MERCER INTERNATIONAL INC. - Quarter Report: 2009 June (Form 10-Q)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No.: 000-51826

MERCER INTERNATIONAL INC.

Washington (State or other jurisdiction of incorporation or organization)		47-0956945 (I.R.S. Employer Identification No.)

Suite 2840, 650 West Georgia Street, Vancouver, British Columbia, Canada, V6B 4N8
(Address of office)

(604) 684-1099
(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ  NO o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months or for such shorter period that the registrant was required to submit and post such files). YES o  NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o  NO þ

The Registrant had 36,422,487 shares of common stock outstanding as at July 31, 2009.

 

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MERCER INTERNATIONAL INC.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2009

(Unaudited)

QUARTERLY REPORT - PAGE 2

MERCER INTERNATIONAL INC.

INTERIM CONSOLIDATED BALANCE SHEETS

(Unaudited)
(In thousands of Euros)

		June 30,				December 31,
		2009				2008
ASSETS
Current assets
Cash and cash equivalents		€	62,100			€	42,452
Cash, restricted			3,531				13,000
Receivables			76,865				100,158
Inventories (Note 4)			69,486				98,457
Prepaid expenses and other			3,532				4,834
Total current assets			215,514				258,901
Long-term assets
Property, plant and equipment			875,876				881,704
Investments (Note 9)			92				419
Deferred note issuance and other costs			8,219				4,011
Deferred income tax			2,133				3,036
Note receivable, less current portion			3,175				3,529
			889,495				892,699
Total assets		€	1,105,009			€	1,151,600
LIABILITIES
Current liabilities
Accounts payable and accrued expenses		€	94,731			€	87,517
Pension and other post-retirement benefit obligations, current portion			555				510
Debt, current portion (Note 5)			39,999				16,500
Total current liabilities			135,285				104,527
Long-term liabilities
Debt, less current portion (Note 5)			810,426				837,918
Unrealized interest rate derivative losses (Notes 6 and 9)			54,675				47,112
Pension and other post-retirement benefit obligations (Note 7)			13,385				12,846
Capital leases and other			9,698				11,267
Deferred income tax			—				5,827
			888,184				914,970
Total liabilities			1,023,469				1,019,497
EQUITY
Shareholders’ equity
Share capital (Note 8)			202,844				202,844
Paid-in capital			(5,871	)			299
Retained earnings (deficit)			(85,872	)			(35,046	)
Accumulated other comprehensive income (loss)			7,658				(1,872	)
Total shareholders’ equity			118,759				166,225
Noncontrolling interest (deficit) (Note 10)			(37,219	)			(34,122	)
Total equity			81,540				132,103
Total liabilities and equity		€	1,105,009			€	1,151,600
Commitments and Contingencies (Note 11)
Subsequent Events (Note 12)

The accompanying notes are an integral part of these interim consolidated financial statements.

QUARTERLY REPORT — PAGE 3

MERCER INTERNATIONAL INC.

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
(In thousands of Euros, except per share data)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenues
Pulp		€	147,522			€	170,585			€	276,555			€	349,686
Energy			11,362				6,066				21,901				13,781
			158,884				176,651				298,456				363,467
Costs and expenses
Operating costs			149,033				148,968				281,030				296,124
Operating depreciation and amortization			13,539				13,514				26,940				27,635
			(3,688	)			14,169				(9,514	)			39,708
Selling, general and administrative expenses			6,032				7,953				13,177				14,849
Purchase (sale) of emission allowances			16				—				(542	)			—
Operating income (loss)			(9,736	)			6,216				(22,149	)			24,859
Other income (expense)
Interest expense			(16,319	)			(16,013	)			(32,868	)			(32,633	)
Investment income (loss)			138				1,421				(3,064	)			1,731
Foreign exchange gain (loss) on debt			5,170				238				754				6,269
Unrealized gain (loss) on derivative instruments (Note 6)			7,451				20,580				(7,562	)			12,730
Total other income (expense)			(3,560	)			6,226				(42,740	)			(11,903	)
Income (loss) before income taxes			(13,296	)			12,442				(64,889	)			12,956
Income tax benefit (provision) — current			(65	)			(213	)			(114	)			163
— deferred			1,888				(7,922	)			4,919				(9,126	)
Net income (loss)			(11,473	)			4,307				(60,084	)			3,993
Less: net loss (income) attributable to noncontrolling interest			(3	)			(3,436	)			9,258				(253	)
Net income (loss) attributable to common shareholders			(11,476	)			871				(50,826	)			3,740
Retained earnings (deficit), beginning of period			(74,396	)			40,288				(35,046	)			37,419
Retained earnings (deficit), end of period		€	(85,872	)		€	41,159			€	(85,872	)		€	41,159
Net income (loss) per share attributable to common shareholders (Note 3):
Basic and diluted		€	(0.32	)		€	0.02			€	(1.40	)		€	0.10

The accompanying notes are an integral part of these interim consolidated financial statements.

QUARTERLY REPORT - PAGE 4

.

