EXHIBIT 99.1
![(MERCER LOGO)](https://capedge.com/proxy/8-K/0000945234-06-000918/o33624o3362400.gif)
For Immediate Release
MERCER INTERNATIONAL INC. REPORTS RECORD 2006 THIRD QUARTER RESULTS
NEW YORK, NY, November 6, 2006 — Mercer International Inc. (Nasdaq: MERC, TSX: MRI.U) today reported results for the third quarter of 2006.
Highlights of the 2006 Third Quarter
• | Revenues increased by approximately 18% to€175.2 million from€148.9 million in the comparative period of 2005, due to higher pulp prices and sales from our Stendal pulp mill. | ||
• | Operating EBITDA increased by approximately 119% to€48.0 million in the third quarter compared to€21.9 million in the comparable period of 2005, primarily as a result of higher pulp prices and significant improvement in the results of our Celgar pulp mill. For a definition of Operating EBITDA, see page 5 of this press release and for a reconciliation of net income (loss) to Operating EBITDA, see page 10 of the financial tables included in this press release. | ||
• | Pulp markets strengthened quarter over quarter. Average list prices for NBSK pulp in Europe were $708 per ADMT in the third quarter of 2006 and $665 per ADMT in the second quarter of 2006, compared to $580 per ADMT in the third quarter of 2005. | ||
• | Mill net pulp realizations increased to€482 per ADMT in the third quarter of 2006 from€453 and€398 per ADMT in the prior quarter of 2006 and the third quarter of 2005, respectively. | ||
• | We recorded an aggregate net unrealized loss of€14.5 million on our outstanding derivatives in the third quarter of 2006, compared to an aggregate net unrealized gain of€3.3 million thereon in the comparative period of 2005. | ||
• | We had net income of€6.7 million, or€0.20 per basic and€0.19 per diluted share, in the current quarter, compared to a net loss of€5.6 million, or€0.17 per basic and diluted share, in the same period of 2005. |
(more)
Mercer Reports 2006 Third Quarter Results | Page 2 |
President’s Comments
Mr. Jimmy S.H. Lee, President and Chairman, stated: “During the third quarter of 2006:
• | Our strong results reflect strengthening pulp markets compared to the prior and comparative quarter. | ||
• | All three of our pulp mills performed well and in particular our Celgar mill had much better results as our planned initiatives are taking effect. | ||
• | The Stendal mill ramp up proceeds substantially as scheduled. In the quarter, it operated above its initial rated capacity and production and sales revenues were up by approximately 14% and 33%, respectively, over the prior quarter. |
Mr. Lee added:
• | Further to our objective of building a focused and profitable pulp company, we have increased our exposure to NBSK pulp in October by acquiring a further 7% interest in the Stendal mill for€8.1 million, of which€6.7 million was paid by a note that, at our election, we can satisfy in our common shares. We have also reduced our exposure to the paper industry as, in August, we disposed of our equity interest in the Heidenau paper mill and an interest in a Swiss specialty paper mill for cash proceeds of€5.0 million and a secured note of€5.0 million. | ||
• | In November 2006, Mr. George Malpass joined our Board. Mr. Malpass was formerly the CEO and a director of a British Columbia forest products company and has been a director of two other public forest products companies. George’s appointment to the Board adds additional broad industry knowledge and public company experience to the Board. This appointment is in addition to the previously announced appointments of Claes-Inge Isacson to Chief Operating Officer and David Ure to Vice President, Controller. |
Mr. Lee continued: “We are continuing to see improvements in pulp prices and demand in all of our markets which we currently believe should result in higher prices in the upcoming months. In October 2006, list NBSK prices increased to approximately $730 per tonne in Europe and approximately $700 per tonne in Asia. These price improvements are being partially offset by upward pressure on fiber prices.”
Mr. Lee concluded: “Looking forward for the balance of the year, we expect the current strength in pulp markets to continue and, with our large, modern and efficient pulp mills, we are well positioned to generate solid results for our stakeholders.”
(more)
Mercer Reports 2006 Third Quarter Results | Page 3 |
Summary Selected Highlights
Q3 | Q2 | YTD | Q3 | YTD | ||||||||||||||||
(in millions of Euro, except where otherwise stated) | 2006 | 2006 | 2006 | 2005 | 2005 | |||||||||||||||
Revenues | € | 175.2 | € | 166.7 | € | 501.0 | € | 148.9 | € | 376.4 | ||||||||||
Sales of emission allowances | — | 7.6 | 13.2 | 6.1 | 12.4 | |||||||||||||||
Income from operations | 34.4 | 10.9 | 56.8 | 7.9 | 16.2 | |||||||||||||||
Operating EBITDA(1) | 48.0 | 25.7 | 99.1 | 21.9 | 55.1 | |||||||||||||||
Interest expense | 22.1 | 23.1 | 68.1 | 21.9 | 63.3 | |||||||||||||||
Unrealized gain (loss) on derivative instruments | (14.5 | ) | 44.7 | 71.0 | 3.3 | (70.3 | ) | |||||||||||||
Unrealized foreign exchange gain (loss) on debt | (0.7 | ) | 6.1 | 11.5 | 5.9 | (1.6 | ) | |||||||||||||
Net income (loss) | 6.7 | 18.4 | 41.7 | (5.6 | ) | (87.4 | ) | |||||||||||||
Income (loss) per share | ||||||||||||||||||||
Basic | € | 0.20 | € | 0.56 | € | 1.26 | € | (0.17 | ) | € | (2.86 | ) | ||||||||
Diluted | € | 0.19 | € | 0.45 | € | 1.05 | € | (0.17 | ) | € | (2.86 | ) |
(1) | For a definition of Operating EBITDA, see page 5 of this press release and for a reconciliation of net income (loss) to Operating EBITDA, see page 10 of the financial tables included in this press release. |
Q3 | Q2 | YTD | Q3 | YTD | ||||||||||||||||
2006 | 2006 | 2006 | 2005 | 2005 | ||||||||||||||||
Production (‘000 tonnes) | ||||||||||||||||||||
Pulp production by mill: | ||||||||||||||||||||
Rosenthal | 84.1 | 67.4 | 227.6 | 83.4 | 240.6 | |||||||||||||||
Stendal | 144.2 | 139.7 | 414.8 | 126.2 | 357.8 | |||||||||||||||
Celgar | 118.9 | 100.7 | 331.0 | 118.0 | 289.9 | |||||||||||||||
