Exhibit 99.1
For Immediate Release
MERCER INTERNATIONAL INC. REPORTS STRONG 2010 FOURTH QUARTER
OPERATING EBITDA OF€64.6 MILLION ($87.8 MILLION) AND
RECORD 2010 YEARLY OPERATING EBITDA OF€224.0 MILLION ($297.3 MILLION)
NEW YORK, NY, February 14, 2011 — Mercer International Inc. (Nasdaq: MERC, TSX: MRI.U) today reported strong results for the fourth quarter and record results for the year ended December 31, 2010. Operating EBITDA in the fourth quarter of 2010 was€64.6 million ($87.8 million), compared to€23.5 million ($34.7 million) in the last quarter of 2009 and€65.5 million ($84.7 million) in the third quarter of 2010. In 2010, Operating EBITDA significantly increased fivefold to a record€224.0 million ($297.3 million) from€41.4 million ($57.7 million) in 2009. Operating EBITDA is defined on page 4 of this press release and reconciled to net income (loss) on page 8 of the financial tables in this press release.
We reported net income of€35.3 million ($48.0 million), or€0.84 ($1.14) per basic share, for the fourth quarter of 2010, compared to€2.7 million ($4.0 million), or€0.08 ($0.12) per basic share, in the last quarter of 2009 and€46.1 million ($59.6 million), or€1.17 ($1.51) per basic share, in the third quarter of 2010. For 2010, we reported net income of€86.3 million ($114.5 million), or€2.24 ($2.97) per basic share, compared to a net loss of€62.2 million ($86.7 million), or€1.71 ($2.38) per basic share, in 2009.
Summary Financial Highlights of the 2010 Fourth Quarter and Year End Results
| | | | | | | | | | | | | | | | | | | | | |
| | | Q4 | | | Q3 | | | Q4 | | | Year | | | Year | |
| | | 2010 | | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | (in millions of Euros, except where otherwise stated) | |
| Pulp revenues | | € | 232.2 | | | € | 224.7 | | | € | 154.9 | | | € | 856.3 | | | € | 577.3 | |
| Energy revenues | | | 13.4 | | | | 9.7 | | | | 10.2 | | | | 44.2 | | | | 42.5 | |
| Operating income (loss) | | | 50.4 | | | | 51.4 | | | | 9.8 | | | | 167.7 | | | | (12.8 | ) |
| Operating EBITDA (loss) | | | 64.6 | | | | 65.5 | | | | 23.5 | | | | 224.0 | | | | 41.4 | |
| Unrealized gain (loss) on derivative instruments | | | 12.4 | | | | 0.5 | | | | 5.1 | | | | 1.9 | | | | (5.8 | ) |
| Foreign exchange gain (loss) on debt | | | (1.5 | ) | | | 9.9 | | | | (1.8 | ) | | | (6.1 | ) | | | 2.7 | |
| Income tax benefit (provision) | | | 0.2 | | | | 7.2 | | | | 1.0 | | | | 5.9 | | | | 5.9 | |
| Net income (loss) attributable to common shareholders | | | 35.3 | | | | 46.1 | | | | 2.7 | | | | 86.3 | | | | (62.2 | ) |
| Net income (loss) per share attributable to common shareholders | | | | | | | | | | | | | | | | | | | | |
| Basic | | € | 0.84 | | | € | 1.17 | | | € | 0.08 | | | € | 2.24 | | | € | (1.71 | ) |
| Diluted | | € | 0.63 | | | € | 0.82 | | | € | 0.07 | | | € | 1.56 | | | € | (1.71 | ) |
| Common shares outstanding at period end (000s) | | | 43,000 | | | | 42,030 | | | | 36,443 | | | | 43,000 | | | | 36,443 | |
Summary Operating Highlights of the 2010 Fourth Quarter and Year End Results
| | | | | | | | | | | | | | | | | | | | | |
| | | Q4 | | | Q3 | | | Q4 | | | Year | | | Year | |
| | | 2010 | | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| Pulp Production (‘000 ADMTs) | | | 356.2 | | | | 380.9 | | | | 356.9 | | | | 1,426.3 | | | | 1,397.4 | |
| Scheduled Production Downtime (‘000 ADMTs) | | | — | | | | 8.3 | | | | 14.0 | | | | 43.5 | | | | 52.1 | |
| Pulp Sales (‘000 ADMTs) | | | 386.0 | | | | 344.8 | | | | 351.8 | | | | 1,428.6 | | | | 1,445.5 | |
| NBSK pulp list price in Europe ($/ADMT) | | | 957 | | | | 980 | | | | 787 | | | | 938 | | | | 667 | |
NBSK pulp list price in Europe (€/ADMT) | | | 704 | | | | 758 | | | | 533 | | | | 707 | | | | 478 | |
Average pulp sales realizations (€/ADMT) | | | 593 | | | | 642 | | | | 434 | | | | 591 | | | | 393 | |
| Energy Production (‘000 MWh) | | | 393.0 | | | | 330.8 | | | | 358.7 | | | | 1,444.1 | | | | 1,445.3 | |
| Energy Sales (‘000 MWh) | | | 149.7 | | | | 119.1 | | | | 116.0 | | | | 520.0 | | | | 478.7 | |
| Average Spot Currency Exchange Rates: | | | | | | | | | | | | | | | | | | | | |
€ / $(1) | | | 0.7361 | | | | 0.7729 | | | | 0.6774 | | | | 0.7541 | | | | 0.7176 | |
C$ / $(1) | | | 1.0129 | | | | 1.0385 | | | | 1.0557 | | | | 1.0298 | | | | 1.1412 | |
C$ /€(2) | | | 1.3766 | | | | 1.3438 | | | | 1.5604 | | | | 1.3671 | | | | 1.5851 | |
| | | |
| (1) | | Average Federal Reserve Bank of New York noon spot rate over the reporting period.
|
| |
| (2) | | Average Bank of Canada noon spot rate over the reporting period. |
President’s Comments
Mr. Jimmy S.H. Lee, President and Chairman, stated: “We are very pleased with the strong fourth quarter and overall yearly performance in 2010 as we achieved record annual pulp production and Operating EBITDA of€224.0 million. Fourth quarter Operating EBITDA of€64.6 million was down marginally from the record third quarter as a result of a slightly weaker U.S. dollar versus the Euro, extreme winter weather conditions in Germany and temporary equipment outages which negatively affected production at our German mills. Both the quarterly and yearly results reflect strong performances by all of our mills, including our Celgar mill which started to achieve our projected performance targets.”