MERCER INTERNATIONAL INC.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)
(In thousands of Euros)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Net income (loss)		€	(11,473	)		€	4,307			€	(60,084	)		€	3,993
Other comprehensive income (loss):
Foreign currency translation adjustment			14,581				2,056				9,195				(8,048	)
Unrealized gains (losses) on securities arising during the period			21				3				335				(22	)
Other comprehensive income (loss)			14,602				2,059				9,530				(8,070	)
Total comprehensive income (loss)			3,129				6,366				(50,554	)			(4,077	)
Comprehensive (income) loss attributable to noncontrolling interest			(3	)			(3,436	)			9,258				(253	)
Comprehensive income (loss) attributable to common shareholders		€	3,126			€	2,930			€	(41,296	)		€	(4,330	)

The accompanying notes are an integral part of these interim consolidated financial statements.

QUARTERLY REPORT - PAGE 5

.

MERCER INTERNATIONAL INC.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
(In thousands of Euros)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Cash flows from (used in) operating activities:
Net income (loss) attributable to common shareholders		€	(11,476	)		€	871			€	(50,826	)		€	3,740
Adjustments to reconcile net income (loss) attributable to common shareholders to cash flows from operating activities
Unrealized (gain) loss on derivative instruments			(7,451	)			(20,580	)			7,562				(12,730	)
Foreign exchange (gain) loss on debt			(5,170	)			(238	)			(754	)			(6,269	)
Loss (gain) on sale of assets			34				64				(25	)			(958	)
Operating depreciation and amortization			13,539				13,514				26,940				27,635
Non-operating amortization			65				70				131				141
Noncontrolling interest			3				3,436				(9,258	)			253
Deferred income taxes			(1,888	)			7,922				(4,919	)			9,126
Stock compensation expense			26				207				(8	)			355
Pension and other post-retirement expense			337				491				668				1,006
Pension and other post-retirement benefit funding			(344	)			(676	)			(691	)			(1,125	)
Inventory provisions			—				—				4,587				—
Other			893				9				1,337				(50	)
Changes in current assets and liabilities
Receivables			4,728				(6,845	)			25,137				(10,678	)
Inventories			21,406				(8,389	)			27,525				(7,683	)
Accounts payable and accrued expenses			15,161				17,181				7,940				5,801
Other			(369	)			(1,232	)			203				865
Net cash from (used in) operating activities			29,494				5,805				35,549				9,429
Cash flows from (used in) investing activities:
Purchase of property, plant and equipment			(7,835	)			(4,859	)			(15,541	)			(7,861	)
Proceeds on sale of property, plant and equipment			103				653				232				1,613
Cash, restricted			—				—				9,469				—
Notes receivable			120				5,303				241				5,303
Net cash from (used in) investing activities			(7,612	)			1,097				(5,599	)			(945	)
Cash flows from (used in) financing activities:
Repayment of notes payable and debt			—				—				(13,800	)			(16,891	)
Repayment of capital lease obligations			(536	)			(194	)			(1,218	)			(832	)
Proceeds from borrowings of notes payable and debt			—				8,431				10,000				8,431
Payment of deferred note issuance costs			—				—				(5,253	)			—
Net cash from (used in) financing activities			(536	)			8,237				(10,271	)			(9,292	)
Effect of exchange rate changes on cash and cash equivalents			(482	)			(1,579	)			(31	)			(745	)
Net increase (decrease) in cash and cash equivalents			20,864				13,560				19,648				(1,553	)
Cash and cash equivalents, beginning of period			41,236				69,735				42,452				84,848
Cash and cash equivalents, end of period		€	62,100			€	83,295			€	62,100			€	83,295

The accompanying notes are an integral part of these interim consolidated financial statements.

QUARTERLY REPORT - PAGE 6

MERCER INTERNATIONAL INC.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Unaudited)
(In thousands of Euros)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Supplemental disclosure of cash flow information:
Cash paid (received) during the period for:
Interest		€	2,952			€	4,280			€	31,210			€	30,766
Income taxes			43				(332	)			72				(318	)
Supplemental schedule of non-cash investing and financing activities:
Acquisition of production and other equipment under capital lease obligations		€	80			€	977			€	116			€	3,699
Increase (decrease) in accounts payable relating to investing activities			(1,602	)			—				(1,141	)			—

The accompanying notes are an integral part of these interim consolidated financial statements.

QUARTERLY REPORT - PAGE 7

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)
(In thousands of Euros, except per share data)

Note 1. The Company and Summary of Significant Accounting Policies

Basis of Presentation

The interim consolidated financial statements contained herein include the accounts of Mercer International Inc. (“Mercer Inc.”) and its wholly-owned and majority-owned subsidiaries collectively (the “Company”). The Company’s shares of common stock are quoted and listed for trading on the NASDAQ Global Market and the Toronto Stock Exchange, respectively.

The interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The year-end consolidated balance sheet data was derived from audited financial statements. The footnote disclosure included herein has been prepared in accordance with accounting principles generally accepted for interim financial statements in the United States (“GAAP”). The interim consolidated financial statements should be read together with the audited consolidated financial statements and accompanying notes included in the Company’s latest annual report on Form 10-K for the fiscal year ended December 31, 2008. In the opinion of the Company, the unaudited interim consolidated financial statements contained herein contain all adjustments necessary to fairly present the results of the interim periods included. The results for the periods included herein may not be indicative of the results for the entire year.

