MERCER INTERNATIONAL INC. - FORM 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

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