Mr. Lee continued: “Overall, pulp prices in the fourth quarter of 2010 remained near historically high levels but were somewhat lower than the third quarter. At the end of 2010, list prices in Europe were approximately $950 per ADMT and in North America and China were approximately $960 and $840 per ADMT, respectively.”
Mr. Lee continued: “We are pleased with the Celgar Green Energy Project, which was substantially completed at the end of the third quarter and generated€3.4 million in revenues in the fourth quarter. In the fourth quarter, we implemented customary equipment modifications to optimize energy generation to ensure the turbine performs as designed.”
Mr. Lee added: “In the fourth quarter of 2010, we effectively extended the maturity of our senior unsecured indebtedness by purchasing and thereby cancelling $289.5 million in aggregate principal amount of our 9.25% senior notes due 2013 (the ‘2013 Notes’) with the net proceeds of a private offering of $300 million in aggregate principal amount of 9.5% senior notes due 2017 and cash on hand. We will redeem the remaining $20.5 million of outstanding 2013 Notes on February 15, 2011.”
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Mr. Lee continued: “In the short term, pulp prices have increased by approximately $20 per ADMT in China in February 2011 and producers have announced an increase of $30 per ADMT in selected markets to take effect in March 2011. Additionally, based on the most recently published data, NBSK producer inventories are around 25 days which generally signals strong demand.”
Mr. Lee concluded: “We are well positioned for a positive 2011. Our current short to medium-term pricing and demand outlook is positive. This, coupled with our world-class mills, should permit us to continue to enhance value for our stakeholders.”
Three Months Ended December 31, 2010 Compared to Three Months Ended December 31, 2009
Pulp revenues for the three months ended December 31, 2010 increased by approximately 50% to€232.2 million from€154.9 million in the comparative period of 2009, due to higher pulp prices and a stronger U.S. dollar relative to the Euro. Revenues from the sale of excess energy increased by approximately 31% in the fourth quarter to€13.4 million from€10.2 million in the same quarter last year, primarily as a result of energy sales from the Celgar Green Energy Project in the fourth quarter of 2010.
Pulp production marginally decreased to 356,244 ADMTs in the current quarter, from 356,859 ADMTs in the same quarter of 2009, primarily due to extreme winter weather conditions in Germany and temporary equipment failures adversely affecting production at our German mills.
Pulp sales volume increased to 385,989 ADMTs in the current quarter from 351,797 ADMTs in the comparative period of 2009, primarily as a result of stronger demand. Average pulp sales realizations increased to€593 per ADMT in the fourth quarter of 2010, compared to€434 per ADMT in the same period last year, primarily due to higher pulp prices.
Costs and expenses in the fourth quarter of 2010 increased to€195.2 million from€155.3 million in the comparative period of 2009, primarily due to higher fiber costs.
On average, our overall fiber costs in the current quarter increased by approximately 25% from the same period in 2009, primarily due to higher fiber costs at our German mills caused by lower levels of harvesting in central Germany, along with extreme winter weather conditions in the fourth quarter of 2010.
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For the fourth quarter of 2010, operating income increased fivefold to€50.4 million from€9.8 million in the comparative quarter of 2009, primarily due to improved pulp prices.
Interest expense in the fourth quarter of 2010 increased to€16.5 million from€15.8 million in the comparative quarter of 2009, primarily due to accretion expense related to the exchange of our convertible notes, partially offset by reduced levels of debt associated with the Stendal mill.
Our Stendal mill recorded an unrealized gain of€12.4 million on our interest rate derivatives in the current quarter, compared to an unrealized gain of€5.1 million in the same quarter of last year. We recorded a foreign exchange loss on our debt of€1.5 million in the fourth quarter of 2010 compared to a loss of€1.8 million in the same period last year.
In the fourth quarter of 2010, the noncontrolling shareholder’s interest in the Stendal mill’s income was€3.5 million, compared to€1.3 million in the same quarter last year.
In the fourth quarter of 2010, Operating EBITDA increased by 175% to€64.6 million from€23.5 million in the fourth quarter of 2009. Operating EBITDA is defined as operating income (loss) 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, 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 or income 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) attributable to common shareholders to Operating EBITDA, see page 8 of the financial tables included in this press release.
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During the quarter, we recorded approximately€0.2 million of income tax benefits, compared to€1.0 million in the same period last year.
During the fourth quarter of 2010, we recorded a loss on the extinguishment of debt of€6.6 million, primarily in connection with the repurchase of our 2013 Notes. In the fourth quarter of 2009, we recorded a gain of€4.4 million on the extinguishment of our convertible notes.
We reported net income attributable to common shareholders of€35.3 million, or€0.84 per basic and€0.63 per diluted share, for the fourth quarter of 2010, which included aggregate net non-cash unrealized gains of€9.3 million, comprised of a non-cash gain of€12.4 million on the Stendal interest rate derivatives, a non-cash foreign exchange loss of€1.5 million on our debt and a non-cash loss in connection with the repurchase of our 2013 Notes. In the fourth quarter of 2009, we reported net income attributable to common shareholders of€2.7 million, or€0.08 per basic and€0.07 per diluted share, which included aggregate net non-cash unrealized gains of€7.7 million, comprised of a non-cash gain of€5.1 million on the Stendal interest rate derivatives, a non-cash foreign exchange loss of€1.8 million on our debt and a non-cash gain of€4.4 million on the extinguishment of our convertible notes.
Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
Pulp revenues for the year ended December 31, 2010 increased by 48% to a record€856.3 million from€577.3 million in the year ended December 31, 2009, primarily due to significantly higher pulp prices in 2010 and a stronger U.S. dollar relative to the Euro. In 2010, revenues from the sale of excess energy increased by approximately 4% to€44.2 million from€42.5 million in 2009, due to increased energy sales at our Celgar mill, partially offset by reduced energy sales at our Rosenthal mill caused by 60 days of scheduled turbine maintenance.
Pulp production increased to a record level of 1,426,286 ADMTs in 2010, from 1,397,441 ADMTs in 2009 primarily as a result of overall strong operating performance at all our mills. We took a total of 31 and 43 days scheduled maintenance downtime at our mills in 2010 and 2009, respectively, and expect to take approximately 39 days in 2011.
Pulp sales volume decreased slightly to 1,428,638 ADMTs in 2010 compared to 1,445,461 ADMTs in 2009. Average pulp sales realizations increased by approximately 50% to€591 per ADMT in 2010 from€393 per ADMT in 2009 primarily due to significantly higher pulp prices.
