33 NASDAQ:MERC | TSX:MRI.U | www.mercerint.com Reconciling Net Income (Loss) to Operating EBITDA Note: For other reconciliations of Net Income (Loss) to Operating EBITDA in periods not shown here, please refer to that period’s respective Form 10-Q or 10-K, which can be found on our website (www.mercerint.com) Note: Some numbers may not add due to rounding in US $ millions 2012 2013 Q2 2013 Q2 2014 Net Income (Loss) Attributable to Common Shareholders ($15.7) ($26.4) ($13.6) $21.6 Add: Net Income Attributable to Non-Controlling Interest $2.2 $0.6 $1.7 $4.3 Add: Income Tax Provision (Benefit) $9.4 $9.2 $2.0 $6.4 Add: Interest Expense $71.8 $69.2 $34.5 $34.6 Add: Loss (Gain) on Derivative Instruments ($4.8) ($19.7) ($13.3) ($5.8) Add: Other Expense (Income) $0.2 ($1.2) $0.1 $0.1 Operating Income (Loss) $63.0 $31.7 $11.4 $61.3 Add: Depreciation and Amortization $74.7 $78.6 $38.9 $39.6 Operating EBITDA $137.7 $110.3 $50.3 $100.9 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 (loss) 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) attributable to common shareholders, including financing costs and the effect of derivative instruments. Operating EBITDA is not a measure of financial performance under the accounting principles generally accepted in the United States of America (“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. Operating EBITDA should only be considered as a supplemental performance measure and should not be considered as a measure of liquidity or cash available to us to invest in the growth of our business. Because all companies do not calculate Operating EBITDA in the same manner, Operating EBITDA as calculated by us may differ from Operating EBITDA or EBITDA as calculated by other companies. We compensate for these limitations by using Operating EBITDA as a supplemental measure of our performance and by relying primarily on our GAAP financial statements. | 
