UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 6, 2014

 

 

MERCER INTERNATIONAL INC.

(Exact name of Registrant as specified in its charter)

 

 

Washington

(State or other jurisdiction of incorporation or organization)

 

000-51826		47-0956945
(Commission File Number)		(I.R.S. Employer Identification No.)

Suite 1120, 700 West Pender Street, Vancouver, British Columbia, Canada V6C 1G8

(Address of Office)

(604) 684-1099

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

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

 

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

 

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

 

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

 

 

 

---

Item 7.01.

Regulation FD Disclosure.

The information furnished under Item 7.01 of this Current Report on Form 8-K (the “Current Report”) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Effective October 1, 2013, Mercer International Inc. (the “Company”) changed its reporting currency from the Euro to the U.S. dollar. The Company’s management is of the opinion that a U.S. dollar reporting currency enhances communication and understanding with the Company’s shareholders, analysts and other stakeholders and improves comparability of the Company’s financial information with its competitors and peer group companies. Consolidated financial statements issued prior to October 1, 2013 were prepared using the Euro as the reporting currency; however, subsequent to October 1, 2013, both current and historical financial information have been translated to U.S. dollars in accordance with the method described below. The Company’s functional currency has not changed.

The Company translates foreign assets and liabilities of its subsidiaries, other than those denominated in U.S. dollars, at the rate of exchange at its balance sheet date. Revenues and expenses are translated at the average rate of exchange throughout the year. Transaction gains and losses related to net assets primarily located in Canada and Germany are recognized as unrealized foreign currency translation adjustments within accumulated other comprehensive income in shareholders’ equity, until all of the investment in the subsidiaries is sold or liquidated. The translation adjustments do not recognize the effect of income tax when the Company expects earnings of the foreign subsidiary to be indefinitely reinvested. The income tax effect on currency translation adjustments related to foreign subsidiaries that are not considered indefinitely reinvested is recorded as a component of deferred taxes in the Company’s consolidated balance sheet with an offset to other comprehensive income. Gains and losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity’s functional currency) are included in costs and expenses in the Company’s consolidated statement of operations. Where inter-company loans are of a long-term investment nature, the after-tax effect of exchange rate changes are included as an unrealized foreign currency translation adjustment within accumulated other comprehensive income in shareholders’ equity.

The indenture governing the Company’s 9.5% senior notes due 2017 requires the Company to provide the results of operations and financial condition of the Company and its restricted subsidiaries under the indenture, collectively referred to as the “Restrictive Group”. Currently, the Restricted Group is comprised of the Company, the Rosenthal and Celgar mills and certain holding subsidiaries. The Restricted Group excludes the Company’s Stendal mill.

The Company is filing this Current Report to present selected financial information for historical reporting periods prior to October 1, 2013 that have been translated to reflect the U.S. dollar as the Company’s reporting currency. This Current Report is being filed in response to requests from certain analysts and securities holders for historical information respecting the effect of the reporting currency change on the Company’s historical financial information.

---

This Current Report is being furnished only for the purposes noted above, and does not modify or update the disclosures of any previous periodic report. This Current Report does not reflect any subsequent information or events other than the change in the Company’s reporting currency.

The summary selected financial information presented is unaudited and is not complete. The summary selected financial information presented is qualified in its entirety by and should be read together with the audited consolidated financial statements and accompanying notes included in the Company’s annual reports on Form 10-K for the fiscal years ended December 31, 2012 and December 31, 2011 and the interim unaudited consolidated financial statements and accompanying notes included in the Company’s quarterly reports on Form 10-Q for the relevant periods.

Certain information included in this Current Report 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. Words such as “expects”, “anticipates”, “projects”, “intends”, “designed”, “will”, “believes”, “estimates”, “may”, “could” and variations of such words and similar expressions are intended to identify such forward-looking statements. Among those factors which could cause actual results to differ materially are the following: the highly cyclical nature of the Company’s business, raw material costs, the Company’s level of indebtedness, competition, foreign exchange and interest rate fluctuations, the Company’s use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to the Company’s production, market conditions and other risk factors listed from time to time in the Company’s reports filed with the Securities and Exchange Commission.