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Costs and expenses in 2010 increased to€732.8 million from€632.6 million in 2009, primarily due to higher fiber costs.
Our overall fiber costs in 2010 increased by approximately 24% from the same period in 2009, primarily due to higher fiber costs in Germany resulting from lower harvesting levels, combined with increased demand for wood from the energy sector for heating and bio-energy purposes. Fiber costs at our Celgar mill increased marginally from the prior year.
For 2010, we recorded operating income of€167.7 million, compared to an operating loss of€12.8 million in 2009, primarily due to higher price realizations resulting from higher pulp prices.
Interest expense in 2010 increased to€67.6 million from€64.8 million in 2009, primarily due to accretion expense related to the exchange of our convertible notes, partially offset by reduced levels of debt associated with our Stendal mill.
Our Stendal mill recorded an unrealized gain of€1.9 million on its interest rate derivatives at the end of 2010, compared to an unrealized loss of€5.8 million last year due to a small increase in European interest rates. We recorded a foreign exchange loss on our debt of€6.1 million in 2010, compared to a gain of€2.7 million in 2009.
In 2010, the noncontrolling shareholder’s interest in the Stendal mill’s income was€8.5 million, compared to€9.9 million of the Stendal mill’s loss last year.
In 2010, Operating EBITDA increased fivefold to€224.0 million from€41.4 million in 2009. For a definition of Operating EBITDA, see page 4 of this press release and for a reconciliation of net income to Operating EBITDA, see page 8 of the financial tables included in this press release.
During both 2010 and 2009, we recorded approximately€5.9 million of net tax recoveries.
We recorded a loss on the extinguishment of debt of€7.5 million in 2010, primarily in connection with the repurchase of our 2013 Notes. In 2009, we recorded a gain of€4.4 million on the extinguishment of our convertible notes.
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We reported net income attributable to common shareholders of€86.3 million, or€2.24 per basic and€1.56 per diluted share, for 2010, which included aggregate net non-cash unrealized losses of€0.5 million, comprised of a non-cash gain of€1.9 million on the Stendal interest rate derivatives, a non-cash foreign exchange loss of€6.1 million on our long-term debt, a non-cash loss on the extinguishment of our 2013 Notes and a non-cash income tax benefit. In 2009, we reported a net loss attributable to common shareholders of $62.2 million, or€1.71 per basic and diluted share, which included aggregate net non-cash unrealized gains of€7.5 million, comprised of a non-cash loss of€5.8 million on the Stendal interest rate derivatives, a non-cash foreign exchange gain of€2.7 million on our long-term debt, a non-cash gain of€4.4 million on the extinguishment of our convertible notes and a non-cash income tax benefit.
Liquidity and Capital Resources
The following table is a summary of selected financial information for the periods indicated:
| | | | | | | | | |
| | | Years Ended December 31, | |
| | | 2010 | | | 2009 | |
| | | (in thousands) | |
Financial Position | | | | | | | | |
| Cash and cash equivalents | | € | 99,022 | | | € | 51,291 | |
| Working capital | | | 231,683 | | | | 99,150 | |
| Property, plant and equipment | | | 846,767 | | | | 868,558 | |
| Total assets | | | 1,216,075 | | | | 1,083,831 | |
| Long-term liabilities | | | 877,315 | | | | 896,074 | |
| Total equity | | | 213,563 | | | | 85,973 | |
As at December 31, 2010, we had approximately€26.4 million and C$17.9 million available under our Rosenthal and Celgar facilities, respectively. As at December 31, 2010, approximately€500.7 million was outstanding under our Stendal mill’s loan facility.
Restricted Group
The following table is a summary of selected financial information for the Restricted Group for the periods indicated.
| | | | | | | | | |
| | | Years Ended December 31, | |
| | | 2010 | | | 2009 | |
| | | (in thousands) | |
Restricted Group Financial Position | | | | | | | | |
| Cash and cash equivalents | | € | 50,654 | | | € | 20,635 | |
| Working capital | | | 150,667 | | | | 57,015 | |
| Property, plant and equipment | | | 362,274 | | | | 362,311 | |
| Total assets | | | 662,944 | | | | 555,977 | |
| Long-term liabilities | | | 312,631 | | | | 301,173 | |
| Total equity | | | 289,141 | | | | 200,247 | |
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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, February 15, 2011 at 10:00 AM (Eastern Daylight Time). Listeners can access the conference call live and archived through March 15, 2011, over the Internet at http://investor.shareholder.com/media/eventdetail.cfm?eventid=91422&CompanyID=MERC&e=1&mediaKey=1AE35D7DABC3ECD95E2779DA87354812 or through a link on the Company’s News/Financial page at http://www.mercerint.com/s/NewsReleases.asp. 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 February 22, 2011 at 11:59 PM (Eastern Standard Time). The replay number is (800) 642-1687 for domestic callers or (706) 645-9291 for international callers, and the passcode is 38594483.
Mercer International Inc. is a global pulp manufacturing company. To obtain further information on the company, please visit its web site at http://www.mercerint.com.
The preceding includes forward looking statements which involve known and unknown risks and uncertainties which may cause our 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: the highly cyclical nature of our business, raw material costs, our level of indebtedness, competition, foreign exchange and interest rate fluctuations, our use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to our production, market conditions and other risk factors listed from time to time in our SEC reports.
