8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

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

Date of Report (Date of earliest event reported): 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.

 

MERCER INTERNATIONAL INC.

/s/ David M. Gandossi

David M. Gandossi
Chief Financial Officer

Date: February 6, 2014