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Balance Sheets

(Unaudited)

(In thousands of U.S. dollars)

 

		September 30, 2013
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
ASSETS
Current assets
Cash and cash equivalents		$	101,607			$	79,976			$	—			$	181,583
Receivables			71,182				60,508				—				131,690
Inventories			93,020				72,912				—				165,932
Prepaid expenses and other			10,796				5,979				—				16,775
Deferred income tax			3,004				2,728				—				5,732
Total current assets			279,609				222,103				—				501,712
Long-term assets
Property, plant and equipment			431,551				620,602				—				1,052,153
Deferred note issuance and other			10,184				8,950				—				19,134
Deferred income tax			11,809				7,444				—				19,253
Due from unrestricted group			148,061				—				(148,061	)			—
Total assets		$	881,214			$	859,099			$	(148,061	)		$	1,592,252
LIABILITIES
Current liabilities
Accounts payable and other		$	70,194			$	69,416			$	—			$	139,610
Pension and other post-retirement benefit obligations			1,038				—				—				1,038
Debt			737				58,545				—				59,282
Total current liabilities			71,969				127,961				—				199,930
Long-term liabilities
Debt			343,318				572,185				—				915,503
Due to restricted group			—				148,061				(148,061	)			—
Unrealized interest rate derivative losses			—				49,750				—				49,750
Pension and other post-retirement benefit obligations			41,599				—				—				41,599
Capital leases and other			8,346				11,285				—				19,631
Deferred income tax			10,339				—				—				10,339
Total liabilities			475,571				909,242				(148,061	)			1,236,752
EQUITY
Total shareholders’ equity (deficit)			405,643				(41,140	)			—				364,503
Noncontrolling interest (deficit)			—				(9,003	)			—				(9,003	)
Total liabilities and equity		$	881,214			$	859,099			$	(148,061	)		$	1,592,252

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Balance Sheets

(Unaudited)

(In thousands of U.S. dollars)

 

		June 30, 2013
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
ASSETS
Current assets
Cash and cash equivalents		$	90,376			$	84,521			$	—			$	174,897
Receivables			64,625				61,608				—				126,233
Inventories			83,523				57,232				—				140,755
Prepaid expenses and other			10,256				6,436				—				16,692
Deferred income tax			2,833				2,126				—				4,959
Total current assets			251,613				211,923				—				463,536
Long-term assets
Property, plant and equipment			425,566				600,686				—				1,026,252
Deferred note issuance and other			8,889				7,543				—				16,432
Deferred income tax			11,548				7,652				—				19,200
Due from unrestricted group			139,348				—				(139,348	)			—
Total assets		$	836,964			$	827,804			$	(139,348	)		$	1,525,420
LIABILITIES
Current liabilities
Accounts payable and other		$	64,405			$	60,494			$	—			$	124,899
Pension and other post-retirement benefit obligations			1,015				—				—				1,015
Debt			1,415				56,279				—				57,694
Total current liabilities			66,835				116,773				—				183,608
Long-term liabilities
Debt			306,884				577,909				—				884,793
Due to restricted group			—				139,348				(139,348	)			—
Unrealized interest rate derivative losses			—				51,777				—				51,777
Pension and other post-retirement benefit obligations			40,537				—				—				40,537
Capital leases and other			7,617				10,075				—				17,692
Deferred income tax			8,966				—				—				8,966
Total liabilities			430,839				895,882				(139,348	)			1,187,373
EQUITY
Total shareholders’ equity (deficit)			406,125				(48,460	)			—				357,665
Noncontrolling interest (deficit)			—				(19,618	)			—				(19,618	)
Total liabilities and equity		$	836,964			$	827,804			$	(139,348	)		$	1,525,420

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Balance Sheets

(Unaudited)

(In thousands of U.S. dollars)

 

