items

LTM and YTD Adjusted EBITDA Reconciliation

Verso Q2 2019 Mill Adjusted Net Sales and Mill Adjusted EBITDA Reconciliation

Q2 19 Q2 20 Shipments (000 tons) Paper 592 280 Pulp 54 66 Total 646 346 Price $ / ton Paper 965 844 Pulp 575 471 Average Price $ / ton 932 773 Shipments and Price

XML

Document And Entity Information	Aug. 05, 2020
Cover [Abstract]
Entity Registrant Name	VERSO CORPORATION
Amendment Flag	false
Entity Central Index Key	0001421182
Document Type	8-K
Document Period End Date	Aug. 05, 2020
Entity Incorporation, State or Country Code	DE
Entity File Number	001-34056
Entity Tax Identification Number	75-3217389
Entity Address, Address Line One	8540 Gander Creek Drive
Entity Address, City or Town	Miamisburg
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45342
City Area Code	877
Local Phone Number	855-7243
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Class A common stock, par value $0.01 per share
Trading Symbol	VRS
Security Exchange Name	NYSE