þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from ____________ to ____________ |
Washington State or other jurisdiction of incorporation or organization | 47-0956945 IRS Employer Identification No. |
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $1.00 | NASDAQ Global Market |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
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Years Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||||
(€/$) | (€/$) | |||||||||||||||||||||||||||||||||||||||
End of period | 0.6848 | 0.7577 | 0.8445 | 0.7942 | 0.7938 | 0.7184 | 0.6848 | 0.7577 | 0.8445 | 0.7942 | ||||||||||||||||||||||||||||||
High for period | 0.7750 | 0.8432 | 0.8571 | 0.8473 | 0.9652 | 0.8035 | 0.7750 | 0.8432 | 0.8571 | 0.8473 | ||||||||||||||||||||||||||||||
Low for period | 0.6729 | 0.7504 | 0.7421 | 0.7339 | 0.7938 | 0.6246 | 0.6729 | 0.7504 | 0.7421 | 0.7339 | ||||||||||||||||||||||||||||||
Average for period | 0.7294 | 0.7962 | 0.8033 | 0.8040 | 0.8838 | 0.6801 | 0.7294 | 0.7962 | 0.8033 | 0.8040 | ||||||||||||||||||||||||||||||
(C$/$) | (C$/$) | |||||||||||||||||||||||||||||||||||||||
End of period | 0.9881 | 1.1653 | 1.1659 | 1.2034 | 1.2923 | 1.2240 | 0.9881 | 1.1653 | 1.1659 | 1.2034 | ||||||||||||||||||||||||||||||
High for period | 0.9168 | 1.0989 | 1.1507 | 1.1775 | 1.2923 | 0.9717 | 0.9168 | 1.0989 | 1.1507 | 1.1775 | ||||||||||||||||||||||||||||||
Low for period | 1.1852 | 1.1726 | 1.2704 | 1.3970 | 1.5751 | 1.2971 | 1.1852 | 1.1726 | 1.2704 | 1.3970 | ||||||||||||||||||||||||||||||
Average for period | 1.0740 | 1.1344 | 1.2116 | 1.3017 | 1.3916 | 1.0669 | 1.0740 | 1.1344 | 1.2116 | 1.3017 |
Years Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||||
(C$/€) | (C$/€) | |||||||||||||||||||||||||||||||||||||||
End of period | 1.4428 | 1.5377 | 1.3805 | 1.6292 | 1.6280 | 1.7046 | 1.4428 | 1.5377 | 1.3805 | 1.6292 | ||||||||||||||||||||||||||||||
High for period | 1.3448 | 1.3523 | 1.3576 | 1.5431 | 1.4967 | 1.4489 | 1.3448 | 1.3523 | 1.3576 | 1.5431 | ||||||||||||||||||||||||||||||
Low for period | 1.5628 | 1.5377 | 1.6400 | 1.6915 | 1.6643 | 1.7316 | 1.5628 | 1.5377 | 1.6400 | 1.6915 | ||||||||||||||||||||||||||||||
Average for period | 1.4690 | 1.4244 | 1.5095 | 1.6169 | 1.5826 | 1.5603 | 1.4690 | 1.4244 | 1.5095 | 1.6169 |
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• | references to “we”, “our”, “us”, the “Company” or “Mercer” mean Mercer International Inc. and its subsidiaries, unless the context clearly suggests otherwise, and references to “Mercer Inc.” mean Mercer International Inc. excluding its subsidiaries; |
• | references to “ADMTs” mean air-dried metric tonnes; | |
• | information is provided as of December 31, | |
• | all references to monetary amounts are to “Euros”, the lawful currency adopted by most members of the European Union, unless otherwise stated; and | |
• | ‘‘€” refers to Euros; “$” refers to U.S. dollars; and “C$” refers to Canadian dollars. |
• | Rosenthal mill. Our wholly-owned subsidiary, Rosenthal, owns and operates a modern, efficient ISO 9002 certified NBSK pulp mill that has a current annual production capacity of approximately 325,000 ADMTs. The Rosenthal mill is located near the town of Blankenstein, Germany. | |
• | Stendal mill. Our 70.6% owned subsidiary, Stendal, | |
• | Celgar mill. Our wholly owned subsidiary, Celgar, owns and operates the Celgar mill, a modern, efficient ISO 9001 certified NBSK pulp mill |
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• | Modern | |
• | Customer Proximity and Service.We are the only producer of market pulp in Germany, which is the largest pulp import market in Europe. Due to the proximity of our German mills to most of our European customers, we benefit from lower transportation costs relative to our major competitors. Our Celgar mill, located in | |
• |
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Renewable and Surplus Energy.Our modern mills generate electricity and steam in their boilers and are generally energy self-sufficient. Such energy is primarily produced from wood residuals which are a renewable carbon neutral source. This has permitted our German mills to benefit from the sales of emission allowances. All of our mills also generate surplus energy which we sell to third | ||
• | Advantageous Capital Investments and Financing. Our German mills are eligible to receive government grants in respect of qualifying capital investments. Over the last nine years, our German mills have benefited from approximately €383.1 million of such government grants. These grants are not reported in our income but reduce the cost basis of the assets purchased when the grants are received. During the last nine years, capital investments at our German mills have reduced the amount of overall wastewater fees that would otherwise be payable by over €43 million. Further, our Stendal mill benefits from German governmental guarantees of its project financing which permitted it to obtain better credit terms and lower interest costs than would otherwise be available. The project debt of Stendal matures in 2017 and is non-recourse to our other operations and Mercer Inc. |
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• | Competitive Fiber Supply.Although fiber is cyclical in both price and supply, there is a significant amount of high-quality fiber within a close radius of each of our mills. This fiber supply, combined with our purchasing power, enables us to enter into contracts and arrangements which have generally provided us with a competitive fiber supply. |
• | Focusing on NBSK Market Pulp.We focus on NBSK pulp because it is a premium grade kraft pulp and generally obtains the highest price relative to other kraft pulps. Although demand is cyclical, between 1997 and 2007, worldwide demand for softwood kraft market pulp | |
• | Maximizing Energy Realizations.In | |
• | ||
• | Operating Modern, World-Class Mills. In order to |
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Years Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||
Costs | 2007 | 2006 | 2005(1)(2) | |||||||||||||||||||||
Cash Production Costs | 2008 | 2007 | 2006 | |||||||||||||||||||||
(per ADMT) | (per ADMT) | |||||||||||||||||||||||
Fiber | € | 247 | € | 192 | € | 171 | € | 247 | € | 247 | € | 192 | ||||||||||||
Labor | 43 | 46 | 46 | 36 | 43 | 46 | ||||||||||||||||||
Chemicals | 39 | 42 | 42 | 44 | 39 | 42 | ||||||||||||||||||
Energy | 1 | 7 | 8 | 21 | 18 | 23 | ||||||||||||||||||
Other | 46 | 41 | 40 | 43 | 46 | 41 | ||||||||||||||||||
Total cash production costs | € | 376 | € | 328 | € | 307 | € | 391 | € | 393 | € | 344 | ||||||||||||
(1) | ||
Cost of production per ADMT produced excluding depreciation. |
Years Ended December 31,(1) | Years Ended December 31, | |||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||
Revenues by Geographic Area | ||||||||||||||||||||||||||||
Germany | € | 198,575 | € | 154,388 | € | 91,460 | € | 198,340 | € | 198,575 | € | 154,388 | ||||||||||||||||
China | 159,553 | 141,296 | 82,356 | 131,412 | 159,553 | 141,296 | ||||||||||||||||||||||
Italy | 50,177 | 60,057 | 71,742 | 56,487 | 50,177 | 60,057 | ||||||||||||||||||||||
Other European Union countries | 136,434 | 117,016 | 91,308 | 133,621 | 136,434 | 117,016 | ||||||||||||||||||||||
Other Asia | 58,242 | 75,522 | 56,953 | 65,192 | 58,242 | 75,522 | ||||||||||||||||||||||
North America | 66,229 | 39,761 | 37,643 | 78,718 | 66,229 | 39,761 | ||||||||||||||||||||||
Other countries | 26,639 | 28,586 | 16,191 | 17,146 | 26,639 | 28,586 | ||||||||||||||||||||||
Total | € | 695,849 | € | 616,626 | € | 447,653 | € | 680,916 | € | 695,849 | € | 616,626 | ||||||||||||||||
(1) | ||
Not including Germany or Italy; includes new entrant countries to the European Union from their time of admission. | ||
Excluding intercompany sales volumes of nil, |
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Year Ended | Year Ended | Year Ended | ||||
December 31, 2008 | December 31, 2007 | December 31, 2006 | ||||
(1) | Includes new entrant countries to the European Union from their time of admission. |
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As at December 31, | As at December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||
Properties, net (as shown on consolidated balance sheets) | € | 933,258 | € | 972,143 | € | 1,015,363 | € | 881,704 | € | 933,258 | € | 972,143 | ||||||||||||
Add back: government grants less amortization, deducted | ||||||||||||||||||||||||
from properties | 304,366 | 341,710 | 327,723 | |||||||||||||||||||||
Add back: government grants less amortization, deducted from properties | 290,187 | 304,366 | 341,710 | |||||||||||||||||||||
Properties, gross amount including government grants less amortization | € | 1,237,624 | € | 1,313,853 | € | 1,343,086 | € | 1,171,891 | € | 1,237,624 | € | 1,313,853 | ||||||||||||
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• | if scheduled debt service for two consecutive periods is partially or wholly financed by drawings from the DSRA and as a result the DSRA is less than 331/3% Fully Funded; | |
• | if the DSRA is fully drawn and Stendal exercises its current6-month principal payment deferral right in respect of the next repayment date; and | |
• | failure to meet the Senior Debt/EBITDA Cover Ratio or Annual Debt Ratio as set out above. |
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• | our markets; | |
• | demand and prices for our products; | |
• | raw material costs and supply; | |
• | energy prices, sales and our initiatives to enhance sales of surplus energy; | |
• | capital expenditures; | |
• | the economy; | |
• | foreign exchange rates — particularly the U.S. dollar and Canadian dollar; | |
• | our level of indebtedness; and | |
• | derivatives. |
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• | our ability to obtain additional financing for working capital, capital expenditures, general corporate and other purposes or to fund future operations may not be available on terms favorable to us or at all; | |
• | a significant amount of our operating cash flow is dedicated to the payment of interest and principal on our indebtedness, thereby diminishing funds that would otherwise be available for our operations and for other purposes; | |
• | increasing our vulnerability to current and future adverse economic and industry conditions; | |
• | a substantial decrease in net operating cash flows or increase in our expenses could make it more difficult for us to meet our debt service requirements, which could force us to modify our operations; | |
• | our leveraged capital structure may place us at a competitive disadvantage by hindering our ability to adjust rapidly to changing market conditions or by making us vulnerable to a downturn in our business or the economy in general; | |
• | causing us to offer debt or equity securities on terms that may not be favorable to us or our shareholders; | |
• | limiting our flexibility in planning for, or reacting to, changes and opportunities in our business and our industry; and | |
• | our level of indebtedness increases the possibility that we may be unable to generate cash sufficient to pay the principal or interest due in respect of our indebtedness. |
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• | unlawful discharges to land, air, water and sewers; | |
• | waste collection, storage, transportation and disposal; | |
• | hazardous waste; | |
• | dangerous goods and hazardous materials and the collection, storage, transportation and disposal of such substances; | |
• | theclean-up of unlawful discharges; | |
• | land use planning; | |
• | municipal zoning; and | |
• | employee health and safety. |
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• | sales and marketing; |
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• | reducing operating costs; | |
• | identifying capital projects which provide a high rate of return; and | |
• | prioritizing expenditures and maintaining employee relations. |
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• | unscheduled maintenance outages; | |
• | prolonged power failures; | |
• | equipment failure; | |
• | design error or operator error; | |
• | chemical spill or release; | |
• | explosion of a boiler; | |
• | disruptions in the transportation infrastructure, including roads, bridges, railway tracks and tunnels; | |
• | fires, floods, earthquakes or other natural catastrophes; | |
• | labor difficulties; and | |
• | other operational problems. |
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• | an approximately | |
• | barking and chipping facilities for pulp logs; | |
• | an approximately | |
• | a fiber line, which includes a Kamyr continuous digester and bleaching facilities; | |
• | a pulp machine, which includes a dryer, a cutter and a bailing line; | |
• | an approximately 63,000 square feet finished goods storage area; | |
• | a chemical recovery system, which includes a recovery boiler, evaporation plant and recausticizing plant; | |
• | a fresh water plant; |
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• | a wastewater treatment plant; and | |
• | a power station with a turbine capable of producing 45 |
• | an approximately 920,000 square feet fiber storage area; | |
• | barking and chipping facilities for pulp logs; | |
• | a fiber line, which includes ten Superbatch digester and bleaching facilities; | |
• | a pulp machine, which includes a dryer, a cutter and a bailing line; | |
• | an approximately 108,000 square feet finished goods storage area; | |
• | a recovery line, which includes a recovery boiler, evaporation plant, recausticizing plant and lime kiln; | |
• | a fresh water plant; |
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• | a wastewater treatment plant; and | |
• | a power station with a turbine capable of producing approximately 100 |
• | chip storage facilities consisting of four vertical silos and an asphalt surfaced yard with a capacity of 200,000 cubic meters of chips; | |
• | a woodroom containing debarking and chipping equipment for pulp logs; | |
• | a fiber line, which includes a dual vessel hydraulic digester, pressure knotting and screening, single stage oxygen delignification and a four stage bleach plant; | |
• | two pulp machines, which each include a dryer, a cutter and a bailing line; | |
• | a chemical recovery system, which includes a recovery boiler, evaporation plant, recausticizing area and effluent treatment system; and | |
• | a turbine and generator capable of producing approximately 52 |
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Annual | Annual | |||||||||||||||||||||||||||||||
Production | Years Ended December 31, | Production | Years Ended December 31, | |||||||||||||||||||||||||||||
Capacity(2) | 2007 | 2006 | 2005 | Capacity(1) | 2008 | 2007 | 2006 | |||||||||||||||||||||||||
(ADMTs) | (ADMTs) | |||||||||||||||||||||||||||||||
Pulp Production by Mill(1): | ||||||||||||||||||||||||||||||||
Pulp Production by Mill: | ||||||||||||||||||||||||||||||||
Rosenthal | 325,000 | 326,838 | 306,188 | 316,600 | 325,000 | 328,693 | 326,838 | 306,188 | ||||||||||||||||||||||||
Celgar | 480,000 | 476,243 | 438,855 | 388,956 | 495,000 | 485,893 | 476,243 | 438,855 | ||||||||||||||||||||||||
Stendal | 620,000 | 601,592 | 557,217 | 479,063 | 635,000 | 610,401 | 601,592 | 557,217 | ||||||||||||||||||||||||
Total pulp production | 1,425,000 | 1,404,673 | 1,302,260 | 1,184,619 | 1,455,000 | 1,424,987 | 1,404,673 | 1,302,260 | ||||||||||||||||||||||||
(1) | ||
Capacity is the rated capacity of the plants for the year ended December 31, |
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ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS |
Fiscal Quarter Ended | High | Low | High | Low | ||||||||||||
2006 | ||||||||||||||||
March 31 | $ | 9.45 | $ | 7.46 | ||||||||||||
June 30 | 9.75 | 8.01 | ||||||||||||||
September 30 | 9.90 | 8.22 | ||||||||||||||
December 31 | 12.36 | 9.00 | ||||||||||||||
2007 | ||||||||||||||||
March 31 | 13.74 | 11.19 | $ | 13.74 | $ | 11.19 | ||||||||||
June 30 | 13.39 | 9.51 | 13.39 | 9.51 | ||||||||||||
September 30 | 10.94 | 7.56 | 10.94 | 7.56 | ||||||||||||
December 31 | 10.10 | 6.99 | 10.10 | 6.99 | ||||||||||||
2008 | ||||||||||||||||
Period ended February 21 | 9.02 | 6.91 | ||||||||||||||
March 31 | $ | 9.02 | $ | 6.70 | ||||||||||||
June 30 | 8.48 | 6.31 | ||||||||||||||
September 30 | 7.72 | 3.17 | ||||||||||||||
December 31 | 3.66 | 0.95 |
Number of Shares to be | Weighted-average | Number of Shares | Number of Shares to be | Weighted-average | Number of Shares | |||||||||||||||||||
Issued Upon Exercise | Exercise Price of | Available for Future | Issued Upon Exercise | Exercise Price of | Available for Future | |||||||||||||||||||
of Outstanding Options | Outstanding Options | Issuance Under Plan | of Outstanding Options | Outstanding Options | Issuance Under Plan | |||||||||||||||||||
1992 Amended Stock Option Plan | 898,334 | $ | 6.41 | 370,000 | ||||||||||||||||||||
2004 Stock Incentive Plan | 30,000 | $ | 7.30 | 758,314 | (1) | 30,000 | $ | 7.30 | 166,700(1 | ) | ||||||||||||||
Amended and Restated 1992 Non-Qualified Stock Option Plan | 898,334 | $ | 6.41 | — (2 | ) |
(1) | An aggregate of | |
(2) | The plan has expired. |
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Company | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||||
Mercer International Inc. | 100.00 | 167.72 | 123.78 | 186.93 | 123.31 | 30.24 | ||||||||||||||||||
SIC Code Index | 100.00 | 116.55 | 119.98 | 186.38 | 228.45 | 37.76 | ||||||||||||||||||
NASDAQ Stock Market Index | 100.00 | 108.41 | 110.79 | 122.16 | 134.29 | 79.25 |
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• | includes the operating results of the Stendal mill from its start up in September 2004 and the results of operations and financial condition of the Celgar mill from the time of its acquisition in February 2005; and | |
• | excludes the results of operations of our paper operations which were sold in 2006 and are accounted for as discontinued operations. Previously reported data and the financial statements and related notes included herein have been reclassified to conform to the current presentation. |
Years Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||||
(Euro in thousands, other than per share and per ADMT amounts) | (Euro in thousands, other than per share and per ADMT amounts) | |||||||||||||||||||||||||||||||||||||||
Statement of Operations Data | ||||||||||||||||||||||||||||||||||||||||
Revenues | € | 704,391 | € | 623,977 | € | 452,437 | € | 182,242 | € | 129,282 | € | 720,291 | € | 727,295 | € | 644,899 | € | 469,178 | € | 197,693 | ||||||||||||||||||||
Costs and expenses | € | 634,805 | € | 531,473 | € | 433,787 | € | 168,055 | € | 118,769 | € | 706,962 | € | 657,709 | € | 552,395 | € | 450,528 | € | 205,894 | ||||||||||||||||||||