The Company has three pulp mills that are aggregated into one reportable business segment, market pulp. Accordingly the results presented are those of the reportable business segment.

Certain prior year amounts in the unaudited interim consolidated financial statements have been reclassified to conform to the current year presentation.

In these interim consolidated financial statements, unless otherwise indicated, all amounts are expressed in Euros (“€”). The term “U.S. dollars” and the symbol “$” refer to United States dollars. The symbol “C$” refers to Canadian dollars.

Use of Estimates

Preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant management judgment is required in determining the accounting for, among other things, the accounting for doubtful accounts and reserves, depreciation and amortization, future cash flows associated with impairment testing for long-lived assets, derivative financial instruments, environmental conservation and legal liabilities, asset retirement obligations, pensions and post-retirement benefit obligations, income taxes, contingencies, and inventory obsolescence and provisions. Actual results could differ from these estimates, and changes in these estimates are recorded when known.

QUARTERLY REPORT - PAGE 8

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 1. The Company and Summary of Significant Accounting Policies (continued)

New Accounting Standards

On July 1, 2009, the Financial Accounting Standards Board (“FASB”) officially released the Accounting Standards Codification (the “Codification” or “ASC”). Pursuant to FASB Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, it will be effective for interim and annual periods ending after September 15, 2009. The Codification does not change GAAP, but it is a major restructuring of how accounting and reporting standards that constitute GAAP are organized. That is, the Codification will be the single source of authoritative nongovernmental GAAP. The organizational changes are expected to make GAAP easier to research by simplifying user access to all authoritative guidance. As a result, content will reside in new locations within the Codification which means referencing to specific guidance will change. The Codification is not effective for the Company’s second quarter so the references to GAAP contained herein are to pre-Codification standards. However, to assist in the transition, where a reference to a pre-Codification standard is defined the new Codification “topic” reference number has been noted in brackets preceded by “ASC”. For example, the pre-Codification guidance for leases is primarily found in Financial Accounting Standard No. 13, “Accounting for Leases” as well as a number of other guidance such as Emerging Issue Task Force abstracts while the Codification guidance for leases is found in ASC 840.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 (“FAS 166”). FASB issued FAS 166 to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. Additionally, on and after the effective date, the concept of a qualifying special-purpose entity is no longer relevant for accounting purposes. This Statement must be applied as of the beginning of the first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. Earlier application is prohibited. This Statement must be applied to transfers occurring on or after the effective date. The Company is in the process of determining the impact, if any, the adoption of FAS 166 will have on its financial statements and disclosures.

QUARTERLY REPORT - PAGE 9

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 1. The Company and Summary of Significant Accounting Policies (continued)

In December 2008, the FASB issued FASB Staff Position No. 132 (R)-1, Employers’ Disclosures about Pensions and Other Postretirement Benefits (“FSP 132(R)-1”) (ASC 715). FSP 132(R)-1 provides guidance on an employer’s (sponsor’s) disclosures about plan assets of a defined benefit pension or other postretirement plan and requires disclosures about fair value measurements of plan assets. FSP 132(R)-1 is effective for financial statements issued for fiscal years ending after December 15, 2009, and implementation is required to be prospective. Earlier application of the provisions in FSP 132(R)-1 is permitted. The Company is in the process of determining the impact, if any, the adoption of FSP 132(R)-1 will have on its financial statements and disclosures.

Recently Implemented Accounting Standards

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB 51 (“FAS 160”) (ASC 810). FAS 160 establishes accounting and reporting standards for entities that have equity investments that are not attributable directly to the parent, called noncontrolling interests or minority interests. Additionally, FAS 160 states where and how to report noncontrolling interests in the consolidated statements of financial position and operations, how to account for changes in noncontrolling interests and provides disclosure requirements. The provisions of FAS 160 are effective for fiscal years beginning on or after December 15, 2008. The Company adopted FAS 160 on January 1, 2009 and amended its presentation and disclosure accordingly. See Note 10 - Noncontrolling Interest.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141(R), Business Combinations (“FAS 141(R)”) (ASC 805). FAS 141(R) establishes how an entity accounts for identifiable assets acquired, liabilities assumed, and any noncontrolling interests acquired, how to account for goodwill acquired and determines what disclosures are required as part of a business combination. FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company adopted FAS 141(R) on January 1, 2009, and the adoption had no impact on the Company’s financial statements or disclosures.

In February 2008, the FASB Staff issued FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157 (“FSP 157-2”) (ASC 820), which defers the effective date of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”) (ASC 820), for all non-financial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. FSP 157-2 defers the effective date of FAS 157 to fiscal years beginning after November 15, 2008, for items within the scope of FSP 157-2. The Company adopted FSP 157-2 on January 1, 2009. The adoption of FSP 157-2 did not have a material impact on the Company’s financial statement disclosures.

QUARTERLY REPORT - PAGE 10

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 1. The Company and Summary of Significant Accounting Policies (continued)

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (“FAS 161”) (ASC 815). FAS 161 requires enhanced disclosures about how and why companies use derivatives, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items affect a company’s financial position, financial performance and cash flows. The provisions of FAS 161 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company adopted FAS 161 effective January 1, 2009, see Note 6 — Derivative Transactions.