		March 31, 2013
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
ASSETS
Current assets
Cash and cash equivalents		$	66,820			$	75,295			$	—			$	142,115
Receivables			89,822				64,518				—				154,340
Inventories			92,556				52,440				—				144,996
Prepaid expenses and other			6,207				4,445				—				10,652
Deferred income tax			2,813				2,098				—				4,911
Total current assets			258,218				198,796				—				457,014
Long-term assets
Property, plant and equipment			437,217				593,943				—				1,031,160
Deferred note issuance and other			8,119				6,806				—				14,925
Deferred income tax			11,843				7,554				—				19,397
Due from unrestricted group			134,303				—				(134,303	)			—
Total assets		$	849,700			$	807,099			$	(134,303	)		$	1,522,496
LIABILITIES
Current liabilities
Accounts payable and other		$	67,662			$	57,734			$	—			$	125,396
Pension and other post-retirement benefit obligations			1,050				—				—				1,050
Debt			15,183				55,552				—				70,735
Total current liabilities			83,895				113,286				—				197,181
Long-term liabilities
Debt			284,361				560,856				—				845,217
Due to restricted group			—				134,303				(134,303	)			—
Unrealized interest rate derivative losses			—				58,448				—				58,448
Pension and other post-retirement benefit obligations			41,674				—				—				41,674
Capital leases and other			7,828				10,006				—				17,834
Deferred income tax			7,930				—				—				7,930
Total liabilities			425,688				876,899				(134,303	)			1,168,284
EQUITY
Total shareholders’ equity (deficit)			424,012				(49,392	)			—				374,620
Noncontrolling interest (deficit)			—				(20,408	)			—				(20,408	)
Total liabilities and equity		$	849,700			$	807,099			$	(134,303	)		$	1,522,496

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Balance Sheets

(Unaudited)

(In thousands of U.S. dollars)

 

		December 31, 2012
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
ASSETS
Current assets
Cash and cash equivalents		$	48,407			$	89,032			$	—			$	137,439
Receivables			80,708				64,442				—				145,150
Inventories			98,606				57,373				—				155,979
Prepaid expenses and other			7,661				2,764				—				10,425
Deferred income tax			2,885				3,002				—				5,887
Total current assets			238,267				216,613				—				454,880
Long-term assets
Property, plant and equipment			455,293				611,213				—				1,066,506
Deferred note issuance and other			8,712				7,324				—				16,036
Deferred income tax			12,102				11,057				—				23,159
Due from unrestricted group			134,897				—				(134,897	)			—
Total assets		$	849,271			$	846,207			$	(134,897	)		$	1,560,581
LIABILITIES
Current liabilities
Accounts payable and other		$	55,517			$	63,082			$	—			$	118,599
Pension and other post-retirement benefit obligations			1,072				—				—				1,072
Debt			7,465				52,740				—				60,205
Total current liabilities			64,054				115,822				—				179,876
Long-term liabilities
Debt			285,079				592,701				—				877,780
Due to restricted group			—				134,897				(134,897	)			—
Unrealized interest rate derivative losses			—				66,819				—				66,819
Pension and other post-retirement benefit obligations			42,378				—				—				42,378
Capital leases and other			8,008				10,367				—				18,375
Deferred income tax			7,591				—				—				7,591
Total liabilities			407,110				920,606				(134,897	)			1,192,819
EQUITY
Total shareholders’ equity (deficit)			442,161				(53,057	)			—				389,104
Noncontrolling interest (deficit)			—				(21,342	)			—				(21,342	)
Total liabilities and equity		$	849,271			$	846,207			$	(134,897	)		$	1,560,581

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Balance Sheets

(Unaudited)

(In thousands of U.S. dollars)

 