Operating income (loss) from continuing operations | € | 69,586 | € | 92,504 | € | 18,650 | € | (8,201 | ) | € | (4,683 | ) | € | 13,329 | € | 69,586 | € | 92,504 | € | 18,650 | € | (8,201 | ) | |||||||||||||||||
Unrealized gains (losses) on derivative financial instruments | € | 13,537 | € | 109,358 | € | (69,308 | ) | € | (32,331 | ) | € | (13,153 | ) | € | (25,228 | ) | € | 13,537 | € | 109,358 | € | (69,308 | ) | € | (32,331 | ) | ||||||||||||||
Realized gains (losses) on derivative financial instruments | € | 6,820 | € | (3,510 | ) | € | (2,455 | ) | € | 44,467 | € | 29,321 | € | — | € | 6,820 | € | (3,510 | ) | € | (2,455 | ) | € | 44,467 | ||||||||||||||||
Interest expense(1) | € | 71,400 | € | 91,931 | € | 86,326 | € | 23,185 | € | 12,576 | € | 65,756 | € | 71,400 | € | 91,931 | € | 86,326 | € | 23,185 | ||||||||||||||||||||
Investment income | € | 4,453 | € | 6,090 | € | 2,422 | € | 2,772 | € | 5,912 | € | (1,174 | ) | € | 4,453 | € | 6,090 | € | 2,422 | € | 2,772 | |||||||||||||||||||
Net income (loss) from continuing operations | € | 22,389 | € | 69,242 | € | (112,058 | ) | € | 30,139 | € | 5,409 | € | (72,465 | ) | € | 22,389 | € | 69,242 | € | (112,058 | ) | € | 30,139 | |||||||||||||||||
Net income (loss) (including discontinued operations) | € | 22,179 | € | 63,210 | € | (117,146 | ) | € | 19,980 | € | (3,593 | ) | € | (72,465 | ) | € | 22,179 | € | 63,210 | € | (117,146 | ) | € | 19,980 | ||||||||||||||||
Net income (loss) per share from continuing operations, | ||||||||||||||||||||||||||||||||||||||||
Basic | € | 0.62 | € | 2.08 | € | (3.59 | ) | € | 1.73 | € | 0.32 | |||||||||||||||||||||||||||||
Net income (loss) per share from continuing operations, Basic | € | (2.00 | ) | € | 0.62 | € | 2.08 | € | (3.59 | ) | € | 1.73 | ||||||||||||||||||||||||||||
Diluted | € | 0.58 | € | 1.72 | € | (3.59 | ) | € | 1.25 | € | 0.32 | € | (2.00 | ) | € | 0.58 | € | 1.72 | € | (3.59 | ) | € | 1.25 | |||||||||||||||||
Net income (loss) per share (including discontinued operations) | € | 0.61 | € | 1.90 | € | (3.75 | ) | € | 1.15 | € | (0.21 | ) | € | (2.00 | ) | € | 0.61 | € | 1.90 | € | (3.75 | ) | € | 1.15 | ||||||||||||||||
Weighted average shares outstanding (in thousands), | ||||||||||||||||||||||||||||||||||||||||
Basic | 36,081 | 33,336 | 31,218 | 17,426 | 16,941 | 36,285 | 36,081 | 33,336 | 31,218 | 17,426 | ||||||||||||||||||||||||||||||
Diluted | 45,303 | 43,084 | 31,218 | 28,525 | 16,941 | 36,287 | 45,303 | 43,084 | 31,218 | 28,525 | ||||||||||||||||||||||||||||||
Balance Sheet Data | ||||||||||||||||||||||||||||||||||||||||
Current assets | € | 290,259 | € | 221,800 | € | 251,522 | € | 207,409 | € | 128,401 | € | 258,901 | € | 290,259 | € | 221,800 | € | 251,522 | € | 207,409 | ||||||||||||||||||||
Current liabilities | € | 121,516 | € | 120,002 | € | 140,327 | € | 229,068 | € | 177,348 | € | 104,527 | € | 121,516 | € | 120,002 | € | 140,327 | € | 229,068 | ||||||||||||||||||||
Working capital | € | 168,743 | € | 101,798 | (2) | € | 111,195 | (2) | € | (21,659 | )(2) | € | (48,947 | ) | € | 154,374 | € | 168,743 | € | 101,798(2 | ) | € | 111,195(2 | ) | € | (21,659 | )(2) | |||||||||||||
Total assets(3) | € | 1,283,517 | € | 1,302,594 | € | 1,393,816 | € | 1,255,649 | € | 935,905 | € | 1,180,230 | € | 1,283,517 | € | 1,302,594 | € | 1,393,816 | € | 1,255,649 | ||||||||||||||||||||
Long-term liabilities | € | 885,339 | € | 963,791 | € | 1,104,746 | € | 863,840 | € | 625,702 | € | 909,478 | € | 885,339 | € | 963,791 | € | 1,104,746 | € | 863,840 | ||||||||||||||||||||
Shareholders’ equity | € | 276,662 | € | 218,801 | € | 148,743 | € | 162,741 | € | 132,855 | € | 166,225 | € | 276,662 | € | 218,801 | € | 148,743 | € | 162,741 | ||||||||||||||||||||
Other Pulp Data(4) | ||||||||||||||||||||||||||||||||||||||||
Other Pulp Data(4) | ||||||||||||||||||||||||||||||||||||||||
Sales volume (ADMTs) | 1,352,590 | 1,326,355 | 1,101,304 | 421,716 | 303,655 | 1,423,300 | 1,352,590 | 1,326,355 | 1,101,304 | 421,716 | ||||||||||||||||||||||||||||||
Production | 1,404,673 | 1,302,260 | 1,184,619 | 446,710 | 310,244 | 1,424,987 | 1,404,673 | 1,302,260 | 1,184,619 | 446,710 | ||||||||||||||||||||||||||||||
Average price realized (per ADMT) | € | 516 | € | 465 | € | 407 | € | 423 | € | 417 | € | 478 | € | 516 | € | 465 | € | 407 | € | 423 |
(1) | We capitalized most of the interest related to the Stendal mill prior to September 18, 2004. | |
(2) | We have applied for investment grants from the federal and state governments of Germany and had claims of approximately €0.3 million outstanding at December 31, 2007, all of which was received in 2008, €1.6 million outstanding at December 31, 2006, all of which was received in 2007 and approximately €7.0 million outstanding at December 31, 2005, all of which was received in 2006. However, in accordance with our accounting policies, we do not record these grants until they are received. | |
(3) | We do not report the effect of government grants relating to our assets in our income. These grants reduce the cost basis of the assets purchased when the grants are received. See “Item 1 — Business — Capital Expenditures”. | |
(4) | Excluding intercompany sales. |
3538
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• | Commenced the Celgar Energy Project at our Celgar mill to advance our objective of increasing production of and revenues from “green” energy; | |
• | Submitted a proposal under the bioenergy call for “green” power issued by British Columbia’s primary public utility provider which was selected and has resulted in the finalization of an electricity purchase agreement with, the utility for the supply of electrical energy generated from the Celgar Energy Project; | |
• | Worked with our lenders to restructure the Stendal Loan Facility which resulted in the completion of an amending agreement in February 2009; | |
• | Modernized the Celgar mill’s woodroom, established log purchasing programs and implemented logistical changes to improve Celgar’s fiber costs; | |
• | Continued to focus on cost reductions and working capital management; and | |
• | Developed various initiatives to enhance short-term liquidity. |
3740
Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(ADMTs) | ||||||||||||
Pulp Production | 1,404,673 | 1,302,260 | 1,184,619 | |||||||||
Pulp Sales(1) | 1,352,590 | 1,326,355 | 1,101,304 | |||||||||
Revenues(1) | € | 704,391 | € | 623,977 | € | 452,437 | ||||||
NBSK pulp list prices in Europe ($/ADMT) | $ | 800 | $ | 680 | $ | 610 | ||||||
Average pulp sales realizations (€/ADMT) | € | 516 | € | 465 | € | 407 | ||||||
Average Spot Currency Exchange Rates | ||||||||||||
€/$ | 0.7294 | 0.7962 | 0.8033 | |||||||||
C$/$ | 1.0740 | 1.1344 | 1.2116 | |||||||||
C$/€ | 1.4690 | 1.4244 | 1.5095 |
Years Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Pulp Production (’000 ADMTs) | 1,425.0 | 1,404.7 | 1,302.3 | |||||||||
Scheduled Production Downtime (’000 ADMTs) | 47.0 | 46.0 | 60.0 | |||||||||
Pulp Sales (’000 ADMTs)(1) | 1,423.3 | 1,352.6 | 1,326.4 | |||||||||
Pulp Revenues (in millions)(1) | € | 689.3 | € | 704.4 | € | 624.0 | ||||||
NBSK pulp list prices in Europe ($/ADMT) | $ | 839 | $ | 800 | $ | 680 | ||||||
NBSK pulp list prices (€/ADMT) | € | 571 | € | 584 | € | 542 | ||||||
Average pulp sales realizations (€/ADMT)(2) | € | 478 | € | 516 | € | 465 | ||||||
Energy Production (’000 MWh) | 1,456.6 | 1,401.9 | 1,297.4 | |||||||||
Energy Sales (’000 MWh) | 456.1 | 430.4 | 414.4 | |||||||||
Energy Revenue (in millions) | 31.0 | 22.9 | 20.9 | |||||||||
Average energy sales realizations (€/MWh) | 68 | 53 | 50 | |||||||||
Average Spot Currency Exchange Rates | ||||||||||||
€ / $(3) | 0.6800 | 0.7294 | 0.7962 | |||||||||
C$ / $(3) | 1.0669 | 1.0740 | 1.1344 | |||||||||
C$ / €(4) | 1.5603 | 1.4690 | 1.4244 |
(1) | Excluding intercompany sales volumes of nil, | |
(2) | List price less discounts and commissions. | |
(3) | Average Federal Reserve Bank of New York noon spot rate over the reporting period. | |
(4) | Average Bank of Canada noon spot rate over the reporting period. |
41
42
Years Ended December 31, | ||||||||
2008 | 2007 | |||||||
(in thousands) | ||||||||
Net income (loss) from continuing operations | € | (72,465 | ) | € | 22,389 | |||
Minority interest | (13,075 | ) | 1,251 | |||||
Income taxes (benefits) | 2,477 | 10,314 | ||||||
Interest expense | 65,756 | 71,400 | ||||||
Investment (income) loss | 1,174 | (4,453 | ) | |||||
Derivative financial instruments, net | 25,228 | (20,357 | ) | |||||
Unrealized foreign exchange (gain) loss on debt | 4,234 | (10,958 | ) | |||||
Operating income from continuing operations | 13,329 | 69,586 | ||||||
Add: Depreciation and amortization | 55,762 | 56,658 | ||||||
Operating EBITDA | € | 69,091 | € | 126,244 | ||||
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39
Years Ended December 31, | ||||||||
2007 | 2006 | |||||||
(in thousands) | ||||||||
Net income from continuing operations | € | 22,389 | € | 69,242 | ||||
Minority interest | 1,251 | 1,071 | ||||||
Income taxes provision | 10,314 | 57,443 | ||||||
Interest expense | 71,400 | 91,931 | ||||||
Investment income | (4,453 | ) | (6,090 | ) | ||||
Derivative financial instruments, net | (20,357 | ) | (105,848 | ) | ||||
Foreign exchange gain on debt | (10,958 | ) | (15,245 | ) | ||||
Operating income from continuing operations | 69,586 | 92,504 | ||||||
Add: Depreciation and amortization | 56,658 | 55,834 | ||||||
Operating EBITDA | € | 126,244 | € | 148,338 | ||||
40
41
Years Ended December 31, | Years Ended December 31, | |||||||||||||||
2006 | 2005 | 2007 | 2006 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Net income (loss) from continuing operations | € | 69,242 | € | (112,058 | ) | € | 22,389 | € | 69,242 | |||||||
Minority interest | 1,071 | (17,674 | ) | 1,251 | 1,071 | |||||||||||
Income taxes provision (benefit) | 57,443 | (13,140 | ) | |||||||||||||
Income taxes (benefits) | 10,314 | 57,443 | ||||||||||||||
Interest expense | 91,931 | 86,326 | 71,400 | 91,931 | ||||||||||||
Investment income | (6,090 | ) | (2,422 | ) | ||||||||||||
Investment (income) loss | (4,453 | ) | (6,090 | ) | ||||||||||||
Derivative financial instruments, net | (105,848 | ) | 71,763 | (20,357 | ) | (105,848 | ) | |||||||||
Foreign exchange (gain) loss on debt | (15,245 | ) | 4,156 | (10,958 | ) | (15,245 | ) | |||||||||
Impairment of investments | — | 1,699 | ||||||||||||||
Operating income from continuing operations | 92,504 | 18,650 | ||||||||||||||
Operating income (loss) from continuing operations | 69,586 | 92,504 | ||||||||||||||
Add: Depreciation and amortization | 55,834 | 51,160 | 56,658 | 55,834 | ||||||||||||
Operating EBITDA | € | 148,338 | € | 69,810 | € | 126,244 | € | 148,338 | ||||||||
45
Years Ended December 31, | Years Ended December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Financial Position | ||||||||||||||||
Cash and cash equivalents | € | 84,848 | € | 69,367 | € | 42,452 | € | 84,848 | ||||||||
Cash, restricted | 13,000 | 33,000 | ||||||||||||||
Working capital | 168,743 | 101,630 | (1) | 154,374 | 168,743 | |||||||||||
Property, plant and equipment | 933,258 | 972,143 | 881,704 | 933,258 | ||||||||||||
Total assets | 1,283,517 | 1,300,500 | (1) | 1,180,230 | 1,283,517 | |||||||||||
Long-term liabilities | 885,339 | 963,791 | 909,478 | 885,339 | ||||||||||||
Shareholders’ equity | 276,662 | 218,801 | 166,225 | 276,662 |
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47
4348
Years Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||
Revenues | € | 128 | € | 46,351 | € | 61,471 | € | — | € | 128 | € | 46,351 | ||||||||||||
Operating income (loss) from discontinued operations | (210 | ) | 394 | (2,306 | ) | — | (210 | ) | 394 | |||||||||||||||
Net loss on disposal of discontinued operations | — | (5,957 | ) | — | — | — | (5,957 | ) | ||||||||||||||||
Net loss | (210 | ) | (6,032 | ) | (5,088 | ) | — | (210 | ) | (6,032 | ) |
Years Ended December 31, | Years Ended December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Cash flows used in operating activities | € | (1,519 | ) | € | (2,121 | ) | € | — | € | (1,519 | ) | |||||
Cash flows from investing activities | 1,260 | 5,944 | — | 1,260 | ||||||||||||
Cash flows used in financing activities | — | (4,158 | ) | — | — |
Payments Due By Period | Payments Due By Period | |||||||||||||||||||||||||||||||||||||||
Contractual Obligations | 2008 | 2009-2010 | 2011-2012 | Beyond 2012 | Total | 2009 | 2010-2011 | 2012-2013 | Beyond 2013 | Total | ||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||
Long-term debt(1) | € | — | € | 61,304 | € | — | € | 212,285 | € | 273,589 | € | — | € | 66,505 | € | 222,718 | € | — | € | 289,223 | ||||||||||||||||||||
Debt, Stendal(2) | 34,023 | 76,433 | 91,587 | 374,224 | 576,267 | 16,500 | 37,083 | 64,583 | 412,907 | 531,073 | ||||||||||||||||||||||||||||||
Capital lease obligations(3) | 3,680 | 3,223 | 1,579 | 1,815 | 10,297 | 3,419 | 5,734 | 1,547 | 1,537 | 12,237 | ||||||||||||||||||||||||||||||
Operating lease obligations(4) | 731 | 839 | 140 | 1 | 1,675 | 2,276 | 3,403 | 958 | — | 6,637 | ||||||||||||||||||||||||||||||
Purchase obligations(5) | 39,152 | 6,348 | 1,707 | 5,905 | 53,112 | 2,788 | 2,349 | 2,102 | 5,841 | 13,080 | ||||||||||||||||||||||||||||||
Other long-term liabilities(6) | 2,273 | 4,123 | 4,487 | 13,455 | 24,338 | |||||||||||||||||||||||||||||||||||
Contractual commitments for capital expenditures(6) | 9,420 | 420 | — | — | 9,840 | |||||||||||||||||||||||||||||||||||
Other long-term liabilities(7) | 1,236 | 927 | 1,121 | 3,679 | 6,963 | |||||||||||||||||||||||||||||||||||
Total(7) | € | 79,859 | € | 152,270 | € | 99,464 | € | 607,685 | € | 939,278 | ||||||||||||||||||||||||||||||
Total(8) | € | 35,639 | € | 116,421 | € | 293,029 | € | 423,964 | € | 869,053 | ||||||||||||||||||||||||||||||
(1) | This reflects principal only relating primarily to indebtedness under credit facilities relating to the pulp mills, but does not reflect indebtedness relating to the Stendal mill. See “Item 1 — Business — Description of Certain Indebtedness”, footnote 2 below and Note | |
(2) | This reflects principal only in connection with indebtedness relating to the Stendal mill, including under the Stendal Loan Facility and convertible notes. See “Item 1 — Business | |
(3) | Capital lease obligations relate to transportation vehicles and production equipment. These amounts reflect principal and interest. | |
(4) | Operating lease obligations relate to transportation vehicles and other production and office equipment. |
49
(5) | Purchase obligations relate primarily totake-or-pay contracts, including for purchases of raw materials, made in the ordinary course of business. | |
(6) | Contractual commitments for capital expenditures relate primarily to non-cancellable commitments related to the Celgar Energy Project and the Rosenthal bleaching line renewal project. | |
(7) | Other long-term liabilities relate primarily to future payments that will be made for post-employment benefits other than pensions. Those amounts are estimated using actuarial assumptions, including expected future service, to project the future obligations. Additionally, the balance also includes pension | |
We have identified approximately |
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51
Years Ended December 31, | ||||||||
2008 | 2007 | |||||||
(in thousands) | ||||||||
Restricted Group(1) | ||||||||
Net income (loss) from continuing operations(2) | € | (30,432 | ) | € | 17,702 | |||
Income taxes (benefits) | 3,728 | 6,428 | ||||||
Interest expense | 27,027 | 28,472 | ||||||
Investment (income) loss | (6,834 | ) | (5,303 | ) | ||||
Unrealized foreign exchange (gain) loss on debt | 4,114 | (10,629 | ) | |||||
Operating income (loss) from continuing operations | (2,397 | ) | 36,670 | |||||
Add: Depreciation and amortization | 28,867 | 28,919 | ||||||
Operating EBITDA | € | 26,470 | € | 65,589 | ||||
(1) | See Note 20 of the financial statements included in this annual report onForm 10-K for a reconciliation to our consolidated results. | |
(2) | For the Restricted Group net income from continuing operations and net income are the same for 2008, but different for 2007. |
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46
Years Ended December 31, | ||||||||
2007 | 2006 | |||||||
(in thousands) | ||||||||
Restricted Group(1) | ||||||||
Net income from continuing operations | € | 17,702 | € | 9,351 | ||||
Income taxes benefit | 6,428 | 11,258 | ||||||
Interest expense | 28,472 | 34,354 | ||||||
Investment and other income | (5,303 | ) | (5,316 | ) | ||||
Foreign exchange gain on debt | (10,629 | ) | (15,245 | ) | ||||
Operating income from continuing operations | 36,670 | 34,402 | ||||||
Add: Depreciation and amortization | 28,919 | 27,819 | ||||||
Operating EBITDA | € | 65,589 | € | 62,221 | ||||
Years Ended December 31, | ||||||||
2007 | 2006 | |||||||
(in thousands) | ||||||||
Restricted Group(1) | ||||||||
Net income (loss) from continuing operations | € | 17,702 | € | 9,351 | ||||
Income taxes (benefits) | 6,428 | 11,258 | ||||||
Interest expense | 28,472 | 34,354 | ||||||
Investment (income) loss | (5,303 | ) | (5,316 | ) | ||||
Unrealized foreign exchange (gain) loss on debt | (10,629 | ) | (15,245 | ) | ||||
Operating income (loss) from continuing operations | 36,670 | 34,402 | ||||||
Add: Depreciation and amortization | 28,919 | 27,819 | ||||||
Operating EBITDA | € | 65,589 | € | 62,221 | ||||
(1) | See Note 20 of the financial statements included |
4753
Years Ended December 31, | ||||||||
2006 | 2005 | |||||||
(in thousands) | ||||||||
Restricted Group(1)(2) | ||||||||
Net income (loss) from continuing operations(3) | € | 9,351 | € | (25,206 | ) | |||
Income taxes benefit | 11,258 | 1,161 | ||||||
Interest expense | 34,354 | 32,352 | ||||||
Investment and other income | (5,316 | ) | (3,742 | ) | ||||
Derivative financial instruments, net | — | 295 | ||||||
Foreign exchange (gain) loss on debt | (15,245 | ) | 4,156 | |||||
Impairment of investments | — | 1,699 | ||||||
Operating income from continuing operations | 34,402 | 10,715 | ||||||
Add: Depreciation and amortization | 27,819 | 23,898 | ||||||
Operating EBITDA | € | 62,221 | € | 34,613 | ||||
Years Ended | ||||||||||||||||||||
Years Ended December 31, | December 31, | |||||||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||
Restricted Group Financial Position(1) | ||||||||||||||||||||
Cash and cash equivalents | € | 59,371 | € | 39,078 | € | 26,176 | € | 59,371 | ||||||||||||
Working capital | 120,486 | 74,961 | 101,490 | 120,486 | ||||||||||||||||
Property, plant and equipment, net | 385,569 | 408,957 | ||||||||||||||||||
Property, plant and equipment | 351,009 | 385,569 | ||||||||||||||||||
Total assets | 627,854 | 609,515 | 579,777 | 627,854 | ||||||||||||||||
Long-term liabilities | 305,158 | 318,728 | 324,638 | 305,158 | ||||||||||||||||