| | | |
APPROVED BY:
| | FD |
Jimmy S.H. Lee
Chairman & President
(604) 684-1099 | | Investors/Media: Eric Boyriven, Alexandra Tramont
(212) 850-5600 |
| | | |
David M. Gandossi
Executive Vice-President &
Chief Financial Officer
(604) 684-1099 | | |
-FINANCIAL TABLES FOLLOW-
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MERCER INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of Euros)
| | | | | | | | | |
| | | December 31, | |
| | | 2010 | | | 2009 | |
ASSETS | | | | | | | | |
| Current assets | | | | | | | | |
| Cash and cash equivalents | | € | 99,022 | | | € | 51,291 | |
| Receivables | | | 121,709 | | | | 71,143 | |
| Inventories | | | 102,219 | | | | 72,629 | |
| Prepaid expenses and other | | | 11,360 | | | | 5,871 | |
| Deferred income tax | | | 22,570 | | | | — | |
| | | | | | | |
| Total current assets | | | 356,880 | | | | 200,934 | |
| | | | | | | |
| Long-term assets | | | | | | | | |
| Property, plant and equipment | | | 846,767 | | | | 868,558 | |
| Deferred note issuance and other | | | 11,082 | | | | 8,186 | |
| Deferred income tax | | | — | | | | 3,426 | |
| Note receivable | | | 1,346 | | | | 2,727 | |
| | | | | | | |
| | | | 859,195 | | | | 882,897 | |
| | | | | | | |
| Total assets | | € | 1,216,075 | | | € | 1,083,831 | |
| | | | | | | |
| | | | | | | | | |
LIABILITIES | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable and accrued expenses | | € | 84,873 | | | € | 85,185 | |
| Pension and other post-retirement benefit obligations | | | 728 | | | | 567 | |
| Debt | | | 39,596 | | | | 16,032 | |
| | | | | | | |
| Total current liabilities | | | 125,197 | | | | 101,784 | |
| | | | | | | |
| Long-term liabilities | | | | | | | | |
| Debt | | | 782,328 | | | | 813,142 | |
| Unrealized interest rate derivative losses | | | 50,973 | | | | 52,873 | |
| Pension and other post-retirement benefit obligations | | | 24,236 | | | | 17,902 | |
| Capital leases and other | | | 12,010 | | | | 12,157 | |
| Deferred income tax | | | 7,768 | | | | — | |
| | | | | | | |
| | | | 877,315 | | | | 896,074 | |
| | | | | | | |
| Total liabilities | | | 1,002,512 | | | | 997,858 | |
| | | | | | | |
| | | | | | | | | |
EQUITY | | | | | | | | |
| Shareholders’ equity | | | | | | | | |
| Share capital | | | 219,211 | | | | 202,844 | |
| Paid-in capital | | | (3,899 | ) | | | (6,082 | ) |
| Retained earnings (deficit) | | | (10,956 | ) | | | (97,235 | ) |
| Accumulated other comprehensive income (loss) | | | 31,712 | | | | 23,695 | |
| | | | | | | |
| Total shareholders’ equity | | | 236,068 | | | | 123,222 | |
| | | | | | | |
| | | | | | | | | |
| Noncontrolling interest (deficit) | | € | (22,505 | ) | | € | (37,249 | ) |
| | | | | | | |
| Total equity | | | 213,563 | | | | 85,973 | |
| | | | | | | |
| Total liabilities and equity | | € | 1,216,075 | | | € | 1,083,831 | |
| | | | | | | |
(1)
MERCER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of Euros, except per share data)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Years Ended | |
| | | December 31, | | | December 31, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| Revenues | | | | | | | | | | | | | | | | |
| Pulp | | € | 232,200 | | | € | 154,886 | | | € | 856,311 | | | € | 577,298 | |
| Energy | | | 13,442 | | | | 10,226 | | | | 44,225 | | | | 42,501 | |
| | | | | | | | | | | | | |
| | | | 245,642 | | | | 165,112 | | | | 900,536 | | | | 619,799 | |
| | | | | | | | | | | | | | | | | |
| Costs and expenses | | | | | | | | | | | | | | | | |
| Operating costs | | | 172,552 | | | | 134,185 | | | | 643,529 | | | | 551,781 | |
| Operating depreciation and amortization | | | 14,115 | | | | 13,594 | | | | 55,932 | | | | 53,919 | |
| | | | | | | | | | | | | |
| | | | 58,975 | | | | 17,333 | | | | 201,075 | | | | 14,099 | |
| Selling, general and administrative expenses | | | 8,498 | | | | 7,617 | | | | 33,442 | | | | 27,414 | |
| Purchase (sale) of emission allowances | | | 57 | | | | (127 | ) | | | (110 | ) | | | (516 | ) |
| | | | | | | | | | | | | |
| Operating income (loss) | | | 50,420 | | | | 9,843 | | | | 167,743 | | | | (12,799 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | |
| Interest expense | | | (16,480 | ) | | | (15,817 | ) | | | (67,621 | ) | | | (64,770 | ) |
| Investment income (loss) | | | 164 | | | | 1,240 | | | | 468 | | | | (1,804 | ) |
| Foreign exchange gain (loss) on debt | | | (1,451 | ) | | | (1,841 | ) | | | (6,126 | ) | | | 2,692 | |
| Gain (loss) on extinguishment of debt | | | (6,565 | ) | | | 4,447 | | | | (7,494 | ) | | | 4,447 | |
| Gain (loss) on derivative instruments | | | 12,422 | | | | 5,129 | | | | 1,899 | | | | (5,760 | ) |
| | | | | | | | | | | | | |
| Total other income (expense) | | | (11,910 | ) | | | (6,842 | ) | | | (78,874 | ) | | | (65,195 | ) |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | 38,510 | | | | 3,001 | | | | 88,869 | | | | (77,994 | ) |
| Income tax benefit (provision) — current | | | (131 | ) | | | (7 | ) | | | (3,881 | ) | | | (134 | ) |
| — deferred | | | 378 | | | | 1,014 | | | | 9,760 | | | | 6,003 | |
| | | | | | | | | | | | | |
| Net income (loss) | | | 38,757 | | | | 4,008 | | | | 94,748 | | | | (72,125 | ) |
| Less: net loss (income) attributable to noncontrolling interest | | | (3,468 | ) | | | (1,259 | ) | | | (8,469 | ) | | | 9,936 | |
| | | | | | | | | | | | | |
| Net income (loss) attributable to common shareholders | | € | 35,289 | | | € | 2,749 | | | € | 86,279 | | | € | (62,189 | ) |
| | | | | | | | | | | | | | | | | |
| Retained earnings (deficit), beginning of period | | | (46,245 | ) | | | (99,984 | ) | | | (97,235 | ) | | | (35,046 | ) |
| | | | | | | | | | | | | |
