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What changed in MERCER INTERNATIONAL INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MERCER INTERNATIONAL INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+272 added−277 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-20)

Top changes in MERCER INTERNATIONAL INC.'s 2025 10-K

272 paragraphs added · 277 removed · 214 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

2 edited+0 added−0 removed0 unchanged
Biggest changeBUSINESS 3 Mercer 3 Corporate Strategy 8 Pulp Industry 9 Solid Wood Industry 12 Generation and Sales of Green Energy and Chemicals 13 Production Costs 15 Sales, Marketing and Distribution 18 Transportation 20 Capital Expenditures 21 Innovation 21 Environmental 22 Climate Change 23 Human Capital 25 Community Involvement 27 Commitment to Sustainability 27 Description of Certain Indebtedness 29 ITEM 1A.
Biggest changeBUSINESS 3 Mercer 3 Corporate Strategy 7 Pulp Industry 8 Solid Wood Industry 11 Generation and Sales of Green Energy and Chemicals 13 Production Costs 15 Sales, Marketing and Distribution 18 Transportation 20 Capital Expenditures 21 Innovation 21 Environmental 22 Climate Change 23 Human Capital 25 Community Involvement 28 Commitment to Sustainability 28 Description of Certain Indebtedness 29 ITEM 1A.
RISK FACTORS 31 Risks Related to our Business 31 Risks Related to our Debt 40 Risks Related to Macroeconomic Conditions 42 Legal and Regulatory Risks 44 Risks Related to Ownership of our Shares 46
RISK FACTORS 31 Risks Related to our Business 31 Risks Related to our Debt 41 Risks Related to Macroeconomic Conditions 42 Legal and Regulatory Risks 44 Risks Related to Ownership of our Shares 46

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

67 edited+15 added−14 removed128 unchanged
Biggest changeThe fixed price tariff expired in December 2024 for our Stendal mill, and expires in 2029 for our Friesau mill and between 2029 to 2034 for our Torgau facility's four cogeneration power plants. In October 2022, the Council of the European Union formally adopted emergency measures to address high energy prices resulting from the war in Ukraine.
Biggest changeIn October 2022, the Council of the European Union formally adopted emergency measures to address high energy prices resulting from the war in Ukraine. In Germany, this was implemented through the adoption of a levy on surplus revenues in December 2022 on electricity producers which expired in June 2023.
If we are unable to offer certified products, or to meet commitments to supply certified product or meet the product specifications of our customers, it could adversely affect the marketability of our products and our ability to compete with other producers.
If we are unable to offer certified products, or to meet commitments to supply certified products or meet the product specifications of our customers, it could adversely affect the marketability of our products and our ability to compete with other producers.
Our high debt levels may have important consequences for us, including, but not limited to the following: • 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; ( 40 ) • 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.
Our high debt levels may have important consequences for us, including, but not limited to the following: • 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.
Any of our mills could cease operations unexpectedly due to a number of events, including: • unscheduled maintenance outages; • prolonged power failures; • equipment failures; • employee errors or failures; • design error or contractor error; • chemical spill or release or industrial fire; • explosion of a boiler; • disruptions in the transportation infrastructure, including roads, bridges, railway tracks, tunnels, canals and ports; • fires, floods, earthquakes, windstorms, pest infestations, severe weather conditions or other natural catastrophes affecting our production of goods or the supply of raw materials like fiber; ( 36 ) • prolonged supply disruption of major inputs; • labor difficulties; • capital projects that require temporary cost increases or curtailment of production; • health pandemics and related restrictions; and • other operational problems.
Any of our mills could cease operations unexpectedly due to a number of events, including: • unscheduled maintenance outages; • prolonged power failures; • equipment failures; • employee errors or failures; • design error or contractor error; • chemical spill or release or industrial fire; • explosion of a boiler; • disruptions in the transportation infrastructure, including roads, bridges, railway tracks, tunnels, canals and ports; • fires, floods, earthquakes, windstorms, pest infestations, severe weather conditions or other natural catastrophes affecting our production of goods or the supply of raw materials like fiber; • prolonged supply disruption of major inputs; • labor difficulties; • capital projects that require temporary cost increases or curtailment of production; • health pandemics and related restrictions; and • other operational problems.
In addition, many of our information technology systems, such as those we use for administrative functions, including human resources, payroll, accounting and internal and external communications, as well as the information technology systems of our third-party business partners and service providers, whether cloud-based or hosted in proprietary servers, contain personal, financial or other information that is entrusted to us by our customers and personnel.
In addition, many of our information technology systems, such as those we use for administrative functions, including human resources, payroll, accounting and internal and external communications, as well as the ( 39 ) information technology systems of our third-party business partners and service providers, whether cloud-based or hosted in proprietary servers, contain personal, financial or other information that is entrusted to us by our customers and personnel.
Our performance, in turn, will be subject to prevailing economic and competitive conditions, as well as financial, business, legislative, regulatory, industry and other factors, many of which are beyond our control. Our ability to meet our future debt service and other obligations may depend in significant part on the extent to which we can successfully implement our business strategy.
Our performance, in turn, will be subject to prevailing economic, market and competitive conditions, as well as financial, business, legislative, regulatory, industry and other factors, many of which are beyond our control. Our ability to meet our future debt service and other obligations may depend in significant part on the extent to which we can successfully implement our business strategy.
Further, while a strengthening dollar generally lowers our costs and expenses in Germany and Canada, it increases the cost of pulp to our customers and generally puts downward pressure on pulp prices and reduces our energy, chemical, pallet, biofuel, wood residual and European lumber sales revenues as they are sold in euros and Canadian dollars.
Further, while a strengthening dollar generally lowers our costs and expenses in Germany and Canada, it increases the cost of pulp to our customers and generally puts downward pressure on pulp prices and reduces our energy, chemical, pallet, biofuel, wood residual and European lumber revenues as they are sold in euros and Canadian dollars.
( 38 ) If our long-lived assets become impaired, we may be required to record non-cash impairment charges that could have a material impact on our results of operations. We review the carrying value of long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
If our long-lived assets become impaired, we may be required to record non-cash impairment charges that could have a material impact on our results of operations. We review the carrying value of long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
In addition, evolving standards and regulations related to climate change, sustainability and environmental, social and governance reporting may also result in additional expenditures and divert management attention from our business. Risks Related to ou r Debt Our level of indebtedness could negatively impact our financial condition, results of operations and liquidity.
In addition, evolving standards and regulations related to climate change, sustainability and environmental, social and governance reporting may also result in additional expenditures and divert management attention from our business. ( 40 ) Risks Related to ou r Debt Our level of indebtedness could negatively impact our financial condition, results of operations and liquidity.
These restrictions will affect, and in many respects will limit or prohibit, our ability to, among other things, incur or guarantee additional indebtedness, pay dividends or make distributions on capital stock or redeem or repurchase capital stock, make investments or acquisitions, create liens and enter into mergers, consolidations or transactions with affiliates.
These restrictions will affect, and in many respects will limit or may prohibit, our ability to, among other things, incur or guarantee additional indebtedness, pay dividends or make distributions on capital stock or redeem or repurchase capital stock, make investments or acquisitions, create liens and enter into mergers, consolidations or transactions with affiliates.
In addition, the quantity, quality and price of fiber we receive could be affected by man-made causes such as those resulting from industrial disputes, material curtailments or shut down of operations by suppliers, government orders and legislation (including new taxes or tariffs).
In addition, the quantity, quality and price of fiber we receive could be affected by man-made causes such as those resulting from industrial disputes, material curtailments or shut down of operations by suppliers, government orders and legislation (including new taxes, tariffs or duties).
We rely on third parties for transportation services. Our business primarily relies upon third parties for the transportation of products to our customers, as well as for the delivery of our raw materials to our mills. Our products and raw materials are principally transported by truck, barge, rail and sea-going vessels, all of which are highly regulated.
( 38 ) We rely on third parties for transportation services. Our business primarily relies upon third parties for the transportation of products to our customers, as well as for the delivery of our raw materials to our mills. Our products and raw materials are principally transported by truck, barge, rail and sea-going vessels, all of which are highly regulated.
Furthermore, governments in the United States, the European Union, the United Kingdom, Canada and others have imposed financial and economic sanctions on certain industry segments and various parties in Russia. We are monitoring the conflicts including the potential impact of financial and economic sanctions on the global economy and particularly the economies of Europe.
Furthermore, governments in the United States, the European Union, the United Kingdom, Canada and others have imposed financial ( 33 ) and economic sanctions on certain industry segments and various parties in Russia. We are monitoring the conflicts including the potential impact of financial and economic sanctions on the global economy and particularly the economies of Europe.
The majority of our employees are part of a union or are represented by a works council and we have collective agreements in place with our employees at all of our mills, other than the Peace River mill, Mercer Spokane facility, Torgau facility and Mercer Conway facility, which are non-union and not represented by a works council.
The majority of our employees are part of a union or are represented by a works council and we have collective agreements in place with our employees at all of our mills, other than the Peace River mill, Spokane facility, Torgau facility and Conway facility, which are non-union and not represented by a works council.
The markets for our principal products, being pulp and lumber, are sensitive to cyclical changes in the global economy, industry capacity and foreign exchange rates, all of which can have a significant influence on selling prices and our operating results.
The markets for our principal products, being pulp and lumber, are sensitive to cyclical changes in the global economy, industry capacity and foreign exchange rates, all of which can have a significant influence on selling prices and our operating ( 31 ) results.
In addition, the reduction in natural gas supply and increase in energy prices in Germany resulting from the Ukraine war has previously increased both the demand and prices for wood chips and residuals resulting in higher per unit fiber costs for our German mills in recent years.
In addition, the reduction in natural gas supply and increase in energy prices in Germany resulting from the Ukraine war has previously increased both the demand and prices for wood chips and residuals resulting in higher per unit fiber costs for ( 32 ) our German mills in recent years.
We rely on various technologies to process, store and report on our business and to communicate electronically between ( 39 ) our facilities, personnel, customers and suppliers as well as for administrative functions and many of such technology systems are dependent on one another for their functionality.
We rely on various technologies to process, store and report on our business and to communicate electronically between our facilities, personnel, customers and suppliers as well as for administrative functions and many of such technology systems are dependent on one another for their functionality.
Such declines in the dollar relative to the euro and the Canadian dollar reduce our operating margins and the cash flow available to fund our operations and to service our debt. This could have a material adverse effect ( 42 ) on our business, financial condition, results of operations and cash flows.
Such declines in the dollar relative to the euro and the Canadian dollar reduce our operating margins and the cash flow available to fund our operations and to service our debt. This could have a material adverse effect on our business, financial condition, results of operations and cash flows.
As a result, we are currently unable to identify and predict all of the specific consequences of climate change on our business and operations. Further, governmental initiatives and social focus in response to climate change also have an impact on operations.
As a result, we are currently unable to identify and predict all of the specific consequences of climate change ( 35 ) on our business and operations. Further, governmental initiatives and social focus in response to climate change also have an impact on operations.
( 41 ) Risks Related to M acroeco n omic Conditions A weakening of the global economy, including capital and credit markets, could adversely affect our business and financial results and have a material adverse effect on our liquidity and capital resources.
Risks Related to M acroeco n omic Conditions A weakening of the global economy, including capital and credit markets, could adversely affect our business and financial results and have a material adverse effect on our liquidity and capital resources.
We may experience material disruptions to our production. A material disruption at one of our manufacturing facilities could prevent us from meeting customer demand, reduce our sales and/or negatively impact our results of operations.
( 36 ) We may experience material disruptions to our production. A material disruption at one of our manufacturing facilities could prevent us from meeting customer demand, reduce our sales and/or negatively impact our results of operations.
International security issues and adverse developments in respect thereof such as the war in Ukraine and the conflicts in the Middle East could materially adversely affect global trade and economic activity and cause logistics disruptions or delays.
( 42 ) International security issues and adverse developments in respect thereof such as the war in Ukraine and the conflicts in the Middle East could materially adversely affect global trade and economic activity and cause logistics disruptions or delays.
The duration and scope of a health epidemic or pandemic can be difficult to predict and depends on many factors, including the emergence of new variants and the availability, acceptance and effectiveness of preventative measures.
The duration and scope of a health ( 43 ) epidemic or pandemic can be difficult to predict and depends on many factors, including the emergence of new variants and the availability, acceptance and effectiveness of preventative measures.