		September 30, 2012
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
ASSETS
Current assets
Cash and cash equivalents		$	70,738			$	91,465			$	—			$	162,203
Receivables			80,110				72,402				—				152,512
Inventories			89,784				55,945				—				145,729
Prepaid expenses and other			9,938				3,179				—				13,117
Deferred income tax			6,815				4,802				—				11,617
Total current assets			257,385				227,793				—				485,178
Long-term assets
Property, plant and equipment			458,062				590,552				—				1,048,614
Deferred note issuance and other			7,812				7,517				—				15,329
Deferred income tax			11,407				8,854				—				20,261
Due from unrestricted group			128,548				—				(128,548	)			—
Total assets		$	863,214			$	834,716			$	(128,548	)		$	1,569,382
LIABILITIES
Current liabilities
Accounts payable and other		$	80,574			$	67,318			$	—			$	147,892
Pension and other post-retirement benefit obligations			1,014				—				—				1,014
Debt			1,399				51,424				—				52,823
Total current liabilities			82,987				118,742				—				201,729
Long-term liabilities
Debt			285,060				577,310				—				862,370
Due to restricted group			—				128,548				(128,548	)			—
Unrealized interest rate derivative losses			—				68,172				—				68,172
Pension and other post-retirement benefit obligations			41,638				—				—				41,638
Capital leases and other			8,186				9,040				—				17,226
Deferred income tax			6,987				—				—				6,987
Total liabilities			424,858				901,812				(128,548	)			1,198,122
EQUITY
Total shareholders’ equity (deficit)			438,356				(47,249	)			—				391,107
Noncontrolling interest (deficit)			—				(19,847	)			—				(19,847	)
Total liabilities and equity		$	863,214			$	834,716			$	(128,548	)		$	1,569,382

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Balance Sheets

(Unaudited)

(In thousands of U.S. dollars)

 

		June 30, 2012
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
ASSETS
Current assets
Cash and cash equivalents		$	63,462			$	102,346			$	—			$	165,808
Marketable securities			12,923				—				—				12,923
Receivables			70,219				61,431				—				131,650
Inventories			89,388				60,373				—				149,761
Prepaid expenses and other			7,282				3,602				—				10,884
Deferred income tax			6,232				4,246				—				10,478
Total current assets			249,506				231,998				—				481,504
Long-term assets
Property, plant and equipment			450,516				584,323				—				1,034,839
Deferred note issuance and other			8,087				7,825				—				15,912
Deferred income tax			11,246				9,210				—				20,456
Due from unrestricted group			123,856				—				(123,856	)			—
Total assets		$	843,211			$	833,356			$	(123,856	)		$	1,552,711
LIABILITIES
Current liabilities
Accounts payable and other		$	67,369			$	64,225			$	—			$	131,594
Pension and other post-retirement benefit obligations			979				—				—				979
Debt			1,378				44,338				—				45,716
Total current liabilities			69,726				108,563				—				178,289
Long-term liabilities
Debt			285,739				593,610				—				879,349
Due to restricted group			—				123,856				(123,856	)			—
Unrealized interest rate derivative losses			—				65,609				—				65,609
Pension and other post-retirement benefit obligations			40,282				—				—				40,282
Capital leases and other			8,183				8,859				—				17,042
Deferred income tax			4,934				—				—				4,934
Total liabilities			408,864				900,497				(123,856	)			1,185,505
EQUITY
Total shareholders’ equity (deficit)			434,347				(46,603	)			—				387,744
Noncontrolling interest (deficit)			—				(20,538	)			—				(20,538	)
Total liabilities and equity		$	843,211			$	833,356			$	(123,856	)		$	1,552,711

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Balance Sheets

(Unaudited)

(In thousands of U.S. dollars)

 