In April 2008, the FASB issued FASB Staff Position No. 142-3, Determination of the Useful Life of Intangible Assets (“FSP 142-3”) (ASC 350 and ASC 275). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets (“FAS 142”) (ASC 350). FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company adopted FSP 142-3 on January 1, 2009, the impact of which was not material.

In May 2008, the FASB issued FASB Staff Position APB 14-1 Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Settlement) (“FSP 14-1”) (ASC 470). FSP 14-1 states that convertible debt instruments that are within its scope are required to be separated into both a debt component and an equity component. In addition, any debt discount is to be accreted to interest expense over the expected life of the debt. The provisions of FSP 14-1 are effective for financial statements issued for fiscal years beginning after December 15, 2008, and implementation is generally required to be retrospective. The adoption of FSP 14-1 on January 1, 2009 had no impact on the Company’s financial statements or disclosure.

In April 2009, the FASB issued FASB Staff Position No. 107-1, Interim Disclosures about Fair Value of Financial Instruments (“FSP FAS 107-1”) (ASC 825). FSP FAS 107-1 amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. FSP FAS 107-1 also amends APB Opinion No. 28, Interim Financial Reporting, to require disclosures in summarized financial information at interim reporting periods. The provisions of FSP FAS 107-1 are effective for interim periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009. The Company adopted FSP FAS 107-1 on April 1, 2009, the impact of which was not material. See Note 9 — Financial Instruments.

QUARTERLY REPORT - PAGE 11

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 1. The Company and Summary of Significant Accounting Policies (continued)

In May 2009 the FASB issued Statement of Financial Accounting Standards No. 165, “Subsequent Events” (“FAS 165”) (ASC 855). FAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued (subsequent event). Specifically, FAS 165 defines the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure, the circumstances under which an entity should recognize events or transactions that occur after the balance sheet date, and the disclosures required. The Company has adopted FAS 165 effective June 30, 2009. The adoption of FAS 165 has not resulted in any significant changes in how the Company recognizes or discloses subsequent events.

Note 2. Stock-Based Compensation

The Company had a non-qualified stock option plan which provides for options to be granted to officers and employees to acquire a maximum of 3,600,000 common shares including options for 130,000 shares to directors who are not officers or employees. This plan expired in 2008 but unexercised options that were previously granted under this plan remain outstanding. The Company also has a stock incentive plan which provides for options, stock appreciation rights and restricted shares to be awarded to employees and outside directors to a maximum of 1,000,000 common shares. During the first quarter of 2008, the Company implemented a new form of stock-based compensation called performance stock under its existing stock incentive plan.

Performance Stock

Grants of performance stock comprise rights to receive stock at a future date that are contingent on the Company and the grantee achieving certain performance objectives. During the three and six months ended June 30, 2009, potential stock based performance awards totaled 565,165, which vest on December 31, 2010. Expense for the three and six month periods ended June 30, 2009 was €5 and €(55), respectively (2008 – €155 and €254).

The fair value of performance stock is determined based upon the number of shares awarded and the quoted price of the Company’s stock. Performance stock generally cliff vest three years from the award date. As of June 30, 2009, no performance stock had vested. During the three month period ended June 30, 2009, nil performance stock were cancelled. During the six month period ended June 30, 2009, 39,991 performance stock were cancelled due to the departure of an employee. On April 28, 2009, 34,542 performance stock were issued to two employees.

QUARTERLY REPORT - PAGE 12

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 2. Stock-Based Compensation (continued)

Restricted Stock

The fair value of restricted stock is determined based upon the number of shares granted and the quoted price of the Company’s stock on the date of grant. Restricted stock generally vests over two years. Expense is recognized on a straight-line basis over the vesting period. Expense recognized for the three and six months ended June 30, 2009 was €21 and €47, respectively (2008 – €52 and €101).

As at June 30, 2009, restricted stock compensation cost has been fully recognized. As at June 30, 2009, the total number of restricted stock awards outstanding was 232,685, all of which had vested.

During the three and six month periods ended June 30, 2009, no restricted stock awards were granted (2008 – 21,000). There were nil restricted stock awards cancelled during the three and six month periods ended June 30, 2009 (2008 – nil and nil).

Stock Options

During the three and six month periods ended June 30, 2009 and 2008, no options were exercised, cancelled or expired.

Note 3. Net Income (Loss) Per Share Attributable to Common Shareholders

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Net income (loss) attributable to common shareholders — basic and diluted		€	(11,476	)		€	871			€	(50,826	)		€	3,740
Net income (loss) per share attributable to common shareholders:
Basic and diluted		€	(0.32	)		€	0.02			€	(1.40	)		€	0.10
Weighted average number of common shares outstanding:
Basic (1)			36,289,181				36,252,360				36,287,115				36,252,360
Effect of dilutive instruments:
Performance rights			—				61,837				—				—
Stock options and awards			—				149,546				—				153,986
Diluted			36,289,181				36,463,743				36,287,115				36,406,346

QUARTERLY REPORT - PAGE 13

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 3. Net Income (Loss) Per Share Attributable to Common Shareholders (continued)

The calculation of diluted income (loss) per share attributable to common shareholders does not assume the exercise of stock options and awards or the conversion of convertible notes that would have an anti-dilutive effect on earnings per share.