These potential developments, market perceptions concerning these and related issues and the attendant regulatory uncertainty regarding, for example, the posture of governments with respect to international trade or national security issues, could have a material adverse effect on global trade and economic growth which, in turn, can adversely affect our business, results of operation and financial condition.
These potential developments, market perceptions concerning these and related issues and the attendant regulatory uncertainty regarding, for example, the posture of governments with respect to international trade or national security issues, could have a material adverse effect on global trade and economic growth which, in turn, can adversely affect our business, results of operations and financial condition.
Demand for CLT, glulam and other mass timber products is primarily driven by commercial and industrial construction demand and customers’ desire to take advantage of the characteristics and environmental attributes of such products. A pulp producer's actual sales realizations are third-party industry quoted list prices net of customer discounts, rebates and other selling concessions.
Demand for CLT, glulam and other mass timber products is primarily driven by commercial and industrial construction demand and customers’ desire to take advantage of the characteristics and environmental attributes of such products. A pulp producer's actual sales realizations are based on third-party industry quoted list prices net of customer discounts, rebates and other selling concessions.
While various central banks initiated interest rate reductions in the second half of 2024, interest rates remain at relatively high levels. They may also fluctuate in the future. High interest rates can, among other things, dampen macroeconomic conditions and business activity and lead to a recession.
While various central banks initiated interest rate reductions in the second half of 2024 and throughout 2025, interest rates remain at relatively high levels. They may also fluctuate in the future. High interest rates can, among other things, dampen macroeconomic conditions and business activity and lead to a recession.
Because market conditions beyond our control determine the prices for pulp and lumber, prices may fall below our cash production costs, requiring us to either incur short-term losses on product sales or reduce or cease production at one or more of our mills.
Because market conditions beyond our control determine the prices for pulp and lumber, prices may fall below our cash production costs, requiring us to either incur short-term losses on product sales or curtail or cease production at one or more of our mills.
As demand for our products has principally historically been determined by general global macroeconomic activities, demand and prices for our products have historically decreased substantially during economic slowdowns. A significant economic downturn may affect our sales and profitability. Further, our suppliers and customers may also be adversely affected by an economic downturn.
Historically, demand and prices for our products have been principally determined by general global macroeconomic activities and have decreased substantially during economic slowdowns. A significant economic downturn may affect our sales and profitability. Further, our suppliers and customers may also be adversely affected by an economic downturn.
Cyclical fluctuations in the price and supply of our raw materials, particularly fiber, could adversely affect our business. Our main raw material is fiber in the form of wood chips, pulp logs, sawlogs and lumber. Fiber represented approximately 55% of our pulp cash production costs and approximately 75% of our lumber cash production costs in 2024.
Cyclical fluctuations in the price and supply of our raw materials, particularly fiber, could adversely affect our business. Our main raw material is fiber in the form of wood chips, pulp logs, sawlogs and lumber. Fiber represented approximately 55% of our pulp cash production costs and approximately 75% of our lumber cash production costs in 2025.
In our Western Canadian operations, fiber supply may also be impacted by unsettled land and title claims by, and government relations and actions relating to, Indigenous Nations. Any or a combination of these factors can affect fiber prices in a region.
In our Western Canadian operations, fiber supply may also be impacted by unsettled land and title claims by, and government relations and actions relating to, First Nations. Any or a combination of these factors can affect fiber prices in a region.
We have obtained insurance coverage that we believe would ordinarily be maintained by an operator of facilities similar to our mills. Our insurance is subject to various limits and exclusions. Damage or destruction to our facilities could result in claims that are excluded by, or exceed the limits of, our insurance coverage.
Our insurance coverage may not be adequate. We have obtained insurance coverage that we believe would ordinarily be maintained by an operator of facilities similar to our mills. Our insurance is subject to various limits and exclusions. Damage or destruction to our facilities could result in claims that are excluded by, or exceed the limits of, our insurance coverage.
In 2024, a significant portion of pulp segment revenues from our Canadian pulp mills and approximately 10% of our overall pulp segment revenues were from the United States. The U.S. market accounted for approximately 47% of our lumber revenues and approximately 41% of our lumber sales volumes in 2024.
In 2025, a significant portion of pulp segment revenues from our Canadian pulp mills and approximately 10% of our overall pulp segment revenues were from the United States. The U.S. market accounted for approximately 46% of our lumber revenues and approximately 41% of our lumber sales volumes in 2025.
Duties or other restrictions imposed on Canadian softwood lumber exports by the United States can negatively impact Canadian sawmill production in our Canadian pulp mills’ supply area and result in reduced availability and increased costs for wood chips for our Canadian mills.
Further, additional tariffs, duties or other restrictions may be imposed. Duties or other restrictions imposed on Canadian softwood lumber exports by the United States can negatively impact Canadian sawmill production in our Canadian pulp mills’ supply area and result in reduced availability and increased costs for wood chips for our Canadian mills.
Other risks to our business from climate change include: • a greater susceptibility of northern forests to disease, fire and insect infestation, which could diminish fiber availability; • the disruption of transportation systems and power supply lines due to more severe storms; • the loss of fresh water transportation for logs and pulp due to lower water levels; • decreases in the quantity and quality of processed water for our mills’ operations; ( 35 ) • the loss of northern forests in areas in sufficient proximity to our mills to competitively acquire fiber; and • lower harvest levels decreasing the supply of harvestable timber and, as a consequence, wood residuals.
Other risks to our business from climate change include: • a greater susceptibility of northern forests to disease, fire and insect infestation, which could negatively impact fiber availability; • the disruption of transportation systems and power supply lines due to more severe storms; • the loss of freshwater transportation for logs and pulp due to lower water levels; • decreases in the quantity and quality of processed water for our mills’ operations; • the loss of northern forests in areas in sufficient proximity to our mills to competitively acquire fiber; and • regulatory reductions in allowable harvest levels decreasing the supply of harvestable timber and, as a consequence, wood residuals.
Acquisitions also frequently result in the recording of goodwill and other intangible assets, which are subject to potential impairments in the future that could have a material adverse effect on our operating results.
Acquisitions also frequently result in the recording of goodwill and other intangible assets, which are subject to potential impairments in the future that could have a material adverse effect on our operating results. Furthermore, the costs of integrating acquisitions could significantly impact our operating results.
In addition, effects of the existing and future conflicts could heighten and increase many of the other risks described in this Item 1A. The impacts of proposed tariffs or other trade barriers by the United States, or other nations, may adversely impact our business, financial condition and results of operations.
In addition, effects of the existing and future conflicts could heighten and increase many of the other risks described in this Item 1A. The impacts of changes in international trade policies, including tariffs, duties or other trade barriers by the United States, or other nations, may adversely impact our business, financial condition and results of operations.
If any of our facilities were to incur significant downtime, our ability to meet our production capacity targets and satisfy customer requirements would be impaired and could have a material adverse effect on our business, financial condition, results of operations and cash flows. Acquisitions may result in additional risks and uncertainties in our business.
If any of our facilities were to incur significant downtime, our ability to meet our production capacity targets and satisfy customer requirements would be impaired and could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Should the markets for our products deteriorate or should we decide to invest capital differently or should other cash flow assumptions change, it is possible that we will be required to record non-cash impairment charges in the future that could have a material adverse effect on our results of operations. Our insurance coverage may not be adequate.
Should the markets for our products deteriorate or should we decide to invest capital differently, make operational changes at our mills or should other cash flow assumptions change, it is possible that we will be required to record non-cash impairment charges in the future that could have a material adverse effect on our results of operations.
As of December 31, 2024, we had approximately $1,474.0 million of indebtedness outstanding. We may also incur additional indebtedness in the future.
As of December 31, 2025, we had approximately $1,605.1 million of indebtedness outstanding. We may also incur additional indebtedness in the future.
Our paper, magazine, book and catalog publishing customers could increase their use of, and compete with, non-print media, including multimedia technologies, electronic storage and communication platforms which could further reduce their consumption of papers and in turn their demand for market pulp.
Our paper, magazine, book and catalog publishing customers could increase their ( 37 ) use of, and compete with, non-print media, including multimedia technologies, electronic storage and communication platforms which could further reduce their consumption of papers and in turn their demand for market pulp. The demand for such paper products has weakened significantly over the last several years.
Furthermore, acquisitions could entail a number of risks, including: • diversion of management's attention from our ongoing business; • difficulty integrating the operations, including financial and accounting functions, sales and marketing procedures, technology and other corporate administrative functions of the combined operations; • increased operating costs; • exposure to substantial unanticipated liabilities; • difficulty in realizing projected synergies, efficiencies and cost savings; • exposure to facilities with different health and safety standards than ours and difficulty in integrating their practices to our standards; • difficulty maintaining relationships with present and potential customers, distributors and suppliers due to uncertainties regarding service, production quality and prices; and • problems retaining key employees.
Furthermore, acquisitions could entail a number of risks, including: (i) diversion of management's attention from our ongoing business; (ii) difficulty integrating the operations of the acquired operations; (iii) increased operating costs; (iv) exposure to substantial unanticipated liabilities; (v) difficulty in realizing projected synergies, efficiencies and cost savings; (vi) exposure to facilities with different health and safety standards than ours and difficulty in integrating their practices to our standards; (vii) difficulty maintaining relationships with present and potential customers, distributors and suppliers due to uncertainties regarding service, production quality and prices; and (viii) problems retaining key employees.
Tariffs on Canadian goods (and any new tariffs, retaliatory tariffs or other trade protectionist measures implemented in connection therewith) and threatened imposition of tariffs against the European Union could have a material adverse impact on the sales of our products to customers in the United States.
Tariffs on goods originating from Europe and Canada (and any new tariffs, retaliatory tariffs or other trade protectionist measures implemented in connection therewith) could have a material adverse impact on the sales of our products to customers in the United States.
Such increases may have an adverse impact on our business, operating schedule and financial condition. If the current global economy or outlook is undermined by downside risks and there is a prolonged economic downturn, governments may resort to new or enhanced trade barriers to protect their domestic industries against imports, thereby depressing demand.
If the current global economy or outlook is undermined by downside risks and there is a prolonged economic downturn, governments may resort to new or enhanced trade barriers to protect their domestic industries against imports, thereby depressing demand.
Our business, financial condition and results of operations could be adversely affected by disruptions in the global and European economies caused by geopolitical conflicts, including Russia's invasion of Ukraine and conflicts in the Middle East.
Our business, financial condition and results of operations could be adversely affected by disruptions in the global and European economies caused by geopolitical conflicts, including Russia's invasion of Ukraine and conflicts in the Middle East. The global economy has been negatively impacted by increasing tension, uncertainty and tragedy resulting from Russia's invasion of Ukraine and conflicts in the Middle East.
While we are taking steps to seek to mitigate their potential impact on our business, given that developments are ongoing with respect to these proposed tariffs and other measures, their impacts are uncertain and could ( 34 ) adversely affect our business, financial condition and results of operations. We face intense competition in the forest products industry.
While we are taking steps to seek to mitigate their potential impact on our business, given these developments are ongoing, their impacts are uncertain and could adversely affect our business, financial condition and results of operations. We face intense competition in the forest products industry. We compete with numerous forest products companies, some of which have greater financial resources.
If any new capacity, particularly for NBSK pulp, is not absorbed in the market or offset by curtailments or closures of older, high-cost pulp mills, the increase could put downward pressure on pulp prices and materially adversely affect our results of operations, margin and profitability.
However, we cannot predict whether additional new capacity will be announced or will come online in the future. If any new pulp capacity is not absorbed in the market or offset by curtailments or closures of older, high-cost pulp mills, the increase could put downward pressure on pulp prices and materially adversely affect our results of operations, margin and profitability.
( 43 ) Legal and R egulatory Risks We are subject to extensive environmental regulation and we could incur substantial costs as a result of compliance with, violations of or liabilities under applicable environmental laws and regulations.
Legal and R egulatory Risks We are subject to extensive environmental regulation and we could incur substantial costs as a result of compliance with, violations of or liabilities under applicable environmental laws and regulations. Our operations are subject to numerous environmental laws and regulations as well as permits, guidelines and policies relating to the protection of the environment.
While we believe this may be partially offset by increased wood chip supply from U.S. sawmills and pulp log availability, we cannot currently predict the effect on our Canadian mills’ overall fiber costs. Availability of fiber may be further limited by adverse responses to and prevention of wildfires, weather, insect infestation, disease, ice storms, windstorms, flooding and other natural causes.