Total pulp production | 347.2 | 307.8 | 973.4 | 327.6 | 888.3 | |||||||||||||||
Sales (‘000 tonnes) | ||||||||||||||||||||
Pulp sales volume by mill: | ||||||||||||||||||||
Rosenthal | 80.6 | 73.0 | 229.9 | 86.8 | 241.6 | |||||||||||||||
Stendal | 144.9 | 136.9 | 422.3 | 120.4 | 243.3 | |||||||||||||||
Celgar | 112.7 | 119.4 | 342.4 | 125.1 | 325.4 | |||||||||||||||
Total pulp sales volume(1) | 338.2 | 329.3 | 994.6 | 332.3 | 810.3 | |||||||||||||||
Mill net pulp price realizations (€/ADMT)(2) | 482 | 453 | 454 | 398 | 402 | |||||||||||||||
NBSK list price in Europe (US$/ADMTs) | 708 | 665 | 663 | 580 | 611 |
(1) | Excluding intercompany pulp sales volumes of 2,774 ADMTs in Q3 2006, 4,871 ADMTs in Q2 2006, 12,631 ADMTs in YTD 2006, 3,057 ADMTs in Q3 2005 and 10,651 ADMTs in YTD 2005, respectively. | |
(2) | Excluding revenues from third party transportation activities. |
Three Months Ended September 30, 2006 Compared to Three Months Ended September 30, 2005
Revenues for the three months ended September 30, 2006 increased to€175.2 million from€148.9 million in the comparative period of 2005, primarily due to higher pulp prices and sales from our Stendal pulp mill. Pulp sales by volume increased to 338,201 ADMTs in the third quarter of 2006 from 332,282 ADMTs in the comparative period of 2005.
(more)
Mercer Reports 2006 Third Quarter Results | Page 4 |
Cost of sales and general, administrative and other expenses in the third quarter of 2006 decreased to€140.8 million from€141.0 million in the comparative period of 2005.
Pulp Operations
For the third quarter of 2006, revenues from our pulp operations increased to€164.9 million from€133.4 million in the same period a year ago. List prices for NBSK pulp in Europe were approximately€556 ($708) per ADMT in the third quarter of 2006,€529 ($665) per ADMT in the second quarter of 2006 and approximately€476 ($580) per ADMT in the comparative third quarter of last year.
Mill net pulp sales realizations increased to€482 per ADMT on average in the third quarter of 2006 from€398 per ADMT in the third quarter of 2005, primarily as a result of higher prices.
Cost of sales and general, administrative and other expenses for the pulp operations increased to€132.8 million in the third quarter of 2006 from€125.5 million in the comparative period of 2005, primarily as a result of the absence of the sale of emission allowances and higher sales from our Stendal mill.
Fiber costs at our German pulp mills increased by approximately 10% in the third quarter of 2006 versus the same quarter of 2005, primarily because of increased demand for wood residuals. In the third quarter of 2006, fiber costs at our Celgar mill increased by approximately 6% versus the same quarter of 2005, primarily because of fluctuations in regional woodchip availability. We expect that reduced fiber availability during the winter harvesting season will result in continued upward pressure on fiber prices into the last part of 2006 and into the first part of 2007.
For the third quarter of 2006, operating income from our pulp operations increased by approximately 267% to€33.8 million from€9.2 million in the comparative quarter of 2005, primarily as a result of higher pulp prices and improved operating results at our Celgar mill.
In the third quarter of 2006, income from operations increased to€34.4 million from€7.9 million in the same quarter last year. Interest expense in the third quarter of 2006 increased marginally to€22.1 million from€21.9 million in the year ago period.
Derivative Instruments and Minority Interest
We recorded a net unrealized non-cash holding loss of€14.5 million before minority interests upon the marked to market valuation of Stendal’s outstanding foreign currency and interest rate derivatives at the end of the current quarter, compared to a net realized and unrealized non-cash holding gain of€3.1 million before minority interests upon the marked to market valuation of our outstanding derivatives in the comparative quarter of 2005.
(more)
Mercer Reports 2006 Third Quarter Results | Page 5 |
In the third quarter of 2006, minority interest, representing the two minority shareholders’ proportionate interest in the Stendal mill, was€6.0 million, compared to€5.7 million in the third quarter of 2005.
Paper Operations
In August 2006, we disposed of our equity interest in the Heidenau paper mill and our interest in a Swiss specialty paper mill for cash proceeds of€5.0 million and a secured note of€5.0 million. We recorded a gain of€0.4 million on this transaction. We now currently operate one paper mill at Fährbrücke, that we do not consider part of our core operations. We are continuing to explore and consider strategic options for such mill, including a sale, closure or divestiture thereof.
Revenues from our paper operations were€10.3 million in the current quarter, compared to€15.5 million in the comparative period of 2005. For the third quarter of 2006, the operating loss of our paper operations decreased to€0.3 million from€1.1 million in the third quarter of 2005.
Earnings Per Share and Operating EBITDA
We generated “Operating EBITDA” of€48.0 million and€21.9 million in the three months ended September 30, 2006 and 2005, respectively. Operating EBITDA is defined as income (loss) from operations plus depreciation and amortization and non-recurring capital asset impairment charges. Management uses Operating EBITDA as a benchmark measurement of its own operating results, and as a benchmark relative to its competitors. Management considers it to be a meaningful supplement to operating income as a performance measure primarily because depreciation expense and non-recurring capital asset impairment charges are not an actual cash cost, and depreciation expense varies widely from company to company in a manner that management considers largely independent of the underlying cost efficiency of their operating facilities. In addition, we believe Operating EBITDA is commonly used by securities analysts, investors and other interested parties to evaluate our financial performance.