Stock options and awards excluded from the calculation of diluted income (loss) per share attributable to common shareholders because they are anti-dilutive represented 928,334 for the three and six month periods ended June 30, 2009 (2008 – 68,334).

Convertible notes excluded from the calculation of diluted income (loss) per share attributable to common shareholders because they are anti-dilutive represented 8,678,065 for the three and six month periods ended June 30, 2009 (2008 – 8,678,065).

Performance and restricted stock excluded from the calculation of diluted income (loss) per share attributable to common shareholders because they are anti-dilutive represented 369,924 shares for the three month period ended June 30, 2009 (2008 – 346,743) and 369,924 shares for the six month period ended June 30, 2009 (2008 – 414,012).

Note 4. Inventories

		June 30, 2009				December 31, 2008
Raw materials		€	21,012			€	38,225
Finished goods			26,067				37,881
Work in process and other			22,407				22,351
		€	69,486			€	98,457

Note 5. Debt

Certain of the Company’s debt agreements were issued under an indenture which, among other things, restricts its ability and the ability of its restricted subsidiaries to make certain payments. These limitations are subject to other important qualifications and exceptions. As at June 30, 2009, the Company was in compliance with the terms of the indenture.

QUARTERLY REPORT - PAGE 14

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 5. Debt (continued)

Debt consists of the following:

		June 30, 2009				December 31, 2008
Note payable to bank, included in a total loan facility of €827,950 to finance the construction related to the Stendal mill (a)		€	522,823			€	531,073
Senior notes due February 2013, interest at 9.25% accrued and payable semi-annually, unsecured (b)			221,128				222,718
Subordinated convertible notes due October 2010, interest at 8.5% accrued and payable semi-annually (c)			47,974				48,319
Credit agreement with a lender with respect to a revolving credit facility of C$40 million (d)			13,499				18,186
Loan payable to the noncontrolling shareholder of the Stendal mill (e) (Note 10)			35,001				34,122
Credit agreement with a bank with respect to a revolving credit facility of €40 million (f)			10,000				—
			850,425				854,418
Less: current portion			(39,999	)			(16,500	)
Debt, less current portion		€	810,426			€	837,918

The Company made scheduled principal repayments under these facilities of €34,023 in 2008, and €13,800 during the six months ended June 30, 2009. As of June 30, 2009, the principal maturities of debt are as follows:

Matures		Amount
2009		€	8,250
2010(1)			85,390
2011			23,167
2012			24,583
2013			261,128
Thereafter			447,907
		€	850,425

QUARTERLY REPORT - PAGE 15

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 5. Debt (continued)

QUARTERLY REPORT — PAGE 16

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 5. Debt (continued)

Note 6. Derivative Transactions

The Company adopted FAS 161 effective January 1, 2009. The adoption of FAS 161 resulted in no impact on the Company’s consolidated balance sheet or consolidated statement of operations.

The Company is exposed to certain market risks relating to its ongoing business. The Company seeks to manage these risks through internal risk management policies as well from time to time the use of derivatives. Currently, the primary risk managed using derivative instruments is interest rate risk.

During 2004, the Company entered into certain variable-to-fixed interest rate swaps in connection with the Stendal Loan Facility with respect to an aggregate maximum principal amount of approximately €612,600 of the total indebtedness under the Stendal Loan Facility. Under the interest rate swaps, the Company pays a fixed rate and receives a floating rate with the interest payments being calculated on a notional amount. Currently, the aggregate notional amount of these contracts is €505,430 at a fixed interest rate of 5.28% and they mature October 2017 (matching the maturity of the Stendal Loan Facility). The Company substantially converted the Stendal Loan Facility from a variable interest rate loan into a fixed interest rate loan, thereby reducing interest rate uncertainty.

The Company recognized an unrealized gain of €7,451 and an unrealized loss of €7,562, with respect to these interest rate swaps for the three and six months ended June 30, 2009, respectively (2008 - Unrealized gain of €20,580 and €12,730), in “Unrealized gain (loss) on derivative instruments” in the Interim Consolidated Statement of Operations. Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (“FAS 133”) (ASC 815), requires companies to recognize all derivative instruments at their fair value in the consolidated balance sheet. Accordingly, the fair value of the interest rate swap is presented in “Unrealized interest rate derivative losses” within the long-term liabilities section in the Interim Consolidated Balance Sheets, which currently amounts to a cumulative unrealized loss of €54,675 (2008 – €47,112).

QUARTERLY REPORT - PAGE 17

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 6. Derivative Transactions (continued)

The interest rate derivative contracts are with the same banks that hold the Stendal Loan Facility and the Company does not anticipate non-performance by the banks.

Note 7. Pension and Other Post-Retirement Benefit Obligations

Included in pension and other post-retirement benefit obligations are amounts related to the Company’s Celgar and German mills.

The largest component of this obligation is with respect to the Celgar mill which maintains defined benefit pension and post-retirement benefit plans for certain employees (“Celgar Plans”).