While we believe this may be partially offset by increased wood chip supply from U.S. sawmills and pulp log availability, we cannot currently predict the effect on our Canadian mills’ overall fiber costs.
Except for the Stendal mill, the Mercer Spokane facility and the Mercer Conway facility, our facilities have been operating for decades and we have not done invasive testing to determine whether or to what extent any such environmental contamination exists.
In addition, we may be held legally responsible for liabilities as a successor owner of businesses that we acquire or have acquired. Except for the Stendal mill, the Spokane facility and the Conway facility, our facilities have been operating for decades and we have not done invasive testing to determine whether or to what extent any such environmental contamination exists.
The global economy has been negatively impacted by increasing tension, uncertainty and tragedy resulting ( 33 ) from Russia's invasion of Ukraine and conflicts in the Middle East. The adverse and uncertain economic conditions resulting therefrom have and may further negatively impact global demand, cause supply chain disruptions and increase costs for transportation, energy and other raw materials.
The adverse and uncertain economic conditions resulting therefrom have and may further negatively impact global demand, cause supply chain disruptions and increase costs for transportation, energy and other raw materials.
Increased trade protectionism or the perception that it may occur could materially adversely affect our business. Increasing trade protectionism may cause an increase in the cost of products exported from regions globally, the length of time required to transport products, and the risks associated with exporting products.
Increasing trade protectionism may cause an increase in the cost of products exported from regions globally, the length of time required to transport products, and the risks associated with exporting products. Such increases may have an adverse impact on our business, operating schedule and financial condition.
International Trade Commission requesting an investigation into alleged subsidies provided to Canadian lumber producers. Since then, the U.S. Department of Commerce announced various countervailing and anti-dumping duty rates on Canadian softwood lumber and the United States and Canada have engaged in proceedings under the North American Free Trade Agreement and through the World Trade ( 32 ) Organization.
Department of Commerce announced various countervailing and anti-dumping duty rates on Canadian softwood lumber and the United States and Canada have engaged in proceedings under the USMCA and through the World Trade Organization. In the second half of 2025, the U.S.
Increased trade barriers, sanctions and other restrictions on global or regional trade could adversely affect our business, financial condition and results of operations. Although we have no operations in Russia or Ukraine, the destabilizing effects of Russia's invasion of Ukraine could have other adverse effects on our business, including transportation, logistics, fiber supply and energy availability.
Although we have no operations in Russia, Ukraine or areas of conflict in the Middle East, the destabilizing effects of these events could have other adverse effects on our business, including transportation, logistics, fiber supply and energy availability.
We cannot assure you that we will be able to implement our strategy fully or that the anticipated results of our strategy will be realized. Over the next several years, we will require financing to refinance maturing debt obligations (unless extended), and such refinancing may not be available on favorable terms or at all.
Over the coming years, we will need to refinance maturing debt obligations (unless extended), and such refinancing may not be available on favorable terms or at all.
Certain integrated pulp and paper producers have the ability to discontinue paper production by idling their paper machines and selling their pulp production on the market, if market conditions, prices and trends warrant such actions.
Certain integrated pulp and paper producers have the ability to discontinue paper production by idling their paper machines and selling their pulp production on the market, if market conditions, prices and trends warrant such actions. Currently, we are aware of approximately 2.6 million ADMTs of announced net hardwood pulp production capacity increases scheduled to come online in 2026.
We compete with numerous forest products companies, some of which have greater financial resources. The trend toward consolidation in the forest products industry has led to the formation of sizable global producers that have greater flexibility in pricing and financial resources for marketing, investment, research and development, innovation, and expansion.
The trend toward consolidation in the forest products industry has led to the formation of sizable global producers that have greater flexibility in pricing and financial resources for marketing, investment, research and development, innovation, and expansion. Additionally, certain of our competitors are fully or more vertically integrated than we are and may have different priorities when operating their respective businesses.
Evolving sustainability reporting and environmental, social and governance preferences of customers, investors and other stakeholders may impact our business. Sustainability and environmental, social and governance reporting frameworks are numerous and evolving rapidly.
If we are unable to address any of these risks, our results of operations and financial condition could be materially adversely affected. Evolving sustainability reporting and environmental, social and governance preferences of customers, investors and other stakeholders may impact our business. Sustainability and environmental, social and governance reporting frameworks are numerous and evolving rapidly.
Further escalation of geopolitical tensions related to this military conflict and/or its expansion could result in loss of property, expropriation, cyberattacks, supply disruptions, plant closures and an inability to obtain key supplies and materials, as well as adversely affect both our and our customers’ supply chains and logistics, particularly in Europe.
Further escalation of geopolitical tensions could, among other things, impact economic and market conditions, result in an inability to obtain key supplies and materials, or adversely affect both our and our customers’ supply chains and logistics, particularly in Europe.
If we are unable to address any of these risks, our results of operations and financial condition could be materially adversely affected. ( 37 ) Our operations require substantial capital and we may be unable to maintain adequate capital resources to provide for such capital requirements.
Our operations require substantial capital and we may be unable to maintain adequate capital resources to provide for such capital requirements.
In September 2024, the U.S. Department of Commerce published amended final results for its fifth administrative review, setting the countervailing duty at 6.74% and the anti-dumping rate at 7.66%, for combined final duty rates of 14.40% for “all other” Canadian lumber producers. In September 2024, Canada announced that it is challenging the final results of the U.S.
Department of Commerce published the final results for its sixth administrative review, setting the countervailing duty at 14.63% and the anti-dumping rate at 20.53%, for combined final duty rates of 35.16% for “all other” Canadian lumber producers.
The forest products industry is also capital intensive, and we require significant investment to remain competitive. Some of our competitors may be lower-cost producers in some of the businesses in which we operate.
Some of our competitors may be lower-cost producers in some of the businesses in which we operate.
The windfall profits tax was equivalent to 90% of the revenue above a “baseline” threshold for energy producers. We cannot predict if either Germany or the European Union will adopt new legal measures if there are further energy shortages and high prices resulting from the Ukraine conflict or otherwise in the future.
We cannot predict if either Germany or the European Union will adopt new legal measures if there are further energy shortages and high prices resulting from the Ukraine conflict or otherwise in the future. The effect of the foregoing and any similar legislation may negatively impact our revenues and after-tax income from surplus green energy sales during applicable periods.
Additionally, certain of our competitors are fully or more vertically integrated than we are and may have different priorities when operating their respective businesses. Because the markets for our products are highly competitive, actions by competitors can affect our ability to compete and the volatility of prices at which our products are sold.
Because the markets for our products are highly competitive, actions by competitors can affect our ability to compete and the volatility of prices at which our products are sold. The forest products industry is also capital intensive, and we require significant investment to remain competitive.
Therefore, our profitability depends on managing our cost structure, particularly raw materials which represent a significant component of our operating costs and can fluctuate based upon factors beyond our control. If the prices of our products decline, or if prices for our raw materials increase, or both, our results of operations and cash flows could be materially adversely affected.
Therefore, our profitability depends on managing our cost structure, particularly raw materials which represent a significant component of our operating costs and can fluctuate based upon factors beyond our control. Fluctuations in market dynamics may also cause us to pursue strategic divestitures.
Following the expiration of a softwood lumber trade agreement in 2016, the United States and Canada have renewed a long-standing trade dispute regarding lumber exports from Canada to the United States. In November 2016, a petition was filed by a coalition of U.S. lumber producers to the U.S. Department of Commerce and the U.S.
Tariffs, duties and any retaliatory measures could also impact our raw material costs and result in volatility in transportation costs and logistics disruptions and delays. Following the expiration of a softwood lumber trade agreement in 2016, the United States and Canada have renewed a long-standing trade dispute regarding lumber exports from Canada to the United States.
Department of Commerce’s fifth administrative review. It is uncertain when or if the United States and Canada may settle a new agreement and what terms or restrictions it may contain. Further, additional tariffs, duties or other restrictions may be imposed.
This measure resulted in a 10% global tariff on imports of softwood timber and lumber, which is assessed in addition to the anti-dumping and countervailing duties on Canadian softwood lumber. It is uncertain when or if the United States and Canada may settle a new agreement and what terms or restrictions it may contain.
In Germany, our mills sell surplus green energy at market prices or certain of our mills have the option to sell at fixed prices or tariffs pursuant to the Renewable Energy Act.
In Germany, our mills sell surplus green energy at market prices, while our Friesau mill and Torgau facility also have the option to sell at special regulated rates pursuant to the Renewable Energy Act. Such special regulated rates expire in 2029 for our Friesau mill and between 2029 and 2034 for our Torgau facility’s four cogeneration power plants.
Removed
( 31 ) Currently, we are aware of approximately 0.4 million ADMTs of announced net pulp production capacity increases, primarily of softwood kraft pulp scheduled to come online in 2025. However, we cannot predict whether additional new capacity will be announced or will come online in the future.
Added
Curtailments or divestitures may also result in long-lived asset or other impairments and the incurrence of related expenses such as severance, pension, environmental remediation, and care and maintenance costs. If the prices of our products decline, or if prices for our raw materials increase, or both, our results of operations and cash flows could be materially adversely affected.
Removed
Additionally, while NBHK pulp is not a direct competitor to NBSK pulp, if any future increases in NBHK pulp supply are not absorbed by demand growth, such supply could put downward pressure on NBSK pulp prices as well.
Added
Availability of fiber may be further limited by adverse responses to and prevention of wildfires, weather, insect infestation, disease, ice storms, windstorms, flooding and other natural causes.
Removed
Additionally, both the European Union and Germany adopted or proposed, in response to energy supply shortages and high energy prices, price caps and “windfall” taxes on energy sales resulting from the war in Ukraine. These expired in June 2023 with respect to electricity.
Added
See “ – The impacts of changes in international trade policies, including tariffs, duties or other trade barriers by the United States, or other nations, may adversely impact our business, financial condition and results of operations”.
Removed
On February 1, 2025 the President of the United States signed executive orders directing the United States to impose a 25% tariff on all goods originating from Canada and Mexico, and an additional 10% tariff on goods imported from China.
Added
Increased trade barriers, sanctions and other restrictions on global or regional trade could adversely affect our business, financial condition and results of operations.
Removed
While 30-day pauses in tariffs against Canada and Mexico were announced on February 3, 2025, we do not currently know when or if such tariffs will take effect or their duration.
Added
In February 2025, the President of the United States signed executive orders imposing tariffs on Canada and Mexico. Following a temporary pause, these tariffs went into effect in March 2025. While an exemption was subsequently issued for goods compliant with the United States-Mexico-Canada Agreement (USMCA), any products failing to meet the strict rules of origin remain subject to tariffs.
Removed
If implemented, the tariffs and any retaliatory measures could also impact our raw material costs and result in volatility in transportation costs and logistics disruptions and delays. For example, in 2024, our Celgar pulp mill sourced a significant portion of its fiber requirements from United States suppliers.
Added
Effective August 2025, goods originating from Europe became subject to a new reciprocal tariff regime which established a baseline duty. Furthermore, while a trade agreement reached in November 2025 reduced the rate of duty on goods imported from China, they remain subject to continued tariffs, and specific trade restrictions and retaliatory measures remain in place.
Removed
In order to grow our business, we may seek to acquire additional assets or companies. For example, in September 2022, we acquired the Torgau facility for approximately $263.2 million and, in June 2023, we acquired the Mercer Conway facility and Mercer Okanagan facility for approximately $82.1 million.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+1 added−0 removed9 unchanged
Biggest changeWe seek to align our cybersecurity program with practices recommended under ISO 27001 and by the National Institute of Standards and Technology and the Center for Internet Security Critical Security Controls. When reviewing key third-party information technology service providers, our engagement process customarily includes, among other things, a review of such providers’ cybersecurity measures.
Biggest changeWe seek to align our cybersecurity program with practices recommended under ISO 27001 and by the National Institute of Standards and Technology and the Center for Internet Security Critical Security Controls. We leverage third-party risk intelligence for continuous monitoring and objective assessment of key third-party information technology service providers, which informs our overall cybersecurity risk oversight and control environment.
Additionally, our Chief Information Officer and Director of Cybersecurity meet periodically with the Board or the Audit Committee to brief them on technology and information security matters. Our Director of Cybersecurity is informed of cybersecurity incidents by applicable personnel, and oversees remediation efforts in accordance with our policies and processes.