Shareholders’ equity | 278,582 | 243,949 | 210,179 | 278,582 |
(1) | See Note 20 of the financial statements included |
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• | the history of the tax loss carryforwards and their expiry dates; | |
• | future reversals of temporary differences; |
49
• | our projected earnings; and | |
• | tax planning opportunities. |
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50
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57
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Recognized | Recognized | Recognized | Recognized | |||||||||||||||||||||||||||||||||||||
Gain (Loss) | Gain (Loss) | Gain (Loss) | Gain (Loss) | |||||||||||||||||||||||||||||||||||||
Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||||||||||||||||||||
Notional | December 31, | Notional | December 31, | Notional | December 31, | Notional | December 31, | |||||||||||||||||||||||||||||||||
Derivative Instrument | Maturity Date | Amount | 2007 | Amount | 2006 | Maturity Date | Amount | 2008 | Amount | 2007 | ||||||||||||||||||||||||||||||
(in millions) | (in thousands) | (in millions) | (in thousands) | (in millions of | (in thousands) | (in millions) | (in thousands) | |||||||||||||||||||||||||||||||||
Euros or MWh) | ||||||||||||||||||||||||||||||||||||||||
Interest Rate Derivatives | ||||||||||||||||||||||||||||||||||||||||
Stendal Interest Rate Contracts(1)(2) | October 2017 | € | 556.6 | € | 19,470 | € | 590.0 | € | 37,292 | |||||||||||||||||||||||||||||||
Stendal Interest Rate Contracts(1) | October 2017 | € | 523.1 | € | (25,228 | ) | € | 556.6 | € | 19,470 | ||||||||||||||||||||||||||||||
Foreign Exchange Rate Derivatives | ||||||||||||||||||||||||||||||||||||||||
Stendal Currency Swap(3) | Settled | € | — | € | (181 | ) | € | 295.0 | € | 33,683 | ||||||||||||||||||||||||||||||
Stendal Currency Swap | Settled | € | — | — | € | 147.5 | 17,629 | Settled | € | — | € | — | € | — | € | (181 | ) | |||||||||||||||||||||||
Stendal Currency Swap | Settled | € | — | 1,067 | € | 147.5 | 16,654 | Settled | € | — | — | € | — | 1,067 | ||||||||||||||||||||||||||
Stendal Currency Forward(6) | Settled | $ | — | — | $ | 50.0 | 590 | |||||||||||||||||||||||||||||||||
€ | 886 | € | 68,556 | € | — | € | 886 | |||||||||||||||||||||||||||||||||
Energy Derivative(4) | ||||||||||||||||||||||||||||||||||||||||
Electricity forward sale | 2009 | MWh | 104,000 | € | 9,172 | — | € | — | ||||||||||||||||||||||||||||||||
Electricity forward purchase | 2009 | MWh | 104,000 | € | (5,901 | ) | — | — | ||||||||||||||||||||||||||||||||
€ | 3,271 | € | — | |||||||||||||||||||||||||||||||||||||
(1) | In connection with the Stendal Loan Facility, in the third quarter of 2002 Stendal entered into the Stendal Interest Rate Contracts, which arevariable-to-fixed interest rate swaps, for the term of the Stendal Loan Facility, with respect to an aggregate maximum amount of approximately €612.6 million of the principal amount of the long-term indebtedness under the Stendal Loan Facility. The swaps took effect on October 1, 2002 and are comprised of three contracts. The first contract commenced in October 2002 for a notional amount of €4.1 million, gradually increasing to €464.9 million, with an interest rate of 3.795%, and matured in May 2004. The second contract commenced in May 2004 for a notional amount of €464.9 million, gradually increasing to €612.6 million, with an interest rate of 5.28%, and matured in April 2005. The third contract commenced in April 2005 for a notional amount of €612.6 million, with an interest rate of 5.28%, and the notional amount gradually decreases and the contract terminates upon the maturity of the Stendal Loan Facility in October 2017. |
58
(2) | ||
For €306.3 million of the outstanding principal amount under the Stendal Loan Facility, all repayment installments from February 7, 2005 until October 2, 2017 were swapped into U.S. dollar amounts at a rate of | ||
For €153.2 million of the outstanding principal amount under the Stendal Loan Facility, all repayment installments from April 18, 2005 until October 2, 2017 were swapped into U.S. dollar amounts at a rate of | ||
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As at December 31, 2007 | As at December 31, 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying | Fair | Expected maturity date | Carrying | Fair | Expected maturity date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Value | Value | 2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Value | Value | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | |||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, restricted (€)(1) | € | 33,000 | € | 33,000 | € | 660 | € | 660 | € | 660 | € | 660 | € | 660 | € | 36,300 | € | 13,000 | € | 13,000 | € | 130 | € | 130 | € | 130 | € | 130 | € | 130 | € | 13,650 | ||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed rate ($)(2) | € | 212,285 | € | 193,179 | € | — | € | — | € | — | € | — | € | — | € | 212,285 | € | 222,718 | € | 116,927 | € | — | € | — | € | — | € | — | € | 222,718 | € | — | ||||||||||||||||||||||||||||||||
Average interest rate | 9.25 | % | 9.25 | % | 9.25 | % | 9.25 | % | 9.25 | % | 9.25 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed rate ($)(3) | € | 46,056 | € | 60,333 | € | — | € | — | € | 46,056 | € | — | € | — | € | — | € | 48,319 | € | 31,891 | € | — | € | 48,391 | € | — | € | — | € | — | € | — | ||||||||||||||||||||||||||||||||
Average interest rate | 8.5 | % | 8.5 | % | 8.5 | % | 8.5 | % | 8.5 | % | 8.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable rate(€)(4) | € | 565,096 | € | 565,096 | € | 34,000 | € | 36,600 | € | 39,800 | € | 44,000 | € | 47,600 | € | 363,096 | ||||||||||||||||||||||||||||||||||||||||||||||||
Variable rate (€)(4) | € | 531,073 | € | 531,073 | € | 16,500 | € | 13,916 | € | 23,167 | € | 24,583 | € | 40,000 | € | 412,907 | ||||||||||||||||||||||||||||||||||||||||||||||||
Average interest rate | 5.8 | % | 5.8 | % | 5.8 | % | 5.8 | % | 5.8 | % | 5.8 | % | 5.8 | % | 5.8 | % | 6.3 | % | 6.3 | % | 6.3 | % | 6.3 | % | 6.3 | % | 6.3 | % | 6.3 | % | 6.3 | % | ||||||||||||||||||||||||||||||||
Variable rate (C$)(5) | € | 15,248 | € | 15,248 | € | — | € | 15,248 | € | — | € | — | € | — | € | — | € | 18,186 | € | 18,186 | € | — | € | 18,186 | € | — | € | — | € | — | € | — | ||||||||||||||||||||||||||||||||
Average interest rate | 6.5 | % | 6.5 | % | 6.5 | % | 3.9 | % | 3.9 | % | 3.9 | % |
As at December 31, 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As at December 31, 2007 | Nominal | Fair | Expected maturity date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nominal | Fair | Expected maturity date | Amount | Value | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | Value | 2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Derivatives | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable to fixed(€)(6) | € | 556,580 | € | (21,885 | ) | € | 33,520 | € | 36,020 | € | 39,280 | € | 43,315 | € | 46,870 | € | 357,575 | |||||||||||||||||||||||||||||||||||||||||||||||
Variable to fixed (€)(6) | € | 523,062 | € | (47,112 | ) | € | 36,018 | € | 39,280 | € | 43,315 | € | 46,873 | € | 50,794 | € | 306,782 | |||||||||||||||||||||||||||||||||||||||||||||||
Average pay rate | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | ||||||||||||||||||||||||||||||||
Average receive rate | 4.8 | % | 4.8 | % | 4.8 | % | 4.8 | % | 4.8 | % | 4.8 | % | 4.8 | % | 4.8 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.3 | % |
(1) | We are required to maintain a restricted cash account pursuant to the Stendal Loan Facility. The interest income on the restricted cash balance is estimated to be | |
(2) | Senior | |
(3) | Subordinated convertible notes due October 2010, bearing interest at 8.5%, principal amount $67.3 million. | |
(4) | Stendal Loan Facility bears interest at varying rates of between Euribor plus 0.90% to Euribor plus 1.85%. | |
(5) | Celgar Working Capital Facility bears interest at bankers acceptance plus 2.25% or Canadian prime plus 0.50% on Canadian dollar denominated amounts and bears interest at LIBOR plus 2.25% or U.S. base plus 0.50% on U.S. dollar denominated amounts. As at December 31, | |
(6) | Interest rate swaps put in place on the Stendal Loan Facility, effectively converting it from a variable interest rate to a fixed interest rate loan. |
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As at December 31, 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As at December 31, 2007 | Carrying | Fair | Expected maturity date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying | Fair | Expected maturity date | Value | Value | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Value | Value | 2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
On-Balance Sheet Financial Instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Euro functional currency Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed rate ($)(1) | € | 212,285 | € | 193,179 | € | — | € | — | € | — | € | — | € | — | € | 212,285 | € | 222,718 | € | 116,927 | € | — | € | — | € | — | € | — | € | 222,718 | € | — | ||||||||||||||||||||||||||||||||
Average interest rate | 9.25 | % | 9.25 | % | 9.25 | % | 9.25 | % | 9.25 | % | 9.25 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed rate ($)(2) | € | 46,056 | € | 60,333 | € | — | € | — | € | 46,056 | € | — | € | — | € | — | € | 48,319 | € | 31,891 | € | — | € | 48,319 | € | — | € | — | € | — | € | — | ||||||||||||||||||||||||||||||||
Average interest rate | 8.5 | % | 8.5 | % | 8.5 | % | 8.5 | % | 8.5 | % | 8.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable rate (C$)(3) | € | 15,248 | € | 15,248 | € | — | € | 15,248 | € | — | € | — | € | — | € | — | € | 18,186 | € | 18,186 | € | — | € | 18,186 | € | — | € | — | € | — | € | — | ||||||||||||||||||||||||||||||||
Average interest rate | 6.5 | % | 6.5 | % | 6.5 | % | 3.9 | % | 3.9 | % | 3.9 | % |
(1) | Senior | |
(2) | Subordinated convertible notes due October 2010, | |
(3) | Celgar Working Capital Facility bears interest at bankers acceptance plus 2.25% or Canadian prime plus 0.50% on Canadian dollar denominated amounts and bears interest at LIBOR plus 2.25% or U.S. base plus 0.50% on U.S. dollar denominated amounts. As at December 31, |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
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• | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Mercer; | |
• | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and | |
• | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements. |
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ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
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ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
• | Whether the transaction is fair and reasonable to us; | |
• | The business reasons for the transaction; | |
• | Whether the transaction would impair the independence of one of our non-employee directors; and | |
• | Whether the transaction is material, taking into account the significance of the transaction. |
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Page | ||||
72 | ||||
Balance Sheets | 73 | |||
Consolidated Statements of Operations | 74 | |||
Consolidated Statements of Comprehensive Income (Loss) | 75 | |||
Consolidated Statements of Changes in Shareholders’ Equity | 76 | |||
Consolidated Statements of Cash Flows | 77 | |||
Notes to the Consolidated Financial Statements | 78 |
(1) | List of Exhibits |
1 | .1 | Underwriting Agreement dated February 8, 2005 between Mercer International Inc. and RBC Capital Markets Corporation, on behalf of itself and CIBC World Markets Corp., Raymond James & Associates, Inc. and D.A. Davidson & Co. Incorporated by reference fromForm 8-K dated February 10, 2005. | ||
1 | .2 | Underwriting Agreement dated February 8, 2005 among Mercer International Inc. and RBC Capital Markets Corporation and Credit Suisse First Boston LLC, on behalf of themselves and CIBC World Markets Corp. Incorporated by reference fromForm 8-K dated February 10, 2005. | ||
2 | .1 | Agreement and Plan of Merger among Mercer International Inc., Mercer International Regco Inc. and Mercer Delaware Inc. dated December 14, 2005. Incorporated by reference to the Proxy Statement/Prospectus filed on December 15, 2005. | ||
3 | .1 | Articles of Incorporation of the Company, as amended. Incorporated by reference fromForm 8-A dated March 1, 2006. | ||
3 | .2 | Bylaws of the Company. Incorporated by reference fromForm 8-A dated March 1, 2006. | ||
4 | .1 | Indenture dated as of October 10, 2003 between Mercer International Inc. and Wells Fargo Bank Minnesota, N.A. Incorporated by reference fromForm 8-K dated October 15, 2003. | ||
4 | .2 | Indenture dated as of December 10, 2004 between Mercer International Inc. and Wells Fargo Bank, N.A. Incorporated by reference fromForm S-3 filed December 10, 2004. | ||
4 | .3 | First Supplemental Indenture dated February 14, 2005 to Indenture dated December 10, 2004 between Mercer International Inc. and Wells Fargo Bank, N.A. Incorporated by reference fromForm 8-K dated February 17, 2005. | ||
10 | .1 | Amended and Restated 1992 Stock Option Plan. Incorporated by reference fromForm S-8 dated March 2, 2000. | ||
10 | .2* | 2002 Employee Incentive Bonus Plan. | ||
10 | .3 | Project Financing Facility Agreement dated August 26, 2002 between Zellstoff Stendal GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated September 10, 2002. | ||
10 | .4 | Shareholders’ Undertaking Agreement dated August 26, 2002 among Mercer International Inc., Stendal Pulp Holdings GmbH, RWE Industrie-Lösungen GmbH, AIG Altmark Industrie AG and FAHR Beteiligungen AG and Zellstoff Stendal GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated September 10, 2002. | ||
10 | .5* | Shareholders’ Agreement dated August 26, 2002 among Zellstoff Stendal GmbH, Stendal Pulp Holdings GmbH, RWE Industrie-Lösungen GmbH and FAHR Beteiligungen AG. |
1.1 | Underwriting Agreement dated February 8, 2005 between Mercer International Inc. and RBC Capital Markets Corporation, on behalf of itself and CIBC World Markets Corp., Raymond James & Associates, Inc. and D.A. Davidson & Co. Incorporated by reference fromForm 8-K dated February 10, 2005. | |
1.2 | Underwriting Agreement dated February 8, 2005 among Mercer International Inc. and RBC Capital Markets Corporation and Credit Suisse First Boston LLC, on behalf of themselves and CIBC World Markets Corp. Incorporated by reference fromForm 8-K dated February 10, 2005. | |
2.1 | Agreement and Plan of Merger among Mercer International Inc., Mercer International Regco Inc. and Mercer Delaware Inc. dated December 14, 2005. Incorporated by reference to the Proxy Statement/Prospectus filed on December 15, 2005. | |
3.1 | Articles of Incorporation of the Company, as amended. Incorporated by reference fromForm 8-A dated March 1, 2006. | |
3.2 | Bylaws of the Company. Incorporated by reference fromForm 8-A dated March 1, 2006. | |
4.1* | First Supplemental Indenture dated March 1, 2006 to Indenture dated as of October 10, 2003 between Mercer International Inc. and Wells Fargo Bank, N.A. | |
4.2 | Indenture dated as of December 10, 2004 between Mercer International Inc. and Wells Fargo Bank, N.A. Incorporated by reference fromForm S-3 filed December 10, 2004. | |
4.3 | First Supplemental Indenture dated February 14, 2005 to Indenture dated December 10, 2004 between Mercer International Inc. and Wells Fargo Bank, N.A. Incorporated by reference fromForm 8-K dated February 17, 2005. | |
10.1 | Project Financing Facility Agreement dated August 26, 2002 between Zellstoff Stendal GmbH and Bayerische Hypo-und Vereinsbank AG, as amended by Amendment, Restatement and Undertaking Agreement dated February 3, 2009. | |
10.2 | Shareholders’ Undertaking Agreement dated August 26, 2002 among Mercer International Inc., Stendal Pulp Holdings GmbH, RWE Industrie-Lösungen GmbH, AIG Altmark Industrie AG and FAHR Beteiligungen AG and Zellstoff Stendal GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated September 10, 2002. | |
10.3* | Shareholders’ Agreement dated August 26, 2002 among Zellstoff Stendal GmbH, Stendal Pulp Holdings GmbH, RWE Industrie-Lösungen GmbH and FAHR Beteiligungen AG. |
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10 | .6* | Contract for the Engineering, Design, Procurement, Construction, Erection andStart-Up of a Kraft Pulp Mill between Zellstoff Stendal GmbH and RWE Industrie-Lösungen GmbH dated August 26, 2002. Certain non-public information has been omitted from the appendices to Exhibit 10.16 pursuant to a request for confidential treatment filed with the SEC. Such non-public information was filed with the SEC on a confidential basis. The SEC approved the request for confidential treatment in January 2004. | ||
10 | .7* | Form of Trustee’s Indemnity Agreement between Mercer International Inc. and its Trustees. | ||
10 | .8 | Employment Agreement dated for reference August 7, 2003 between Mercer International Inc. and David Gandossi. Incorporated by reference fromForm 8-K dated August 11, 2003. | ||
10 | .9 | Employment Agreement effective as of April 28, 2004 between Mercer International Inc. and Jimmy S.H. Lee. Incorporated by reference fromForm 8-K dated April 28, 2004. | ||
10 | .10 | 2004 Stock Incentive Plan. Incorporated by reference fromForm S-8 dated June 15, 2004. | ||
10 | .11 | Asset Purchase Agreement by and among Mercer International Inc., 0706906 B.C. Ltd. and KPMG Inc., as receiver of all of the assets and undertakings of Stone Venepal (Celgar) Pulp Inc. dated November 22, 2004. Incorporated by reference fromForm 8-K dated November 23, 2004. | ||
10 | .12 | Revolving Credit Facility Agreement dated February 9, 2005 among D&Z Holding GmbH, Zellstoff-und Papierfabrik Rosenthal GmbH & Co. KG, ZPR Beteiligungs GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated February 17, 2005. | ||
10 | .13 | Shareholders’ Undertaking Agreement dated February 9, 2005 relating to Revolving Credit Facility Agreement. Incorporated by reference fromForm 8-K dated February 17, 2005. | ||
10 | .14 | Revolving Term Credit Facility dated for reference May 19, 2006 among Zellstoff Celgar Limited Partnership, as borrower, and the lenders from time to time parties thereto, as lenders and CIT Business Credit Canada Inc., as agent. Incorporated by reference fromForm 8-K dated May 30, 2006. | ||
10 | .15 | Employment Agreement dated October 2, 2006 between Stendal Pulp Holding GmbH and Wolfram Ridder. Incorporated by reference fromForm 8-K dated October 2, 2006. | ||
10 | .16 | Employment Agreement effective October 16, 2006 between Mercer International Inc. and David Ure dated September 22, 2006. Incorporated by reference fromForm 8-K dated October 13, 2006. | ||