		March 31, 2012
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
ASSETS
Current assets
Cash and cash equivalents		$	71,464			$	94,139			$	—			$	165,603
Marketable securities			16,279				—				—				16,279
Receivables			85,064				70,673				—				155,737
Inventories			89,674				54,839				—				144,513
Prepaid expenses and other			6,185				3,615				—				9,800
Deferred income tax			6,808				2,095				—				8,903
Total current assets			275,474				225,361				—				500,835
Long-term assets
Property, plant and equipment			464,981				619,256				—				1,084,237
Deferred note issuance and other			7,492				8,202				—				15,694
Deferred income tax			11,853				5,060				—				16,913
Due from unrestricted group			127,524				—				(127,524	)			—
Total assets		$	887,324			$	857,879			$	(127,524	)		$	1,617,679
LIABILITIES
Current liabilities
Accounts payable and other		$	73,495			$	60,812			$	—			$	134,307
Pension and other post-retirement benefit obligations			999				—				—				999
Debt			1,451				46,669				—				48,120
Total current liabilities			75,945				107,481				—				183,426
Long-term liabilities
Debt			292,816				624,194				—				917,010
Due to restricted group			—				127,524				(127,524	)			—
Unrealized interest rate derivative losses			—				68,690				—				68,690
Pension and other post-retirement benefit obligations			41,147				—				—				41,147
Capital leases and other			8,586				8,276				—				16,862
Deferred income tax			5,694				—				—				5,694
Total liabilities			424,188				936,165				(127,524	)			1,232,829
EQUITY
Total shareholders’ equity (deficit)			463,136				(55,645	)			—				407,491
Noncontrolling interest (deficit)			—				(22,641	)			—				(22,641	)
Total liabilities and equity		$	887,324			$	857,879			$	(127,524	)		$	1,617,679

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Balance Sheets

(Unaudited)

(In thousands of U.S. dollars)

 

		December 31, 2011
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
ASSETS
Current assets
Cash and cash equivalents		$	58,152			$	78,147			$	—			$	136,299
Marketable securities			15,847				—				—				15,847
Receivables			81,331				74,965				—				156,296
Inventories			92,999				63,364				—				156,363
Prepaid expenses and other			6,511				4,077				—				10,588
Deferred income tax			6,718				2,038				—				8,756
Total current assets			261,558				222,591				—				484,149
Long-term assets
Property, plant and equipment			459,111				605,856				—				1,064,967
Deferred note issuance and other			7,746				6,216				—				13,962
Deferred income tax			11,016				4,923				—				15,939
Due from unrestricted group			115,222				—				(115,222	)			—
Total assets		$	854,653			$	839,586			$	(115,222	)		$	1,579,017
LIABILITIES
Current liabilities
Accounts payable and other		$	64,620			$	64,633			$	—			$	129,253
Pension and other post-retirement benefit obligations			981				—				—				981
Debt			1,411				31,889				—				33,300
Total current liabilities			67,012				96,522				—				163,534
Long-term liabilities
Debt			288,477				630,479				—				918,956
Due to restricted group			—				115,222				(115,222	)			—
Unrealized interest rate derivative losses			—				67,962				—				67,962
Pension and other post-retirement benefit obligations			40,469				—				—				40,469
Capital leases and other			8,566				8,366				—				16,932
Deferred income tax			3,353				—				—				3,353
Total liabilities			407,877				918,551				(115,222	)			1,211,206
EQUITY
Total shareholders’ equity (deficit)			446,776				(55,444	)			—				391,332
Noncontrolling interest (deficit)			—				(23,521	)			—				(23,521	)
Total liabilities and equity		$	854,653			$	839,586			$	(115,222	)		$	1,579,017

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Statements of Operations

(Unaudited)

(In thousands of U.S. dollars)

 

		Three Months Ended September 30, 2013
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
Revenues
Pulp		$	140,193			$	106,464			$	—			$	246,657
Energy and chemicals			7,871				14,690				—				22,561
			148,064				121,154				—				269,218
Operating costs			120,408				99,752				—				220,160
Operating depreciation and amortization			10,777				8,617				—				19,394
Selling, general and administrative expenses			7,433				5,072				—				12,505
Restructuring expenses			3,855				—				—				3,855
			142,473				113,441				—				255,914
Operating income (loss)			5,591				7,713				—				13,304
Other income (expense)
Interest expense			(8,204	)			(11,232	)			2,182				(17,254	)
Gain (loss) on derivative instruments			(1,400	)			4,045				—				2,645
Other income (expense)			2,371				37				(2,182	)			226
Total other income (expense)			(7,233	)			(7,150	)			—				(14,383	)
Income (loss) before income taxes			(1,642	)			563				—				(1,079	)
Income tax benefit (provision)			(1,439	)			192				—				(1,247	)
Net income (loss)			(3,081	)			755				—				(2,326	)
Less: net income attributable to noncontrolling interest			—				(640	)			—				(640	)
Net income (loss) attributable to common shareholders		$	(3,081	)		$	115			$	—			$	(2,966	)