Operating EBITDA does not reflect the impact of a number of items that affect our net income (loss), including financing costs and the effect of derivative instruments. Operating EBITDA is not a measure of financial performance under GAAP, and should not be considered as an alternative to net income (loss) or income (loss) from operations as a measure of performance, nor as an alternative to net cash from operating activities as a measure of liquidity. Operating EBITDA has significant limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. For a reconciliation of net income (loss) to Operating EBITDA, see page 10 of the financial tables included in this press release.
(more)
Mercer Reports 2006 Third Quarter Results | Page 6 |
We reported net income for the third quarter of 2006 of€6.7 million, or€0.20 per basic and€0.19 per diluted share, which included an aggregate of€15.2 million of unrealized losses on our outstanding derivatives and a foreign exchange loss on our long-term debt. In the third quarter of 2005, we reported a net loss of€5.6 million, or€0.17 per basic and diluted share, which reflected the inclusion of interest expense of€14.7 million related to our Stendal mill and the net realized and unrealized gain of€3.1 million on our interest rate and currency derivatives and the unrealized non-cash foreign exchange gain of€5.9 million on our long-term debt.
Earnings Release Call
In conjunction with this release, Mercer International Inc. will host a conference call, which will be simultaneously broadcast live over the Internet. Management will host the call, which is scheduled for Tuesday, November 7, 2006 at 10:00 AM EST. Listeners can access the conference call live and archived over the Internet through a link at the Company’s web site at http://www.mercerint.com/en/newsCurrent.cfm, or at http://www.videonewswire.com/event.asp?id=36530. Please allow 15 minutes prior to the call to visit the site and download and install any necessary audio software. A replay of this call will be available approximately two hours after the live call ends until November 14, 2006 at 11:59 p.m. (Eastern Standard Time). The replay number is (800) 642-1687, and the passcode is 1285017.
Mercer International Inc. is a global pulp and paper manufacturing company. To obtain further information on the company, please visit its web site at http://www.mercerint.com.
(more)
Mercer Reports 2006 Third Quarter Results | Page 7 |
The preceding includes forward looking statements which involve known and unknown risks and uncertainties which may cause the Company’s actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: market conditions, competition and other risk factors listed from time to time in the company’s SEC reports.
APPROVED BY: Jimmy S.H. Lee Chairman & President (604) 684-1099 | Financial Dynamics Investors: Eric Boyriven, Alexandra Tramont Media: Scot Hoffman (212) 850-5600 | |
David M. Gandossi | ||
Executive Vice-President & | ||
Chief Financial Officer | ||
(604) 684-1099 |
-FINANCIAL TABLES FOLLOW-
(more)
MERCER INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
September 30, 2006 and December 31, 2005
(Euros in thousands)
September 30, 2006 and December 31, 2005
(Euros in thousands)
September 30, | December 31, | |||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | € | 69,373 | € | 83,547 | ||||
Cash restricted | — | 7,039 | ||||||
Receivables | 83,853 | 74,315 | ||||||
Note receivable, current portion | 7,230 | — | ||||||
Inventories | 62,508 | 81,147 | ||||||
Prepaid expenses and other | 5,626 | 5,474 | ||||||
Total current assets | 228,590 | 251,522 | ||||||
Long-Term Assets | ||||||||
Cash restricted | 57,000 | 24,573 | ||||||
Property, plant and equipment | 994,805 | 1,024,662 | ||||||
Investments | 1,396 | 6,314 | ||||||
Deferred note issuance and other costs | 7,329 | 8,364 | ||||||
Deferred income tax | 43,189 | 78,381 | ||||||
Note receivable, less current portion | 4,036 | — | ||||||
1,107,755 | 1,142,294 | |||||||
Total assets | € | 1,336,345 | € | 1,393,816 | ||||
LIABILITIES | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued expenses | € | 103,321 | € | 112,726 | ||||
Debt, current portion | 40,903 | 27,601 | ||||||
Total current liabilities | 144,224 | 140,327 | ||||||
Long-Term Liabilities | ||||||||
Debt, less current portion | 883,096 | 922,619 | ||||||
Unrealized foreign exchange rate derivative loss | 16,506 | 61,979 | ||||||
Unrealized interest rate derivative losses | 52,022 | 78,646 | ||||||
Pension and other post-retirement benefit obligations | 16,631 | 17,113 | ||||||
Capital leases and other | 8,893 | 9,945 | ||||||
Deferred income tax | 19,130 | 14,444 | ||||||
996,278 | 1,104,746 | |||||||
Total liabilities | 1,140,502 | 1,245,073 | ||||||
Minority Interest | — | — | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common shares | 181,731 | 181,586 | ||||||
Additional paid-in capital, stock options | 123 | 14 | ||||||
Deficit | (6,233 | ) | (47,970 | ) | ||||
Accumulated other comprehensive income | 20,222 | 15,113 | ||||||
Total shareholders’ equity | 195,843 | 148,743 | ||||||
Total liabilities and shareholders’ equity | € | 1,336,345 | € | 1,393,816 | ||||
(1)
MERCER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands, except per share data)
For the Nine Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands, except per share data)
2006 | 2005 | |||||||
Revenues | € | 500,954 | € | 376,430 | ||||
Costs and expenses: | ||||||||
Cost of sales | 433,432 | 350,185 | ||||||
67,522 | 26,245 | |||||||
General and administrative expenses | (24,344 | ) | (22,399 | ) | ||||
Sale of emission allowances | 13,246 | 12,353 | ||||||
Gain on sale of assets | 359 | — | ||||||
Income from operations | 56,783 | 16,199 | ||||||
Other income (expense) | ||||||||
Interest expense | (68,129 | ) | (63,320 | ) | ||||
Investment income | 4,096 | 1,594 | ||||||
Unrealized foreign exchange gain (loss) on debt | 11,469 | (1,591 | ) | |||||
Realized loss on derivative instruments | (5,219 | ) | (2,455 | ) | ||||
Unrealized gain (loss) on derivative instruments | 76,251 | (67,804 | ) | |||||
Impairment of investments | — | (1,699 | ) | |||||