10 | .17 | Employment Agreement effective November 6, 2006 between Mercer International Inc. and Claes-Inge Isacson dated September 25, 2006. Incorporated by reference fromForm 8-K dated October 13, 2006. | ||
99 | .1 | Exchange Agreement dated December 4, 2006 between Mercer International Inc. and Nisswa Master Fund Ltd. Incorporated by reference fromForm 8-K dated December 5, 2006. | ||
99 | .2 | Exchange Agreement dated December 4, 2006 between Mercer International Inc. and CC Arbitrage Ltd. Incorporated by reference fromForm 8-K dated December 5, 2006. | ||
21 | List of Subsidiaries of Registrant. | |||
23 | .1 | Consent of Independent Chartered Accountants — PricewaterhouseCoopers LLP. | ||
23 | .2 | Consent of Independent Registered Chartered Accountants — Deloitte & Touche LLP. | ||
31 | .1 | Section 302 Certificate of Chief Executive Officer. | ||
31 | .2 | Section 302 Certificate of Chief Financial Officer. | ||
32 | .1** | Section 906 Certificate of Chief Executive Officer. | ||
32 | .2** | Section 906 Certificate of Chief Financial Officer. |
10.4* | Contract for the Engineering, Design, Procurement, Construction, Erection andStart-Up of a Kraft Pulp Mill between Zellstoff Stendal GmbH and RWE Industrie-Lösungen GmbH dated August 26, 2002. Certain non-public information has been omitted from the appendices to Exhibit 10.16 pursuant to a request for confidential treatment filed with the SEC. Such non-public information was filed with the SEC on a confidential basis. The SEC approved the request for confidential treatment in January 2004. | |
10.5* | Form of Trustee’s Indemnity Agreement between Mercer International Inc. and its Trustees. | |
10.6 | Employment Agreement dated for reference August 7, 2003 between Mercer International Inc. and David Gandossi. Incorporated by reference fromForm 8-K dated August 11, 2003. | |
10.7 | Employment Agreement effective as of April 28, 2004 between Mercer International Inc. and Jimmy S.H. Lee. Incorporated by reference fromForm 8-K dated April 28, 2004. | |
10.8 | 2004 Stock Incentive Plan. Incorporated by reference fromForm S-8 dated June 15, 2004. | |
10.9 | Asset Purchase Agreement by and among Mercer International Inc., 0706906 B.C. Ltd. and KPMG Inc., as receiver of all of the assets and undertakings of Stone Venepal (Celgar) Pulp Inc. dated November 22, 2004. Incorporated by reference fromForm 8-K dated November 23, 2004. | |
10.10 | Revolving Credit Facility Agreement dated February 9, 2005 among D&Z Holding GmbH, Zellstoff-und Papierfabrik Rosenthal GmbH & Co. KG, ZPR Beteiligungs GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated February 17, 2005. | |
10.11 | Shareholders’ Undertaking Agreement dated February 9, 2005 relating to Revolving Credit Facility Agreement. Incorporated by reference fromForm 8-K dated February 17, 2005. | |
10.12 | Revolving Term Credit Facility dated for reference May 19, 2006 among Zellstoff Celgar Limited Partnership, as borrower, and the lenders from time to time parties thereto, as lenders and CIT Business Credit Canada Inc., as agent. Incorporated by reference fromForm 8-K dated May 30, 2006. | |
10.13 | Employment Agreement dated October 2, 2006 between Stendal Pulp Holding GmbH and Wolfram Ridder. Incorporated by reference fromForm 8-K dated October 2, 2006. | |
10.14 | Employment Agreement effective October 16, 2006 between Mercer International Inc. and David Ure dated September 22, 2006. Incorporated by reference fromForm 8-K dated October 13, 2006. | |
10.15 | Employment Agreement effective September 25, 2006 between Mercer International Inc. and Claes-Inge Isacson dated December 5, 2008. | |
10.16 | Employment Agreement effective September 1, 2005 between Mercer International Inc. and Leonhard Nossol dated August 18, 2005. Incorporated by reference fromForm 10-Q dated May 6, 2008. | |
10.17*** | Electricity Purchase Agreement effective January 27, 2009 between Zellstoff Celgar Limited Partnership and British Columbia Hydro and Power Authority. | |
14 | Code of Business Conduct and Ethics. Incorporated by reference from the definitive proxy statement on Schedule 14A dated August 11, 2003. | |
99.1 | Exchange Agreement dated December 4, 2006 between Mercer International Inc. and Nisswa Master Fund Ltd. Incorporated by reference fromForm 8-K dated December 5, 2006. | |
99.2 | Exchange Agreement dated December 4, 2006 between Mercer International Inc. and CC Arbitrage Ltd. Incorporated by reference fromForm 8-K dated December 5, 2006. | |
99.3 | Audit Committee Charter. Incorporated by reference from the definitive proxy statement on Schedule 14A dated April 28, 2005. | |
99.4 | Governance and Nominating Committee Charter. Incorporated by reference from the definitive proxy statement on Schedule 14A dated April 28, 2004. | |
21 | List of Subsidiaries of Registrant. | |
23.1 | Consent of Independent Registered Chartered Accountants — PricewaterhouseCoopers LLP. | |
23.2 | Consent of Independent Registered Chartered Accountants — Deloitte & Touche LLP. | |
31.1 | Section 302 Certificate of Chief Executive Officer. | |
31.2 | Section 302 Certificate of Chief Financial Officer. |
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32.1** | Section 906 Certificate of Chief Executive Officer. | |
32.2** | Section 906 Certificate of Chief Financial Officer. |
* | Filed inForm 10-K for prior years. | |
** | In accordance with Release33-8212 of the Commission, these Certifications: (i) are “furnished” to the Commission and are not “filed” for the purposes of liability under theSecurities Exchange Act of 1934, as amended, or the “Exchange Act”; and (ii) are not to be subject to automatic incorporation by reference into any of our Company’s registration statements filed under the Securities Act, as amended for the purposes of liability thereunder or any offering memorandum, unless our Company specifically incorporates them by reference therein. |
*** | Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and filed separately with the Commission pursuant to a confidential treatment application filed with the Commission. |
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December 31, | ||||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents (Note 3) | € | 84,848 | € | 69,367 | ||||
Receivables (Note 4) | 89,890 | 75,022 | ||||||
Note receivable, current portion | 5,896 | 7,798 | ||||||
Inventories (Note 5) | 103,610 | 62,857 | ||||||
Prepaid expenses and other | 6,015 | 4,662 | ||||||
Current assets of discontinued operations (Note 18) | — | 2,094 | ||||||
Total current assets | 290,259 | 221,800 | ||||||
Long-Term Assets | ||||||||
Cash, restricted (Note 3) | 33,000 | 57,000 | ||||||
Property, plant and equipment (Note 6) | 933,258 | 972,143 | ||||||
Investments | 96 | 1 | ||||||
Unrealized foreign exchange rate derivative gain (Note 15) | — | 5,933 | ||||||
Deferred note issuance and other costs | 5,303 | 6,984 | ||||||
Deferred income tax (Note 10) | 17,624 | 29,989 | ||||||
Note receivable, less current portion | 3,977 | 8,744 | ||||||
993,258 | 1,080,794 | |||||||
Total assets | € | 1,283,517 | € | 1,302,594 | ||||
LIABILITIES | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued expenses (Note 7) | € | 87,000 | € | 83,810 | ||||
Pension and other post-retirement benefit obligations, current portion (Note 9) | 493 | 363 | ||||||
Debt, current portion (Note 8) | 34,023 | 33,903 | ||||||
Current liabilities of discontinued operations (Note 18) | — | 1,926 | ||||||
Total current liabilities | 121,516 | 120,002 | ||||||
Long-Term Liabilities | ||||||||
Debt, less current portion (Note 8) | 815,832 | 873,928 | ||||||
Unrealized interest rate derivative losses (Note 15) | 21,885 | 41,355 | ||||||
Pension and other post-retirement benefit obligations (Note 9) | 19,983 | 17,954 | ||||||
Capital leases and other | 8,999 | 7,643 | ||||||
Deferred income tax (Note 10) | 18,640 | 22,911 | ||||||
885,339 | 963,791 | |||||||
Total liabilities | 1,006,855 | 1,083,793 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Preferred shares, U.S.$1 par value; 50,000,000 authorized and issuable in series Series A, 2,000,000 authorized, none issued and outstanding | — | — | ||||||
Common shares, U.S.$1 par value; 200,000,000 authorized; 36,285,027 issued and outstanding at December 31, 2007 and 35,465,176 at December 31, 2006 (Note 11) | 202,844 | 195,642 | ||||||
Additional paid-in capital | 134 | 154 | ||||||
Retained earnings | 37,419 | 15,240 | ||||||
Accumulated other comprehensive income | 36,265 | 7,765 | ||||||
Total shareholders’ equity | 276,662 | 218,801 | ||||||
Total liabilities and shareholders’ equity | € | 1,283,517 | € | 1,302,594 | ||||
Commitments and contingencies (Note 17) |
December 31, | ||||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents (Note 2) | € | 42,452 | € | 84,848 | ||||
Cash, restricted (Note 2) | 13,000 | — | ||||||
Receivables (Note 3) | 100,158 | 89,890 | ||||||
Note receivable, current portion | 642 | 5,896 | ||||||
Inventories (Note 4) | 98,457 | 103,610 | ||||||
Prepaid expenses and other | 4,192 | 6,015 | ||||||
Total current assets | 258,901 | 290,259 | ||||||
Long-term assets | ||||||||
Cash, restricted (Note 2) | — | 33,000 | ||||||
Property, plant and equipment (Note 5) | 881,704 | 933,258 | ||||||
Investments | 419 | 96 | ||||||
Deferred note issuance and other costs | 4,011 | 5,303 | ||||||
Deferred income tax (Note 9) | 31,666 | 17,624 | ||||||
Note receivable, less current portion | 3,529 | 3,977 | ||||||
921,329 | 993,258 | |||||||
Total assets | € | 1,180,230 | € | 1,283,517 | ||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses (Note 6) | € | 87,517 | € | 87,000 | ||||
Pension and other post-retirement benefit obligations, current portion (Note 8) | 510 | 493 | ||||||
Debt, current portion (Note 7) | 16,500 | 34,023 | ||||||
Total current liabilities | 104,527 | 121,516 | ||||||
Long-term liabilities | ||||||||
Debt, less current portion (Note 7) | 803,796 | 815,832 | ||||||
Unrealized interest rate derivative losses (Note 14) | 47,112 | 21,885 | ||||||
Pension and other post-retirement benefit obligations (Note 8) | 12,846 | 19,983 | ||||||
Capital leases and other (Note 15) | 11,267 | 8,999 | ||||||
Deferred income tax (Note 9) | 34,457 | 18,640 | ||||||
909,478 | 885,339 | |||||||
Total liabilities | 1,014,005 | 1,006,855 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Share capital (Note 10) | 202,844 | 202,844 | ||||||
Paid-in capital | 299 | 134 | ||||||
Retained earnings (deficit) | (35,046 | ) | 37,419 | |||||
Accumulated other comprehensive income | (1,872 | ) | 36,265 | |||||
Total shareholders’ equity | 166,225 | 276,662 | ||||||
Total liabilities and shareholders’ equity | € | 1,180,230 | € | 1,283,517 | ||||
Commitments and contingencies (Note 16) | ||||||||
Subsequent events (Note 19) |
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For The Years Ended December 31, | For the Years Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
Revenues | € | 704,391 | € | 623,977 | € | 452,437 | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Pulp revenue | € | 689,320 | € | 704,391 | € | 623,977 | ||||||||||||||||||
Energy revenue | 30,971 | 22,904 | 20,922 | |||||||||||||||||||||
720,291 | 727,295 | 644,899 | ||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||
Operating costs | 548,334 | 456,604 | 364,802 | 626,933 | 575,238 | 477,526 | ||||||||||||||||||
Operating depreciation and amortization | 56,400 | 55,834 | 51,160 | 55,484 | 56,400 | 55,834 | ||||||||||||||||||
99,657 | 111,539 | 36,475 | 37,874 | 95,657 | 111,539 | |||||||||||||||||||
Selling, general and administrative expenses | 34,714 | 34,644 | 35,117 | 30,158 | 30,714 | 34,644 | ||||||||||||||||||
(Sale) purchase of emission allowances | (4,643 | ) | (15,609 | ) | (17,292 | ) | (5,613 | ) | (4,643 | ) | (15,609 | ) | ||||||||||||
Operating income from continuing operations | 69,586 | 92,504 | 18,650 | 13,329 | 69,586 | 92,504 | ||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||
Interest expense | (71,400 | ) | (91,931 | ) | (86,326 | ) | (65,756 | ) | (71,400 | ) | (91,931 | ) | ||||||||||||
Investment income | 4,453 | 6,090 | 2,422 | |||||||||||||||||||||
Foreign exchange gain (loss) on debt and distributions | 10,958 | 15,245 | (4,156 | ) | ||||||||||||||||||||
Realized gain (loss) on derivative instruments | 6,820 | (3,510 | ) | (2,455 | ) | |||||||||||||||||||
Unrealized gain (loss) on derivative instruments | 13,537 | 109,358 | (69,308 | ) | ||||||||||||||||||||
Impairment of investments | — | — | (1,699 | ) | ||||||||||||||||||||
Investment income (loss) | (1,174 | ) | 4,453 | 6,090 | ||||||||||||||||||||
Foreign exchange gain (loss) on debt | (4,234 | ) | 10,958 | 15,245 | ||||||||||||||||||||
Realized gain (loss) on derivative instruments (Note 14) | — | 6,820 | (3,510 | ) | ||||||||||||||||||||
Unrealized gain (loss) on derivative instruments (Note 14) | (25,228 | ) | 13,537 | 109,358 | ||||||||||||||||||||
Total other (expense) income | (35,632 | ) | 35,252 | (161,522 | ) | |||||||||||||||||||
Total other income (expense) | (96,392 | ) | (35,632 | ) | 35,252 | |||||||||||||||||||
Income (loss) before income taxes and minority interest from continuing operations | 33,954 | 127,756 | (142,872 | ) | (83,063 | ) | 33,954 | 127,756 | ||||||||||||||||
Income tax (provision) benefit (Note 10) | ||||||||||||||||||||||||
Income tax benefit (provision) (Note 9) | ||||||||||||||||||||||||
Current | (2,170 | ) | (584 | ) | (383 | ) | (501 | ) | (2,170 | ) | (584 | ) | ||||||||||||
Deferred | (8,144 | ) | (56,859 | ) | 13,523 | (1,976 | ) | (8,144 | ) | (56,859 | ) | |||||||||||||
Income (loss) before minority interest from continuing operations | 23,640 | 70,313 | (129,732 | ) | (85,540 | ) | 23,640 | 70,313 | ||||||||||||||||
Minority interest | (1,251 | ) | (1,071 | ) | 17,674 | 13,075 | (1,251 | ) | (1,071 | ) | ||||||||||||||
Net income (loss) from continuing operations | 22,389 | 69,242 | (112,058 | ) | (72,465 | ) | 22,389 | 69,242 | ||||||||||||||||
Net loss from discontinued operations | (210 | ) | (6,032 | ) | (5,088 | ) | — | (210 | ) | (6,032 | ) | |||||||||||||
Net income (loss) | € | 22,179 | € | 63,210 | € | (117,146 | ) | € | (72,465 | ) | € | 22,179 | € | 63,210 | ||||||||||
Net income (loss) per share from continuing operations (Note 13) | ||||||||||||||||||||||||
Net income (loss) per share from continuing operations (Note 12) | ||||||||||||||||||||||||
Basic | € | 0.62 | € | 2.08 | € | (3.59 | ) | € | (2.00 | ) | € | 0.62 | € | 2.08 | ||||||||||
Diluted | € | 0.58 | € | 1.72 | € | (3.59 | ) | € | (2.00 | ) | € | 0.58 | € | 1.72 | ||||||||||
Net income (loss) per share (Note 13) | ||||||||||||||||||||||||
Net income (loss) per share (Note 12) | ||||||||||||||||||||||||
Basic | € | 0.61 | € | 1.90 | € | (3.75 | ) | € | (2.00 | ) | € | 0.61 | € | 1.90 | ||||||||||
Diluted | € | 0.58 | € | 1.58 | € | (3.75 | ) | € | (2.00 | ) | € | 0.58 | € | 1.58 | ||||||||||
6974
For The Years Ended December 31, | For the Years Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
Net income (loss) | € | 22,179 | € | 63,210 | € | (117,146 | ) | € | (72,465 | ) | € | 22,179 | € | 63,210 | ||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||
Foreign currency translation adjustment | 29,214 | (3,730 | ) | 5,156 | (41,876 | ) | 29,214 | (3,730 | ) | |||||||||||||||
Pension plan additional minimum liability | — | — | (331 | ) | ||||||||||||||||||||
FASB 158 pension expense | (809 | ) | — | — | ||||||||||||||||||||
Unrealized gains on securities Unrealized holding gains arising during the year | 95 | 171 | 134 | |||||||||||||||||||||
FASB 158 pension income (expense) | 4,079 | (809 | ) | — | ||||||||||||||||||||
Unrealized gains (losses) on securities arising during the year | (340 | ) | 95 | 171 | ||||||||||||||||||||
Other comprehensive income (loss) | 28,500 | (3,559 | ) | 4,959 | (38,137 | ) | 28,500 | (3,559 | ) | |||||||||||||||
Comprehensive income (loss) | € | 50,679 | € | 59,651 | € | (112,187 | ) | € | (110,602 | ) | € | 50,679 | € | 59,651 | ||||||||||
7075
Comprehensive Income | Accumulated Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Shares | Accumulated Other | Common Shares | Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | Foreign | Defined | Unrealized | Amount | Foreign | Defined | Unrealized | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paid in | Additional | Retained | Currency | Benefit | Gains | Paid in | Retained | Currency | Benefit | Gains | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Excess of | Paid-in | Earnings | Translation | Pension | (Losses) on | Shareholders’ | Number | Excess of | Paid-in | Earnings | Translation | Pension | (Losses) on | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
of Shares | Par Value | Par Value | Capital | (Deficit) | Adjustments | Plans | Securities | Total | Total Equity | of Shares | Par Value | Par Value | Capital | (Deficit) | Adjustments | Plans | Securities | Total | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2004 | 18,074,229 | € | 13,836 | € | 69,561 | € | 14 | € | 69,176 | € | 10,459 | € | - | € | (305 | ) | € | 10,154 | € | 162,741 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued on equity offering | 10,768,700 | 8,275 | 58,370 | — | — | — | — | — | — | 66,645 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued on acquisition of Celgar | 4,210,526 | 3,244 | 27,570 | — | — | — | — | — | — | 30,814 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued on grants of restricted stock | 115,685 | 93 | 637 | — | — | — | — | — | — | 730 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (117,146 | ) | — | — | — | — | (117,146 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | 5,156 | (331 | ) | 134 | 4,959 | 4,959 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2005 | 33,169,140 | € | 25,448 | € | 156,138 | € | 14 | € | (47,970 | ) | € | 15,615 | € | (331 | ) | € | (171 | ) | € | 15,113 | € | 148,743 | 33,169,140 | € | 25,448 | € | 156,138 | € | 14 | € | (47,970 | ) | € | 15,615 | € | (331 | ) | € | (171 | ) | € | 15,113 | € | 148,743 | ||||||||||||||||||||||||||||||||||||