| Retained earnings (deficit), end of period | | € | (10,956 | ) | | € | (97,235 | ) | | € | (10,956 | ) | | € | (97,235 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) per share attributable to common shareholders | | | | | | | | | | | | | | | | |
| Basic | | € | 0.84 | | | € | 0.08 | | | € | 2.24 | | | € | (1.71 | ) |
| | | | | | | | | | | | | |
| Diluted | | € | 0.63 | | | € | 0.07 | | | € | 1.56 | | | € | (1.71 | ) |
| | | | | | | | | | | | | |
(2)
MERCER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Euros)
| | | | | | | | | | | | | |
| | | For the Years Ended December 31, | |
| | | 2010 | | | 2009 | | | 2008 | |
| Cash flows from (used in) operating activities | | | | | | | | | | | | |
| Net income (loss) attributable to common shareholders | | € | 86,279 | | | € | (62,189 | ) | | € | (72,465 | ) |
| Adjustments to reconcile net income (loss) attributable to common shareholders to cash flows from operating activities | | | | | | | | | | | | |
| Loss (gain) on derivative instruments | | | (1,899 | ) | | | 5,760 | | | | 25,228 | |
| Foreign exchange (gain) loss on debt | | | 6,126 | | | | (2,692 | ) | | | 4,234 | |
| Loss (gain) on extinguishment of debt | | | 7,494 | | | | (4,447 | ) | | | — | |
| Depreciation and amortization | | | 56,231 | | | | 54,170 | | | | 55,762 | |
| Accretion expense (income) | | | 2,492 | | | | 181 | | | | — | |
| Noncontrolling interest | | | 8,469 | | | | (9,936 | ) | | | (13,075 | ) |
| Deferred income taxes | | | (9,760 | ) | | | (6,003 | ) | | | 1,976 | |
| Stock compensation expense | | | 2,394 | | | | 455 | | | | 264 | |
| Pension and other post-retirement expense, net of funding | | | 418 | | | | 282 | | | | (758 | ) |
| Inventory provisions | | | — | | | | — | | | | 11,272 | |
| Other | | | 5,190 | | | | 2,482 | | | | 3,025 | |
| Changes in current assets and liabilities | | | | | | | | | | | | |
| Receivables | | | (40,038 | ) | | | 31,907 | | | | (14,811 | ) |
| Inventories | | | (24,462 | ) | | | 32,158 | | | | (13,331 | ) |
| Accounts payable and accrued expenses | | | (3,089 | ) | | | (2,950 | ) | | | (1,091 | ) |
| Other | | | (4,566 | ) | | | (1,859 | ) | | | 1,904 | |
| | | | | | | | | | |
| Net cash from (used in) operating activities | | | 91,279 | | | | 37,319 | | | | (11,866 | ) |
| | | | | | | | | | | | | |
| Cash flows from (used in) investing activities | | | | | | | | | | | | |
| Purchase of property, plant and equipment | | | (38,300 | ) | | | (28,828 | ) | | | (25,704 | ) |
| Proceeds on sale of property, plant and equipment | | | 1,138 | | | | 436 | | | | 2,000 | |
| Cash, restricted | | | — | | | | 13,000 | | | | 20,000 | |
| Note receivable | | | 1,113 | | | | 152 | | | | 5,708 | |
| | | | | | | | | | |
| Net cash from (used in) investing activities | | | (36,049 | ) | | | (15,240 | ) | | | 2,004 | |
| | | | | | | | | | | | | |
| Cash flows from (used in) financing activities | | | | | | | | | | | | |
| Repayment of notes payable and debt | | | (234,598 | ) | | | (26,499 | ) | | | (34,023 | ) |
| Repayment of capital lease obligations | | | (2,920 | ) | | | (3,178 | ) | | | (3,312 | ) |
| Proceeds from borrowings of notes payable and debt | | | 222,193 | | | | 13,511 | | | | — | |
| Proceeds from (repayment of) credit facilities, net | | | (2,660 | ) | | | (4,272 | ) | | | 5,837 | |
| Proceeds from government grants | | | 17,952 | | | | 9,058 | | | | 266 | |
| Payment of deferred note issuance costs | | | (6,095 | ) | | | (1,969 | ) | | | — | |
| | | | | | | | | | |
| Net cash from (used in) financing activities | | | (6,128 | ) | | | (13,349 | ) | | | (31,232 | ) |
| Effect of exchange rate changes on cash and cash equivalents | | | (1,371 | ) | | | 109 | | | | (1,302 | ) |
| | | | | | | | | | |
| | | | | | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | 47,731 | | | | 8,839 | | | | (42,396 | ) |
| Cash and cash equivalents, beginning of period | | | 51,291 | | | | 42,452 | | | | 84,848 | |
| | | | | | | | | | |
| Cash and cash equivalents, end of period | | € | 99,022 | | | € | 51,291 | | | € | 42,452 | |
| | | | | | | | | | |
(3)
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Balance Sheets
(In thousands of Euros)
The terms of the indentures governing our 9.25% senior unsecured notes and our 9.5% senior unsecured notes require that we provide the results of operations and financial condition of Mercer International Inc. and our restricted subsidiaries under the indenture, collectively referred to as the “Restricted Group”. As at and during the three months and years ended December 31, 2010 and 2009, the Restricted Group was comprised of Mercer International Inc., certain holding subsidiaries and our Rosenthal and Celgar mills. The Restricted Group excludes the Stendal mill.
| | | | | | | | | | | | | | | | | |
| | | December 31, 2010 | |
| | | Restricted | | | Unrestricted | | | | | | | Consolidated | |
| | | Group | | | Subsidiaries | | | Eliminations | | | Group | |
ASSETS | | | | | | | | | | | | | | | | |
| Current | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | € | 50,654 | | | € | 48,368 | | | € | — | | | € | 99,022 | |
| Receivables | | | 70,865 | | | | 50,844 | | | | — | | | | 121,709 | |
| Inventories | | | 60,910 | | | | 41,309 | | | | — | | | | 102,219 | |
| Prepaid expenses and other | | | 6,840 | | | | 4,520 | | | | — | | | | 11,360 | |
| Deferred income tax | | | 22,570 | | | | — | | | | — | | | | 22,570 | |
| | | | | | | | | | | | | |
| Total current assets | | | 211,839 | | | | 145,041 | | | | — | | | | 356,880 | |
| Long-term assets | | | | | | | | | | | | | | | | |
| Property, plant and equipment | | | 362,274 | | | | 484,493 | | | | — | | | | 846,767 | |
| Deferred note issuance and other | | | 6,903 | | | | 4,179 | | | | — | | | | 11,082 | |
| Deferred income tax | | | — | | | | — | | | | — | | | | — | |
| Due from unrestricted group | | | 80,582 | | | | — | | | | (80,582 | ) | | | — | |