Total other income (expense) | 18,468 | (135,275 | ) | |||||
Income (loss) before income taxes and minority interest | 75,251 | (119,076 | ) | |||||
Income tax (provision) benefit | (40,388 | ) | 14,627 | |||||
Income (loss) before minority interest | 34,863 | (104,449 | ) | |||||
Minority interest | 6,874 | 17,076 | ||||||
Net income (loss) | € | 41,737 | € | (87,373 | ) | |||
(Deficit) retained earnings, beginning of period | (47,970 | ) | 69,176 | |||||
Deficit, end of period | € | (6,233 | ) | € | (18,197 | ) | ||
Income (loss) per share | ||||||||
Basic | € | 1.26 | € | (2.86 | ) | |||
Diluted | € | 1.05 | € | (2.86 | ) | |||
(2)
MERCER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands, except per share data)
For the Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands, except per share data)
2006 | 2005 | |||||||
Revenues | € | 175,185 | € | 148,928 | ||||
Costs and expenses: | ||||||||
Cost of sales | 135,387 | 140,018 | ||||||
39,798 | 8,910 | |||||||
General and administrative expenses | (5,753 | ) | (7,083 | ) | ||||
Sale of emission allowances | — | 6,065 | ||||||
Gain on sale of assets | 359 | — | ||||||
Income from operations | 34,404 | 7,892 | ||||||
Other income (expense) | ||||||||
Interest expense | (22,092 | ) | (21,911 | ) | ||||
Investment income | 1,085 | 613 | ||||||
Unrealized foreign exchange gain (loss) on debt | (704 | ) | 5,918 | |||||
Realized loss on derivative instruments | — | (284 | ) | |||||
Unrealized gain (loss) on derivative instruments | (14,473 | ) | 3,335 | |||||
Total other expense | (36,184 | ) | (12,329 | ) | ||||
Loss before income taxes and minority interest | (1,780 | ) | (4,437 | ) | ||||
Income tax (provision) benefit | 2,532 | (6,785 | ) | |||||
Income (loss) before minority interest | 752 | (11,222 | ) | |||||
Minority interest | 5,976 | 5,667 | ||||||
Net income (loss) | € | 6,728 | € | (5,555 | ) | |||
Deficit, beginning of period | (12,961 | ) | (12,642 | ) | ||||
Deficit, end of period | € | (6,233 | ) | € | (18,197 | ) | ||
Income (loss) per share | ||||||||
Basic | € | 0.20 | € | (0.17 | ) | |||
Diluted | € | 0.19 | € | (0.17 | ) | |||
(3)
MERCER INTERNATIONAL INC.
BUSINESS SEGMENT INFORMATION
For the Nine Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
For the Nine Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
Corporate, | ||||||||||||||||||||||||||||
Rosenthal | Celgar | Stendal | Total | Other and | Consolidated | |||||||||||||||||||||||
Pulp | Pulp | Pulp | Pulp | Paper | Eliminations | Total | ||||||||||||||||||||||
Nine Months Ended September 30, 2006 | ||||||||||||||||||||||||||||
Sales to external customers | € | 109,225 | € | 157,431 | € | 190,514 | € | 457,170 | € | 43,784 | € | — | € | 500,954 | ||||||||||||||
Intersegment net sales | (1,022 | ) | (103 | ) | 7,326 | 6,201 | (139 | ) | (6,062 | ) | — | |||||||||||||||||
108,203 | 157,328 | 197,840 | 463,371 | 43,645 | (6,062 | ) | 500,954 | |||||||||||||||||||||
Operating costs | 73,333 | 140,343 | 143,022 | 356,698 | 40,038 | (5,645 | ) | 391,091 | ||||||||||||||||||||
Operating depreciation and amortization | 10,857 | 9,491 | 21,210 | 41,558 | 551 | 232 | 42,341 | |||||||||||||||||||||
General and administrative | 5,565 | 7,484 | 7,852 | 20,901 | 2,828 | 615 | 24,344 | |||||||||||||||||||||
Gain on sale of assets | — | — | — | — | (359 | ) | — | (359 | ) | |||||||||||||||||||
(Sale) purchase of emission allowances | (3,651 | ) | — | (9,595 | ) | (13,246 | ) | — | — | (13,246 | ) | |||||||||||||||||
86,104 | 157,318 | 162,489 | 405,911 | 43,058 | (4,798 | ) | 444,171 | |||||||||||||||||||||
Income (loss) from operations | 22,099 | 10 | 35,351 | 57,460 | 587 | (1,264 | ) | 56,783 | ||||||||||||||||||||
Interest expense | (68,129 | ) | ||||||||||||||||||||||||||
Investment income | 4,096 | |||||||||||||||||||||||||||
Unrealized foreign exchange gain on debt | 11,469 | |||||||||||||||||||||||||||
Derivative financial instruments, net | 71,032 | |||||||||||||||||||||||||||
Income before income taxes and minority interest | € | 75,251 | ||||||||||||||||||||||||||
Segment assets | € | 324,824 | € | 239,258 | € | 729,148 | € | 1,293,230 | € | 5,564 | € | 37,551 | € | 1,336,345 | ||||||||||||||
Corporate, | ||||||||||||||||||||||||||||
Rosenthal | Celgar(1) | Stendal | Total | Other and | Consolidated | |||||||||||||||||||||||
Pulp | Pulp | Pulp | Pulp | Paper | Eliminations | Total | ||||||||||||||||||||||
Nine Months Ended September 30, 2005 | ||||||||||||||||||||||||||||
Sales to external customers | € | 103,058 | € | 97,458 | € | 128,919 | € | 329,435 | € | 46,995 | € | — | € | 376,430 | ||||||||||||||
Intersegment net sales | — | — | 4,679 | 4,679 | — | (4,679 | ) | — | ||||||||||||||||||||
103,058 | 97,458 | 133,598 | 334,114 | 46,995 | (4,679 | ) | 376,430 | |||||||||||||||||||||
Operating costs | 73,146 | 86,438 | 112,739 | 272,323 | 44,879 | (5,879 | ) | 311,323 | ||||||||||||||||||||
Operating depreciation and amortization | 10,173 | 7,083 | 20,179 | 37,435 | 592 | 835 | 38,862 | |||||||||||||||||||||
General and administrative | 5,441 | 5,285 | 3,120 | 13,846 | 3,720 | 4,833 | 22,399 | |||||||||||||||||||||
(Sale) purchase of emission allowances | (4,402 | ) | — | (7,951 | ) | (12,353 | ) | — | — | (12,353 | ) | |||||||||||||||||
84,358 | 98,806 | 128,087 | 311,251 | 49,191 | (211 | ) | 360,231 | |||||||||||||||||||||
Income (loss) from operations | 18,700 | (1,348 | ) | 5,511 | 22,863 | (2,196 | ) | (4,468 | ) | 16,199 | ||||||||||||||||||
Interest expense | (63,320 | ) | ||||||||||||||||||||||||||
Investment income | 1,594 | |||||||||||||||||||||||||||
Unrealized foreign exchange loss on debt | (1,591 | ) | ||||||||||||||||||||||||||
Derivative financial instruments, net | (70,259 | ) | ||||||||||||||||||||||||||
Impairment of investments | (1,699 | ) | ||||||||||||||||||||||||||
Loss before income taxes and minority interest | € | (119,076 | ) | |||||||||||||||||||||||||
Segment assets | € | 341,732 | € | 251,918 | € | 787,388 | € | 1,381,038 | € | 22,783 | € | 5,416 | € | 1,409,237 | ||||||||||||||
(1) | The results of the Celgar pulp mill are from the date of its acquisition on February 14, 2005. |
(4)
MERCER INTERNATIONAL INC.