 

		Three Months Ended June 30, 2013
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
Revenues
Pulp		$	137,957			$	115,209			$	—			$	253,166
Energy and chemicals			7,886				13,648				—				21,534
			145,843				128,857				—				274,700
Operating costs			135,425				108,938				—				244,363
Operating depreciation and amortization			10,791				8,476				—				19,267
Selling, general and administrative expenses			7,375				4,864				—				12,239
			153,591				122,278				—				275,869
Operating income (loss)			(7,748	)			6,579				—				(1,169	)
Other income (expense)
Interest expense			(7,685	)			(11,639	)			2,154				(17,170	)
Gain (loss) on derivative instruments			(551	)			7,472				—				6,921
Other income (expense)			2,118				44				(2,154	)			8
Total other income (expense)			(6,118	)			(4,123	)			—				(10,241	)
Income (loss) before income taxes			(13,866	)			2,456				—				(11,410	)
Income tax benefit (provision)			(795	)			(20	)			—				(815	)
Net income (loss)			(14,661	)			2,436				—				(12,225	)
Less: net income attributable to noncontrolling interest			—				(790	)			—				(790	)
Net income (loss) attributable to common shareholders		$	(14,661	)		$	1,646			$	—			$	(13,015	)

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Statements of Operations

(Unaudited)

(In thousands of U.S. dollars)

 

		Three Months Ended March 31, 2013
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
Revenues
Pulp		$	132,350			$	105,468			$	—			$	237,818
Energy and chemicals			9,361				14,606				—				23,967
			141,711				120,074				—				261,785
Operating costs			118,200				99,784				—				217,984
Operating depreciation and amortization			10,815				8,635				—				19,450
Selling, general and administrative expenses			7,547				4,197				—				11,744
			136,562				112,616				—				249,178
Operating income (loss)			5,149				7,458				—				12,607
Other income (expense)
Interest expense			(7,745	)			(11,791	)			2,176				(17,360	)
Gain (loss) on derivative instruments			(456	)			6,820				—				6,364
Other income (expense)			2,027				57				(2,176	)			(92	)
Total other income (expense)			(6,174	)			(4,914	)			—				(11,088	)
Income (loss) before income taxes			(1,025	)			2,544				—				1,519
Income tax benefit (provision)			(1,342	)			197				—				(1,145	)
Net income (loss)			(2,367	)			2,741				—				374
Less: net income attributable to noncontrolling interest			—				(935	)			—				(935	)
Net income (loss) attributable to common shareholders		$	(2,367	)		$	1,806			$	—			$	(561	)

 

		Three Months Ended December 31, 2012
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
Revenues
Pulp		$	126,666			$	95,814			$	—			$	222,480
Energy and chemicals			9,184				13,133				—				22,317
			135,850				108,947				—				244,797
Operating costs			111,815				92,855				—				204,670
Operating depreciation and amortization			9,664				8,496				—				18,160
Selling, general and administrative expenses			8,199				4,284				—				12,483
			129,678				105,635				—				235,313
Operating income (loss)			6,172				3,312				—				9,484
Other income (expense)
Interest expense			(7,360	)			(12,455	)			2,005				(17,810	)
Gain (loss) on derivative instruments			80				3,019				—				3,099
Other income (expense)			2,099				62				(2,005	)			156
Total other income (expense)			(5,181	)			(9,374	)			—				(14,555	)
Income (loss) before income taxes			991				(6,062	)			—				(5,071	)
Income tax benefit (provision)			(2,812	)			(275	)			—				(3,087	)
Net income (loss)			(1,821	)			(6,337	)			—				(8,158	)
Less: net loss attributable to noncontrolling interest			—				1,495				—				1,495
Net income (loss) attributable to common shareholders		$	(1,821	)		$	(4,842	)		$	—			$	(6,663	)