| Note receivable | | | 1,346 | | | | — | | | | — | | | | 1,346 | |
| | | | | | | | | | | | | |
| Total assets | | € | 662,944 | | | € | 633,713 | | | € | (80,582 | ) | | € | 1,216,075 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | |
| Current liabilities | | | | | | | | | | | | | | | | |
| Accounts payable and accrued expenses | | € | 44,015 | | | € | 40,858 | | | € | — | | | € | 84,873 | |
| Pension and other post-retirement benefit obligations | | | 728 | | | | — | | | | — | | | | 728 | |
| Debt | | | 16,429 | | | | 23,167 | | | | — | | | | 39,596 | |
| | | | | | | | | | | | | |
| Total current liabilities | | | 61,172 | | | | 64,025 | | | | — | | | | 125,197 | |
| Long-term liabilities | | | | | | | | | | | | | | | | |
| Debt | | | 273,473 | | | | 508,855 | | | | — | | | | 782,328 | |
| Due to restricted group | | | — | | | | 80,582 | | | | (80,582 | ) | | | — | |
| Unrealized interest rate derivative losses | | | — | | | | 50,973 | | | | — | | | | 50,973 | |
| Pension and other post-retirement benefit obligations | | | 24,236 | | | | — | | | | — | | | | 24,236 | |
| Capital leases and other | | | 7,154 | | | | 4,856 | | | | — | | | | 12,010 | |
| Deferred income tax | | | 7,768 | | | | — | | | | — | | | | 7,768 | |
| | | | | | | | | | | | | |
| Total liabilities | | | 373,803 | | | | 709,291 | | | | (80,582 | ) | | | 1,002,512 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
EQUITY | | | | | | | | | | | | | | | | |
| Total shareholders’ equity (deficit) | | | 289,141 | | | | (53,073 | ) | | | — | | | | 236,068 | |
| Noncontrolling interest (deficit) | | | — | | | | (22,505 | ) | | | — | | | | (22,505 | ) |
| | | | | | | | | | | | | |
| Total liabilities and equity | | € | 662,944 | | | € | 633,713 | | | € | (80,582 | ) | | € | 1,216,075 | |
| | | | | | | | | | | | | |
(4)
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Balance Sheets
(In thousands of Euros)
| | | | | | | | | | | | | | | | | |
| | | December 31, 2009 | |
| | | Restricted | | | Unrestricted | | | | | | | Consolidated | |
| | | Group | | | Subsidiaries | | | Eliminations | | | Group | |
ASSETS | | | | | | | | | | | | | | | | |
| Current | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | € | 20,635 | | | € | 30,656 | | | € | — | | | € | 51,291 | |
| Receivables | | | 34,588 | | | | 36,555 | | | | — | | | | 71,143 | |
| Inventories | | | 52,897 | | | | 19,732 | | | | — | | | | 72,629 | |
| Prepaid expenses and other | | | 3,452 | | | | 2,419 | | | | — | | | | 5,871 | |
| | | | | | | | | | | | | |
| Total current assets | | | 111,572 | | | | 89,362 | | | | — | | | | 200,934 | |
| Long-term assets | | | | | | | | | | | | | | | | |
| Property, plant and equipment | | | 362,311 | | | | 506,247 | | | | — | | | | 868,558 | |
| Deferred note issuance and other | | | 3,388 | | | | 4,798 | | | | — | | | | 8,186 | |
| Deferred income tax | | | 3,426 | | | | — | | | | — | | | | 3,426 | |
| Due from unrestricted group | | | 72,553 | | | | — | | | | (72,553 | ) | | | — | |
| Note receivable | | | 2,727 | | | | — | | | | — | | | | 2,727 | |
| | | | | | | | | | | | | |
| Total assets | | € | 555,977 | | | € | 600,407 | | | € | (72,553 | ) | | € | 1,083,831 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | |
| Current liabilities | | | | | | | | | | | | | | | | |
| Accounts payable and accrued expenses | | € | 51,875 | | | € | 33,310 | | | € | — | | | € | 85,185 | |
| Pension and other post-retirement benefit obligations | | | 567 | | | | — | | | | — | | | | 567 | |
| Debt | | | 2,115 | | | | 13,917 | | | | — | | | | 16,032 | |
| | | | | | | | | | | | | |
| Total current liabilities | | | 54,557 | | | | 47,227 | | | | — | | | | 101,784 | |
| Long-term liabilities | | | | | | | | | | | | | | | | |
| Debt | | | 276,604 | | | | 536,538 | | | | — | | | | 813,142 | |
| Due to restricted group | | | — | | | | 72,553 | | | | (72,553 | ) | | | — | |
| Unrealized interest rate derivative losses | | | — | | | | 52,873 | | | | — | | | | 52,873 | |
| Pension and other post-retirement benefit obligations | | | 17,902 | | | | — | | | | — | | | | 17,902 | |
| Capital leases and other | | | 6,667 | | | | 5,490 | | | | — | | | | 12,157 | |
| | | | | | | | | | | | | |
| Total liabilities | | | 355,730 | | | | 714,681 | | | | (72,553 | ) | | | 997,858 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
EQUITY | | | | | | | | | | | | | | | | |
| Total shareholders’ equity (deficit) | | | 200,247 | | | | (77,025 | ) | | | — | | | | 123,222 | |
| Noncontrolling interest (deficit) | | | — | | | | (37,249 | ) | | | — | | | | (37,249 | ) |
| | | | | | | | | | | | | |
| Total liabilities and equity | | € | 555,977 | | | € | 600,407 | | | € | (72,553 | ) | | € | 1,083,831 | |
| | | | | | | | | | | | | |
(5)
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Statements of Operations
(In thousands of Euros)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, 2010 | |
| | | Restricted | | | Unrestricted | | | | | | | Consolidated | |
| | | Group | | | Subsidiaries | | | Eliminations | | | Group | |
| Revenues | | | | | | | | | | | | | | | | |
| Pulp | | € | 135,245 | | | € | 96,955 | | | € | — | | | € | 232,200 | |
| Energy | | | 6,395 | | | | 7,047 | | | | — | | | | 13,442 | |
| | | | | | | | | | | | | |
| | | | 141,640 | | | | 104,002 | | | | — | | | | 245,642 | |
| | | | | | | | | | | | | |
| Operating costs | | | 92,209 | | | | 80,343 | | | | — | | | | 172,552 | |
| Operating depreciation and amortization | | | 7,616 | | | | 6,499 | | | | — | | | | 14,115 | |
| Selling, general and administrative expenses and other | | | 5,439 | | | | 3,116 | | | | — | | | | 8,555 | |
| | | | | | | | | | | | | |
| | | | 105,264 | | | | 89,958 | | | | — | | | | 195,222 | |
| | | | | | | | | | | | | |