BUSINESS SEGMENT INFORMATION
For the Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
For the Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
Corporate, | ||||||||||||||||||||||||||||
Rosenthal | Celgar | Stendal | Total | Other and | Consolidated | |||||||||||||||||||||||
Pulp | Pulp | Pulp | Pulp | Paper | Eliminations | Total | ||||||||||||||||||||||
Three Months Ended September 30, 2006 | ||||||||||||||||||||||||||||
Sales to external customers | € | 40,284 | € | 56,620 | € | 68,004 | € | 164,908 | € | 10,277 | € | — | € | 175,185 | ||||||||||||||
Intersegment net sales | (870 | ) | (126 | ) | 2,638 | 1,642 | (247 | ) | (1,395 | ) | — | |||||||||||||||||
39,414 | 56,494 | 70,642 | 166,550 | 10,030 | (1,395 | ) | 175,185 | |||||||||||||||||||||
Operating costs | 23,880 | 41,641 | 47,451 | 112,972 | 10,067 | (1,211 | ) | 121,828 | ||||||||||||||||||||
Operating depreciation and amortization | 3,107 | 3,200 | 7,081 | 13,388 | 95 | 76 | 13,559 | |||||||||||||||||||||
General and administrative | 1,973 | 2,545 | 1,912 | 6,430 | 552 | (1,229 | ) | 5,753 | ||||||||||||||||||||
Gain on sale of assets | — | — | — | — | (359 | ) | — | (359 | ) | |||||||||||||||||||
�� | ||||||||||||||||||||||||||||
28,960 | 47,386 | 56,444 | 132,790 | 10,355 | (2,364 | ) | 140,781 | |||||||||||||||||||||
Income (loss) from operations | 10,454 | 9,108 | 14,198 | 33,760 | (325 | ) | 969 | 34,404 | ||||||||||||||||||||
Interest expense | (22,092 | ) | ||||||||||||||||||||||||||
Investment income | 1,085 | |||||||||||||||||||||||||||
Unrealized foreign exchange gain on debt | (704 | ) | ||||||||||||||||||||||||||
Derivative financial instruments, net | (14,473 | ) | ||||||||||||||||||||||||||
Loss before income taxes and minority interest | € | (1,780 | ) | |||||||||||||||||||||||||
Corporate, | ||||||||||||||||||||||||||||
Rosenthal | Celgar | Stendal | Total | Other and | Consolidated | |||||||||||||||||||||||
Pulp | Pulp | Pulp | Pulp | Paper | Eliminations | Total | ||||||||||||||||||||||
Three Months Ended September 30, 2005 | ||||||||||||||||||||||||||||
Sales to external customers | € | 37,122 | € | 48,978 | € | 47,313 | € | 133,413 | € | 15,515 | € | — | € | 148,928 | ||||||||||||||
Intersegment net sales | — | — | 1,339 | 1,339 | — | (1,339 | ) | — | ||||||||||||||||||||
37,122 | 48,978 | 48,652 | 134,752 | 15,515 | (1,339 | ) | 148,928 | |||||||||||||||||||||
Operating costs | 25,741 | 45,884 | 41,193 | 112,818 | 15,278 | (2,057 | ) | 126,039 | ||||||||||||||||||||
Operating depreciation and amortization | 3,543 | 2,986 | 6,725 | 13,254 | 213 | 512 | 13,979 | |||||||||||||||||||||
General and administrative | 1,631 | 2,448 | 1,443 | 5,522 | 1,158 | 403 | 7,083 | |||||||||||||||||||||
(Sale) purchase of emission allowances | (2,267 | ) | — | (3,798 | ) | (6,065 | ) | — | — | (6,065 | ) | |||||||||||||||||
28,648 | 51,318 | 45,563 | 125,529 | 16,649 | (1,142 | ) | 141,036 | |||||||||||||||||||||
Income (loss) from operations | 8,474 | (2,340 | ) | 3,089 | 9,223 | (1,134 | ) | (197 | ) | 7,892 | ||||||||||||||||||
Interest expense | (21,911 | ) | ||||||||||||||||||||||||||
Investment income | 613 | |||||||||||||||||||||||||||
Derivative financial instruments, net | 3,051 | |||||||||||||||||||||||||||
Unrealized foreign exchange loss on debt | 5,918 | |||||||||||||||||||||||||||
Loss before income taxes and minority interest | € | (4,437 | ) | |||||||||||||||||||||||||
(5)
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Balance Sheet
As at September 30, 2006
(Euros in thousands)
Combined Condensed Balance Sheet
As at September 30, 2006
(Euros in thousands)
The terms of the indenture governing our 9.25% senior unsecured notes requires that we provide the results of operations and financial condition of Mercer International Inc. excluding its subsidiaries (“Mercer Inc.”) and our restricted subsidiaries under the indenture, collectively referred to as the “Restricted Group”. From February 14, 2005, the Restricted Group includes Mercer Inc., certain holding subsidiaries and Rosenthal, and the Celgar mill. The Restricted Group excludes our paper operations and the Stendal mill.