Additionally, our Chief Information Officer and Director of Cybersecurity meet periodically with the Board or the Audit Committee to brief them on technology and information security matters. Our Director of Cybersecurity is informed of cybersecurity incidents by applicable personnel, and oversees ( 47 ) remediation efforts in accordance with our policies and processes.
He has held various leadership positions where he developed, managed and implemented security programs and controls. He also holds, ( 47 ) among other information technology certifications, the Certified Information Systems Security Professional designation.
He has held various leadership positions where he developed, managed and implemented security programs and controls. He also holds, among other information technology certifications, the Certified Information Systems Security Professional designation.
Our Chief Information Officer reports to our Audit Committee on significant incidents periodically. Our Chief Information Officer has over 30 years of technology leadership experience and is, among other things, a Certified Information Systems Security Professional and a Certified Secure Infrastructure Specialist. Our Director of Cybersecurity has over 20 years of experience as a cybersecurity and information technology professional.
Our Chief Information Officer reports to our Audit Committee on significant incidents periodically. Our Chief Information Officer has over 30 years of technology leadership experience and is, among other things, a Certified Information Systems Security Professional and a Certified Secure Infrastructure Specialist. Our Director of Cybersecurity has over 25 years of experience as a cybersecurity and information technology professional.
However, there can be no assurance that we, or our third-party partners or service providers, will not experience a cybersecurity threat or incident in the future that could materially adversely affect our business strategy, results of operations, or financial condition. For further discussion of the risks related to cybersecurity, see also Item 1A.
However, there can be no assurance that we, or our third-party partners or service providers, will not experience a cybersecurity threat or incident in the future that could materially adversely affect our business strategy, results of operations, or financial condition.
As the volume and complexity of cyberattacks continue to evolve, we continue to enhance our security capabilities by continued investment in cyber technologies, further developing our internal cybersecurity personnel and educating our workforce regarding cybersecurity, and leveraging emerging technologies.
As the volume and complexity of cyberattacks continue to evolve, we remain committed to enhancing our security capabilities by continued investments in cyber technologies and developing our internal cybersecurity personnel, educating our workforce, and leveraging emerging technologies.
“Risk Factors – Risks Related to our Business - Failures or security breaches of our information technology systems could disrupt our operations and negatively impact our business”.
For further discussion of the risks related to cybersecurity, see also Item 1A. “Risk Factors – Risks Related to our Business – Failures or security breaches of our information technology systems could disrupt our operations and negatively impact our business”.
Additionally, we use third-party data, such as Security Scorecard, to review and monitor such providers and as an indicator in respect of our cybersecurity environments. We periodically undertake cybersecurity audits or other independent assessments, the results of which are reported to our Audit Committee.
We continue to seek to enhance our vendor onboarding and oversight controls, including contractual requirements and a risk-tiered approach to vendor review. We periodically undertake cybersecurity audits or other independent assessments, the results of which are reported to our Audit Committee.
Added
While the cybersecurity programs described herein fully encompass our information technology infrastructure, we recognize the unique requirements of our operational technology environments. Accordingly, we are executing targeted initiatives to further harmonize our operational technology security strategy with established information technology standards, implementing commensurate controls where technically feasible to ensure a unified and robust enterprise security framework.

Item 2. Properties

Properties — owned and leased real estate

14 edited+0 added−1 removed11 unchanged
Biggest changeIts facilities include: • a Transverse High Grader sorting line; • an industry-first glulam press; • a Lineal High Grader Sorting Line; • a finger jointing line; • a hydraulic CLT press; • three CNC machines; and • one Rex planer. Mercer Okanagan Facility.
Biggest changeThe Conway facility has an annual production capacity of approximately 75,000 m 3 of CLT and glulam. Its facilities include: • a Lineal High Grader sorting line; • a glulam press; • a finger jointing line; • a hydraulic CLT press; • three CNC machines; and • two Rex planers. Okanagan Facility.
Its facilities include: • large portal glulam CNC machine; • glulam jigs, including an arch-line; • a glulam beam planer and sander; • two finger jointing lines; and • a hydraulic CLT press.
Its facilities include: • a large portal glulam CNC machine; • glulam jigs, including an arch-line; • a glulam beam planer and sander; • two finger jointing lines; and • a hydraulic CLT press.
Friesau Mill. The Friesau mill is situated on a 150 acre site in the town of Saalburg-Ebersdorf, Germany, approximately 185 miles south of Berlin and only 10 miles from the Rosenthal mill. It is a two-line sawmill ( 49 ) with an annual production capacity of approximately 550 MMfbm of lumber on a continuously operating basis.
Friesau Mill. The Friesau mill is situated on a 150 acre site in the town of Saalburg-Ebersdorf, Germany, approximately 185 miles south of Berlin and only 10 miles from the Rosenthal mill. It is a two-line sawmill with an annual production capacity of approximately 550 MMfbm of lumber on a continuously operating basis.
The Mercer Okanagan facility is located in Okanagan Falls, British Columbia, and is situated on approximately 20 acres of land. The Mercer Okanagan facility has an annual production capacity of approximately 40,000 m 3 of CLT and glulam.
The Okanagan facility is located in Okanagan Falls, British Columbia, and is situated on approximately 20 acres of land. The Okanagan facility has an annual production capacity of approximately 40,000 m 3 of CLT and glulam.
ITEM 2. PROPERTIES We own the Stendal, Rosenthal, Celgar, Peace River pulp mills, and their underlying properties. We also own the Friesau mill and the Torgau, Mercer Spokane, Mercer Conway, Mercer Okanagan facilities and their underlying properties. Stendal Mill.
ITEM 2. PROPERTIES We own the Stendal, Rosenthal, Celgar, Peace River pulp mills, and their underlying properties. We also own the Friesau mill and the Torgau, Spokane, Conway, Okanagan facilities and their underlying properties. Stendal Mill.
The facilities at the Celgar mill include: • an approximately 450,000 square feet fiber storage area and an approximately 440,000 square feet log storage area; • a wood room containing debarking and chipping facilities for pulp logs; • a fiber line, which includes a dual vessel hydraulic digester, a two stage oxygen delignification system and a four stage bleach plant; • two pulp machines, which each include a dryer, a cutter and a baling line; • an approximately 28,000 square feet on-site finished goods storage area and an approximately 29,000 square feet off-site finished goods storage area; • a chemical recovery line, which includes a recovery boiler, evaporation plant, recausticizing plant and lime kiln; • a wastewater treatment system; and • a power station with two turbines capable of producing approximately 100 MW of electrical power.
The facilities at the mill include: • an approximately 450,000 square feet fiber storage area and an approximately 440,000 square feet roundwood storage area; • a wood room containing debarking and chipping facilities for pulp logs; • a fiber line, which includes a dual vessel hydraulic digester, a two stage oxygen delignification system and a four stage bleach plant; • two pulp machines, which each include a dryer, a cutter and a baling line; • an approximately 28,000 square feet on-site finished goods storage area and an approximately 29,000 square feet off-site finished goods storage area; • a chemical recovery line, which includes a recovery boiler, evaporation plant, recausticizing plant and lime kiln; • a wastewater treatment system; and • a power station with two turbines capable of producing approximately 100 MW of electrical power.
It is an integrated production site with two sawmills with an annual lumber capacity of approximately 410 MMfbm and a pallet production capacity of 17 million pallets and two biofuel plants (wood pellets and briquettes) with a total capacity of 230,000 tonnes. The mill also sells electrical power to the regional power grid. The mill is self-sufficient in thermal power.
It is an integrated production site with two sawmills with an annual lumber capacity of approximately 473 MMfbm and a pallet production capacity of 17 million pallets and two biofuel plants (wood pellets and briquettes) with a total capacity of 230,000 tonnes. The mill also sells electrical power to the regional power grid. The mill is self-sufficient in thermal power.
The facilities at the mill include: • an approximately 425,000 square feet fiber storage area; • debarking and chipping facilities for pulp logs; • an approximately 625,000 square feet roundwood yard; • a fiber line, which includes a Kamyr continuous digester and bleaching facilities; • a pulp machine, which includes a dryer, a cutter and a baling line; • an approximately 60,000 square feet finished goods storage area; • a chemical recovery line, which includes a recovery boiler, evaporation plant, recausticizing plant and lime kiln; • a fresh water plant; ( 48 ) • a wastewater treatment plant; • a tall oil plant; • a lignin plant; and • a power station with a turbine capable of producing 57 MW of electrical power.
The facilities at the mill include: • an approximately 425,000 square feet fiber storage area and an approximately 625,000 square feet roundwood storage area; • debarking and chipping facilities for pulp logs; • a fiber line, which includes a Kamyr continuous digester and bleaching facilities; • a pulp machine, which includes a dryer, a cutter and a baling line; • an approximately 60,000 square feet finished goods storage area; ( 48 ) • a chemical recovery line, which includes a recovery boiler, evaporation plant, recausticizing plant and lime kiln; • a freshwater plant; • a wastewater treatment plant; • a tall oil plant; • a lignin plant; and • a power station with a turbine capable of producing 57 MW of electrical power.
Its facilities include: • four logyards totaling approximately 1,000,000 square feet with log debarking and sorting lines; • three sawlines (one Linck, one EWD and one Hew sawline with Kallfass sorting lines) and one milling line; • EPAL pallet production with eight Coralli and one Storti line; • two progressive kilns and nine drying kilns capable of matching pallet and sawmill production; • one planer line; • pellet production with six Münch presses as well as two Salmatec presses; • briquette production with 12 lines (Nielsen); • two storage silos for pellets with a total capacity of 5,000 cubic tonnes; and • four biomass fueled cogeneration power plants capable of producing 15 MW of electrical power.
Its facilities include: • four logyards totaling approximately 1,000,000 square feet with log debarking and sorting lines; • three sawlines (one Linck, one EWD and one Hew sawline with Kallfass sorting lines) and one milling line; • pallet production with eight Coralli and one Storti line; • two continuous kilns and nine batch kilns capable of matching pallet and sawmill production; • one planer line; • pellet production with six Münch presses as well as two Salmatec presses; • briquette production with 12 lines (Nielsen); • two storage silos for pellets with a total capacity of 5,000 cubic tonnes; and • four biomass fueled cogeneration power plants capable of producing 15 MW of electrical power.
The facilities at the mill include: • an approximately 740,000 square feet fiber and roundwood storage area; • debarking and chipping facilities for pulp logs; • a fiber line, which includes 12 SuperBatch™ digesters and bleaching facilities; • a pulp machine, which includes a dryer, a cutter and two baling lines; • an approximately 105,000 square feet finished goods storage area; • a chemical recovery line, which includes a recovery boiler, evaporation plant, recausticizing plant and lime kiln; • a tall oil plant; • a turpentine plant; • a methanol plant; • a fresh water plant; • a wastewater treatment plant; and • a power station with two turbines capable of producing 148 MW of electrical power.
The facilities at the mill include: • an approximately 740,000 square feet fiber and roundwood storage area; • a wood room containing debarking and chipping facilities for pulp logs; • a fiber line, which includes 12 SuperBatch™ digesters and bleaching facilities; • a pulp machine, which includes a dryer, a cutter and two baling lines; • an approximately 105,000 square feet finished goods storage area; • a chemical recovery line, which includes a recovery boiler, evaporation plant, recausticizing plant and lime kiln; • a tall oil plant; • a turpentine plant; • a methanol plant; • a freshwater plant; • a wastewater treatment plant; and • a power station with two turbines capable of producing 148 MW of electrical power.
Mercer Spokane Facility. The Mercer Spokane facility is situated on approximately 54 acres of land near Spokane, Washington. The Mercer Spokane facility has an annual production capacity of approximately 140,000 m 3 or 13 million square feet of 5-ply CLT panels.
Spokane Facility. The Spokane facility is situated on approximately 37 acres of land near Spokane, Washington. The Spokane facility has an annual production capacity of approximately 140,000 m 3 or 13 million square feet of 5-ply CLT panels.
The facilities at the Friesau mill include: • an approximately 1,000,000 square feet roundwood storage area; • three log debarking and two sorting lines; • two Linck sawlines; • 34 lumber kilns capable of matching sawmill production; • three continuous kilns; • two planer lines; • an approximately 663,800 square feet finished goods storage area; and • a biomass fueled cogeneration power plant capable of producing 13 MW of electrical power.
The facilities at the mill include: • an approximately 1,000,000 square feet roundwood storage area; • three log debarking and two sorting lines; • two Linck sawlines; • three continuous kilns and 29 batch kilns capable of matching sawmill production; • two planer lines; • an approximately 663,800 square feet finished goods storage area; and • a biomass fueled cogeneration power plant capable of producing 13 MW of electrical power.