Shares issued on exercise of stock options | 60,000 | 41 | 251 | — | — | — | — | — | — | 292 | 60,000 | 41 | 251 | — | — | — | — | — | — | 292 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued on grants of restricted stock | 45,000 | 32 | 297 | — | — | — | — | — | — | 329 | 45,000 | 32 | 297 | — | — | — | — | — | — | 329 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares of restricted stock cancelled | (9,999 | ) | (7 | ) | (57 | ) | — | — | — | — | — | — | (64 | ) | (9,999 | ) | (7 | ) | (57 | ) | — | — | — | — | — | — | (64 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued on repurchase of notes | 2,201,035 | 1,447 | 12,052 | — | — | — | — | — | — | 13,499 | 2,201,035 | 1,447 | 12,052 | — | — | — | — | — | — | 13,499 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | 140 | — | — | — | — | — | 140 | — | — | — | 140 | — | — | — | — | �� | — | 140 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment to initially apply FASB Statement No. 158, net of tax | — | — | — | — | — | — | (3,789 | ) | — | (3,789 | ) | (3,789 | ) | — | — | — | — | — | — | (3,789 | ) | — | (3,789 | ) | (3,789 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 63,210 | — | — | — | — | 63,210 | — | — | — | — | 63,210 | — | — | — | — | 63,210 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | (3,730 | ) | — | 171 | (3,559 | ) | (3,559 | ) | — | — | — | — | — | (3,730 | ) | — | 171 | (3,559 | ) | (3,559 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2006 | 35,465,176 | € | 26,961 | € | 168,681 | € | 154 | € | 15,240 | € | 11,885 | € | (4,120 | ) | € | - | € | 7,765 | € | 218,801 | 35,465,176 | € | 26,961 | € | 168,681 | € | 154 | € | 15,240 | € | 11,885 | € | (4,120 | ) | € | - | € | 7,765 | € | 218,801 | ||||||||||||||||||||||||||||||||||||||||
Shares issued on exercise of stock options | 56,666 | 43 | 261 | — | — | — | — | — | — | 304 | 56,666 | 43 | 261 | — | — | — | — | — | — | 304 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued on grants of restricted stock | 21,000 | 15 | 145 | — | — | — | — | — | — | 160 | 21,000 | 15 | 145 | — | — | — | — | — | — | 160 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued on repurchase of notes | 742,185 | 557 | 6,181 | — | — | — | — | — | — | 6,738 | 742,185 | 557 | 6,181 | — | — | — | — | — | — | 6,738 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | (20 | ) | — | — | — | — | — | (20 | ) | — | — | — | (20 | ) | — | — | — | — | — | (20 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 22,179 | — | — | — | — | 22,179 | — | — | — | — | 22,179 | — | — | — | — | 22,179 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | 29,214 | (809 | ) | 95 | 28,500 | 28,500 | — | — | — | — | — | 29,214 | (809 | ) | 95 | 28,500 | 28,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2007 | 36,285,027 | € | 27,576 | € | 175,268 | € | 134 | € | 37,419 | € | 41,099 | € | (4,929 | ) | € | 95 | € | 36,265 | € | 276,662 | 36,285,027 | € | 27,576 | € | 175,268 | € | 134 | € | 37,419 | € | 41,099 | € | (4,929 | ) | € | 95 | € | 36,265 | € | 276,662 | ||||||||||||||||||||||||||||||||||||||||
Shares issued on grants of restricted stock | 21,000 | — | — | 61 | — | — | — | — | — | 61 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued on grants of performance stock | 116,460 | — | — | 29 | — | — | — | — | — | 29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | 75 | — | — | — | — | — | 75 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (72,465 | ) | — | — | — | — | (72,465 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | (41,876 | ) | 4,079 | (340 | ) | (38,137 | ) | (38,137 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2008 | 36,422,487 | € | 27,576 | € | 175,268 | € | 299 | € | (35,046 | ) | € | (777 | ) | € | (850 | ) | € | (245 | ) | € | (1,872 | ) | € | 166,225 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7176
For The Years Ended December 31, | For the Years Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||||||||||
Cash flows from (used in) operating activities | ||||||||||||||||||||||||
Net income (loss) | € | 22,179 | € | 63,210 | € | (117,146 | ) | € | (72,465 | ) | € | 22,179 | € | 63,210 | ||||||||||
Adjustments to reconcile net income (loss) to cash flows from operating activities | ||||||||||||||||||||||||
Unrealized (gains) losses on derivatives | (13,537 | ) | (109,358 | ) | 69,308 | |||||||||||||||||||
Unrealized (gain) loss on derivatives | 25,228 | (13,537 | ) | (109,358 | ) | |||||||||||||||||||
Unrealized foreign exchange (gain) loss on debt | (10,958 | ) | (15,245 | ) | 4,156 | 4,234 | (10,958 | ) | (15,245 | ) | ||||||||||||||
Operating depreciation and amortization | 56,400 | 56,085 | 52,041 | 55,484 | 56,400 | 56,085 | ||||||||||||||||||
Non-operating amortization | 258 | 269 | 1,385 | 278 | 258 | 269 | ||||||||||||||||||
Loss on sale of assets | — | 5,957 | — | |||||||||||||||||||||
Impairment of investments | — | — | 1,699 | |||||||||||||||||||||
Loss (gain) on sale of assets | (765 | ) | 179 | 5,957 | ||||||||||||||||||||
Minority interest | 1,251 | 1,071 | (17,674 | ) | (13,075 | ) | 1,251 | 1,071 | ||||||||||||||||
Income from equity investee | — | (1,206 | ) | — | — | — | (1,206 | ) | ||||||||||||||||
Deferred income taxes | 8,144 | 56,859 | (11,480 | ) | 1,976 | 8,144 | 56,859 | |||||||||||||||||
Stock compensation expense | 243 | 541 | 441 | 264 | 243 | 541 | ||||||||||||||||||
Pension and other post-retirement expense | 1,806 | 1,638 | 1,582 | 1,981 | 1,806 | 1,638 | ||||||||||||||||||
Pension and other post-retirement benefit funding | (2,021 | ) | (1,941 | ) | (1,663 | ) | (2,739 | ) | (2,021 | ) | (1,941 | ) | ||||||||||||
Inventory provisions | 11,272 | — | — | |||||||||||||||||||||
Other | 2,227 | 1,438 | 2,026 | (123 | ) | 2,048 | 1,438 | |||||||||||||||||
Changes in current assets and liabilities | ||||||||||||||||||||||||
Receivables | (11,890 | ) | (7,381 | ) | (18,810 | ) | (14,811 | ) | (11,890 | ) | (7,381 | ) | ||||||||||||
Inventories | (38,703 | ) | 7,364 | (4,150 | ) | (13,331 | ) | (38,703 | ) | 7,364 | ||||||||||||||
Accounts payable and accrued expenses | 3,303 | (9,305 | ) | 50,582 | 1,240 | 3,303 | (9,305 | ) | ||||||||||||||||
Other | 447 | (773 | ) | (959 | ) | 3,486 | 447 | (773 | ) | |||||||||||||||
Net cash from operating activities | 19,149 | 49,223 | 11,338 | |||||||||||||||||||||
Cash Flows from (used in) Investing Activities | ||||||||||||||||||||||||
Net cash from (used in) operating activities | (11,866 | ) | 19,149 | 49,223 | ||||||||||||||||||||
Cash flows from (used in) investing activities | ||||||||||||||||||||||||
Cash, restricted | 24,000 | (25,388 | ) | 61,221 | 20,000 | 24,000 | (25,388 | ) | ||||||||||||||||
Purchase of property, plant and equipment(3) | (4,864 | ) | (32,937 | ) | (21,987 | ) | (25,704 | ) | (4,864 | ) | (32,937 | ) | ||||||||||||
Proceeds on sale of property, plant and equipment | 881 | 1,765 | 857 | 2,000 | 881 | 1,765 | ||||||||||||||||||
Note receivable | 4,954 | (6,870 | ) | — | 5,708 | 4,954 | (6,870 | ) | ||||||||||||||||
Proceeds from available-for-sale securities | — | 1,184 | — | — | — | 1,184 | ||||||||||||||||||
Acquisition of Celgar pulp mill | — | — | (146,608 | ) | ||||||||||||||||||||
Purchases of available-for-sale securities | — | — | (1,650 | ) | ||||||||||||||||||||
Net cash from (used in) investing activities | 24,971 | (62,246 | ) | (108,167 | ) | 2,004 | 24,971 | (62,246 | ) | |||||||||||||||
Cash Flows from (used in) Financing Activities | ||||||||||||||||||||||||
Cash flows from (used in) financing activities | ||||||||||||||||||||||||
Repayment of notes payable and debt | (26,719 | ) | (87,911 | ) | (272,391 | ) | (34,023 | ) | (26,719 | ) | (87,911 | ) | ||||||||||||
Repayment of capital lease obligations | (5,562 | ) | (4,091 | ) | (6,411 | ) | (3,312 | ) | (5,562 | ) | (4,091 | ) | ||||||||||||
Proceeds from investment grants | 1,236 | 9,101 | 84,694 | 266 | 1,236 | 9,101 | ||||||||||||||||||
Issuance of common shares | 305 | 556 | 66,645 | — | 305 | 556 | ||||||||||||||||||
Proceeds from borrowings of notes payable and debt | — | 78,100 | 313,118 | 5,837 | — | 78,100 | ||||||||||||||||||
Proceeds from minority shareholders | — | 5,463 | 5,463 | — | — | 5,463 | ||||||||||||||||||
Decrease in construction costs payable | — | (240 | ) | (64,223 | ) | — | — | (240 | ) | |||||||||||||||
Net cash (used in) from financing activities | (30,740 | ) | 978 | 126,895 | ||||||||||||||||||||
Net cash from (used in) financing activities | (31,232 | ) | (30,740 | ) | 978 | |||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,664 | (1,698 | ) | 3,913 | (1,302 | ) | 1,664 | (1,698 | ) | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 15,044 | (13,743 | ) | 33,979 | (42,396 | ) | 15,044 | (13,743 | ) | |||||||||||||||
Cash and cash equivalents, beginning of year(1) | 69,804 | 83,547 | 49,568 | |||||||||||||||||||||
Cash and cash equivalents, beginning of year (1) | 84,848 | 69,804 | 83,547 | |||||||||||||||||||||
Cash and cash equivalents, end of year(2) | € | 84,848 | € | 69,804 | € | 83,547 | ||||||||||||||||||
Cash and cash equivalents, end of year (2) | € | 42,452 | € | 84,848 | € | 69,804 | ||||||||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||||||||||
Cash paid during the period for: | ||||||||||||||||||||||||
Interest | € | 73,318 | € | 84,382 | € | 46,411 | € | 60,652 | € | 73,318 | € | 84,382 | ||||||||||||
Income taxes | 452 | 1,304 | 640 | 1,100 | 452 | 1,304 | ||||||||||||||||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||||||||||||||||||
Acquisition of production and other equipment under capital lease obligations | € | 2,110 | € | 3,301 | € | 2,864 | € | 5,318 | € | 2,110 | € | 3,301 | ||||||||||||
Property, plant and equipment on acquisition of 7% interest in Stendal | 6,738 | 8,067 | — | — | — | 8,067 | ||||||||||||||||||
Acquisition of notes receivable on sale of paper assets | — | 11,321 | — | — | — | 11,321 | ||||||||||||||||||
Common shares issued on acquisition of Celgar mill | — | — | 30,814 | |||||||||||||||||||||
Increase (decrease) in accounts payable relating to investing activities | 2,627 | — | — |
(1) | Includes amounts related to discontinued operations of: 2008 — €nil, 2007 — €437, 2006 — €772 | |
(2) | Includes amounts related to discontinued operations of: 2008 — €nil, 2007 — €nil, 2006 — €437 | |
(3) |
7277
Note 1. | The Company and Summary of Significant Accounting Policies |
78
Note 1. | The Company and Summary of Significant Accounting Policies — (Continued) |
73
79
Note 1. | The Company and Summary of Significant Accounting Policies — (Continued) |
74
80
Note 1. | The Company and Summary of Significant Accounting Policies — (Continued) |
81
Note 1. | The Company and Summary of Significant Accounting Policies — (Continued) |
75
82
Note 1. | The Company and Summary of Significant Accounting Policies — (Continued) |
76
83
Note |
Note | Cash, Cash Equivalents and Restricted Cash |
December 31 | ||||||||
2007 | 2006 | |||||||
Cash and cash equivalents | € | 84,848 | € | 69,367 | ||||
Long-term cash restricted | € | 33,000 | € | 57,000 | ||||
December 31 | ||||||||
2007 | 2006 | |||||||
Sale of pulp (net of allowance of €626 and €470, respectively) | € | 81,913 | € | 69,163 | ||||
Value added tax | 2,673 | 456 | ||||||
Other | 5,304 | 5,403 | ||||||
€ | 89,890 | € | 75,022 | |||||
December 31, | ||||||||
2008 | 2007 | |||||||
Cash and cash equivalents | € | 42,452 | € | 84,848 | ||||
Cash, restricted | € | 13,000 | € | 33,000 | ||||
7784
Note 2. | Cash, Cash Equivalents and Restricted Cash — (Continued) |
Note | Receivables |
December 31, | ||||||||
2008 | 2007 | |||||||
Sale of pulp (net of allowance of €614 and €626, respectively) | € | 85,120 | € | 81,913 | ||||
Value added tax | 3,433 | 2,673 | ||||||
Other | 11,605 | 5,304 | ||||||
€ | 100,158 | € | 89,890 | |||||
Note | Inventories |
December 31 | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
Raw materials | € | 59,559 | € | 38,905 | € | 38,225 | € | 38,045 | ||||||||
Work in process and finished goods | 44,051 | 23,952 | ||||||||||||||
Finished goods | 37,881 | 43,127 | ||||||||||||||
Work in process and other | 22,351 | 22,438 | ||||||||||||||
€ | 103,610 | € | 62,857 | € | 98,457 | € | 103,610 | |||||||||
Note | Property, Plant and Equipment |
December 31 | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
Land | € | 24,538 | € | 23,953 | € | 24,661 | € | 24,538 | ||||||||
Buildings | 125,369 | 127,338 | 125,046 | 125,369 | ||||||||||||
Production equipment and other | 1,069,170 | 1,062,049 | 1,061,991 | 1,070,202 | ||||||||||||
1,219,077 | 1,213,340 | 1,211,698 | 1,220,109 | |||||||||||||
Less: Accumulated depreciation | (285,819 | ) | (241,197 | ) | (329,994 | ) | (286,851 | ) | ||||||||
€ | 933,258 | € | 972,143 | € | 881,704 | € | 933,258 | |||||||||
85
Note 5. | Property, Plant and Equipment — (Continued) |
Note | Accounts Payable and Accrued Expenses |
December 31 | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
Trade payables | € | 37,245 | € | 32,591 | € | 31,140 | € | 37,245 | ||||||||
Accounts payable and other | 12,356 | 9,509 | 4,559 | 3,097 | ||||||||||||
Accrued expenses | 17,219 | 19,923 | 31,181 | 25,752 | ||||||||||||
Accrued interest | 16,711 | 16,629 | 17,202 | 17,437 | ||||||||||||
Capital leases, current portion | 3,469 | 5,158 | 3,435 | 3,469 | ||||||||||||
€ | 87,000 | € | 83,810 | € | 87,517 | € | 87,000 | |||||||||
Note 7. | Debt |
December 31, | ||||||||
2008 | 2007 | |||||||
Note payable to bank, included in a total credit facility of €827,950 to finance the construction related to the Stendal pulp mill (a) | € | 531,073 | € | 565,096 | ||||
Senior notes due February 2013, interest at 9.25% accrued and payable semi-annually, unsecured (b) (Note 11) | 222,718 | 212,285 | ||||||
Subordinated convertible notes due October 2010, interest at 8.5% accrued and payable semi-annually (c) (Note 11) | 48,319 | 46,056 | ||||||
Credit agreement with a syndicate of banks with respect to a revolving credit facility of C$40 million (d) | 18,186 | 15,248 | ||||||
Loans payable to minority shareholders of Stendal pulp mill (e) | — | 11,170 | ||||||
Credit agreement with bank with respect to a revolving credit facility of €40 million (f) | — | — | ||||||
820,296 | 849,855 | |||||||
Less: current portion | (16,500 | ) | (34,023 | ) | ||||
Debt, less current portion | € | 803,796 | € | 815,832 | ||||
7886
Note | Debt — (Continued) |
December 31 | ||||||||
2007 | 2006 | |||||||
Note payable to bank, included in a total credit facility of €827,950 to finance the construction related to the Stendal pulp mill(a) | € | 565,096 | € | 599,000 | ||||
Senior notes due February 2013, interest at 9.25% accrued and payable semi-annually, unsecured (b) (Note 11) | 212,285 | 234,902 | ||||||
Subordinated convertible notes due October 2010, interest at 8.5% accrued and payable semi-annually(c) (Note 11) | 46,056 | 50,962 | ||||||
Credit agreement with a syndicate of banks with respect to a revolving credit facility of Cdn.$40 million(d) | 15,248 | 7,917 | ||||||
Loans payable to minority shareholders of Stendal pulp mill(e) | 11,170 | 8,307 | ||||||
Credit agreement with bank with respect to a revolving credit facility of €40 million(f) | — | — | ||||||
Note payable to third party(g) | — | 6,743 | ||||||
849,855 | 907,831 | |||||||
Less: Current portion | (34,023 | ) | (33,903 | ) | ||||
Debt, less current portion | € | 815,832 | € | 873,928 | ||||
Matures | Amount | Amount | ||||||
2008 | € | 34,023 | ||||||
2009 | 51,847 | € | 16,500 | |||||
2010 | 85,889 | 80,421 | ||||||
2011 | 43,966 | 23,167 | ||||||
2012 | 47,621 | 24,583 | ||||||
2013 | 262,718 | |||||||
Thereafter | 586,509 | 412,907 | ||||||
€ | 849,855 | € | 820,296 | |||||
(a) | Note payable to bank, included in a total credit facility of €827,950 to finance the construction related to the Stendal pulp mill, interest at rates varying from Euribor plus 0.90% to Euribor plus 1.85% (rates on amounts of borrowing at December 31, |
(b) | In February 2005, the Company issued $310 million of senior notes due February 2013, interest at 9.25% accrued and payable semi-annually, unsecured. |
79
amount) equal to |
(c) | As at December 31, |
(d) | Credit agreement with respect to a revolving credit facility of C$40 million, on a three year term. Borrowings under the credit agreement are secured by pulp mill inventory and receivables. Canadian dollar denominated amounts bear interest at bankers acceptance plus 2.25% or Canadian prime plus 0.50%. U.S. dollar denominated amounts bear interest at LIBOR plus 2.25% or U.S. base plus 0.50%. As at December 31, 2008, this facility was drawn by C$31 million and was accruing interest at a rate of approximately 3.90%. The credit agreement matures May 19, 2009, but is subject to a one-year extension at the Company’s request. On January 23, 2009, the Company was granted a one-year extension pursuant to the terms of the credit agreement. The extension carries the same general terms and matures May 19, 2010. |
87
Note 7. | Debt — (Continued) |
(e) | Loans payable to the minority shareholder of Stendal pulp mill bear interest at 7%, payable in September 2006 then payable semi-annually beginning March 2007, unsecured, subordinated to all liabilities of the Stendal pulp mill, due in 2017. The amounts outstanding on these loans were |
(f) | Credit agreement with respect to a revolving credit facility of |
Note | Pension and Other Post-Retirement Benefit Obligations |
2008 | ||||||||||||
Other | ||||||||||||
Post-Retirement | ||||||||||||
Benefit | ||||||||||||
Pension | Obligations | Total | ||||||||||
Change in benefit obligation | ||||||||||||
Benefit obligation, December 31, 2007 | € | 27,832 | € | 16,137 | € | 43,969 | ||||||
Service cost | 789 | 501 | 1,290 | |||||||||
Interest cost | 1,356 | 800 | 2,156 | |||||||||
Benefit payments | (1,417 | ) | (381 | ) | (1,798 | ) | ||||||
Past service cost (credit) | 973 | (1,152 | ) | (179 | ) | |||||||
Actuarial (gains) losses | (5,557 | ) | (3,442 | ) | (8,999 | ) | ||||||
Foreign currency exchange rate changes | (3,948 | ) | (2,166 | ) | (6,114 | ) | ||||||
Benefit obligation, December 31, 2008 | 20,028 | 10,297 | 30,325 | |||||||||
Reconciliation of fair value of plan assets | ||||||||||||
Fair value of plan assets, December 31, 2007 | 23,903 | — | 23,903 | |||||||||
Actual returns | (4,084 | ) | — | (4,084 | ) | |||||||
Contributions | 2,077 | 381 | 2,458 | |||||||||
Benefit payments | (1,417 | ) | (381 | ) | (1,798 | ) | ||||||
Foreign currency exchange rate changes | (3,381 | ) | — | (3,381 | ) | |||||||
Fair value of plan assets, December 31, 2008 | 17,098 | — | 17,098 | |||||||||
Funded status, December 31, 2008 | € | (2,930 | ) | € | (10,297 | ) | € | (13,227 | )(1) | |||
8088
Note | Pension and Other Post-Retirement Benefit Obligations — (Continued) |
2008 | ||||||||||||
Other | ||||||||||||
Post-Retirement | ||||||||||||
Benefit | ||||||||||||
Pension | Obligations | Total | ||||||||||
Components of the net benefit cost recognized | ||||||||||||
Service cost | € | 789 | € | 501 | € | 1,290 | ||||||
Interest cost | 1,356 | 800 | 2,156 | |||||||||
Expected return on plan assets | (1,542 | ) | — | (1,542 | ) | |||||||
Amortization of recognized items | (6 | ) | 83 | 77 | ||||||||
Net benefit costs | € | 597 | € | 1,384 | € | 1,981 | ||||||
(1) | The total of €13,356 on the consolidated balance sheets also includes the pension liabilities of €129 relating to employees at the Company’s German operations. |
2007 | ||||||||||||
Other | ||||||||||||
Post-Retirement | ||||||||||||
Benefit | ||||||||||||
Pension | Obligations | Total | ||||||||||
Change in benefit obligation | ||||||||||||
Benefit obligation, December 31, 2006 | € | 25,990 | € | 13,867 | € | 39,857 | ||||||