September 30, 2006 | ||||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
ASSETS | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | € | 37,381 | € | 31,992 | € | — | € | 69,373 | ||||||||
Cash restricted | — | — | — | — | ||||||||||||
Receivables | 45,683 | 38,170 | — | 83,853 | ||||||||||||
Note receivable, current portion | 1,963 | 5,267 | — | 7,230 | ||||||||||||
Inventories | 38,951 | 23,557 | — | 62,508 | ||||||||||||
Prepaid expenses and other | 3,271 | 2,355 | — | 5,626 | ||||||||||||
Total current assets | 127,249 | 101,341 | — | 228,590 | ||||||||||||
Cash restricted | — | 57,000 | — | 57,000 | ||||||||||||
Property, plant and equipment | 424,205 | 570,600 | — | 994,805 | ||||||||||||
Other | 3,118 | 5,607 | — | 8,725 | ||||||||||||
Deferred income tax | 17,093 | 26,096 | — | 43,189 | ||||||||||||
Due from unrestricted group | 48,352 | — | (48,352 | ) | — | |||||||||||
Note receivable, less current portion | — | 4,036 | — | 4,036 | ||||||||||||
Total assets | € | 620,017 | € | 764,680 | € | (48,352 | ) | € | 1,336,345 | |||||||
LIABILITIES | ||||||||||||||||
Current liabilities | ||||||||||||||||
Accounts payable and accrued expenses | € | 41,532 | € | 61,789 | € | — | € | 103,321 | ||||||||
Debt, current portion | — | 40,903 | — | 40,903 | ||||||||||||
Total current liabilities | 41,532 | 102,692 | — | 144,224 | ||||||||||||
Debt, less current portion | 317,999 | 565,097 | — | 883,096 | ||||||||||||
Due to restricted group | — | 48,352 | (48,352 | ) | — | |||||||||||
Unrealized derivative loss | — | 68,528 | — | 68,528 | ||||||||||||
Other | 21,213 | 4,311 | — | 25,524 | ||||||||||||
Deferred income tax | 2,604 | 16,526 | — | 19,130 | ||||||||||||
Total liabilities | 383,348 | 805,506 | (48,352 | ) | 1,140,502 | |||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Total shareholders’ equity (deficit) | 236,669 | (40,826 | )(1) | — | 195,843 | |||||||||||
Total liabilities and shareholders’ equity | € | 620,017 | € | 764,680 | € | (48,352 | ) | € | 1,336,345 | |||||||
(1) | Shareholders’ equity does not include government grants received or receivable related to the Stendal mill. Shareholders’ equity is impacted by the unrealized non-cash marked to market valuation losses on derivative financial instruments. |
(6)
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Balance Sheet
As at December 31, 2005
(Euros in thousands)
Combined Condensed Balance Sheet
As at December 31, 2005
(Euros in thousands)
December 31, 2005 | ||||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
ASSETS | ||||||||||||||||
Current | ||||||||||||||||
Cash and cash equivalents | € | 48,790 | € | 34,757 | € | — | € | 83,547 | ||||||||
Cash restricted | — | 7,039 | — | 7,039 | ||||||||||||
Receivables | 41,349 | 32,966 | — | 74,315 | ||||||||||||
Inventories | 47,100 | 34,047 | — | 81,147 | ||||||||||||
Prepaid expenses and other | 2,940 | 2,534 | — | 5,474 | ||||||||||||
Total current assets | 140,179 | 111,343 | — | 251,522 | ||||||||||||
Cash restricted | — | 24,573 | — | 24,573 | ||||||||||||
Property, plant and equipment | 404,151 | 620,511 | — | 1,024,662 | ||||||||||||
Other | 10,533 | 4,145 | — | 14,678 | ||||||||||||
Deferred income tax | 24,303 | 54,078 | — | 78,381 | ||||||||||||
Due from unrestricted group | 46,412 | — | (46,412 | ) | — | |||||||||||
Total assets | € | 625,578 | € | 814,650 | € | (46,412 | ) | € | 1,393,816 | |||||||
LIABILITIES | ||||||||||||||||
Current | ||||||||||||||||
Accounts payable and accrued expenses | € | 46,867 | € | 64,646 | € | — | € | 111,513 | ||||||||
Construction costs payable | — | 1,213 | — | 1,213 | ||||||||||||
Debt, current portion | — | 27,601 | — | 27,601 | ||||||||||||
Total current liabilities | 46,867 | 93,460 | — | 140,327 | ||||||||||||
Debt, less current portion | 342,023 | 580,596 | — | 922,619 | ||||||||||||
Due to restricted group | — | 46,412 | (46,412 | ) | — | |||||||||||
Unrealized derivative loss | — | 140,625 | — | 140,625 | ||||||||||||
Other | 20,722 | 6,336 | — | 27,058 | ||||||||||||
Deferred income tax | 1,851 | 12,593 | — | 14,444 | ||||||||||||
Total liabilities | 411,463 | 880,022 | (46,412 | ) | 1,245,073 | |||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Total shareholders’ equity (deficit) | 214,115 | (65,372 | )(1) | — | 148,743 | |||||||||||
Total liabilities and shareholders’ equity | € | 625,578 | € | 814,650 | € | (46,412 | ) | € | 1,393,816 | |||||||
(1) | Shareholders’ equity does not include government grants received or receivable related to the Stendal mill. Shareholders’ equity is impacted by the unrealized non-cash marked to market valuation losses on derivative financial instruments. |
(7)
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Statements of Operations
For the Nine Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
Combined Condensed Statements of Operations
For the Nine Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
Nine Months Ended September 30, 2006 | ||||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
Revenues | € | 265,531 | € | 241,485 | € | (6,062 | ) | € | 500,954 | |||||||
Operating costs | 214,093 | 176,998 | — | 391,091 | ||||||||||||
Operating depreciation and amortization | 20,580 | 21,761 | — | 42,341 | ||||||||||||
General and administrative expenses | 13,664 | 10,680 | — | 24,344 | ||||||||||||
(Sale) purchase of emission allowances | (3,651 | ) | (9,595 | ) | — | (13,246 | ) | |||||||||
Gain on sale of assets | — | (359 | ) | — | (359 | ) | ||||||||||
244,686 | 199,485 | — | 444,171 | |||||||||||||