The facilities at the Peace River mill include: • an approximately 1,130,000 square feet fiber storage area and an approximately 2,700,000 square feet log storage area; • an approximately 189 railcar siding/storage capacity; • a fiber line which includes a dual vessel hydraulic digester, a single stage oxygen delignification system and a four stage bleach plant; • a pulp machine, which includes a dryer, cutter and two baling lines; • an approximately 56,000 square feet on-site finished goods storage area; • a chemical recovery line, which includes a recovery boiler, evaporation plant, recausticizing plant and a lime kiln; • a fresh water treatment plant; • a wastewater treatment system; and • two turbines capable of producing approximately 65 MW of electrical power.
The facilities at the mill include: • an approximately 1,130,000 square feet fiber storage area and an approximately 2,700,000 square feet roundwood storage area; • a wood room containing debarking and chipping facilities for pulp logs; • an approximately 189 railcar siding/storage capacity; • a fiber line which includes a dual vessel hydraulic digester, a single stage oxygen delignification system and a four stage bleach plant; • a pulp machine, which includes a dryer, cutter and two baling lines; • an approximately 56,000 square feet finished goods storage area; • a chemical recovery line, which includes a recovery boiler, evaporation plant, recausticizing plant and a lime kiln; • a freshwater treatment plant; ( 49 ) • a wastewater treatment system; and • two turbines capable of producing approximately 65 MW of electrical power.
Its facilities include: • a Transverse High Grader sorting line; • a Lineal High Grader Sorting Line; • a finger jointing line; • a continuous kiln; • a pneumatic CLT press; • three CNC machines; and • three Gilbert planers. ( 50 ) Mercer Conway Facility.
Its facilities include: • a Transverse High Grader sorting line; • a Lineal High Grader sorting line; • a finger jointing line; • a continuous kiln; • a pneumatic CLT press; ( 50 ) • three CNC machines; and • three Gilbert planers. Conway Facility. The Conway facility is situated on approximately 144 acres of land near Conway, Arkansas.
Removed
The Mercer Conway facility is situated on approximately 124 acres of land near Conway, Arkansas. The Mercer Conway facility has an annual production capacity of approximately 75,000 m 3 of CLT and glulam.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−9 removed14 unchanged
Biggest changeThe further declaration and payment of dividends is at the discretion of our board of directors and will depend upon various factors, including our earnings, financial condition, restrictions imposed by our credit facilities and the terms of any other indebtedness that may be outstanding, cash requirements, future prospects and other factors deemed relevant by our board of directors.
Biggest changeThe declaration, timing and amount of any future dividends will be subject to the discretion and approval of our board of directors based upon consideration of, among other things, our financial condition, capital allocation strategy, liquidity requirements, earnings, market conditions, future prospects and other factors deemed relevant by our board of directors.
The graph assumes $100 was invested in each of our common stock, the S&P SmallCap 600 Index, the Peer Group and the SIC Code Index on December 31, 2019. Data points on the graph are annual.
The graph assumes $100 was invested in each of our common stock, the S&P SmallCap 600 Index, the Peer Group and the SIC Code Index on December 31, 2020. Data points on the graph are annual.
The indentures governing our Senior Notes and our credit facilities limit our ability to pay dividends or make other distributions on capital stock. See Item 1. “Business – Description of Certain Indebtedness”. (d) Equity Compensation Plans.
The indentures governing our Senior Notes and our credit facilities limit our ability to pay dividends or make other distributions on capital stock. See Item 1. “Business – Description of Certain Indebtedness”. (d) Equity Compensation Plans. See Item 12. "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" for information relating to our equity compensation plans.
Comparison of Cumulative Total Return Assumes $100 Invested December 31, 2019 Assumes Dividends Reinvested Fiscal Year Ending December 31, 2024 2019 2020 2021 2022 2023 2024 Mercer International Inc. $ 100.00 $ 87.24 $ 104.19 $ 103.54 $ 87.29 $ 62.33 S&P SmallCap 600 Index $ 100.00 $ 111.29 $ 141.13 $ 118.41 $ 137.42 $ 149.37 SIC Code Index $ 100.00 $ 106.31 $ 114.10 $ 138.09 $ 87.71 $ 96.95 Peer Group (1) $ 100.00 $ 116.61 $ 114.36 $ 99.24 $ 114.24 $ 106.38 (1) The Peer Group is determined by our Human Resources Committee and is comprised of Borregaard ASA, Canfor Pulp Products Inc., Empresas CMPC S.A., ENCE Energía y Celulosa S.A., International Paper, Klabin S.A., Metsä Board Oyj, Rayonier Advanced Materials Inc., Rottneros AB, Stora Enso Oyj, Suzano S.A., Svenska Cellulosa AB SCA, UPM-Kymmene Oyj, and West Fraser Timber Co.
Comparison of Cumulative Total Return ( 52 ) Assumes Dividends Reinvested Fiscal Year Ending December 31, 2025 2020 2021 2022 2023 2024 2025 Mercer International Inc. $ 100.00 $ 119.43 $ 118.68 $ 100.05 $ 71.45 $ 22.49 S&P SmallCap 600 Index $ 100.00 $ 126.82 $ 106.40 $ 123.48 $ 134.22 $ 142.30 SIC Code Index $ 100.00 $ 107.34 $ 129.90 $ 82.51 $ 91.20 $ 48.94 Peer Group (1) $ 100.00 $ 98.25 $ 85.66 $ 98.85 $ 92.47 $ 89.89 (1) The Peer Group is determined by our Human Resources Committee and is comprised of Borregaard ASA, Canfor Pulp Products Inc., Empresas CMPC S.A., ENCE Energía y Celulosa S.A., International Paper, Klabin S.A., Metsä Board Oyj, Rayonier Advanced Materials Inc., Rottneros AB, Stora Enso Oyj, Suzano S.A., Svenska Cellulosa AB SCA, UPM-Kymmene Oyj, and West Fraser Timber Co.
In 2024, our board of directors approved four quarterly dividend payments of $0.075 per share each, paid on April 4, July 3, October 3 and December 26.
As of February 10, 2026, there were approximately 171 holders of record of our shares and a total of 66,982,506 shares were outstanding. (c) Dividend Information. In 2025, our board of directors approved two quarterly dividend payments of $0.075 per share each, paid on April 2 and July 3, 2025.
Removed
As of February 18, 2025, there were approximately 172 holders of record of our shares and a total of 66,870,774 shares were outstanding. (c) Dividend Information.
Added
On July 31, 2025, we announced that our board of directors had suspended our quarterly dividend. In making this determination, the change was considered prudent from a capital allocation standpoint in light of ongoing market and global trade environment uncertainties.
Removed
On February 20, 2025, we announced that our board of directors declared a quarterly dividend of $0.075 per share to be paid to holders of our common stock on April 2, 2025 to shareholders of record on March 26, 2025.
Removed
The following table sets forth information as of December 31, 2024 with respect to the shares of our common stock that may be issued under our existing equity compensation plans: Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) ($) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Plan Category Equity compensation plans approved by shareholders (1)(2) — — 1,136,333 Equity compensation plans not approved by shareholders — — — (1) Excludes 21,054 outstanding restricted shares and 93,760 deferred stock units, 43,363 of which had vested as of December 31, 2024 and 4,379,461 outstanding performance share units, 1,142,097 of which had vested as of December 31, 2024.
Removed
The underlying shares of common stock relating to the vested performance share units will be issued in February 2025. Of the remaining 3,237,364 performance share units, 1,263,178 will vest in 2026 and 1,974,186 will vest in 2027.
Removed
The actual number of shares of common stock issued in respect of the performance share units will vary from 0% to 200% of performance share units granted, based upon achievement of performance objectives established for such awards.
Removed
(2) Represents the number of shares of our common stock remaining available for issuance under the 2022 Stock Incentive Plan as of December 31, 2024.
Removed
In May 2022, our board of directors adopted an amended and restated stock incentive plan (the “2022 Stock Incentive Plan”) which provides for stock options, restricted stock units, which under the prior plan were called “restricted stock rights”, deferred stock units, restricted shares, performance shares, performance share units, and stock appreciation rights to be awarded to employees, consultants and non-employee directors.
Removed
The 2022 Stock Incentive Plan replaced the Company’s 2010 stock incentive plan (the “2010 Stock Incentive Plan”). However, the 2010 Stock Incentive Plan will govern prior awards until all awards granted under the 2010 Stock Incentive Plan have been exercised, forfeited, cancelled, expired, or otherwise terminated in accordance with the ( 52 ) terms thereof.
Removed
The Company may grant up to a maximum of 2.5 million common shares under the 2022 Stock Incentive Plan. (e) Performance Graph.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

2 edited+0 added−0 removed0 unchanged
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 55 Results of Operations 55 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 59 Sensiti vities 62 Liquidity and Capital Resources 63 Balance Sheet Data 65 Sources and Uses of Funds 65 Credit Facilities and Debt Covenants 66 Foreign Currency 67 Credit Ratings of Senior Notes 67 Critical Accounting Policies 67 New Accounting Standards 72 ITEM 7A.
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 55 Results of Operations 55 Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 60 Sensiti vities 64 Liquidity and Capital Resources 65 Balance Sheet Data 66 Sources and Uses of Funds 67 Credit Facilities and Debt Covenants 68 Foreign Currency 68 Credit Ratings of Senior Notes 69 Critical Accounting Policies 69 New Accounting Standards 73 ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 72 Foreign Currency Exchange Risk 72 Product Price Risk 73 ( i ) Fiber Price Risk 73 Inflation Risk 73 Interest Rate Risk 73 Credit Risk 74 Risk Management and Derivatives 74 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 75
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 73 Foreign Currency Exchange Risk 73 Product Price Risk 74 ( i ) Fiber Price Risk 74 Inflation Risk 74 Interest Rate Risk 74 Credit Risk 75 Risk Management and Derivatives 75 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 76

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

101 edited+41 added−38 removed58 unchanged
Biggest changeThe following table provides a reconciliation of net loss to operating income (loss) and Operating EBITDA for the years indicated: Year Ended December 31, 2024 2023 (in thousands) Net loss $ (85,141 ) $ (242,056 ) Income tax recovery (1,774 ) (27,767 ) Interest expense 109,150 88,246 Other income (7,228 ) (7,197 ) Operating income (loss) 15,007 (188,774 ) Add: Depreciation and amortization 170,793 172,502 Add: Impairment of sandalwood business held for sale — 33,734 Add: Loss on disposal of investment in joint venture 23,645 — Add: Goodwill impairment 34,277 — Operating EBITDA $ 243,722 $ 17,462 ( 57 ) Selected Production, Sales and Other Data Year Ended December 31, 2024 2023 Pulp Segment Pulp production ('000 ADMTs) NBSK 1,589.1 1,714.4 NBHK 254.0 251.2 Annual maintenance downtime ('000 ADMTs) 86.9 82.9 Annual maintenance downtime (days) 57 71 Pulp sales ('000 ADMTs) NBSK 1,647.5 1,689.0 NBHK 252.3 262.2 Average NBSK pulp prices ($/ADMT) (1) Europe 1,519 1,257 China 774 747 North America 1,646 1,448 Average NBHK pulp prices ($/ADMT) (1) China 645 592 North America 1,356 1,227 Average pulp sales realizations ($/ADMT) (2) NBSK 784 729 NBHK 637 627 Energy production ('000 MWh) (3) 2,125.3 2,142.0 Energy sales ('000 MWh) (3) 797.2 832.6 Average energy sales realizations ($/MWh) (3) 91 107 Solid Wood Segment Lumber Production (MMfbm) 475.6 462.3 Sales (MMfbm) 470.4 500.5 Average sales realizations ($/Mfbm) 462 435 Energy Production and sales ('000 MWh) 126.3 160.2 Average sales realizations ($/MWh) 131 134 Manufactured products (4) Production ('000 m 3 ) 34.0 25.1 Sales ('000 m 3 ) 30.7 33.4 Average sales realizations ($/m 3 ) 3,006 1,514 Pallets Production ('000 units) 10,243.5 10,707.2 Sales ('000 units) 10,089.2 11,041.2 Average sales realizations ($/unit) 10 11 Biofuels (5) Production ('000 tonnes) 160.4 167.2 Sales ('000 tonnes) 184.4 144.8 Average sales realizations ($/tonne) 217 281 Average Spot Currency Exchange Rates $ / € (6) 1.0820 1.0817 $ / C$ (6) 0.7302 0.7412 (1) Source: RISI pricing report.