Service cost | 840 | 473 | 1,313 | |||||||||
Interest cost | 1,363 | 741 | 2,104 | |||||||||
Benefit payments | (1,593 | ) | (323 | ) | (1,916 | ) | ||||||
Actuarial (gains) losses | (481 | ) | 442 | (39 | ) | |||||||
Foreign currency exchange rate changes | 1,713 | 937 | 2,650 | |||||||||
Benefit obligation, December 31, 2007 | 27,832 | 16,137 | 43,969 | |||||||||
Reconciliation of fair value of plan assets | ||||||||||||
Fair value of plan assets, December 31, 2006 | 21,993 | — | 21,993 | |||||||||
Actual returns | 351 | — | 351 | |||||||||
Contributions | 1,698 | 323 | 2,021 | |||||||||
Benefit payments | (1,593 | ) | (323 | ) | (1,916 | ) | ||||||
Foreign currency exchange rate changes | 1,454 | — | 1,454 | |||||||||
Fair value of plan assets, December 31, 2007 | 23,903 | — | 23,903 | |||||||||
Funded status, December 31, 2007 | € | (3,929 | ) | € | (16,137 | ) | € | (20,066 | )(1) | |||
Components of the net benefit cost recognized | ||||||||||||
Service cost | € | 840 | € | 473 | € | 1,313 | ||||||
Interest cost | 1,363 | 741 | 2,104 | |||||||||
Expected return on plan assets | (1,673 | ) | — | (1,673 | ) | |||||||
Amortization of recognized items | — | 62 | 62 | |||||||||
Net benefit costs | € | 530 | € | 1,276 | € | 1,806 | ||||||
(1) | The total of €20,476 on the consolidated balance sheets also includes the pension liabilities of €410 relating to employees at |
8189
Note | Pension and Other Post-Retirement Benefit Obligations — (Continued) |
2006 | ||||||||||||
Other | ||||||||||||
Post-Retirement | ||||||||||||
Benefit | ||||||||||||
Pension | Obligations | Total | ||||||||||
Change in benefit obligation | ||||||||||||
Benefit obligation, December 31, 2005 | € | 28,191 | € | 15,155 | € | 43,346 | ||||||
Service cost | 815 | 414 | 1,229 | |||||||||
Interest cost | 1,271 | 695 | 1,966 | |||||||||
Benefit payments | (1,493 | ) | �� | (210 | ) | (1,703 | ) | |||||
Actuarial (gains) losses | 38 | (637 | ) | (599 | ) | |||||||
Foreign currency exchange rate changes | (2,832 | ) | (1,550 | ) | (4,382 | ) | ||||||
Benefit obligation, December 31, 2006 | 25,990 | 13,867 | 39,857 | |||||||||
Reconciliation of fair value of plan assets | ||||||||||||
Fair value of plan assets, December 31, 2005 | 21,498 | — | 21,498 | |||||||||
Actual returns | 2,223 | — | 2,223 | |||||||||
Contributions | 1,963 | 210 | 2,173 | |||||||||
Benefit payments | (1,493 | ) | (210 | ) | (1,703 | ) | ||||||
Foreign currency exchange rate changes | (2,198 | ) | — | (2,198 | ) | |||||||
Fair value of plan assets, December 31, 2006 | 21,993 | — | 21,993 | |||||||||
Funded status, December 31, 2006 | € | (3,997 | ) | € | (13,867 | ) | € | (17,864 | )(1) | |||
Components of the net benefit cost recognized | ||||||||||||
Service cost | € | 815 | € | 414 | € | 1,229 | ||||||
Interest cost | 1,271 | 695 | 1,966 | |||||||||
Expected return on plan assets | (1,416 | ) | — | (1,416 | ) | |||||||
Amortization of recognized items | 1 | 92 | 93 | |||||||||
Net benefit costs | € | 671 | € | 1,201 | € | 1,872 | ||||||
Amount | Amount | |||||||
2008 | € | 1,873 | ||||||
2009 | 1,979 | € | 1,765 | |||||
2010 | 2,107 | 1,871 | ||||||
2011 | 2,192 | 1,963 | ||||||
2012 | 2,295 | 2,073 | ||||||
2013 - 2017 | 13,455 | |||||||
2013 | 2,197 | |||||||
2014 — 2018 | 13,108 |
82
December 31 | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
Benefit obligations | ||||||||||||||||
Discount rate | 5.25% | 5.00% | 7.25 | % | 5.25 | % | ||||||||||
Rate of compensation increase | 3.00% | 3.00% | 2.75 | % | 3.00 | % | ||||||||||
Net benefit cost for year ended | ||||||||||||||||
Discount rate | 5.00% | 5.00% | 5.25 | % | 5.00 | % | ||||||||||
Rate of compensation increase | 3.00% | 3.00% | 3.00 | % | 3.00 | % | ||||||||||
Expected rate of return on plan assets | 7.25% | 7.25% | 7.00 | % | 7.25 | % | ||||||||||
Assumed health care cost trend rate at | ||||||||||||||||
Initial health care cost trend rate | 12.00% | 12.00% | 12.00 | % | 12.00 | % | ||||||||||
Annual rate of decline in trend rate | 1.00% | 1.00% | 1.00 | % | 1.00 | % | ||||||||||
Ultimate health care cost trend rate | 5.00% | 5.00% | 4.50 | % | 5.00 | % | ||||||||||
Medical services plan premiums trend rate | 2.50 | % | 2.50 | % |
90
Note 8. | Pension and Other Post-Retirement Benefit Obligations — (Continued) |
December 31, 2007 | December 31, 2006 | December 31, 2008 | December 31, 2007 | |||||||||||||||||||||||||||||
1% increase | 1% decrease | 1% increase | 1% decrease | 1% increase | 1% decrease | 1% increase | 1% decrease | |||||||||||||||||||||||||
Effect on total service and interest rate components | € | 212 | € | (160 | ) | € | 183 | € | (140 | ) | € | 235 | € | (178 | ) | € | 212 | € | (160 | ) | ||||||||||||
Effect on post-retirement benefit obligation | € | 2,252 | € | (1,762 | ) | € | 1,879 | € | (1,467 | ) | € | 1,598 | € | (1,251 | ) | € | 2,252 | € | (1,762 | ) |
Target | 2007 | 2006 | Target | 2008 | 2007 | |||||||||||||||||||
Equity securities | 50-70% | 59% | 60% | 50-70 | % | 61 | % | 59 | % | |||||||||||||||
Debt securities | 30-45% | 34% | 35% | 30-45 | % | 36 | % | 34 | % | |||||||||||||||
Cash and cash equivalents | 0-10% | 7% | 5% | 0-10 | % | 3 | % | 7 | % | |||||||||||||||
100% | 100% | 100 | % | 100 | % | |||||||||||||||||||
Note | Income Taxes |
83
2008 | 2007 | |||||||
Balance at January 1 | € | 4,000 | € | 4,400 | ||||
Additions — current year tax positions | — | 200 | ||||||
Reductions — prior year tax positions | (3,200 | ) | (300 | ) | ||||
Lapse of statute of limitations | — | (300 | ) | |||||
Settlements | — | — | ||||||
Balance at December 31 | € | 800 | € | 4,000 | ||||
91
Note 9. | Income Taxes — (Continued) |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
U.S. Federal statutory rates | 34 | % | 34 | % | 34 | % | 34 | % | 34 | % | 34 | % | ||||||||||||
U.S. Federal statutory rates on (income) loss from continuing operations before income tax and minority interest | € | (11,544 | ) | € | (43,437 | ) | € | 48,865 | € | 28,241 | € | (11,544 | ) | € | (43,437 | ) | ||||||||
Tax differential on foreign income (loss) | 2,902 | (4,070 | ) | 3,951 | (2,966 | ) | 2,902 | (4,070 | ) | |||||||||||||||
Effect of foreign earnings | (17,800 | ) | — | — | ||||||||||||||||||||
Valuation allowance | 15,021 | (16,145 | ) | (44,571 | ) | (5,530 | ) | 15,021 | (16,145 | ) | ||||||||||||||
Other | (16,693 | ) | 6,209 | 4,895 | (4,422 | ) | (16,693 | ) | 6,209 | |||||||||||||||
€ | (10,314 | ) | € | (57,443 | ) | € | 13,140 | € | (2,477 | ) | € | (10,314 | ) | € | (57,443 | ) | ||||||||
Comprised of: | ||||||||||||||||||||||||
Current | € | (2,170 | ) | € | (584 | ) | € | (383 | ) | € | (501 | ) | € | (2,170 | ) | € | (584 | ) | ||||||
Deferred | (8,144 | ) | (56,859 | ) | 13,523 | (1,976 | ) | (8,144 | ) | (56,859 | ) | |||||||||||||
€ | (10,314 | ) | € | (57,443 | ) | € | 13,140 | € | (2,477 | ) | € | (10,314 | ) | € | (57,443 | ) | ||||||||
84
December 31 | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
German tax loss carryforwards | € | 50,725 | € | 68,262 | € | 67,930 | € | 50,725 | ||||||||
U.S. tax loss carryforwards | 5,909 | 19,934 | ||||||||||||||
Canadian tax loss carryforwards | 2,497 | 631 | 4,924 | 2,497 | ||||||||||||
Basis difference between income tax and financial reporting with respect to operating pulp mills | (6,354 | ) | (3,939 | ) | (17,118 | ) | (6,354 | ) | ||||||||
Derivative financial instruments | 6,144 | 13,457 | 13,227 | 6,144 | ||||||||||||
Long term debt | (2,736 | ) | (458 | ) | ||||||||||||
Long-term debt | (1,726 | ) | (2,736 | ) | ||||||||||||
Payables and accrued expenses | 148 | 111 | (780 | ) | 148 | |||||||||||
Reserve for deferred pension liability | 18 | 179 | 2,079 | 18 | ||||||||||||
Capital leases | 652 | 177 | 531 | 652 | ||||||||||||
U.S. tax loss carryforwards | 19,934 | 17,000 | ||||||||||||||
Other | 1,149 | (128 | ) | 956 | 1,149 | |||||||||||
72,177 | 95,292 | 75,932 | 72,177 | |||||||||||||
Valuation allowance | (73,193 | ) | (88,214 | ) | (78,723 | ) | (73,193 | ) | ||||||||
Net deferred tax (liability) asset | € | (1,016 | ) | € | 7,078 | € | (2,791 | ) | € | (1,016 | ) | |||||
Comprised of: | ||||||||||||||||
Deferred income tax asset | € | 17,624 | € | 29,989 | € | 31,666 | € | 17,624 | ||||||||
Deferred income tax liability | (18,640 | ) | (22,911 | ) | (34,457 | ) | (18,640 | ) | ||||||||
€ | (1,016 | ) | € | 7,078 | € | (2,791 | ) | € | (1,016 | ) | ||||||
92
Note 9. | Income Taxes — (Continued) |
Note | Shareholders’ Equity |
85
Note | Stock-Based Compensation |
93
Note 11. | Stock-Based Compensation — (Continued) |
Number | Weighted Average | Number | Weighted Average | |||||||||||||
of Options | Exercise Price | of Options | Exercise Price | |||||||||||||
(In U.S. Dollars) | (In U.S. Dollars) | |||||||||||||||
Outstanding at December 31, 2004 | 1,055,000 | $ | 6.58 | |||||||||||||
Granted | 130,000 | 7.78 | ||||||||||||||
Outstanding at December 31, 2005 | 1,185,000 | 6.71 | 1,185,000 | $ | 6.71 | |||||||||||
Exercised | (60,000 | ) | 6.38 | (60,000 | ) | 6.38 | ||||||||||
Outstanding at December 31, 2006 | 1,125,000 | 6.69 | 1,125,000 | 6.69 | ||||||||||||
Exercised | (56,666 | ) | 7.10 | (56,666 | ) | 7.10 | ||||||||||
Cancelled | (5,000 | ) | 7.92 | (5,000 | ) | 7.92 | ||||||||||
Expired | (135,000 | ) | 8.50 | (135,000 | ) | 8.50 | ||||||||||
Outstanding at December 31, 2007 | 928,334 | $ | 6.44 | |||||||||||||
Outstanding at December 31, 2007 and 2008 | 928,334 | $ | 6.44 | |||||||||||||
94
Note 11. | Stock-Based Compensation — (Continued) |
Outstanding Options | Outstanding Options | Outstanding Options | ||||||||||||||||||||||||||||||||||||||
Weighted | Exercisable Options | Weighted | Exercisable Options | |||||||||||||||||||||||||||||||||||||
Exercise | Average | Weighted | Weighted | Average | Weighted | Weighted | ||||||||||||||||||||||||||||||||||
Price | Remaining | Average | Average | Remaining | Average | Average | ||||||||||||||||||||||||||||||||||
Range | Number | Contractual Life | Exercise Price | Number | Exercise Price | Number | Contractual Life | Exercise Price | Number | Exercise Price | ||||||||||||||||||||||||||||||
(In U.S. Dollars) | ||||||||||||||||||||||||||||||||||||||||
(In U.S. Dollars) | (Years) | (In U.S. Dollars) | (Years) | |||||||||||||||||||||||||||||||||||||
$5.65 - $6.375 | 830,000 | 2.50 | $6.29 | 830,000 | $6.29 | 830,000 | 1.50 | $6.29 | 830,000 | $6.29 | ||||||||||||||||||||||||||||||
7.30 | 30,000 | 7.50 | 7.30 | 30,000 | 7.30 | 30,000 | 6.50 | 7.30 | 30,000 | 7.30 | ||||||||||||||||||||||||||||||
7.92 | 68,334 | 7.75 | 7.92 | 68,334 | 7.92 | 68,334 | 6.75 | 7.92 | 68,334 | 7.92 |
86
2006 | ||||
Risk-free interest rate | 4.1% | |||
Expected life of the options | 0.5 years | |||
Expected volatility(1) | 34.1% | |||
Expected dividend yield | 0.0% | |||
Weighted average fair value per option granted (in U.S. dollars) | $2.94 |
(1) | The expected volatility was based on |
Number | Weighted Average | |||||||
of Options | Exercise Price | |||||||
(In U.S. Dollars) | ||||||||
Non-vested at December 31, 2006 | 43,333 | $ | 7.77 | |||||
Vested and cancelled during the year | (43,333 | ) | 7.77 | |||||
Non-vested at December 31, 2007 | — | $ | — | |||||
8795
Note 11. | Stock-Based Compensation — (Continued) |
Note | Net Income (Loss) Per Share |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
Net income (loss) from continuing operations — basic | € | 22,389 | € | 69,242 | € | (112,058 | ) | € | (72,465 | ) | € | 22,389 | € | 69,242 | ||||||||||
Interest on convertible notes, net of tax | 3,930 | 4,912 | — | — | 3,930 | 4,912 | ||||||||||||||||||
Net income (loss) from continuing operations — diluted | € | 26,319 | € | 74,154 | € | (112,058 | ) | € | (72,465 | ) | € | 26,319 | € | 74,154 | ||||||||||
Net income (loss) from continuing operations per share: | ||||||||||||||||||||||||
Basic | € | 0.62 | € | 2.08 | € | (3.59 | ) | € | (2.00 | ) | € | 0.62 | € | 2.08 | ||||||||||
Diluted | € | 0.58 | € | 1.72 | € | (3.59 | ) | € | (2.00 | ) | € | 0.58 | € | 1.72 | ||||||||||
Net income (loss) from continuing operations | € | 22,389 | € | 69,242 | € | (112,058 | ) | € | (72,465 | ) | € | 22,389 | € | 69,242 | ||||||||||
Net loss from discontinued operations | (210 | ) | (6,032 | ) | (5,088 | ) | — | (210 | ) | (6,032 | ) | |||||||||||||
Net income (loss) — basic | 22,179 | 63,210 | (117,146 | ) | (72,465 | ) | 22,179 | 63,210 | ||||||||||||||||
Interest on convertible notes, net of tax | 3,930 | 4,912 | — | — | 3,930 | 4,912 | ||||||||||||||||||
Net income (loss) — diluted | € | 26,109 | € | 68,122 | € | (117,146 | ) | € | (72,465 | ) | € | 26,109 | € | 68,122 | ||||||||||
Net income (loss) per share: | ||||||||||||||||||||||||
Basic | € | 0.61 | € | 1.90 | € | (3.75 | ) | € | (2.00 | ) | € | 0.61 | € | 1.90 | ||||||||||
Diluted | € | 0.58 | € | 1.58 | € | (3.75 | ) | € | (2.00 | ) | € | 0.58 | € | 1.58 | ||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||||||||
Basic | 36,080,931 | 33,336,348 | 31,217,765 | |||||||||||||||||||||
Basic(1) | 36,285,027 | 36,080,931 | 33,336,348 | |||||||||||||||||||||
Effect of dilutive shares: | ||||||||||||||||||||||||
Stock options and awards | 362,774 | 319,793 | — | 2,394 | 362,774 | 319,793 | ||||||||||||||||||
Convertible notes | 8,859,036 | 9,428,022 | — | — | 8,859,036 | 9,428,022 | ||||||||||||||||||
Diluted | 45,302,741 | 43,084,163 | 31,217,765 | 36,287,421 | 45,302,741 | 43,084,163 | ||||||||||||||||||
(1) | The basic weighted average number of shares excludes performance and restricted stock which have been issued, but have not vested as at December 31, 2008. |
Note | Business Segment Information |
8896
Note | Business Segment Information — (Continued) |
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
Germany | € | 198,575 | € | 154,388 | € | 91,460 | € | 198,340 | € | 198,575 | € | 154,388 | ||||||||||||
China | 159,553 | 141,296 | 82,356 | 131,412 | 159,553 | 141,296 | ||||||||||||||||||
Italy | 50,177 | 60,057 | 71,742 | 56,487 | 50,177 | 60,057 | ||||||||||||||||||
Other European Union countries(1) | 136,434 | 117,016 | 91,308 | 133,621 | 136,434 | 117,016 | ||||||||||||||||||
Other Asia | 58,242 | 75,522 | 56,953 | 65,192 | 58,242 | 75,522 | ||||||||||||||||||
North America | 66,229 | 39,761 | 37,643 | 78,718 | 66,229 | 39,761 | ||||||||||||||||||
Other countries | 26,639 | 28,586 | 16,191 | 17,146 | 26,639 | 28,586 | ||||||||||||||||||
695,849 | 616,626 | 447,653 | 680,916 | 695,849 | 616,626 | |||||||||||||||||||
Energy revenues | 30,971 | 22,904 | 20,922 | |||||||||||||||||||||
Third party transportation revenues | 8,542 | 7,351 | 4,784 | 8,404 | 8,542 | 7,351 | ||||||||||||||||||
€ | 704,391 | € | 623,977 | € | 452,437 | € | 720,291 | € | 727,295 | € | 644,899 | |||||||||||||
(1) | Not including Germany or Italy; includes new entrant countries to the European Union from their time of admission. |
2007 | 2006 | 2008 | 2007 | |||||||||||||
Germany | € | 776,839 | € | 851,290 | € | 732,766 | € | 776,839 | ||||||||
Canada | 189,277 | 181,574 | 161,850 | 189,277 | ||||||||||||
Other | 4,215 | 5,024 | 4,036 | 4,215 | ||||||||||||
€ | 970,331 | € | 1,037,888 | € | 898,652 | € | 970,331 | |||||||||
Note | Financial Instruments |
2007 | 2006 | 2008 | 2007 | |||||||||||||||||||||||||||||
Carrying | Carrying | Carrying | Carrying | |||||||||||||||||||||||||||||
Amount | Fair Value | Amount | Fair Value | Amount | Fair Value | Amount | Fair Value | |||||||||||||||||||||||||
Cash and cash equivalents | € | 84,848 | € | 84,848 | € | 69,367 | € | 69,367 | € | 42,452 | € | 42,452 | € | 84,848 | € | 84,848 | ||||||||||||||||
Cash, restricted | 33,000 | 33,000 | 57,000 | 57,000 | 13,000 | 13,000 | 33,000 | 33,000 | ||||||||||||||||||||||||
Receivables | 100,158 | 100,158 | 89,890 | 89,890 | ||||||||||||||||||||||||||||
Notes receivable | 9,873 | 9,873 | 16,542 | 16,542 | 4,171 | 4,171 | 9,873 | 9,873 | ||||||||||||||||||||||||
Long-term debt | 849,855 | 845,026 | 907,831 | 921,435 | ||||||||||||||||||||||||||||
Foreign exchange rate derivative contracts — asset | — | — | 5,933 | 5,933 | ||||||||||||||||||||||||||||
Accounts payable and accrued expenses | 87,517 | 87,517 | 87,000 | 87,000 | ||||||||||||||||||||||||||||
Debt | 820,296 | 704,901 | 849,855 | 845,026 | ||||||||||||||||||||||||||||
Interest rate derivative contracts — liability | 21,885 | 21,885 | 41,355 | 41,355 | 47,112 | 47,112 | 21,885 | 21,885 |
97
Note 14. | Financial Instruments — (Continued) |
89
2008 | 2007 | 2006 | ||||||||||
Realized net gain on foreign exchange derivatives | € | — | € | 6,820 | € | (3,510 | ) | |||||
Unrealized net gain (loss) on interest rate derivatives | € | (25,228 | ) | € | 19,470 | € | 37,292 | |||||
Unrealized net gain (loss) on foreign exchange derivatives | — | (5,933 | ) | 72,066 | ||||||||
Unrealized net gain (loss) on derivative financial instruments | € | (25,228 | ) | € | 13,537 | € | 109,358 | |||||
98
Note 14. | Financial Instruments — (Continued) |
9099
Note 14. | Financial Instruments — (Continued) |
Quoted prices | Significant | |||||||||||||||
in active | other | Significant | ||||||||||||||
markets for | observable | unobservable | ||||||||||||||
identical assets | inputs | inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Assets | ||||||||||||||||
Investments held in restricted cash(a) | € | 6,622 | € | — | € | — | € | 6,622 | ||||||||
Investments(a) | 419 | — | — | 419 | ||||||||||||
Total assets | € | 7,041 | € | — | € | — | € | 7,041 | ||||||||
Liabilities | ||||||||||||||||
Derivatives(b) | ||||||||||||||||
— Interest rate swaps | — | 47,112 | — | 47,112 | ||||||||||||
Total liabilities | € | — | € | 47,112 | € | — | € | 47,112 | ||||||||
�� |
(a) | Based on observable market data. | |
(b) | Based on observable inputs for the liability (interest rates and yield curves observable at specific intervals). |
Note | Lease Commitments |
Capital | Operating | Capital | Operating | |||||||||||||
Leases | Leases | Leases | Leases | |||||||||||||
2008 | € | 3,680 | € | 731 | ||||||||||||
2009 | 1,748 | 529 | € | 3,419 | € | 2,276 | ||||||||||
2010 | 1,475 | 310 | 2,740 | 2,005 | ||||||||||||
2011 | 1,353 | 101 | 2,994 | 1,398 | ||||||||||||
2012 | 226 | 3 | 1,356 | 953 | ||||||||||||
2013 | 191 | 5 | ||||||||||||||
Thereafter | 2,041 | 1 | 1,537 | — | ||||||||||||
Total | € | 10,523 | € | 1,675 | € | 12,237 | € | 6,637 | ||||||||
Less imputed interest | (1,585 | ) | (1,642 | ) | ||||||||||||
Total present value of minimum capitalized payments | 8,938 | 10,595 | ||||||||||||||
Less current portion of capital lease obligations | (3,469 | ) | (3,435 | ) | ||||||||||||
Long-term capital lease obligations | € | 5,469 | € | 7,160 | ||||||||||||
100
Note 15. | Lease Commitments — (Continued) |
Note | Commitments and Contingencies |
Note | Discontinued Operations |
91
101
December 31, | ||||||||
2007 | 2006 | |||||||
Assets | ||||||||
Cash and cash equivalents | € | — | € | 437 | ||||
Receivables | — | 1,657 | ||||||