| Operating income (loss) | | | 36,376 | | | | 14,044 | | | | — | | | | 50,420 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | |
| Interest expense | | | (7,425 | ) | | | (10,259 | ) | | | 1,204 | | | | (16,480 | ) |
| Investment income (loss) | | | 1,333 | | | | 35 | | | | (1,204 | ) | | | 164 | |
| Foreign exchange gain (loss) on debt | | | (1,451 | ) | | | — | | | | — | | | | (1,451 | ) |
| Gain (loss) on extinguishment of debt | | | (6,565 | ) | | | — | | | | — | | | | (6,565 | ) |
| Gain (loss) on derivative instruments | | | — | | | | 12,422 | | | | — | | | | 12,422 | |
| | | | | | | | | | | | | |
| Total other income (expense) | | | (14,108 | ) | | | 2,198 | | | | — | | | | (11,910 | ) |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | 22,268 | | | | 16,242 | | | | — | | | | 38,510 | |
| Income tax benefit (provision) | | | 297 | | | | (50 | ) | | | — | | | | 247 | |
| | | | | | | | | | | | | |
| Net income (loss) | | | 22,565 | | | | 16,192 | | | | — | | | | 38,757 | |
| Less: net (income) loss attributable to noncontrolling interest | | | — | | | | (3,468 | ) | | | — | | | | (3,468 | ) |
| | | | | | | | | | | | | |
| Net income (loss) attributable to common shareholders | | € | 22,565 | | | € | 12,724 | | | € | — | | | € | 35,289 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, 2009 | |
| | | Restricted | | | Unrestricted | | | | | | | Consolidated | |
| | | Group | | | Subsidiaries | | | Eliminations | | | Group | |
| Revenues | | | | | | | | | | | | | | | | |
| Pulp | | € | 87,776 | | | € | 67,110 | | | € | — | | | € | 154,886 | |
| Energy | | | 4,021 | | | | 6,205 | | | | — | | | | 10,226 | |
| | | | | | | | | | | | | |
| | | | 91,797 | | | | 73,315 | | | | — | | | | 165,112 | |
| | | | | | | | | | | | | |
| Operating costs | | | 79,665 | | | | 54,520 | | | | — | | | | 134,185 | |
| Operating depreciation and amortization | | | 7,045 | | | | 6,549 | | | | — | | | | 13,594 | |
| Selling, general and administrative expenses and other | | | 4,384 | | | | 3,106 | | | | — | | | | 7,490 | |
| | | | | | | | | | | | | |
| | | | 91,094 | | | | 64,175 | | | | — | | | | 155,269 | |
| | | | | | | | | | | | | |
| Operating income (loss) | | | 703 | | | | 9,140 | | | | — | | | | 9,843 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | |
| Interest expense | | | (6,576 | ) | | | (10,389 | ) | | | 1,148 | | | | (15,817 | ) |
| Investment income (loss) | | | 1,740 | | | | 648 | | | | (1,148 | ) | | | 1,240 | |
| Foreign exchange gain (loss) on debt | | | (1,841 | ) | | | — | | | | — | | | | (1,841 | ) |
| Gain (loss) on extinguishment of debt | | | 4,447 | | | | — | | | | — | | | | 4,447 | |
| Gain (loss) on derivative instruments | | | — | | | | 5,129 | | | | — | | | | 5,129 | |
| | | | | | | | | | | | | |
| Total other income (expense) | | | (2,230 | ) | | | (4,612 | ) | | | — | | | | (6,842 | ) |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | (1,527 | ) | | | 4,528 | | | | — | | | | 3,001 | |
| Income tax benefit (provision) | | | 1,016 | | | | (9 | ) | | | — | | | | 1,007 | |
| | | | | | | | | | | | | |
| Net income (loss) | | | (511 | ) | | | 4,519 | | | | — | | | | 4,008 | |
| Less: net (income) loss attributable to noncontrolling interest | | | — | | | | (1,259 | ) | | | — | | | | (1,259 | ) |
| | | | | | | | | | | | | |
| Net income (loss) attributable to common shareholders | | € | (511 | ) | | € | 3,260 | | | € | — | | | € | 2,749 | |
| | | | | | | | | | | | | |
(6)
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Statements of Operations
(In thousands of Euros)
| | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2010 | |
| | | Restricted | | | Unrestricted | | | | | | | Consolidated | |
| | | Group | | | Subsidiaries | | | Eliminations | | | Group | |
| Revenues | | | | | | | | | | | | | | | | |
| Pulp | | € | 490,020 | | | € | 366,291 | | | € | — | | | € | 856,311 | |
| Energy | | | 15,145 | | | | 29,080 | | | | — | | | | 44,225 | |
| | | | | | | | | | | | | |
| | | | 505,165 | | | | 395,371 | | | | — | | | | 900,536 | |
| | | | | | | | | | | | | |
| Operating costs | | | 361,272 | | | | 282,257 | | | | — | | | | 643,529 | |
| Operating depreciation and amortization | | | 29,971 | | | | 25,961 | | | | — | | | | 55,932 | |
| Selling, general and administrative expenses and other | | | 20,231 | | | | 13,101 | | | | — | | | | 33,332 | |
| | | | | | | | | | | | | |
| | | | 411,474 | | | | 321,319 | | | | — | | | | 732,793 | |
| | | | | | | | | | | | | |
| Operating income (loss) | | | 93,691 | | | | 74,052 | | | | — | | | | 167,743 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | |
| Interest expense | | | (31,498 | ) | | | (40,852 | ) | | | 4,729 | | | | (67,621 | ) |
| Investment income (loss) | | | 5,103 | | | | 94 | | | | (4,729 | ) | | | 468 | |
| Foreign exchange gain (loss) on debt | | | (6,126 | ) | | | — | | | | — | | | | (6,126 | ) |
| Gain (loss) on extinguishment of debt | | | (7,494 | ) | | | — | | | | — | | | | (7,494 | ) |
| Gain (loss) on derivative instruments | | | — | | | | 1,899 | | | | — | | | | 1,899 | |
| | | | | | | | | | | | | |
| Total other income (expense) | | | (40,015 | ) | | | (38,859 | ) | | | — | | | | (78,874 | ) |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | 53,676 | | | | 35,193 | | | | — | | | | 88,869 | |
| Income tax benefit (provision) | | | 8,651 | | | | (2,772 | ) | | | — | | | | 5,879 | |
| | | | | | | | | | | | | |
| Net income (loss) | | | 62,327 | | | | 32,421 | | | | — | | | | 94,748 | |
| Less: net (income) loss attributable to noncontrolling interest | | | — | | | | (8,469 | ) | | | — | | | | (8,469 | ) |
| | | | | | | | | | | | | |
| Net income (loss) attributable to common shareholders | | € | 62,327 | | | € | 23,952 | | | € | — | | | € | 86,279 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2009 | |