Biggest changeThe following table provides a reconciliation of net loss to operating income (loss) and Operating EBITDA for the years indicated: Year Ended December 31, 2025 2024 (in thousands) Net loss $ (497,889 ) $ (85,141 ) Income tax recovery (13,322 ) (1,774 ) Interest expense 114,834 109,150 Other income (1,372 ) (7,228 ) Operating income (loss) (397,749 ) 15,007 Add: Depreciation and amortization 160,048 170,793 Add: Impairments of long-lived assets 215,682 — Add: Loss on disposal of investment in joint venture — 23,645 Add: Goodwill impairment — 34,277 Operating EBITDA $ (22,019 ) $ 243,722 ( 58 ) Selected Production, Sales and Other Data Year Ended December 31, 2025 2024 Pulp Segment Pulp production ('000 ADMTs) NBSK 1,518.4 1,589.1 NBHK 316.4 254.0 Annual maintenance downtime ('000 ADMTs) 125.7 86.9 Annual maintenance downtime (days) 86 57 Pulp sales ('000 ADMTs) NBSK 1,502.4 1,647.5 NBHK 327.4 252.3 Average NBSK pulp prices ($/ADMT) (1) Europe 1,525 1,519 China 722 774 North America 1,710 1,646 Average NBHK pulp prices ($/ADMT) (1) China 539 645 North America 1,245 1,356 Average pulp sales realizations ($/ADMT) (2) NBSK 743 784 NBHK 549 637 Energy production ('000 MWh) (3) 2,029.1 2,125.3 Energy sales ('000 MWh) (3) 718.9 797.2 Average energy sales realizations ($/MWh) (3) 97 91 Solid Wood Segment Lumber Production (MMfbm) 472.2 475.6 Sales (MMfbm) 464.8 470.4 Average sales realizations ($/Mfbm) 533 462 Energy Production and sales ('000 MWh) 137.0 126.3 Average sales realizations ($/MWh) 139 131 Manufactured products (4) Production ('000 m 3 ) 30.5 34.0 Sales ('000 m 3 ) 27.3 30.7 Average sales realizations ($/m 3 ) 1,834 3,006 Pallets Production ('000 units) 8,331.1 10,243.5 Sales ('000 units) 8,542.2 10,089.2 Average sales realizations ($/unit) 12 10 Biofuels (5) Production ('000 tonnes) 141.3 160.4 Sales ('000 tonnes) 135.5 184.4 Average sales realizations ($/tonne) 254 217 Average Spot Currency Exchange Rates $ / € (6) 1.1306 1.0820 $ / C$ (6) 0.7159 0.7302 (1) Source: RISI pricing report.
Judgment is required for the following inputs which are used to determine our net obligations and our net periodic benefit costs each year: • discount rate – used to determine the net present value of our pension and other post-retirement benefit obligations and to determine the interest cost component of our net periodic pension and other post-retirement benefit costs; • return on assets – used to estimate the growth in the value of invested assets that are available to satisfy pension obligations and to determine the expected return on the plan assets component of our net periodic pension costs; • mortality rate – used to estimate the impact of mortality on pension and other post-retirement benefit obligations; • rate of compensation increase – used to calculate the impact future pay increases will have on pension benefit obligations; and • health care cost trend rate – used to calculate the impact of future health care costs on other post-retirement benefit obligations.
( 70 ) Judgment is required for the following inputs which are used to determine our net obligations and our net periodic benefit costs each year: • discount rate – used to determine the net present value of our pension and other post-retirement benefit obligations and to determine the interest cost component of our net periodic pension and other post-retirement benefit costs; • return on assets – used to estimate the growth in the value of invested assets that are available to satisfy pension obligations and to determine the expected return on the plan assets component of our net periodic pension costs; • mortality rate – used to estimate the impact of mortality on pension and other post-retirement benefit obligations; • rate of compensation increase – used to calculate the impact future pay increases will have on pension benefit obligations; and • health care cost trend rate – used to calculate the impact of future health care costs on other post-retirement benefit obligations.
In determining the expected return on assets, we consider the historical long-term returns, expected asset mix and the active management premium. For the mortality rate we use actuarially-determined mortality tables that are consistent with our historical mortality experience and future expectations for mortality of the employees who participate in our pension ( 69 ) and other post-retirement benefit plans.
In determining the expected return on assets, we consider the historical long-term returns, expected asset mix and the active management premium. For the mortality rate we use actuarially-determined mortality tables that are consistent with our historical mortality experience and future expectations for mortality of the employees who participate in our pension and other post-retirement benefit plans.
In the European market, lumber is generally customized in terms ( 55 ) of dimensions and finishing, whereas the U.S. market is driven primarily by demand from new housing starts and home renovation activities and dimensions and finishing are generally standardized and competition is primarily price driven. Energy and chemical production and sales are key revenue sources for us.
In the European market, lumber is generally customized in terms ( 55 ) of dimensions and finishing, whereas the U.S. market is driven primarily by demand from new housing starts and home renovation activities and dimensions and finishing are generally standardized and competition is primarily price driven. Energy and chemical production and sales are revenue sources for us.
Further initiatives to increase our generation and sales of renewable energy, chemicals and other by-products will continue to be a key focus for us. Such further initiatives may require additional capital spending. Energy and chemicals are by-products of our pulp and lumber production and the volumes generated and sold are primarily related to the rate of production.
Further initiatives to increase our generation and sales of renewable energy, chemicals and other by-products will continue to be a focus for us. Such further initiatives may require additional capital spending. Energy and chemicals are by-products of our pulp and lumber production and the volumes generated and sold are primarily related to the rate of production.
( 70 ) Revenues Under Long-Term Contracts We have revenues from long-term contracts which are recognized over the contract term as the work progresses towards completion. The timing of revenue recognition involves a judgmental process of estimating costs and profit for the performance obligation. Cost of sales is recognized as incurred.
Revenues Under Long-Term Contracts We have revenues from long-term contracts which are recognized over the contract term as the work progresses towards completion. The timing of revenue recognition involves a judgmental process of estimating costs and profit for the performance obligation. Cost of sales is recognized as incurred.
We disclose contingent liabilities when there is a reasonable possibility that an ultimate loss may occur and we record contingent liabilities when it becomes probable that we will have to make payments and the amount of loss can be reasonably estimated.
We disclose contingent liabilities when there is a reasonable ( 72 ) possibility that an ultimate loss may occur and we record contingent liabilities when it becomes probable that we will have to make payments and the amount of loss can be reasonably estimated.
Interest on our 2028 Senior Notes is payable semi-annually ( 66 ) in arrears on April 1 and October 1, at the rate of 12.875% and they mature in October 2028. Interest on our 2029 Senior Notes is payable semi-annually in arrears on February 1 and August 1, at the rate of 5.125% and they mature in February 2029.
Interest on our 2028 Senior Notes is payable semi-annually in arrears on April 1 and October 1, at the rate of 12.875% and they mature in October 2028. Interest on our 2029 Senior Notes is payable semi-annually in arrears on February 1 and August 1, at the rate of 5.125% and they mature in February 2029.
We assess the realization of these deferred income tax assets at each reporting period to determine whether it is more likely than not that the deferred income tax assets will be realized.
We assess the realization of these deferred income tax assets at each ( 71 ) reporting period to determine whether it is more likely than not that the deferred income tax assets will be realized.
Actual depreciation and amortization charges for an individual asset may therefore be significantly accelerated if the outlook for its remaining useful life is shortened considerably. The unit of accounting for impairment testing for long-lived assets is its “Asset Group”, which includes ( 68 ) property, plant and equipment, net, amortizable intangible assets, net, and liabilities directly related to those assets.
Actual depreciation and amortization charges for an individual asset may therefore be significantly accelerated if the outlook for its remaining useful life is shortened considerably. The unit of accounting for impairment testing for long-lived assets is its “Asset Group”, which includes property, plant and equipment and amortizable intangible assets, and liabilities directly related to those assets.
Europe and North America are list prices. China are net prices which include discounts, allowances and rebates. (2) Sales realizations after customer discounts, rebates and other selling concessions. (3) Does not include our 50% joint venture interest in CPP, which is accounted for using the equity method. In 2024, we disposed of this interest.
Europe and North America are list prices. China are net prices which include discounts, allowances and rebates. (2) Sales realizations after customer discounts, rebates and other selling concessions. (3) Does not include our 50% joint venture interest in CPP, which was accounted for using the equity method. In 2024, we disposed of this interest.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of our operations for the years ended December 31, 2024 and 2023 is based upon and should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of our operations for the years ended December 31, 2025 and 2024 is based upon and should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report.
In 2024, our pulp mills had 117 days of downtime (approximately 180,400 ADMTs) which included 57 days of planned annual maintenance, 53 days of unplanned downtime at our Peace River and Celgar mills and seven additional days due to slower than expected start-up.
In 2024, our pulp mills had 117 days of downtime (approximately 180,400 ADMTs) which included 57 days of planned annual maintenance, 53 days of unplanned downtime at our Peace River and Celgar mills due to mechanical failures and seven additional days due to slower than expected start-up.
As of December 31, 2024, we were in full compliance with all of the covenants of our indebtedness. Foreign Currency Our reporting currency is the dollar. However, we hold certain assets and liabilities in euros and Canadian dollars and the majority of our expenditures are denominated in euros or Canadian dollars.
As of December 31, 2025, we were in full compliance with all of the covenants of our indebtedness. Foreign Currency Our reporting currency is the dollar. However, we hold certain assets and liabilities in euros and Canadian dollars and the majority of our expenditures are denominated in euros or Canadian dollars.
Please refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our results of operations for 2022 and financial position as of December 31, 2022.
Please refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of our results of operations for 2023 and financial position as of December 31, 2023.
S&P, Moody’s and Fitch base their assessment of the credit risk on our Senior Notes on the business and financial profile of Mercer Inc. and our restricted subsidiaries under the indentures governing the Senior Notes. As of December 31, 2024, all of our subsidiaries were restricted subsidiaries.
S&P, Moody’s and Fitch base their assessment of the credit risk on our Senior Notes on the business and financial profile of Mercer Inc. and our restricted subsidiaries under the indentures governing the Senior Notes. As of December 31, 2025, all of our subsidiaries were restricted subsidiaries.
Our deferred income tax assets are net of a $81.8 million valuation allowance. Our deferred income tax assets are comprised primarily of income tax loss and interest carryforwards and deductible temporary differences, all of which will reduce taxable income in the future.
Our deferred income tax assets are net of a $198.8 million valuation allowance. Our deferred income tax assets are comprised primarily of income tax loss and interest carryforwards and deductible temporary differences, all of which will reduce taxable income in the future.
The third-party industry quoted average European list prices for NBSK pulp between 2015 and 2024 have fluctuated between a low of $790 per ADMT in 2016 to a high of $1,635 per ADMT in 2024.
The third-party industry quoted average European list prices for NBSK pulp between 2016 and 2025 have fluctuated between a low of $790 per ADMT in 2016 to a high of $1,635 per ADMT in 2024.
For our solid wood segment, based upon our 2024 cash production costs and assuming all other factors remained constant, each 1% change in per unit cash production cost yields a change in annual cash production costs of approximately $4.3 million. Seasonal Influences. We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors.
For our solid wood segment, based upon our 2025 cash production costs and assuming all other factors remained constant, each 1% change in per unit cash production cost yields a change in annual cash production costs of approximately $4.5 million. Seasonal Influences. We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors.
For our solid wood segment, based upon our 2024 fiber costs and assuming all other factors remained constant, each 1% change in per unit fiber cost yields a change in annual operating costs of approximately $2.4 million. Foreign Exchange. Our operating costs are primarily in euros for our German mills and Canadian dollars for our Canadian mills.
For our solid wood segment, based upon our 2025 fiber costs and assuming all other factors remained constant, each 1% change in per unit fiber cost yields a change in annual operating costs of approximately $2.7 million. Foreign Exchange. Our operating costs are primarily in euros for our German mills and Canadian dollars for our Canadian mills.
Based on our 2024 energy, chemical, pallet, biofuel, wood residual and European lumber revenues and assuming all other factors remained constant, each $0.01 change in the value of the dollar relative to the euro yields a total change in revenues of approximately $2.9 million.