Pension benefits are based on employees’ earnings and years of service. The Celgar Plans are funded by contributions from the Company based on actuarial estimates and statutory requirements. Pension contributions for the three and six month period ended June 30, 2009 totaled €235 and €583, respectively (2008 – €383 and €831).

The Company anticipates based on actuarial estimates that it will make contributions to the defined benefit pension plan of approximately €879 in 2009.

Effective December 31, 2008, the defined benefit plan was closed to new members. In addition, the defined benefit service accrual ceased on December 31, 2008, and members began to accrue benefits, at a fixed contractual rate, under a new defined contribution plan effective January 1, 2009.

		Three Months Ended June 30,
		2009								2008
						Post-								Post-
		Pension				Retirement				Pension				Retirement
		Benefits				Benefits				Benefits				Benefits
Service cost		€	14			€	84			€	195			€	124
Interest cost			377				203				335				198
Expected return on plan assets			(317	)			—				(381	)			—
Recognized net loss (gain)			35				(59	)			—				20
Net periodic benefit cost		€	109			€	228			€	149			€	342

QUARTERLY REPORT - PAGE 18

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 7. Pension and Other Post-Retirement Benefit Obligations (continued)

		Six Months Ended June 30,
		2009								2008
						Post-								Post-
		Pension				Retirement				Pension				Retirement
		Benefits				Benefits				Benefits				Benefits
Service cost		€	28			€	167			€	399			€	254
Interest cost			747				401				686				405
Expected return on plan assets			(628	)			—				(780	)			—
Recognized net loss (gain)			69				(116	)			—				42
Net periodic benefit cost		€	216			€	452			€	305			€	701

Note 8. Share Capital

Common shares

The Company has authorized 200,000,000 common shares (2008 – 200,000,000) with a par value of $1 per share. As at June 30, 2009, the Company had 36,422,487 (2008 – 36,422,487) common shares issued and outstanding.

Preferred shares

The Company has authorized 50,000,000 preferred shares (2008 — 50,000,000) with $1 par value issuable in series, of which 2,000,000 shares have been designated as Series A. The preferred shares may be issued in one or more series and with such designations and preferences for each series as shall be stated in the resolutions providing for the designation and issue of each such series adopted by the Board of Directors of the Company. The Board of Directors is authorized by the Company’s articles of incorporation to determine the voting, dividend, redemption and liquidation preferences pertaining to each such series. As at June 30, 2009, no preferred shares had been issued by the Company.

QUARTERLY REPORT - PAGE 19

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 9. Financial Instruments

The Company adopted FSP FAS 107-1 on April 1, 2009. The adoption of FSP FAS 107-1 resulted in additional disclosure of fair value information for all interim reporting periods. The additional fair value information includes the fair value and the carrying amount of financial instruments, and the methods and significant assumptions used to estimate the fair value of financial instruments.

The fair value of financial instruments at June 30, 2009 and December 31, 2008 is summarized as follows:

		June 30, 2009								December 31, 2008
		Carrying				Fair				Carrying				Fair
		Amount				Value				Amount				Value
Cash and cash equivalents		€	62,100			€	62,100			€	42,452			€	42,452
Cash, restricted			3,531				3,531				13,000				13,000
Investments			92				92				419				419
Receivables			76,865				76,865				100,158				100,158
Notes receivable			3,825				3,825				4,171				4,171
Accounts payable and accrued expenses			94,731				94,731				87,517				87,517
Debt			850,425				662,695				854,418				704,901
Interest rate derivative contracts — liability			54,675				54,675				47,112				47,112

The carrying value of cash and cash equivalents, restricted cash and accounts payable and accrued expenses approximates the fair value due to the immediate or short-term maturity of these financial instruments. The carrying value of receivables approximates the fair value due to their short-term nature and historical collectability. The fair value of notes receivable was estimated using discounted cash flows at prevailing market rates. The fair value of debt reflects recent market transactions and discounted cash flow estimates. The fair value of the interest rate derivatives is obtained from dealer quotes, based on current interest rates. These values represent the estimated amount the Company would receive or pay to terminate agreements taking into consideration current interest rates and the creditworthiness of the counterparties.

The Company adopted FAS 157 effective January 1, 2008. The adoption of FAS 157 resulted in no impact on the Company’s consolidated balance sheet or the consolidated statement of operations.

The fair value methodologies and, as a result, the fair value of the Company’s investments and derivative instruments are determined based on the fair value hierarchy provided in FAS 157. The fair value hierarchy per FAS 157 is as follows:

Level 1 — Valuations based on quoted prices in active markets for identical assets and liabilities.

Level 2 — Valuations based on observable inputs in active markets for similar assets and liabilities, other than Level 1 prices, such as quoted interest or currency exchange rates.

QUARTERLY REPORT - PAGE 20

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 9. Financial Instruments (continued)

Level 3 — Valuations based on significant unobservable inputs that are supported by little or no market activity, such as discounted cash flow methodologies based on internal cash flow forecasts.

The Company classified its investments within Level 1 of the valuation hierarchy where quoted prices are available in an active market. Level 1 investments include exchange-traded equities.

The Company’s derivatives are classified within Level 2 of the valuation hierarchy, as they are traded on the over-the-counter market and are valued using internal models that use as their basis readily observable market inputs, such as forward interest rates.