Income from operations | 20,845 | 42,000 | (6,062 | ) | 56,783 | |||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (24,602 | ) | (46,182 | ) | 2,655 | (68,129 | ) | |||||||||
Investment income | 3,262 | 2,283 | (1,449 | ) | 4,096 | |||||||||||
Unrealized foreign exchange gain on debt | 11,469 | — | — | 11,469 | ||||||||||||
Derivative financial instruments, net | — | 71,032 | — | 71,032 | ||||||||||||
Total other (expense) income | (9,871 | ) | 27,133 | 1,206 | 18,468 | |||||||||||
Income (loss) before income taxes and minority interest | 10,974 | 69,133 | (4,856 | ) | 75,251 | |||||||||||
Income tax provision | (8,094 | ) | (32,102 | ) | (192 | ) | (40,388 | ) | ||||||||
Income (loss) before minority interest | 2,880 | 37,031 | (5,048 | ) | 34,863 | |||||||||||
Minority interest | — | 6,874 | — | 6,874 | ||||||||||||
Net income (loss) | € | 2,880 | € | 43,905 | € | (5,048 | ) | € | 41,737 | |||||||
Nine Months Ended September 30, 2005 | ||||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
Revenues | € | 200,516 | € | 175,914 | € | — | € | 376,430 | ||||||||
Operating costs | 158,384 | 152,939 | — | 311,323 | ||||||||||||
Operating depreciation and amortization | 17,431 | 20,771 | 660 | 38,862 | ||||||||||||
General and administrative | 15,559 | 6,840 | — | 22,399 | ||||||||||||
(Sale) purchase of emission allowances | (4,402 | ) | (7,951 | ) | — | (12,353 | ) | |||||||||
186,972 | 172,599 | 660 | 360,231 | |||||||||||||
Income (loss) from operations | 13,544 | 3,315 | (660 | ) | 16,199 | |||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (23,918 | ) | (41,351 | ) | 1,949 | (63,320 | ) | |||||||||
Investment income | 2,313 | 1,230 | (1,949 | ) | 1,594 | |||||||||||
Unrealized foreign exchange loss on debt | (1,591 | ) | — | — | (1,591 | ) | ||||||||||
Derivative financial instruments, net | (494 | ) | (69,765 | ) | — | (70,259 | ) | |||||||||
Impairment of investments | (1,699 | ) | — | — | (1,699 | ) | ||||||||||
Total other expense | (25,389 | ) | (109,886 | ) | — | (135,275 | ) | |||||||||
Loss before income taxes and minority interest | (11,845 | ) | (106,571 | ) | (660 | ) | (119,076 | ) | ||||||||
Income tax (provision) benefit | (7,867 | ) | 22,494 | — | 14,627 | |||||||||||
Loss before minority interest | (19,712 | ) | (84,077 | ) | (660 | ) | (104,449 | ) | ||||||||
Minority interest | — | 17,076 | — | 17,076 | ||||||||||||
Net loss | € | (19,712 | ) | € | (67,001 | ) | € | (660 | ) | € | (87,373 | ) | ||||
(8)
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Statements of Operations
For the Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
Combined Condensed Statements of Operations
For the Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
Three Months Ended September 30, 2006 | ||||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
Revenues | € | 95,908 | € | 80,672 | € | (1,395 | ) | € | 175,185 | |||||||
Operating costs | 65,705 | 51,689 | 4,434 | 121,828 | ||||||||||||
Operating depreciation and amortization | 6,383 | 7,176 | — | 13,559 | ||||||||||||
General and administrative expenses | 3,289 | 2,464 | — | 5,753 | ||||||||||||
Gain on sale of assets | — | (359 | ) | — | (359 | ) | ||||||||||
75,377 | 60,970 | 4,434 | 140,781 | |||||||||||||
Income (loss) from operations | 20,531 | 19,702 | (5,829 | ) | 34,404 | |||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (8,160 | ) | (14,827 | ) | 895 | (22,092 | ) | |||||||||
Investment income | 1,143 | (369 | ) | 311 | 1,085 | |||||||||||
Foreign exchange loss on debt | (704 | ) | — | — | (704 | ) | ||||||||||
Derivative financial instruments, net | — | (14,473 | ) | — | (14,473 | ) | ||||||||||
Total other (expense) income | (7,721 | ) | (29,669 | ) | 1,206 | (36,184 | ) | |||||||||
Income (loss) before income taxes and minority interest | 12,810 | (9,967 | ) | (4,623 | ) | (1,780 | ) | |||||||||
Income tax provision | (1,189 | ) | 3,913 | (192 | ) | 2,532 | ||||||||||
Income (loss) before minority interest | 11,621 | (6,054 | ) | (4,815 | ) | 752 | ||||||||||
Minority interest | — | 5,976 | — | 5,976 | ||||||||||||
Net income (loss) | € | 11,621 | € | (78 | ) | € | (4,815 | ) | € | 6,728 | ||||||
Three Months Ended September 30, 2005 | ||||||||||||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
Revenues | € | 86,100 | € | 62,828 | € | — | € | 148,928 | ||||||||
Operating costs | 71,124 | 54,915 | — | 126,039 | ||||||||||||
Operating depreciation and amortization | 6,602 | 7,155 | 222 | 13,979 | ||||||||||||
General and administrative | 4,482 | 2,601 | — | 7,083 | ||||||||||||
(Sale) purchase of emission allowances | (2,267 | ) | (3,798 | ) | — | (6,065 | ) | |||||||||
79,941 | 60,873 | 222 | 141,036 | |||||||||||||
Income from operations | 6,159 | 1,955 | (222 | ) | 7,892 | |||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (7,987 | ) | (14,780 | ) | 856 | (21,911 | ) | |||||||||
Investment income | 1,016 | 453 | (856 | ) | 613 | |||||||||||
Unrealized foreign exchange gain on debt | 5,918 | — | — | 5,918 | ||||||||||||
Derivative financial instruments, net | (31 | ) | 3,082 | — | 3,051 | |||||||||||
Total other income (expense) | (1,084 | ) | (11,245 | ) | — | (12,329 | ) | |||||||||
Income (loss) before income taxes and minority interest | 5,075 | (9,290 | ) | (222 | ) | (4,437 | ) | |||||||||
Income tax (provision) benefit | (3,091 | ) | (3,694 | ) | — | (6,785 | ) | |||||||||
Income (loss) before minority interest | 1,984 | (12,984 | ) | (222 | ) | (11,222 | ) | |||||||||
Minority interest | — | 5,667 | — | 5,667 | ||||||||||||
Net income (loss) | € | 1,984 | € | (7,317 | ) | € | (222 | ) | € | (5,555 | ) | |||||
(9)
MERCER INTERNATIONAL INC.