Based on our 2025 energy, chemical, pallet, biofuel, wood residual and European lumber revenues and assuming all other factors remained constant, each $0.01 change in the value of the dollar relative to the euro yields a total change in revenues of approximately $2.7 million.
Based upon the current level of operations and our current expectations for future periods in light of the current economic environment, and in particular, current and expected pulp and lumber pricing and foreign exchange rates, we believe that cash flow from operations and available cash, together with available borrowings under our revolving credit facilities, will be adequate to finance the capital requirements for our business including the payment of our quarterly dividend during the next 12 months.
Based upon the current level of operations and our current expectations for future periods in light of the current economic environment, and in particular, current and expected pulp and lumber pricing and foreign exchange rates, we believe that cash flow from operations and available cash, together with available borrowings under our revolving credit facilities and access to capital markets, will be adequate to finance the capital requirements for our business during the next 12 months.
Based on our 2024 operating costs and assuming all other factors remained constant, each $0.01 change in the value of the dollar relative to the Canadian dollar yields a total change in annual operating costs of approximately $8.3 million.
Based on our 2025 operating costs and assuming all other factors remained constant, each $0.01 change in the value of the dollar relative to the Canadian dollar yields a total change in annual operating costs of approximately $8.6 million.
Based upon our 2024 sales volume and assuming all other factors remained constant, each $10.00 per tonne change in pulp third-party industry quoted list prices yields a change in pulp revenues of approximately $13.5 million. Lumber Price. Lumber markets are highly competitive and cyclical in nature. As a result, our earnings are sensitive to lumber price changes.
As a result, our earnings are sensitive to pulp price changes. Based upon our 2025 sales volume and assuming all other factors remained constant, each $10.00 per tonne change in pulp third-party industry quoted list prices yields a change in pulp revenues of approximately $12.6 million. Lumber Price. Lumber markets are highly competitive and cyclical in nature.
Our significant accounting policies are disclosed in Note 1 to our audited annual consolidated financial ( 67 ) statements included in Part IV of this Annual Report. While all of the significant accounting policies are important to the consolidated financial statements, some of these policies may be viewed as having a high degree of judgment.
Our significant accounting policies are disclosed in Note 1 to our audited annual consolidated financial statements included in Part IV of this Annual Report on Form 10-K. While all of the significant accounting policies are important to the consolidated financial statements, some of these policies may be viewed as having a high degree of judgment.
On an ongoing basis using currently available information, management reviews its estimates, including those related to accounting for, among other things, future cash flows associated with impairment testing for goodwill and long-lived assets, depreciation and amortization, pension and other post-retirement benefit obligations, deferred income taxes (valuation allowance and permanent reinvestment), the allocation of the purchase price in a business combination to the assets acquired and liabilities assumed, revenues under long-term contracts, inventory impairment, assets and liabilities classified as held for sale and the fair value of disposal groups, legal liabilities and contingencies.
On an ongoing basis using currently available information, management reviews its estimates, including those related to accounting for, among other things, future cash flows associated with impairment testing for long-lived assets, depreciation and amortization, pension and other post-retirement benefit obligations, deferred income taxes (valuation allowance and permanent reinvestment), revenues under long-term contracts, inventory impairment, assets and liabilities classified as held for sale and the fair value of disposal groups, legal liabilities and contingencies.
Based on our 2024 operating costs and assuming all other factors remained constant, each $0.01 change in the value of the dollar relative to the euro yields a total change in annual operating costs of approximately $10.4 million.
Based on our 2025 operating costs and assuming all other factors remained constant, each $0.01 change in the value of the dollar relative to the euro yields a total change in annual operating costs of approximately $11.0 million.
In the U.S., third-party industry quoted monthly average western spruce/pine/fir (“WSPF”) 2 x 4 #2&Btr prices between 2015 and 2024 have fluctuated between a low of $245 per Mfbm in 2015 to a high of $1,604 per Mfbm in 2021.
In the U.S., third-party industry quoted monthly average western spruce/pine/fir (“WSPF”) 2 x 4 #2&Btr prices between 2016 and 2025 have fluctuated between a low of $259 per Mfbm in 2016 to a high of $1,604 per Mfbm in 2021.
Credit Ratings of Senior Notes We and our Senior Notes are rated by Standard & Poor’s Rating Services, referred to as “S&P”, Moody’s Investors Service, Inc., referred to as “Moody’s” and Fitch Ratings, referred to as “Fitch”.
Credit Ratings of Senior Notes The Company and its Senior Notes are rated by Standard & Poor’s Rating Services, referred to as “S&P”, Moody’s Investors Service, Inc., referred to as “Moody’s” and Fitch Ratings, referred to as “Fitch”.
Based on our 2024 energy and chemical revenues and assuming all other factors remained constant, each $0.01 change in the value of the dollar relative to the Canadian dollar yields a total change in energy and chemical revenues of approximately $0.2 million. Inflation. Our key production input costs are for fiber, chemicals and energy.
Based on our 2025 interest expense and assuming all other factors remained constant, each $0.01 change in the value of the dollar relative to the Canadian dollar yields a total change in interest expense of approximately $0.1 million. Inflation. Our key production input costs are for fiber, chemicals and energy.
In 2024, we repaid approximately $25.1 million under our revolving credit facilities, paid dividends of $20.1 million and incurred aggregate debt issuance costs of $4.5 million related to the issuance of the 2028 Senior Notes. In 2023, financing activities provided cash of $228.6 million.
In 2024, we repaid approximately $25.1 million under our revolving credit facilities, paid dividends of $20.1 million and incurred aggregate debt issuance costs of $4.5 million related to the issuance of the 2028 Senior Notes.
Cash Flows from Operating Activities Cash from (used in) operations includes: • cash received from customers; • cash paid to employees and suppliers; • cash paid for interest on our debt; and • cash paid or received for taxes. In 2024, operating activities provided cash of $90.2 million compared to using cash of $69.0 million in 2023.
Cash Flows from Operating Activities Cash from (used in) operations includes: • cash received from customers; • cash paid to employees and suppliers; • cash paid for interest on our debt; and • cash paid or received for taxes. In 2025, operating activities provided cash of $8.6 million compared to $90.2 million in 2024.
An increase in accounts receivable used cash of $32.1 million in 2024 and a decrease in accounts receivable provided cash of $52.5 million in 2023.
A decrease in accounts receivable provided cash of $52.6 million in 2025 and an increase in accounts receivable used cash of $32.1 million in 2024.
In 2024, we received $19.9 million of proceeds from sale of property, plant and equipment primarily related to the sale of land from our sandalwood business. In 2023, investing activities used cash of $199.9 million.
In 2024, we received $19.9 million of proceeds from sale of property, plant and equipment primarily related to the sale of land from our sandalwood business.
Cash Flows from Financing Activities Cash from (used in) financing activities includes: • issuances and payments of debt; • borrowings and payments under revolving lines of credit; and ( 64 ) • payments of cash dividends and repurchases of stock. In 2024, financing activities used cash of $152.8 million.
Cash Flows from Financing Activities Cash from (used in) financing activities includes: • issuances and payments of debt; • borrowings and payments under revolving lines of credit; and • payments of cash dividends and repurchases of stock. In 2025, financing activities provided cash of $79.8 million.
Factors that may affect our credit rating include changes in our operating performance and liquidity. Credit rating downgrades can adversely impact, among other things, future borrowing costs and access to capital markets. In August 2024, Moody’s downgraded its rating on our Senior Notes to B3 from B2 and confirmed its outlook is negative.
Factors that may affect our credit rating include changes in our operating performance and liquidity. Credit rating downgrades can adversely impact, among other things, future borrowing costs and access to capital markets. In November 2025, Moody’s downgraded its rating on our Senior Notes to Caa2 from B3 and changed its outlook to stable from negative.
The pulp industry has historically been characterized by considerable uncertainty in business conditions. Estimates of future economic conditions for our long-lived assets and therefore, their remaining useful economic life, require considerable judgment. If our estimate of the remaining useful life changes, such a change is accounted for prospectively in our determination of depreciation and amortization.
Estimates of future economic conditions for our long-lived assets and therefore, their remaining useful economic life, require considerable judgment. If our estimate of the remaining useful life changes, such a change is accounted for prospectively in our determination of depreciation and amortization.
Cash Flows from Investing Activities Cash from (used in) investing activities includes: • acquisitions of property, plant and equipment and businesses; • proceeds from the sale of assets; and • purchases and sales of short-term investments. In 2024, investing activities used cash of $67.0 million.
( 65 ) Cash Flows from Investing Activities Cash from (used in) investing activities includes: • acquisitions of property, plant and equipment and businesses; • proceeds from the sale of assets; and • purchases and sales of short-term investments. In 2025, investing activities used cash of $81.3 million.
As a result of the strengthening of the dollar versus the euro and Canadian dollar as of December 31, 2024, we recorded a non-cash decrease of $104.4 million in the carrying value of our net assets denominated in euros and Canadian dollars, consisting primarily of our property, plant and equipment.
( 68 ) As a result of the weakening of the dollar versus the euro and Canadian dollar as of December 31, 2025, we recorded a non-cash increase of $133.4 million in the carrying value of our net assets denominated in euros and Canadian dollars, consisting primarily of our property, plant and equipment.
Our 2024 net periodic pension and other post-retirement benefit cost was $1.3 million. The amounts recorded for the net pension and other post-retirement obligations include various judgments and uncertainties.
Our 2025 net periodic pension and other post-retirement benefit cost was $0.7 million. The amounts recorded for the net pension and other post-retirement obligations include various judgments and uncertainties.
Based upon the exchange rate as of December 31, 2024, the dollar was approximately 6% stronger against the euro and 8% stronger against the Canadian dollar since December 31, 2023. See Item 7A. “Quantitative and Qualitative Disclosures about Market Risk”.
Based upon the exchange rate as of December 31, 2025, the dollar was approximately 13% weaker against the euro and 5% weaker against the Canadian dollar since December 31, 2024. See Item 7A. “Quantitative and Qualitative Disclosures about Market Risk”.
We recognize the net funded status of the plans and we record net periodic benefit costs associated with these net obligations. As of December 31, 2024, we had pension and other post-retirement benefit obligations aggregating $91.6 million and accumulated pension plan assets with a fair value of $89.1 million.
We recognize the net funded status of the plans and we record net periodic benefit costs associated with these net obligations. As of December 31, 2025, we had pension and other post-retirement benefit obligations aggregating $93.0 million and accumulated pension plan assets with a fair value of $94.8 million.
This non-cash decrease does not affect our net loss, Operating EBITDA or cash but is reflected in our other comprehensive income (loss) and as a decrease to our total equity. As a result, our accumulated other comprehensive loss increased to $230.8 million.
This non-cash increase does not affect our net loss, Operating EBITDA or cash but is reflected in our other comprehensive income (loss) and as an increase to our total equity. As a result, our accumulated other comprehensive loss decreased to $87.2 million.
( 59 ) Pulp Segment – Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Selected Financial Information Year Ended December 31, 2024 2023 (in thousands) Pulp revenues $ 1,460,460 $ 1,402,620 Energy and chemical revenues $ 88,096 $ 113,510 Segment Operating EBITDA (1) $ 260,914 $ 65,889 (1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP.
Pulp Segment – Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Selected Financial Information Year Ended December 31, 2025 2024 (in thousands) Pulp revenues $ 1,304,823 $ 1,460,460 Energy and chemical revenues $ 81,857 $ 88,096 Segment Operating EBITDA (1) $ 15,601 $ 260,914 (1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP.
Balance Sheet Data The following table is a summary of selected financial information for the dates indicated: As of December 31, 2024 2023 (in thousands) Cash and cash equivalents $ 184,925 $ 313,992 Working capital $ 653,466 $ 806,468 Total assets $ 2,262,932 $ 2,662,578 Long-term liabilities $ 1,576,619 $ 1,740,731 Total shareholders' equity $ 429,775 $ 635,410 Sources and Uses of Funds Our principal sources of funds are cash flows from operations and cash and cash equivalents on hand.
Balance Sheet Data The following table is a summary of selected financial information for the dates indicated: As of December 31, 2025 2024 (in thousands) Cash and cash equivalents $ 186,805 $ 184,925 Working capital $ 582,176 $ 653,466 Total assets $ 2,041,420 $ 2,262,932 Long-term liabilities $ 1,689,734 $ 1,576,619 Total shareholders' equity $ 68,060 $ 429,775 ( 66 ) Sources and Uses of Funds Our principal sources of funds are cash flows from operations and cash and cash equivalents on hand.