| | | Restricted | | | Unrestricted | | | | | | | Consolidated | |
| | | Group | | | Subsidiaries | | | Eliminations | | | Group | |
| Revenues | | | | | | | | | | | | | | | | |
| Pulp | | € | 318,448 | | | € | 258,850 | | | € | — | | | € | 577,298 | |
| Energy | | | 15,183 | | | | 27,318 | | | | — | | | | 42,501 | |
| | | | | | | | | | | | | |
| | | | 333,631 | | | | 286,168 | | | | — | | | | 619,799 | |
| | | | | | | | | | | | | |
| Operating costs | | | 312,029 | | | | 239,752 | | | | — | | | | 551,781 | |
| Operating depreciation and amortization | | | 27,453 | | | | 26,466 | | | | — | | | | 53,919 | |
| Selling, general and administrative expenses and other | | | 15,049 | | | | 11,849 | | | | — | | | | 26,898 | |
| | | | | | | | | | | | | |
| | | | 354,531 | | | | 278,067 | | | | — | | | | 632,598 | |
| | | | | | | | | | | | | |
| Operating income (loss) | | | (20,900 | ) | | | 8,101 | | | | — | | | | (12,799 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | |
| Interest expense | | | (27,351 | ) | | | (41,932 | ) | | | 4,513 | | | | (64,770 | ) |
| Investment income (loss) | | | 5,002 | | | | (2,293 | ) | | | (4,513 | ) | | | (1,804 | ) |
| Foreign exchange gain (loss) on debt | | | 2,692 | | | | — | | | | — | | | | 2,692 | |
| Gain (loss) on extinguishment of debt | | | 4,447 | | | | — | | | | — | | | | 4,447 | |
| Gain (loss) on derivative instruments | | | — | | | | (5,760 | ) | | | — | | | | (5,760 | ) |
| | | | | | | | | | | | | |
| Total other income (expense) | | | (15,210 | ) | | | (49,985 | ) | | | — | | | | (65,195 | ) |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | (36,110 | ) | | | (41,884 | ) | | | — | | | | (77,994 | ) |
| Income tax benefit (provision) | | | 183 | | | | 5,686 | | | | — | | | | 5,869 | |
| | | | | | | | | | | | | |
| Net income (loss) | | | (35,927 | ) | | | (36,198 | ) | | | — | | | | (72,125 | ) |
| Less: net (income) loss attributable to noncontrolling interest | | | — | | | | 9,936 | | | | — | | | | 9,936 | |
| | | | | | | | | | | | | |
| Net income (loss) attributable to common shareholders | | € | (35,927 | ) | | € | (26,262 | ) | | € | — | | | € | (62,189 | ) |
| | | | | | | | | | | | | |
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MERCER INTERNATIONAL INC.
COMPUTATION OF OPERATING EBITDA
(Unaudited)
(In thousands of Euros)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Year Ended | |
| | | December 31, | | | December 31, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) attributable to common shareholders | | € | 35,289 | | | € | 2,749 | | | € | 86,279 | | | € | (62,189 | ) |
| Net income (loss) attributable to noncontrolling interest | | | 3,468 | | | | 1,259 | | | | 8,469 | | | | (9,936 | ) |
| Income taxes (benefits) | | | (247 | ) | | | (1,007 | ) | | | (5,879 | ) | | | (5,869 | ) |
| Interest expense | | | 16,480 | | | | 15,817 | | | | 67,621 | | | | 64,770 | |
| Investment (income) loss | | | (164 | ) | | | (1,240 | ) | | | (468 | ) | | | 1,804 | |
| Foreign exchange (gain) loss on debt | | | 1,451 | | | | 1,841 | | | | 6,126 | | | | (2,692 | ) |
| Loss (gain) on extinguishment of debt | | | 6,565 | | | | (4,447 | ) | | | 7,494 | | | | (4,447 | ) |
| Loss (gain) on derivative instruments | | | (12,422 | ) | | | (5,129 | ) | | | (1,899 | ) | | | 5,760 | |
| | | | | | | | | | | | | |
| Operating income (loss) | | | 50,420 | | | | 9,843 | | | | 167,743 | | | | (12,799 | ) |
| Add: Depreciation and amortization | | | 14,179 | | | | 13,652 | | | | 56,231 | | | | 54,170 | |
| | | | | | | | | | | | | |
Operating EBITDA(1) | | € | 64,599 | | | € | 23,495 | | | € | 223,974 | | | € | 41,371 | |
| | | | | | | | | | | | | |
| | | |
| (1) | | Operating EBITDA does not reflect the impact of a number of items that affect our net income (loss) attributable to common shareholders, 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) attributable to common shareholders 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. |
COMPUTATION OF RESTRICTED GROUP OPERATING EBITDA
(Unaudited)
(In thousands of Euros)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Year Ended | |
| | | December 31, | | | December 31, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
Restricted Group | | | | | | | | | | | | | | | | |
Net income (loss) attributable to common shareholders(1) | | € | 22,565 | | | € | (511 | ) | | € | 62,327 | | | € | (35,927 | ) |
| Income taxes (benefits) | | | (297 | ) | | | (1,016 | ) | | | (8,651 | ) | | | (183 | ) |
| Interest expense | | | 7,425 | | | | 6,576 | | | | 31,498 | | | | 27,351 | |
| Investment (income) loss | | | (1,333 | ) | | | (1,740 | ) | | | (5,103 | ) | | | (5,002 | ) |
| Foreign exchange (gain) loss on debt | | | 1,451 | | | | 1,841 | | | | 6,126 | | | | (2,692 | ) |
| Loss (gain) on extinguishment of debt | | | 6,565 | | | | (4,447 | ) | | | 7,494 | | | | (4,447 | ) |
| | | | | | | | | | | | | |
| Operating income (loss) | | | 36,376 | | | | 703 | | | | 93,691 | | | | (20,900 | ) |
| Add: Depreciation and amortization | | | 7,680 | | | | 7,103 | | | | 30,270 | | | | 27,704 | |
| | | | | | | | | | | | | |
Operating EBITDA(2) | | € | 44,056 | | | € | 7,806 | | | € | 123,961 | | | € | 6,804 | |
| | | | | | | | | | | | | |
| | | |
| (1) | | For the Restricted Group, net income (loss) attributable to common shareholders and net income (loss) are the same. |
| |
| (2) | | Operating EBITDA does not reflect the impact of a number of items that affect our net income (loss) attributable to common shareholders, 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) attributable to common shareholders 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. |
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