Liabilities | ||||||||
Accounts payable and accrued expenses | € | — | € | 1,926 |
Note 17. | Discontinued Operations — (Continued) |
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
Revenues | € | 128 | € | 46,351 | € | 61,471 | € | — | € | 128 | € | 46,351 | ||||||||||||
Operating (loss) income from discontinued operations | € | (142 | ) | € | 394 | € | (2,306 | ) | € | — | € | (142 | ) | € | 394 | |||||||||
Total other expenses | (68 | ) | (469 | ) | (2,782 | ) | — | (68 | ) | (469 | ) | |||||||||||||
Loss on disposal of business | — | (5,957 | ) | — | — | — | (5,957 | ) | ||||||||||||||||
Net loss from discontinued operations | € | (210 | ) | € | (6,032 | ) | € | (5,088 | ) | € | — | € | (210 | ) | € | (6,032 | ) | |||||||
Loss per common share from discontinued operations | ||||||||||||||||||||||||
— basic | € | (0.01 | ) | € | (0.18 | ) | € | (0.16 | ) | € | — | € | (0.01 | ) | € | (0.18 | ) | |||||||
— diluted | € | 0.00 | € | (0.14 | ) | € | (0.16 | ) | € | — | € | (0.01 | ) | € | (0.18 | ) |
2007 | 2006 | 2005 | ||||||||||
Cash flows used in operating activities | € | (1,519 | ) | € | (2,121 | ) | € | (347 | ) | |||
Cash flows from (used in) investing activities | 1,260 | 5,944 | (1,200 | ) | ||||||||
Cash flows used in financing activities | — | (4,158 | ) | (700 | ) | |||||||
Cash flows used in discontinued operations | € | (259 | ) | € | (335 | ) | € | (2,247 | ) |
2008 | 2007 | 2006 | ||||||||||
Cash flows used in operating activities | € | — | € | (1,519 | ) | € | (2,121 | ) | ||||
Cash flows from (used in) investing activities | — | 1,260 | 5,944 | |||||||||
Cash flows used in financing activities | — | — | (4,158 | ) | ||||||||
Cash flows used in discontinued operations | € | — | € | (259 | ) | € | (335 | ) | ||||
Note | Minority Share Purchase |
Note 19. | Subsequent Events |
Note 20. | Restricted Group Supplemental Disclosure |
102
Note 20. | Restricted Group Supplemental Disclosure — (Continued) |
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
ASSETS | ||||||||||||||||
Current | ||||||||||||||||
Cash and cash equivalents | € | 26,176 | € | 16,276 | € | — | € | 42,452 | ||||||||
Cash, restricted | — | 13,000 | — | 13,000 | ||||||||||||
Receivables | 57,258 | 42,900 | — | 100,158 | ||||||||||||
Note receivable, current portion | 642 | — | — | 642 | ||||||||||||
Inventories | 59,801 | 38,656 | — | 98,457 | ||||||||||||
Prepaid expenses and other | 2,573 | 1,619 | — | 4,192 | ||||||||||||
Total current assets | 146,450 | 112,451 | — | 258,901 | ||||||||||||
Property, plant and equipment | 351,009 | 530,695 | — | 881,704 | ||||||||||||
Other | 4,425 | 5 | — | 4,430 | ||||||||||||
Deferred income tax | 18,439 | 13,227 | — | 31,666 | ||||||||||||
Due from unrestricted group | 55,925 | — | (55,925 | ) | — | |||||||||||
Note receivable, less current portion | 3,529 | — | — | 3,529 | ||||||||||||
Total assets | € | 579,777 | € | 656,378 | € | (55,925 | ) | € | 1,180,230 | |||||||
LIABILITIES | ||||||||||||||||
Current | ||||||||||||||||
Accounts payable and accrued expenses | € | 44,450 | € | 43,067 | € | — | € | 87,517 | ||||||||
Pension and other post-retirement benefit obligations, current portion | 510 | — | — | 510 | ||||||||||||
Debt, current portion | — | 16,500 | — | 16,500 | ||||||||||||
Total current liabilities | 44,960 | 59,567 | — | 104,527 | ||||||||||||
Debt, less current portion | 289,222 | 514,574 | — | 803,796 | ||||||||||||
Due to restricted group | — | 55,925 | (55,925 | ) | — | |||||||||||
Unrealized derivative loss | — | 47,112 | — | 47,112 | ||||||||||||
Pension and other post-retirement benefit obligations | 12,846 | — | — | 12,846 | ||||||||||||
Capital leases and other | 7,167 | 4,100 | — | 11,267 | ||||||||||||
Deferred income tax | 15,403 | 19,054 | — | 34,457 | ||||||||||||
Total liabilities | 369,598 | 700,332 | (55,925 | ) | 1,014,005 | |||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Total shareholders’ equity (deficit) | 210,179 | (43,954 | ) | — | 166,225 | |||||||||||
Total liabilities and shareholders’ equity | € | 579,777 | € | 656,378 | € | (55,925 | ) | € | 1,180,230 | |||||||
92103
Note 20. | Restricted Group Supplemental Disclosure — (Continued) |
Restricted | Unrestricted | Consolidated | Restricted | Unrestricted | Consolidated | |||||||||||||||||||||||||||
Group | Subsidiaries | Eliminations | Group | Group | Subsidiaries | Eliminations | Group | |||||||||||||||||||||||||
ASSETS | ASSETS | |||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | € | 59,371 | € | 25,477 | € | — | € | 84,848 | € | 59,371 | € | 25,477 | € | — | € | 84,848 | ||||||||||||||||
Receivables | 37,482 | 52,408 | — | 89,890 | 37,482 | 52,408 | — | 89,890 | ||||||||||||||||||||||||
Note receivable, current portion | 589 | 5,307 | — | 5,896 | 589 | 5,307 | — | 5,896 | ||||||||||||||||||||||||
Inventories | 63,444 | 40,166 | — | 103,610 | 63,444 | 40,166 | — | 103,610 | ||||||||||||||||||||||||
Prepaid expenses and other | 3,714 | 2,301 | — | 6,015 | 3,714 | 2,301 | — | 6,015 | ||||||||||||||||||||||||
Total current assets | 164,600 | 125,659 | — | 290,259 | 164,600 | 125,659 | — | 290,259 | ||||||||||||||||||||||||
Cash, restricted | — | 33,000 | — | 33,000 | — | 33,000 | — | 33,000 | ||||||||||||||||||||||||
Property, plant and equipment | 385,569 | 547,689 | — | 933,258 | 385,569 | 547,689 | — | 933,258 | ||||||||||||||||||||||||
Other | 5,399 | — | — | 5,399 | 5,399 | — | — | 5,399 | ||||||||||||||||||||||||
Deferred income tax | 10,852 | 6,772 | — | 17,624 | 10,852 | 6,772 | — | 17,624 | ||||||||||||||||||||||||
Due from unrestricted group | 57,457 | — | (57,457 | ) | — | 57,457 | — | (57,457 | ) | — | ||||||||||||||||||||||
Note receivable, less current portion | 3,977 | — | — | 3,977 | 3,977 | — | — | 3,977 | ||||||||||||||||||||||||
Total assets | € | 627,854 | € | 713,120 | € | (57,457 | ) | € | 1,283,517 | € | 627,854 | € | 713,120 | € | (57,457 | ) | € | 1,283,517 | ||||||||||||||
LIABILITIES | LIABILITIES | |||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||
Accounts payable and accrued expenses | € | 43,621 | € | 43,379 | € | — | € | 87,000 | € | 43,621 | € | 43,379 | € | — | € | 87,000 | ||||||||||||||||
Pension and other post-retirement | ||||||||||||||||||||||||||||||||
benefit obligations, current portion | 493 | — | — | 493 | ||||||||||||||||||||||||||||
Pension and other post-retirement benefit obligations, current portion | 493 | — | — | 493 | ||||||||||||||||||||||||||||
Debt, current portion | — | 34,023 | — | 34,023 | — | 34,023 | — | 34,023 | ||||||||||||||||||||||||
Total current liabilities | 44,114 | 77,402 | — | 121,516 | 44,114 | 77,402 | — | 121,516 | ||||||||||||||||||||||||
Debt, less current portion | 273,589 | 542,243 | — | 815,832 | 273,589 | 542,243 | — | 815,832 | ||||||||||||||||||||||||
Due to restricted group | — | 57,457 | (57,457 | ) | — | — | 57,457 | (57,457 | ) | — | ||||||||||||||||||||||
Unrealized derivative loss | — | 21,885 | — | 21,885 | — | 21,885 | — | 21,885 | ||||||||||||||||||||||||
Pension & other post-retirement benefit obligations | 19,983 | — | — | 19,983 | ||||||||||||||||||||||||||||
Capital leases and other | 27,016 | 1,966 | — | 28,982 | 7,033 | 1,966 | — | 8,999 | ||||||||||||||||||||||||
Deferred income tax | 4,553 | 14,087 | — | 18,640 | 4,553 | 14,087 | — | 18,640 | ||||||||||||||||||||||||
Total liabilities | 349,272 | 715,040 | (57,457 | ) | 1,006,855 | 349,272 | 715,040 | (57,457 | ) | 1,006,855 | ||||||||||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||||
Total shareholders’ equity (deficit) | 278,582 | (1,920 | ) | — | 276,662 | 278,582 | (1,920 | ) | — | 276,662 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | € | 627,854 | € | 713,120 | € | (57,457 | ) | € | 1,283,517 | € | 627,854 | € | 713,120 | € | (57,457 | ) | € | 1,283,517 | ||||||||||||||
93104
Note 20. | Restricted Group Supplemental Disclosure — (Continued) |
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
ASSETS | ||||||||||||||||
Current | ||||||||||||||||
Cash and cash equivalents | € | 39,078 | € | 30,289 | € | — | € | 69,367 | ||||||||
Receivables | 38,662 | 36,360 | — | 75,022 | ||||||||||||
Note receivable, current portion | 620 | 7,178 | — | 7,798 | ||||||||||||
Inventories | 41,087 | 21,770 | — | 62,857 | ||||||||||||
Prepaid expenses and other | 2,352 | 2,310 | — | 4,662 | ||||||||||||
Current assets from discontinued operations | — | 2,094 | — | 2,094 | ||||||||||||
Total current assets | 121,799 | 100,001 | — | 221,800 | ||||||||||||
Cash, restricted | — | 57,000 | — | 57,000 | ||||||||||||
Property, plant and equipment | 408,957 | 563,186 | — | 972,143 | ||||||||||||
Other | 8,155 | 4,763 | — | 12,918 | ||||||||||||
Deferred income tax | 14,316 | 15,673 | — | 29,989 | ||||||||||||
Due from unrestricted group | 51,265 | — | (51,265 | ) | — | |||||||||||
Note receivable, less current portion | 5,023 | 3,721 | — | 8,744 | ||||||||||||
Total assets | € | 609,515 | € | 744,344 | € | (51,265 | ) | € | 1,302,594 | |||||||
LIABILITIES | ||||||||||||||||
Current | ||||||||||||||||
Accounts payable and accrued expenses | € | 46,475 | € | 37,335 | € | — | € | 83,810 | ||||||||
Pension and other post-retirement benefit | ||||||||||||||||
obligations, current portion | 363 | — | — | 363 | ||||||||||||
Debt, current portion | — | 33,903 | — | 33,903 | ||||||||||||
Current liabilities from discontinued operations | — | 1,926 | — | 1,926 | ||||||||||||
Total current liabilities | 46,838 | 73,164 | — | 120,002 | ||||||||||||
Debt, less current portion | 293,781 | 571,840 | — | 865,621 | ||||||||||||
Due to restricted group | — | 51,265 | (51,265 | ) | — | |||||||||||
Unrealized derivative loss | — | 41,355 | — | 41,355 | ||||||||||||
Capital leases and other | 22,115 | 11,789 | — | 33,904 | ||||||||||||
Deferred income tax | 2,832 | 20,079 | — | 22,911 | ||||||||||||
Total liabilities | 365,566 | 769,492 | (51,265 | ) | 1,083,793 | |||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Total shareholders’ equity (deficit) | 243,949 | (25,148 | ) | — | 218,801 | |||||||||||
Total liabilities and shareholders’ equity | € | 609,515 | € | 744,344 | € | (51,265 | ) | € | 1,302,594 | |||||||
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
Revenues | € | 413,088 | € | 307,203 | € | — | € | 720,291 | ||||||||
Operating costs | 369,923 | 257,010 | — | 626,933 | ||||||||||||
Operating depreciation and amortization | 28,589 | 26,895 | — | 55,484 | ||||||||||||
Selling, general and administrative expenses | 17,406 | 12,752 | — | 30,158 | ||||||||||||
(Sale) purchase of emission allowances | (433 | ) | (5,180 | ) | — | (5,613 | ) | |||||||||
Operating income from continuing operations | (2,397 | ) | 15,726 | — | 13,329 | |||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (27,027 | ) | (43,117 | ) | 4,388 | (65,756 | ) | |||||||||
Investment income (loss) | 6,834 | (3,620 | ) | (4,388 | ) | (1,174 | ) | |||||||||
Derivative financial instruments, net | — | (25,228 | ) | — | (25,228 | ) | ||||||||||
Foreign exchange gain on debt | (4,114 | ) | (120 | ) | — | (4,234 | ) | |||||||||
Total other income (expense) | (24,307 | ) | (72,085 | ) | — | (96,392 | ) | |||||||||
Income (loss) before income taxes and minority interest from continuing operations | (26,704 | ) | (56,359 | ) | — | (83,063 | ) | |||||||||
Income tax benefit (provision) | ||||||||||||||||
Current | (264 | ) | (237 | ) | — | (501 | ) | |||||||||
Deferred | (3,464 | ) | 1,488 | — | (1,976 | ) | ||||||||||
Income (loss) before minority interest from continuing operations | (30,432 | ) | (55,108 | ) | — | (85,540 | ) | |||||||||
Minority interest | — | 13,075 | — | 13,075 | ||||||||||||
Net income (loss) from continuing operations | (30,432 | ) | (42,033 | ) | — | (72,465 | ) | |||||||||
Net income (loss) | € | (30,432 | ) | € | (42,033 | ) | € | — | € | (72,465 | ) | |||||
94105
Note 20. | Restricted Group Supplemental Disclosure — (Continued) |
Restricted | Unrestricted | Consolidated | Restricted | Unrestricted | Consolidated | |||||||||||||||||||||||||||
Group | Subsidiaries | Eliminations | Group | Group | Subsidiaries | Eliminations | Group | |||||||||||||||||||||||||
Revenues | € | 401,251 | € | 303,140 | € | — | € | 704,391 | € | 410,369 | € | 316,926 | € | — | € | 727,295 | ||||||||||||||||
Operating costs | 315,836 | 232,498 | — | 548,334 | 328,954 | 246,284 | — | 575,238 | ||||||||||||||||||||||||
Operating depreciation and amortization | 28,661 | 27,739 | — | 56,400 | 28,661 | 27,739 | — | 56,400 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 21,650 | 13,064 | — | 34,714 | 17,650 | 13,064 | — | 30,714 | ||||||||||||||||||||||||
(Sale) purchase of emission allowances | (1,566 | ) | (3,077 | ) | — | (4,643 | ) | (1,566 | ) | (3,077 | ) | — | (4,643 | ) | ||||||||||||||||||
Operating income from continuing operations | 36,670 | 32,916 | — | 69,586 | 36,670 | 32,916 | — | 69,586 | ||||||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||||||
Interest expense | (28,472 | ) | (46,653 | ) | 3,725 | (71,400 | ) | |||||||||||||||||||||||||
Interest income (expense) | (28,472 | ) | (46,653 | ) | 3,725 | (71,400 | ) | |||||||||||||||||||||||||
Investment income | 5,303 | 2,875 | (3,725 | ) | 4,453 | 5,303 | 2,875 | (3,725 | ) | 4,453 | ||||||||||||||||||||||
Derivative financial instruments, net | — | 20,357 | — | 20,357 | — | 20,357 | — | 20,357 | ||||||||||||||||||||||||
Foreign exchange gain on debt and distributions | 10,629 | 329 | — | 10,958 | ||||||||||||||||||||||||||||
Foreign exchange gain on debt | 10,629 | 329 | — | 10,958 | ||||||||||||||||||||||||||||
Total other expense | (12,540 | ) | (23,092 | ) | — | (35,632 | ) | |||||||||||||||||||||||||
Total other income (expense) | (12,540 | ) | (23,092 | ) | — | (35,632 | ) | |||||||||||||||||||||||||
Income before income taxes and minority interest from continuing operations | 24,130 | 9,824 | — | 33,954 | ||||||||||||||||||||||||||||
Income tax provision | ||||||||||||||||||||||||||||||||
Income (loss) before income taxes and minority interest from continuing operations | 24,130 | 9,824 | — | 33,954 | ||||||||||||||||||||||||||||
Income tax benefit (provision) | ||||||||||||||||||||||||||||||||
Current | (1,394 | ) | (776 | ) | — | (2,170 | ) | (1,394 | ) | (776 | ) | — | (2,170 | ) | ||||||||||||||||||
Deferred | (5,034 | ) | (3,110 | ) | — | (8,144 | ) | (5,034 | ) | (3,110 | ) | — | (8,144 | ) | ||||||||||||||||||
Income before minority interest from continuing operations | 17,702 | 5,938 | — | 23,640 | ||||||||||||||||||||||||||||
Income (loss) before minority interest from continuing operations | 17,702 | 5,938 | — | 23,640 | ||||||||||||||||||||||||||||
Minority interest | — | (1,251 | ) | — | (1,251 | ) | — | (1,251 | ) | — | (1,251 | ) | ||||||||||||||||||||
Net income from continuing operations | 17,702 | 4,687 | — | 22,389 | ||||||||||||||||||||||||||||
Net loss from discontinued operations | (210 | ) | — | — | (210 | ) | ||||||||||||||||||||||||||
Net income (loss) from continuing operations | 17,702 | 4,687 | — | 22,389 | ||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | (210 | ) | — | — | (210 | ) | ||||||||||||||||||||||||||
Net income | € | 17,492 | € | 4,687 | € | — | € | 22,179 | ||||||||||||||||||||||||
Net income (loss) | € | 17,492 | € | 4,687 | € | — | € | 22,179 | ||||||||||||||||||||||||
95106
Note 20. | Restricted Group Supplemental Disclosure — (Continued) |
Restricted | Unrestricted | Consolidated | Restricted | Unrestricted | Consolidated | |||||||||||||||||||||||||||
Group | Subsidiaries | Eliminations | Group | Group | Subsidiaries | Eliminations | Group | |||||||||||||||||||||||||
Revenues | € | 360,986 | € | 262,991 | € | — | € | 623,977 | € | 368,016 | € | 276,883 | € | — | € | 644,899 | ||||||||||||||||
Operating costs | 280,837 | 175,767 | — | 456,604 | 287,867 | 189,659 | — | 477,526 | ||||||||||||||||||||||||
Operating depreciation and amortization | 27,819 | 28,015 | — | 55,834 | 27,819 | 28,015 | — | 55,834 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 22,861 | 11,783 | — | 34,644 | 22,861 | 11,783 | — | 34,644 | ||||||||||||||||||||||||
(Sale) purchase of emission allowances | (4,933 | ) | (10,676 | ) | — | (15,609 | ) | (4,933 | ) | (10,676 | ) | — | (15,609 | ) | ||||||||||||||||||
Operating income from continuing operations | 34,402 | 58,102 | — | 92,504 | 34,402 | 58,102 | — | 92,504 | ||||||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||||||
Interest expense | (34,354 | ) | (61,137 | ) | 3,560 | (91,931 | ) | |||||||||||||||||||||||||
Interest income (expense) | (34,354 | ) | (61,137 | ) | 3,560 | (91,931 | ) | |||||||||||||||||||||||||
Investment income | 5,316 | 4,334 | (3,560 | ) | 6,090 | 5,316 | 4,334 | (3,560 | ) | 6,090 | ||||||||||||||||||||||
Derivative financial instruments, net | — | 105,848 | — | 105,848 | — | 105,848 | — | 105,848 | ||||||||||||||||||||||||
Foreign exchange gain on debt and distributions | 15,245 | — | — | 15,245 | ||||||||||||||||||||||||||||
Foreign exchange gain on debt | 15,245 | — | — | 15,245 | ||||||||||||||||||||||||||||
Total other (expense) income | (13,793 | ) | 49,045 | — | 35,252 | |||||||||||||||||||||||||||
Total other income (expense) | (13,793 | ) | 49,045 | — | 35,252 | |||||||||||||||||||||||||||
Income before income taxes and minority interest from continuing operations | 20,609 | 107,147 | — | 127,756 | ||||||||||||||||||||||||||||
Income tax provision | ||||||||||||||||||||||||||||||||
Income (loss) before income taxes and minority interest from continuing operations | 20,609 | 107,147 | — | 127,756 | ||||||||||||||||||||||||||||
Income tax benefit (provision) | ||||||||||||||||||||||||||||||||
Current | (290 | ) | (294 | ) | — | (584 | ) | (290 | ) | (294 | ) | — | (584 | ) | ||||||||||||||||||
Deferred | (10,968 | ) | (45,891 | ) | — | (56,859 | ) | (10,968 | ) | (45,891 | ) | — | (56,859 | ) | ||||||||||||||||||
Income before minority interest from continuing operations | 9,351 | 60,962 | — | 70,313 | ||||||||||||||||||||||||||||
Income (loss)before minority interest from continuing operations | 9,351 | 60,962 | — | 70,313 | ||||||||||||||||||||||||||||
Minority interest | — | (1,071 | ) | — | (1,071 | ) | — | (1,071 | ) | — | (1,071 | ) | ||||||||||||||||||||
Net income from continuing operations | 9,351 | 59,891 | — | 69,242 | ||||||||||||||||||||||||||||
Net loss from discontinued operations | — | (6,032 | ) | — | (6,032 | ) | ||||||||||||||||||||||||||
Net income (loss) from continuing operations | 9,351 | 59,891 | — | 69,242 | ||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | — | (6,032 | ) | — | (6,032 | ) | ||||||||||||||||||||||||||
Net income | € | 9,351 | € | 53,859 | € | — | € | 63,210 | ||||||||||||||||||||||||
Net income (loss) | € | 9,351 | € | 53,859 | € | — | € | 63,210 | ||||||||||||||||||||||||
96107
Restricted | Unrestricted | Consolidated | ||||||||||||||
Group | Subsidiaries | Eliminations | Group | |||||||||||||