The valuation techniques used by the Company are based upon observable inputs. Observable inputs reflect market data obtained from independent sources. In addition, the Company considered the risk of non-performance of the obligor, which in some cases reflects the Company’s own credit risk, in determining the fair value of the derivative instruments. The counterparty to our interest rate swap derivative is a multi-national financial institution. The fair value of the interest rate swaps represents the Company’s exposure on the derivative contracts.

The following table presents a summary of the Company’s outstanding financial instruments and their estimated fair values under the hierarchy defined in FAS 157:

		Fair value measurements at June 30, 2009 using:
		Quoted prices in
		active markets for				Significant other				Significant
		identical assets				observable inputs				unobservable inputs
Description		(Level 1)				(Level 2)				(Level 3)				Total
Assets
Investments (a)		€	92			€	—			€	—			€	92
Liabilities
Derivatives (b)
- Interest rate swaps		€	—			€	54,675			€	—			€	54,675

QUARTERLY REPORT - PAGE 21

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 10. Noncontrolling Interest

The Company adopted FAS 160 on January 1, 2009. The adoption of this standard resulted in retrospective presentation and disclosure changes to the December 31, 2008 Consolidated Balance Sheet. These changes are denoted in the table below:

Excerpt from Consolidated Balance Sheet

		Balance as at				Application of new				Revised balance as at
		December 31, 2008				accounting standard				December 31, 2008
Description						(a)				(b)
Long-term liabilities
Debt, less current portion		€	803,796			€	34,122			€	837,918
Total liabilities			985,375				34,122				1,019,497
Equity
Shareholders’ equity
Share capital			202,844				—				202,844
Paid-in capital			299				—				299
Retained earnings (deficit)			(35,046	)			—				(35,046	)
Accumulated other comprehensive income			(1,872	)			—				(1,872	)
Total shareholders’ equity			166,225				—				166,225
Noncontrolling interest			—				(34,122	)			(34,122	)
Total equity			166,225				(34,222	)			132,103
Total liabilities and equity		€	1,151,600			€	—			€	1,151,600

Commencing January 1, 2009, the Company followed the guidance in FAS 160, and applied any accounting changes on a prospective basis. Pursuant to FAS 160, the noncontrolling shareholder will be attributed its share of losses even if that attribution results in a net deficit balance.

QUARTERLY REPORT - PAGE 22

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 10. Noncontrolling Interest (continued)

Previously, Stendal mill losses in excess of the noncontrolling shareholder’s equity interest were attributable to the Company. The resulting impact of this change in accounting is the recognition of approximately €637 and €9,459 loss by the noncontrolling shareholder for the three and six month periods ended June 30, 2009, respectively. The Company’s net loss attributable to common shareholders for the three and six month periods ended June 30, 2009 would have increased by €637 and €9,459, to a net loss of €12,113 and €60,285 had the Company not adopted FAS 160, resulting in an increase in the net loss per share attributable to the common shareholders of €0.02 and €0.26 per share, respectively.

On March 13, 2009, the Company made a €10,000 capital contribution to the Stendal mill, of which €2,582 related to an increase in the Stendal mill’s stated capital, diluting the interest held by the noncontrolling shareholder and resulting in a 4.32% increase in the Company’s equity ownership in the Stendal mill from 70.58% to 74.90%. Pursuant to FAS 160, the increase in equity ownership was accounted for as an equity transaction. The carrying amount of the Company’s shareholders’ equity was adjusted to reflect the 4.32% increase of ownership interest in the Stendal mill. As a result, the noncontrolling deficit and the Company’s Additional Paid-in Capital were reduced by €6,161.

QUARTERLY REPORT - PAGE 23

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 11. Commitments and Contingencies

During the year, as part of the new Green Energy project for the Celgar mill, the Company entered into a number of contracts for the purchase of a new 48 megawatt condensing turbine-generator set, as well as other related equipment commitments. As at June 30, 2009, the value of the contracts committed was approximately €6,600 (C$11.0 million).

The Company is involved in a property transfer tax and a property tax dispute with respect to the Celgar mill and certain other legal actions and claims arising in the ordinary course of business. While the outcome of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not have a material adverse effect on the consolidated financial condition, results of operations or liquidity of the Company.

Note 12. Subsequent Events

On July 13, 2009, the Company commenced an exchange offer (the “Exchange Offer”) for any and all of its outstanding 8.5% Convertible Senior Subordinated Notes due 2010. Under the terms of the Exchange Offer, the Company is offering to exchange $1,000 principal amount of the notes for 129 shares of the Company’s common stock, plus $200 in principal amount of new 3% Convertible Senior Subordinated Notes due 2012 and pay any accrued and unpaid interest to, but excluding, the settlement date. Unless extended, the Exchange Offer will expire on August 11, 2009.

On July 16, 2009, the Company received a commitment letter to refinance the credit facility for its Rosenthal mill with a new €25,000 revolving working capital facility set to mature in December 2012 and a four-year amortizing term loan in the amount of approximately €4,400. The renewal is subject to customary conditions.

The Company has evaluated subsequent events up to July 31, 2009, the date the financial statements were issued.