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Statements of Operations

(Unaudited)

(In thousands of U.S. dollars)

 

		Three Months Ended September 30, 2012
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
Revenues
Pulp		$	141,388			$	115,819			$	—			$	257,207
Energy and chemicals			8,707				14,013				—				22,720
			150,095				129,832				—				279,927
Operating costs			137,898				101,986				—				239,884
Operating depreciation and amortization			10,415				8,349				—				18,764
Selling, general and administrative expenses			8,016				4,533				—				12,549
			156,329				114,868				—				271,197
Operating income (loss)			(6,234	)			14,964				—				8,730
Other income (expense)
Interest expense			(7,529	)			(11,861	)			1,753				(17,637	)
Gain (loss) on derivative instruments			428				(1,594	)			—				(1,166	)
Other income (expense)			2,108				319				(1,753	)			674
Total other income (expense)			(4,993	)			(13,136	)			—				(18,129	)
Income (loss) before income taxes			(11,227	)			1,828				—				(9,399	)
Income tax benefit (provision)			(1,497	)			(907	)			—				(2,404	)
Net income (loss)			(12,724	)			921				—				(11,803	)
Less: net income attributable to noncontrolling interest			—				(691	)			—				(691	)
Net income (loss) attributable to common shareholders		$	(12,724	)		$	230			$	—			$	(12,494	)

 

		Three Months Ended June 30, 2012
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
Revenues
Pulp		$	133,039			$	105,493			$	—			$	238,532
Energy and chemicals			8,267				14,851				—				23,118
			141,306				120,344				—				261,650
Operating costs			121,548				86,908				—				208,456
Operating depreciation and amortization			10,020				8,622				—				18,642
Selling, general and administrative expenses			6,922				4,124				—				11,046
			138,490				99,654				—				238,144
Operating income (loss)			2,816				20,690				—				23,506
Other income (expense)
Interest expense			(7,617	)			(11,944	)			1,775				(17,786	)
Gain (loss) on derivative instruments			2,101				(371	)			—				1,730
Other income (expense)			1,176				128				(1,775	)			(471	)
Total other income (expense)			(4,340	)			(12,187	)			—				(16,527	)
Income (loss) before income taxes			(1,524	)			8,503				—				6,979
Income tax benefit (provision)			(1,803	)			(1,125	)			—				(2,928	)
Net income (loss)			(3,327	)			7,378				—				4,051
Less: net income attributable to noncontrolling interest			—				(2,103	)			—				(2,103	)
Net income (loss) attributable to common shareholders		$	(3,327	)		$	5,275			$	—			$	1,948

---

MERCER INTERNATIONAL INC.

RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE

Combined Condensed Statements of Operations

(Unaudited)

(In thousands of U.S. dollars)

 

		Three Months Ended March 31, 2012
		Restricted Group				Unrestricted Subsidiaries				Eliminations				Consolidated Group
Revenues
Pulp		$	144,112			$	117,439			$	—			$	261,551
Energy and chemicals			10,480				14,331				—				24,811
			154,592				131,770				—				286,362
Operating costs			128,962				104,172				—				233,134
Operating depreciation and amortization			10,019				8,717				—				18,736
Selling, general and administrative expenses			8,551				4,639				—				13,190
			147,532				117,528				—				265,060
Operating income (loss)			7,060				14,242				—				21,302
Other income (expense)
Interest expense			(7,619	)			(12,674	)			1,759				(18,534	)
Gain (loss) on derivative instruments			—				1,149				—				1,149
Other income (expense)			1,082				139				(1,759	)			(538	)
Total other income (expense)			(6,537	)			(11,386	)			—				(17,923	)
Income (loss) before income taxes			523				2,856				—				3,379
Income tax benefit (provision)			(938	)			(22	)			—				(960	)
Net income (loss)			(415	)			2,834				—				2,419
Less: net income attributable to noncontrolling interest			—				(880	)			—				(880	)
Net income (loss) attributable to common shareholders		$	(415	)		$	1,954			$	—			$	1,539

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: February 6, 2014