Revenues | € | 276,406 | € | 176,031 | € | — | € | 452,437 | ||||||||
Operating costs | 226,689 | 139,718 | (1,605 | ) | 364,802 | |||||||||||
Operating depreciation and amortization | 23,898 | 27,262 | — | 51,160 | ||||||||||||
Selling, general and administrative | 22,375 | 12,742 | — | 35,117 | ||||||||||||
(Sale) purchase of emission allowances | (7,271 | ) | (10,021 | ) | — | (17,292 | ) | |||||||||
Operating income from continuing operations | 10,715 | 6,330 | 1,605 | 18,650 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (32,352 | ) | (56,789 | ) | 2,815 | (86,326 | ) | |||||||||
Investment income | 3,742 | 1,495 | (2,815 | ) | 2,422 | |||||||||||
Derivative financial instruments, net | (295 | ) | (71,468 | ) | — | (71,763 | ) | |||||||||
Foreign exchange loss on debt and distributions | (4,156 | ) | — | — | (4,156 | ) | ||||||||||
Impairment of investments | (1,699 | ) | — | — | (1,699 | ) | ||||||||||
Total other expense | (34,760 | ) | (126,762 | ) | — | (161,522 | ) | |||||||||
Loss before income taxes and minority interest from continuing operations | (24,045 | ) | (120,432 | ) | 1,605 | (142,872 | ) | |||||||||
Income tax (provision) benefit | ||||||||||||||||
Current | (383 | ) | — | — | (383 | ) | ||||||||||
Deferred | (778 | ) | 14,301 | — | 13,523 | |||||||||||
Loss before minority interest from continuing operations | (25,206 | ) | (106,131 | ) | 1,605 | (129,732 | ) | |||||||||
Minority interest | — | 17,674 | — | 17,674 | ||||||||||||
Net loss from continuing operations | (25,206 | ) | (88,457 | ) | 1,605 | (112,058 | ) | |||||||||
Net loss from discontinued operations | — | (5,088 | ) | — | (5,088 | ) | ||||||||||
Net loss | € | (25,206 | ) | € | (93,545 | ) | € | 1,605 | € | (117,146 | ) | |||||
97
Quarter Ended | Quarter Ended | |||||||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | March 31 | June 30 | September 30 | December 31 | |||||||||||||||||||||||||
2008 | ||||||||||||||||||||||||||||||||
Revenues | € | 186,816 | € | 176,651 | € | 184,828 | € | 171,996 | ||||||||||||||||||||||||
Gross profit | 18,643 | 6,216 | 9,854 | (21,384 | ) | |||||||||||||||||||||||||||
Income (loss) before extraordinary items and cumulative effect of a change in accounting from continuing operations | 2,869 | 871 | (17,173 | ) | (59,032 | ) | ||||||||||||||||||||||||||
Income (loss) before extraordinary items and cumulative effect of a change in accounting from continuing operations, per share* | 0.08 | 0.02 | (0.47 | ) | (1.63 | ) | ||||||||||||||||||||||||||
Net income (loss) from discontinued operations | — | — | — | — | ||||||||||||||||||||||||||||
Net income (loss) | 2,869 | 871 | (17,173 | ) | (59,032 | ) | ||||||||||||||||||||||||||
Net income (loss) per share* | 0.08 | 0.02 | (0.47 | ) | (1.63 | ) | ||||||||||||||||||||||||||
2007 | ||||||||||||||||||||||||||||||||
Revenues | € | 169,531 | € | 176,603 | € | 191,111 | € | 167,146 | € | 175,773 | € | 182,401 | € | 195,734 | € | 173,387 | ||||||||||||||||
Gross profit | 14,477 | 10,943 | 21,457 | 22,709 | 14,477 | 10,943 | 21,457 | 22,709 | ||||||||||||||||||||||||
Income before extraordinary items and cumulative effect of a change in accounting from continuing operations | 1,093 | 3,340 | 10,706 | 7,250 | 1,093 | 3,340 | 10,706 | 7,250 | ||||||||||||||||||||||||
Income before extraordinary items and cumulative effect of a change in accounting from continuing operations, per share* | 0.03 | 0.09 | 0.26 | 0.18 | 0.03 | 0.09 | 0.26 | 0.18 | ||||||||||||||||||||||||
Net loss from discontinued operations | (7 | ) | (181 | ) | (10 | ) | (12 | ) | ||||||||||||||||||||||||
Net income | 1,086 | 3,159 | 10,696 | 7,238 | ||||||||||||||||||||||||||||
2006 | ||||||||||||||||||||||||||||||||
Revenues | € | 141,668 | € | 150,594 | € | 171,248 | € | 160,467 | ||||||||||||||||||||||||
Gross profit | 10,994 | 10,583 | 34,758 | 36,169 | ||||||||||||||||||||||||||||
Income before extraordinary items and cumulative effect of a change in accounting from continuing operations | 16,184 | 18,324 | 6,128 | 28,606 | ||||||||||||||||||||||||||||
Income before extraordinary items and cumulative effect of a change in accounting from continuing operations, per share* | 0.40 | 0.45 | 0.18 | 0.67 | ||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | 404 | 97 | 600 | (7,133 | ) | (7 | ) | (181 | ) | (10 | ) | (12 | ) | |||||||||||||||||||
Net income | 16,588 | 18,421 | 6,728 | 21,473 | ||||||||||||||||||||||||||||
Net income (loss) | 1,086 | 3,159 | 10,696 | 7,238 | ||||||||||||||||||||||||||||
Net income (loss) per share* | 0.03 | 0.09 | 0.26 | 0.18 |
* |
98108
Mercer International Inc. | ||
Dated: | By: /s/ Jimmy S.H. Lee Jimmy S.H. Lee Chairman |
/s/ Jimmy S.H. Lee Jimmy S.H. Lee Chairman, Chief Executive Officer and Director | Date: | |
/s/ David M. Gandossi David M. Gandossi Secretary, Executive Vice President, Principal Accounting Officer | Date: | |
/s/ Kenneth A. Shields Kenneth A. Shields Director | Date: | |
/s/ Eric Lauritzen Eric Lauritzen Director | Date: | |
/s/ William D. McCartney William D. McCartney Director | Date: | |
/s/ Graeme A. Witts Graeme A. Witts Director | Date: | |
/s/ Guy W. Adams Guy W. Adams Director | Date: | |
/s/ George Malpass George Malpass Director | Date: |
99109
Exhibit | Exhibit | Exhibit | ||||||
No. | No. | Description of Exhibit | No. | Description of Exhibit | ||||
1 | .1 | Underwriting Agreement dated February 8, 2005 between Mercer International Inc. and RBC Capital Markets Corporation, on behalf of itself and CIBC World Markets Corp., Raymond James & Associates, Inc. and D.A. Davidson & Co. Incorporated by reference fromForm 8-K dated February 10, 2005. | 1 | .1 | Underwriting Agreement dated February 8, 2005 between Mercer International Inc. and RBC Capital Markets Corporation, on behalf of itself and CIBC World Markets Corp., Raymond James & Associates, Inc. and D.A. Davidson & Co. Incorporated by reference fromForm 8-K dated February 10, 2005 | |||
1 | .2 | Underwriting Agreement dated February 8, 2005 among Mercer International Inc. and RBC Capital Markets Corporation and Credit Suisse First Boston LLC, on behalf of themselves and CIBC World Markets Corp. Incorporated by reference fromForm 8-K dated February 10, 2005. | 1 | .2 | Underwriting Agreement dated February 8, 2005 among Mercer International Inc. and RBC Capital Markets Corporation and Credit Suisse First Boston LLC, on behalf of themselves and CIBC World Markets Corp. Incorporated by reference fromForm 8-K dated February 10, 2005 | |||
2 | .1 | Agreement and Plan of Merger among Mercer International Inc., Mercer International Regco Inc. and Mercer Delaware Inc. dated December 14, 2005. Incorporated by reference to the Proxy Statement/Prospectus filed on December 15, 2005. | 2 | .1 | Agreement and Plan of Merger among Mercer International Inc., Mercer International Regco Inc. and Mercer Delaware Inc. dated December 14, 2005. Incorporated by reference to the Proxy Statement/Prospectus filed on December 15, 2005 | |||
3 | .1 | Articles of Incorporation of the Company, as amended. Incorporated by reference fromForm 8-A dated March 1, 2006. | 3 | .1 | Articles of Incorporation of the Company, as amended. Incorporated by reference fromForm 8-A dated March 1, 2006 | |||
3 | .2 | Bylaws of the Company. Incorporated by reference fromForm 8-A dated March 1, 2006. | 3 | .2 | Bylaws of the Company. Incorporated by reference fromForm 8-A dated March 1, 2006 | |||
4 | .1 | Indenture dated as of October 10, 2003 between Mercer International Inc. and Wells Fargo Bank Minnesota, N.A. Incorporated by reference fromForm 8-K dated October 15, 2003. | 4 | .1 | Indenture dated as of October 10, 2003 between Mercer International Inc. and Wells Fargo Bank Minnesota, N.A. Incorporated by reference fromForm 8-K dated October 15, 2003 | |||
4 | .2 | Indenture dated as of December 10, 2004 between Mercer International Inc. and Wells Fargo Bank, N.A. Incorporated by reference fromForm S-3 filed December 10, 2004. | 4 | .2 | Indenture dated as of December 10, 2004 between Mercer International Inc. and Wells Fargo Bank, N.A. Incorporated by reference fromForm S-3 filed December 10, 2004 | |||
4 | .3 | First Supplemental Indenture dated February 14, 2005 to Indenture dated December 10, 2004 between Mercer International Inc. and Wells Fargo Bank, N.A. Incorporated by reference fromForm 8-K dated February 17, 2005. | 4 | .3 | First Supplemental Indenture dated February 14, 2005 to Indenture dated December 10, 2004 between Mercer International Inc. and Wells Fargo Bank, N.A. Incorporated by reference fromForm 8-K dated February 17, 2005 | |||
10 | .1 | Amended and Restated 1992 Stock Option Plan. Incorporated by reference fromForm S-8 dated March 2, 2000. | 10 | .1 | Project Financing Facility Agreement dated August 26, 2002 between Zellstoff Stendal GmbH and Bayerische Hypo-und Vereinsbank AG, as amended by Amendment, Restatement and Undertaking Agreement dated February 3, 2009. | |||
10 | .2* | 2002 Employee Incentive Bonus Plan. | 10 | .2 | Shareholders’ Undertaking Agreement dated August 26, 2002 among Mercer International Inc., Stendal Pulp Holdings GmbH, RWE Industrie-Lösungen GmbH, AIG Altmark Industrie AG and FAHR Beteiligungen AG and Zellstoff Stendal GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated September 10, 2002 | |||
10 | .3 | Project Financing Facility Agreement dated August 26, 2002 between Zellstoff Stendal GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated September 10, 2002. | 10 | .3* | Shareholders’ Agreement dated August 26, 2002 among Zellstoff Stendal GmbH, Stendal Pulp Holdings GmbH, RWE Industrie-Lösungen GmbH and FAHR Beteiligungen AG | |||
10 | .4 | Shareholders’ Undertaking Agreement dated August 26, 2002 among Mercer International Inc., Stendal Pulp Holdings GmbH, RWE Industrie-Lösungen GmbH, AIG Altmark Industrie AG and FAHR Beteiligungen AG and Zellstoff Stendal GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated September 10, 2002. | 10 | .4* | Contract for the Engineering, Design, Procurement, Construction, Erection andStart-Up of a Kraft Pulp Mill between Zellstoff Stendal GmbH and RWE Industrie-Lösungen GmbH dated August 26, 2002. Certain non-public information has been omitted from the appendices to Exhibit 10.16 pursuant to a request for confidential treatment filed with the SEC. Such non-public information was filed with the SEC on a confidential basis. The SEC approved the request for confidential treatment in January 2004 | |||
10 | .5* | Shareholders’ Agreement dated August 26, 2002 among Zellstoff Stendal GmbH, Stendal Pulp Holdings GmbH, RWE Industrie-Lösungen GmbH and FAHR Beteiligungen AG. | 10 | .5* | Form of Trustee’s Indemnity Agreement between Mercer International Inc. and its Trustees | |||
10 | .6* | Contract for the Engineering, Design, Procurement, Construction, Erection andStart-Up of a Kraft Pulp Mill between Zellstoff Stendal GmbH and RWE Industrie-Lösungen GmbH dated August 26, 2002. Certain non-public information has been omitted from the appendices to Exhibit 10.16 pursuant to a request for confidential treatment filed with the SEC. Such non-public information was filed with the SEC on a confidential basis. The SEC approved the request for confidential treatment in January 2004. | 10 | .6 | Employment Agreement dated for reference August 7, 2003 between Mercer International Inc. and David Gandossi. Incorporated by reference fromForm 8-K dated August 11, 2003 | |||
10 | .7* | Form of Trustee’s Indemnity Agreement between Mercer International Inc. and its Trustees. | 10 | .7 | Employment Agreement effective as of April 28, 2004 between Mercer International Inc. and Jimmy S.H. Lee. Incorporated by reference fromForm 8-K dated April 28, 2004 | |||
10 | .8 | Employment Agreement dated for reference August 7, 2003 between Mercer International Inc. and David Gandossi. Incorporated by reference fromForm 8-K dated August 11, 2003. | 10 | .8 | 2004 Stock Incentive Plan. Incorporated by reference fromForm S-8 dated June 15, 2004 | |||
10 | .9 | Employment Agreement effective as of April 28, 2004 between Mercer International Inc. and Jimmy S.H. Lee. Incorporated by reference fromForm 8-K dated April 28, 2004. | 10 | .9 | Asset Purchase Agreement by and among Mercer International Inc., 0706906 B.C. Ltd. and KPMG Inc., as receiver of all of the assets and undertakings of Stone Venepal (Celgar) Pulp Inc. dated November 22, 2004. Incorporated by reference fromForm 8-K dated November 23, 2004 | |||
10 | .10 | 2004 Stock Incentive Plan. Incorporated by reference fromForm S-8 dated June 15, 2004. | 10 | .10 | Revolving Credit Facility Agreement dated February 9, 2005 among D&Z Holding GmbH, Zellstoff-und Papierfabrik Rosenthal GmbH & Co. KG, ZPR Beteiligungs GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated February 17, 2005 |
110
Exhibit | Exhibit | Exhibit | ||||||
No. | No. | Description of Exhibit | No. | Description of Exhibit | ||||
10 | .11 | Asset Purchase Agreement by and among Mercer International Inc., 0706906 B.C. Ltd. and KPMG Inc., as receiver of all of the assets and undertakings of Stone Venepal (Celgar) Pulp Inc. dated November 22, 2004. Incorporated by reference fromForm 8-K dated November 23, 2004. | 10 | .11 | Shareholders’ Undertaking Agreement dated February 9, 2005 relating to Revolving Credit Facility Agreement. Incorporated by reference fromForm 8-K dated February 17, 2005 | |||
10 | .12 | Revolving Credit Facility Agreement dated February 9, 2005 among D&Z Holding GmbH, Zellstoff-und Papierfabrik Rosenthal GmbH & Co. KG, ZPR Beteiligungs GmbH and Bayerische Hypo-und Vereinsbank AG. Incorporated by reference fromForm 8-K dated February 17, 2005. | 10 | .12 | Revolving Term Credit Facility dated for reference May 19, 2006 among Zellstoff Celgar Limited Partnership, as borrower, and the lenders from time to time parties thereto, as lenders and CIT Business Credit Canada Inc., as agent. Incorporated by reference fromForm 8-K dated May 30, 2006 | |||
10 | .13 | Shareholders’ Undertaking Agreement dated February 9, 2005 relating to Revolving Credit Facility Agreement. Incorporated by reference fromForm 8-K dated February 17, 2005. | 10 | .13 | Employment Agreement dated October 2, 2006 between Stendal Pulp Holding GmbH and Wolfram Ridder. Incorporated by reference fromForm 8-K dated October 2, 2006 | |||
10 | .14 | Revolving Term Credit Facility dated for reference May 19, 2006 among Zellstoff Celgar Limited Partnership, as borrower, and the lenders from time to time parties thereto, as lenders and CIT Business Credit Canada Inc., as agent. Incorporated by reference fromForm 8-K dated May 30, 2006. | 10 | .14 | Employment Agreement effective October 16, 2006 between Mercer International Inc. and David Ure dated September 22, 2006. Incorporated by reference fromForm 8-K dated October 13, 2006 | |||
10 | .15 | Employment Agreement dated October 2, 2006 between Stendal Pulp Holding GmbH and Wolfram Ridder. Incorporated by reference fromForm 8-K dated October 2, 2006. | 10 | .15 | Employment Agreement effective September 25, 2006 between Mercer International Inc. and Claes-Inge Isacson dated December 5, 2008 | |||
10 | .16 | Employment Agreement effective October 16, 2006 between Mercer International Inc. and David Ure dated September 22, 2006. Incorporated by reference fromForm 8-K dated October 13, 2006. | 10 | .16 | Employment Agreement effective September 1, 2005 between Mercer International Inc. and Leonhard Nossol dated August 18, 2005. Incorporated by reference fromForm 10-Q dated May 6, 2008 | |||
10 | .17 | Employment Agreement effective November 6, 2006 between Mercer International Inc. and Claes-Inge Isacson dated September 25, 2006. Incorporated by reference fromForm 8-K dated October 13, 2006. | 10 | .17*** | Electricity Purchase Agreement effective January 27, 2009 between Zellstoff Celgar Limited Partnership and British Columbia Hydro and Power Authority | |||
99 | .1 | Exchange Agreement dated December 4, 2006 between Mercer International Inc. and Nisswa Master Fund Ltd. Incorporated by reference fromForm 8-K dated December 5, 2006. | 14 | Code of Business Conduct and Ethics. Incorporated by reference from the definitive proxy statement on Schedule 14A dated August 11, 2003 | ||||
99 | .2 | Exchange Agreement dated December 4, 2006 between Mercer International Inc. and CC Arbitrage Ltd. Incorporated by reference fromForm 8-K dated December 5, 2006. | 99 | .1 | Exchange Agreement dated December 4, 2006 between Mercer International Inc. and Nisswa Master Fund Ltd. Incorporated by reference fromForm 8-K dated December 5, 2006 | |||
21 | List of Subsidiaries of Registrant. | 99 | .2 | Exchange Agreement dated December 4, 2006 between Mercer International Inc. and CC Arbitrage Ltd. Incorporated by reference fromForm 8-K dated December 5, 2006 | ||||
23 | .1 | Consent of Independent Chartered Accountants — PricewaterhouseCoopers LLP. | 99 | .3 | Audit Committee Charter. Incorporated by reference from the definitive proxy statement on Schedule 14A dated April 28, 2005 | |||
23 | .2 | Consent of Independent Registered Chartered Accountants — Deloitte & Touche LLP. | 99 | .4 | Governance and Nominating Committee Charter. Incorporated by reference from the definitive proxy statement on Schedule 14A dated April 28, 2004 | |||
31 | .1 | Section 302 Certificate of Chief Executive Officer. | 21 | List of Subsidiaries of Registrant | ||||
31 | .2 | Section 302 Certificate of Chief Financial Officer. | 23 | .1 | Consent of Independent Registered Chartered Accountants — PricewaterhouseCoopers LLP | |||
32 | .1** | Section 906 Certificate of Chief Executive Officer. | 23 | .2 | Consent of Independent Registered Chartered Accountants — Deloitte & Touche LLP | |||
32 | .2** | Section 906 Certificate of Chief Financial Officer. | 31 | .1 | Section 302 Certificate of Chief Executive Officer | |||
31 | .2 | Section 302 Certificate of Chief Financial Officer | ||||||
32 | .1** | Section 906 Certificate of Chief Executive Officer | ||||||
32 | .2** | Section 906 Certificate of Chief Financial Officer |
* | Filed inForm 10-K for prior years. | |
** | In accordance with Release33-8212 of the Commission, these Certifications: (i) are “furnished” to the Commission and are not “filed” for the purposes of liability under the Securities Exchange Act of 1934, as amended; and (ii) are not to be subject to automatic incorporation by reference into any of the Company’s registration statements filed under the Securities Act of 1933, as amended for the purposes of liability thereunder or any offering memorandum, unless the Company specifically incorporates them by reference therein. | |
*** | Pursuant to 17 CFR 240.24b-2, Confidential Information has been omitted and filed separately with the Commission pursuant to a confidential treatment application filed with the Commission. |
111