QUARTERLY REPORT - PAGE 24

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 13. Restricted Group Supplemental Disclosure

The terms of the indenture governing our 9.25% senior unsecured notes require that we provide the results of operations and financial condition of Mercer International Inc. and our restricted subsidiaries under the indenture, collectively referred to as the “Restricted Group”. As at and during the three and six months ended June 30, 2009 and 2008, the Restricted Group was comprised of Mercer International Inc., certain holding subsidiaries and our Rosenthal and Celgar mills. The Restricted Group excludes the Stendal mill.

Combined Condensed Balance Sheet

		June 30, 2009
		Restricted				Unrestricted								Consolidated
		Group				Subsidiaries				Eliminations				Group
ASSETS
Current assets
Cash and cash equivalents		€	33,842			€	28,258			€	—			€	62,100
Cash, restricted			—				3,531				—				3,531
Receivables			36,888				39,977				—				76,865
Inventories			48,394				21,092				—				69,486
Prepaid expenses and other			2,041				1,491				—				3,532
Total current assets			121,165				94,349				—				215,514
Property, plant and equipment			357,462				518,414				—				875,876
Other			3,204				5,107				—				8,311
Deferred income tax			2,133				—				—				2,133
Due from unrestricted group			68,465				—				(68,465	)			—
Note receivable, less current portion			3,175				—				—				3,175
Total assets		€	555,604			€	617,870			€	(68,465	)		€	1,105,009
LIABILITIES
Current liabilities
Accounts payable and accrued expenses		€	50,436			€	44,295			€	—			€	94,731
Pension and other post-retirement benefit obligations, current portion			555				—				—				555
Debt, current portion			23,499				16,500				—				39,999
Total current liabilities			74,490				60,795				—				135,285
Debt, less current portion			269,102				541,324				—				810,426
Due to restricted group			—				68,465				(68,465	)			—
Unrealized interest rate derivative losses			—				54,675				—				54,675
Pension and other post-retirement benefit obligations			13,385				—				—				13,385
Capital leases and other			6,210				3,488				—				9,698
Total liabilities			363,187				728,747				(68,465	)			1,023,469
EQUITY
Total shareholders’ equity (deficit)			192,417				(73,658	)			—				118,759
Noncontrolling interest (deficit)			—				(37,219	)			—				(37,219	)
Total liabilities and equity		€	555,604			€	617,870			€	(68,465	)		€	1,105,009

QUARTERLY REPORT - PAGE 25

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 13. Restricted Group Supplemental Disclosure (continued)

Combined Condensed Balance Sheet

		December 31, 2008
		Restricted				Unrestricted								Consolidated
		Group				Subsidiaries				Eliminations				Group
ASSETS
Current assets
Cash and cash equivalents		€	26,176			€	16,276			€	—			€	42,452
Cash, restricted			—				13,000				—				13,000
Receivables			57,258				42,900				—				100,158
Inventories			59,801				38,656				—				98,457
Prepaid expenses and other			3,215				1,619				—				4,834
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			3,036				—				—				3,036
Due from unrestricted group			55,925				—				(55,925	)			—
Note receivable, less current portion			3,529				—				—				3,529
Total assets		€	564,374			€	643,151			€	(55,925	)		€	1,151,600
LIABILITIES
Current liabilities
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				548,696				—				837,918
Due to restricted group			—				55,925				(55,925	)			—
Unrealized interest rate derivative losses			—				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			—				5,827				—				5,827
Total liabilities			354,195				721,227				(55,925	)			1,019,497
EQUITY
Total shareholders’ equity (deficit)			210,179				(43,954	)			—				166,225
Noncontrolling interest (deficit)			—				(34,122	)			—				(34,122	)
Total liabilities and equity		€	564,374			€	643,151			€	(55,925	)		€	1,151,600

QUARTERLY REPORT — PAGE 26

MERCER INTERNATIONAL INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands of Euros, except per share data)

Note 13. Restricted Group Supplemental Disclosure (continued)

Combined Condensed Statements of Operations

		Three Months Ended June 30, 2009
		Restricted				Unrestricted								Consolidated
		Group				Subsidiaries				Eliminations				Group
Revenues		€	80,388			€	78,496			€	—			€	158,884
Operating costs			78,813				70,220				—				149,033
Operating depreciation and amortization			6,888				6,651				—				13,539
Selling, general and administrative expenses and other			4,294				1,754				—				6,048
			89,995				78,625				—				168,620
Operating income (loss)			(9,607	)			(129	)			—				(9,736	)
Other income (expense)
Interest expense			(6,927	)			(10,513	)			1,121				(16,319	)
Investment income (loss)			1,234				25				(1,121	)			138
Foreign exchange gain (loss) on debt			5,170				—				—				5,170
Derivative instruments			—				7,451				—				7,451
Total other income (expense)			(523	)			(3,037	)			—				(3,560	)
Income (loss) before income taxes			(10,130	)			(3,166	)			—				(13,296	)
Income tax benefit (provision)			(1,149	)			2,972				—				1,823
Net income (loss)			(11,279	)			(194	)			—				(11,473	)
Less: net (income) loss attributable to noncontrolling interest			—				(3	)			—				(3	)
Net income (loss) attributable to common shareholders		€	(11,279	)		€	(197	)		€	—			€	(11,476	)