COMPUTATION OF OPERATING EBITDA
For the Nine Months and Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
For the Nine Months and Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
Nine Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005(1) | |||||||
(in thousands) | ||||||||
Net income (loss) | € | 41,737 | € | (87,373 | ) | |||
Minority interest | (6,874 | ) | (17,076 | ) | ||||
Income taxes (benefit) | 40,388 | (14,627 | ) | |||||
Interest expense | 68,129 | 63,320 | ||||||
Investment income | (4,096 | ) | (1,594 | ) | ||||
Foreign exchange (gain) loss on debt | (11,469 | ) | 1,591 | |||||
Derivative financial instruments, net (gain) loss | (71,032 | ) | 70,259 | |||||
Impairment of investments | — | 1,699 | ||||||
Income from operations | 56,783 | 16,199 | ||||||
Add: Depreciation and amortization | 42,341 | 38,862 | ||||||
Operating EBITDA | € | 99,124 | € | 55,061 | ||||
Three Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005 | |||||||
(in thousands) | ||||||||
Net income (loss) | € | 6,728 | € | (5,555 | ) | |||
Minority interest | (5,976 | ) | (5,667 | ) | ||||
Income taxes (benefit) | (2,532 | ) | 6,785 | |||||
Interest expense | 22,092 | 21,911 | ||||||
Investment income | (1,085 | ) | (613 | ) | ||||
Foreign exchange (gain ) loss on debt | 704 | (5,918 | ) | |||||
Derivative financial instruments, net (gain) loss | 14,473 | (3,051 | ) | |||||
Income from operations | 34,404 | 7,892 | ||||||
Add: Depreciation and amortization | 13,559 | 13,979 | ||||||
Operating EBITDA | € | 47,963 | € | 21,871 | ||||
(1) | The results of the Celgar pulp mill are included from the date of its acquisition on February 14, 2005. | |
(2) | Operating EBITDA does not reflect the impact of a number of items that affect our net income (loss), including financing costs and the effect of derivative instruments. Operating EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States, and should not be considered as an alternative to net income (loss) or income (loss) from operations as a measure of performance, nor as an alternative to net cash from operating activities as a measure of liquidity. Operating EBITDA has significant limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. |
(10)
MERCER INTERNATIONAL INC.
COMPUTATION OF RESTRICTED GROUP OPERATING EBITDA
For the Nine Months and Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
For the Nine Months and Three Months Ended September 30, 2006 and 2005
(Unaudited)
(Euros in thousands)
Nine Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005(1) | |||||||
(in thousands) | ||||||||
Restricted Group(2) | ||||||||
Net income (loss) | € | 2,880 | € | (19,712 | ) | |||
Income taxes | 8,094 | 7,867 | ||||||
Interest expense | 24,602 | 23,918 | ||||||
Investment and other income | (3,262 | ) | (2,313 | ) | ||||
Derivative financial instruments, net | — | 494 | ||||||
Unrealized foreign exchange (gain) loss on debt | (11,469 | ) | 1,591 | |||||
Impairment of investments | — | 1,699 | ||||||
Income from operations | 20,845 | 13,544 | ||||||
Add: Depreciation and amortization | 20,580 | 17,431 | ||||||
Operating EBITDA | € | 41,425 | € | 30,975 | ||||
Three Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005 | |||||||
(in thousands) | ||||||||
Restricted Group(1) | ||||||||
Net income | € | 11,621 | € | 1,984 | ||||
Income taxes | 1,189 | 3,091 | ||||||
Interest expense | 8,160 | 7,987 | ||||||
Investment and other expense (income) | (1,143 | ) | (1,016 | ) | ||||
Derivative financial instruments, net | — | 31 | ||||||
Unrealized foreign exchange (gain) loss on debt | 704 | (5,918 | ) | |||||
Income from operations | 20,531 | 6,159 | ||||||
Add: Depreciation and amortization | 6,383 | 6,602 | ||||||
Operating EBITDA | € | 26,914 | € | 12,761 | ||||
(1) | The results of the Celgar pulp mill are included from the date of its acquisition on February 14, 2005. | |
(2) | Operating EBITDA does not reflect the impact of a number of items that affect net income (loss), including financing costs and the effect of derivative instruments. Operating EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States, and should not be considered as an alternative to net income (loss) or income (loss) from operations as a measure of performance, nor as an alternative to net cash from operating activities as a measure of liquidity. Operating EBITDA has significant limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. |
(11)
# # #
# # #