The significant estimates in the future cash flows include periods of operation, projections of product pricing, production levels, fiber and other production costs and maintenance spending. When performing impairment tests, we estimate the fair values of the assets using management’s best assumptions, which we believe would be consistent with the assumptions that a hypothetical marketplace participant would use.
The significant estimates in the future cash flows include periods of operation, future production and sales volumes, selling prices, fiber costs, and long-term growth and discount rates. When performing impairment tests, we estimate the fair values of the assets using management’s best assumptions, which we believe are consistent with the assumptions that a hypothetical marketplace participant would use.
Assessing probability of loss and estimating probable losses requires analysis of multiple factors, including, but not limited to, the following: • historical experience; • judgments about the potential actions of third-party claimants and courts; and • recommendations of legal counsel.
Assessing probability of loss and estimating probable losses requires analysis of multiple factors, including, but not limited to, the following: • historical experience; • judgments about the potential actions of third-party claimants and courts; and • recommendations of legal counsel. Contingent liabilities are based on the best information available and actual losses in any future period are inherently uncertain.
Liquidity and Capital Resources Summary of Cash Flows Year Ended December 31, 2024 2023 (in thousands) Net cash from (used in) operating activities $ 90,204 $ (69,005 ) Net cash used in investing activities (66,992 ) (199,867 ) Net cash from (used in) financing activities (152,783 ) 228,624 Effect of exchange rate changes on cash and cash equivalents 504 208 Net decrease in cash and cash equivalents $ (129,067 ) $ (40,040 ) We operate in a cyclical industry and our operating cash flows vary accordingly.
Liquidity and Capital Resources Summary of Cash Flows Year Ended December 31, 2025 2024 (in thousands) Net cash from operating activities $ 8,587 $ 90,204 Net cash used in investing activities (81,326 ) (66,992 ) Net cash from (used in) financing activities 79,806 (152,783 ) Effect of exchange rate changes on cash and cash equivalents (5,187 ) 504 Net increase (decrease) in cash and cash equivalents $ 1,880 $ (129,067 ) We operate in a cyclical industry and our operating cash flows vary accordingly.
Summary Financial Highlights Year Ended December 31, 2024 2023 (in thousands, other than percent and per share amounts) Statement of Operations Data Revenues from external customers Pulp segment $ 1,548,556 $ 1,516,130 Solid wood segment 485,991 472,054 Corporate and other 8,813 5,660 Total revenues $ 2,043,360 $ 1,993,844 Pulp Segment Operating EBITDA (1) $ 260,914 $ 65,889 Solid wood Segment Operating EBITDA (1) (4,390 ) (30,343 ) Corporate and other (12,802 ) (18,084 ) Operating EBITDA (2) $ 243,722 $ 17,462 Operating EBITDA margin (2) 12 % 1 % Net loss $ (85,141 ) $ (242,056 ) Net loss per common share Basic $ (1.27 ) $ (3.65 ) Diluted $ (1.27 ) $ (3.65 ) Common shares outstanding at period end 66,871 66,525 (1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP.
( 57 ) Summary Financial Highlights Year Ended December 31, 2025 2024 (in thousands, other than percent and per share amounts) Statement of Operations Data Revenues from external customers Pulp segment $ 1,386,680 $ 1,548,556 Solid wood segment 467,438 485,991 Corporate and other 13,952 8,813 Total revenues $ 1,868,070 $ 2,043,360 Pulp Segment Operating EBITDA (1) $ 15,601 $ 260,914 Solid wood Segment Operating EBITDA (1) (25,192 ) (4,390 ) Corporate and other (12,428 ) (12,802 ) Operating EBITDA (2) $ (22,019 ) $ 243,722 Operating EBITDA margin (2) (1 %) 12 % Net loss $ (497,889 ) $ (85,141 ) Net loss per common share Basic $ (7.44 ) $ (1.27 ) Diluted $ (7.44 ) $ (1.27 ) Common shares outstanding at period end 66,983 66,871 (1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP.
Fiber is a commodity and both prices and supply are cyclical. As a result, our operating costs are sensitive to fiber cost changes. For our pulp segment, based upon our 2024 fiber costs and assuming all other factors remained constant, each 1% change in per unit fiber cost yields a change in annual operating costs of approximately $5.6 million.
For our pulp segment, based upon our 2025 fiber costs and assuming all other factors remained constant, each 1% change in per unit fiber cost yields a change in annual operating costs of approximately $6.4 million.
Prices quoted for China are net of discounts, allowances and rebates whereas quoted prices for Europe and North America are before applicable discounts, allowances and rebates. Third-party industry quoted average list prices for NBHK pulp in North America were approximately $1,356 per ADMT in 2024 compared to approximately $1,227 per ADMT in 2023.
The third-party industry quoted average NBSK net price in China was approximately $722 per ADMT in 2025 compared to approximately $774 per ADMT in 2024. Prices quoted for China are net of discounts, allowances and rebates whereas quoted prices for Europe and North America are before applicable discounts, allowances and rebates.
Solid Wood Segment – Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Selected Financial Information Year Ended December 31, 2024 2023 (in thousands) Lumber revenues $ 217,471 $ 217,939 Energy revenues $ 16,512 $ 21,451 Manufactured products revenues (1) $ 100,565 $ 58,895 Pallet revenues $ 104,386 $ 121,424 Biofuels revenues (2) $ 40,082 $ 40,680 Wood residuals revenues $ 6,975 $ 11,665 Segment Operating EBITDA (3) $ (4,390 ) $ (30,343 ) (1) Manufactured products primarily includes CLT and glulam.
( 62 ) Solid Wood Segment – Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Selected Financial Information Year Ended December 31, 2025 2024 (in thousands) Lumber revenues $ 247,572 $ 217,471 Manufactured products revenues (1) $ 57,470 $ 100,565 Pallet revenues $ 100,124 $ 104,386 Biofuels revenues (2) $ 34,454 $ 40,082 Energy revenues $ 18,992 $ 16,512 Wood residuals revenues $ 8,826 $ 6,975 Segment Operating EBITDA (3) $ (25,192 ) $ (4,390 ) (1) Manufactured products primarily includes CLT and glulam.
Other material costs in our business include labor and transportation. As a result, our operating costs are sensitive to inflation. For our pulp segment, based upon our 2024 cash production costs and assuming all other factors remained constant, each 1% change in per unit cash production cost yields a change in annual cash production costs of approximately $10.3 million.
For our pulp segment, based upon our 2025 cash production costs and assuming all other factors remained constant, each 1% change in per unit cash production cost yields a change in annual cash production costs of approximately $11.8 million.
Credit Facilities and Debt Covenants We had the following principal amounts outstanding under our credit facilities and Senior Notes as of the dates indicated: As of December 31, 2024 2023 (in thousands) German Revolving Facility $ 168,822 $ 161,330 Rosenthal €2.6 million loan $ — $ — Canadian Revolving Facility $ 347 $ 47,255 2026 Senior Notes (1) $ — $ 300,000 2028 Senior Notes (2) $ 400,000 $ 200,000 2029 Senior Notes $ 875,000 $ 875,000 (1) Redeemed in October 2024.
Credit Facilities and Debt Covenants We had the following principal amounts outstanding under our credit facilities and Senior Notes as of the dates indicated: As of December 31, 2025 2024 (in thousands) German Revolving Facility $ 200,925 $ 168,822 Rosenthal €2.6 million loan $ — $ — Canadian Revolving Facility $ 94,758 $ 347 Standby Letters of Credit Facility (1) $ — $ — 2028 Senior Notes $ 400,000 $ 400,000 2029 Senior Notes $ 875,000 $ 875,000 (1) In October 2025, our Celgar mill and Peace River mill entered into a C$20.0 million revolving credit facility that matures in August 2027.
Average list prices for NBSK pulp in Europe and North America were approximately $1,519 per ADMT and $1,646 per ADMT, respectively, in 2024 compared to approximately $1,257 per ADMT and $1,448 per ADMT, respectively, in 2023. Average NBSK net prices in China were approximately $774 per ADMT in 2024 compared to approximately $747 per ADMT in 2023.
Third-party industry quoted average list prices for NBSK pulp in Europe and North America were approximately $1,525 per ADMT and $1,710 per ADMT, respectively, in 2025 compared to approximately $1,519 per ADMT and $1,646 per ADMT, respectively, in 2024.
Refer to the segment information note in our consolidated financial statements for more information. Pulp segment revenues, comprised of pulp, energy and chemical revenues, modestly increased to $1,548.6 million in 2024 from $1,516.1 million in 2023 as higher pulp revenues were partially offset by lower energy and chemical revenues.
Refer to the segment information note in our consolidated financial statements for more information. Pulp segment revenues, comprised of pulp, energy and chemical revenues, decreased by approximately 10% to $1,386.7 million in 2025 from $1,548.6 million in 2024 driven by lower revenues from all our products.
In 2024, we redeemed the $300 million 2026 Senior Notes using cash on hand and the proceeds from the issuance of $200.0 million of additional 2028 Senior Notes at a 103.0% premium.
In 2025, we borrowed approximately $102.9 million under our revolving credit facilities and paid dividends of $10.0 million. In 2024, financing activities used cash of $152.8 million. In 2024, we redeemed the $300 million 2026 Senior Notes using cash on hand and the proceeds from the issuance of $200.0 million of additional 2028 Senior Notes at a 103.0% premium.
In 2025, excluding amounts being financed through government grants, we currently expect capital expenditures to be approximately $100.0 million to $120.0 million. ( 65 ) We currently consider the majority of undistributed earnings of our foreign subsidiaries to be indefinitely reinvested and, accordingly, no U.S. income tax has been provided on such earnings.
We currently consider the majority of undistributed earnings of our foreign subsidiaries to be indefinitely reinvested and, accordingly, no U.S. income tax has been provided on such earnings.
In 2025, we currently have planned maintenance downtime for our pulp mills of an aggregate of 78 days, or approximately 114,800 ADMTs, which will be comprised of 21 days in the first quarter, 21 days in the second quarter, 18 days in the third quarter and 18 days in the fourth quarter.
In 2026, we currently have planned maintenance downtime for our pulp mills of an aggregate of 44 days, or approximately 53,400 ADMTs, which is expected to be comprised of 24 days in the third quarter and 20 days in the fourth quarter.
We currently expect mass timber prices to decrease in the first half of 2025 as the relatively high interest rate environment continues to soften demand. Pallet prices are expected to be generally stable in the first half of 2025.
We currently expect mass timber prices to remain under pressure in the first half of 2026 primarily due to overall market weakness linked to the relatively high interest rate environment. Pallet prices are expected to be generally stable in the first half of 2026.
Changes in sales volume can affect the level of receivables and influence overall working capital levels. We believe our management practices with respect to working capital conform to common business practices.
Our fiber inventories exhibit seasonal swings as we increase pulp log, sawlog and wood chip inventories to ensure adequate supply of fiber to our mills during the winter months. Changes in sales volume can affect the level of receivables and influence overall working capital levels. We believe our management practices with respect to working capital conform to common business practices.
The rebuild was financed with insurance proceeds, of which $12.2 million was received in 2023. (2) Amounts differ from interest expense which includes non-cash items. See supplemental disclosure of cash flow information from our Consolidated Statements of Cash Flows included in this report. (3) Interest on our 2028 Senior Notes is paid semi-annually in April and October of each year.
See supplemental disclosure of cash flow information from our Consolidated Statements of Cash Flows included in this report. (2) Interest on our 2028 Senior Notes is paid semi-annually in April and October of each year. Interest on our 2029 Senior Notes is paid semi-annually in February and August of each year.
Pulp revenues increased by approximately 4% to $1,460.5 million in 2024 from $1,402.6 million in 2023 primarily due to higher sales realizations partially offset by slightly lower sales volumes. Energy and chemical revenues decreased by approximately 22% to $88.1 million in 2024 from $113.5 million in 2023 primarily as a result of lower sales realizations.
Pulp revenues decreased by approximately 11% to $1,304.8 million in 2025 from $1,460.5 million in 2024 as a result of lower sales realizations and volumes. Energy and chemical revenues decreased by approximately 7% to $81.9 million in 2025 from $88.1 million in 2024 primarily as a result of lower chemical sales realizations.
Long-Lived Assets As of December 31, 2024, we had long-lived assets recorded in our Consolidated Balance Sheet of $1,304.5 million. These long-lived assets include property, plant and equipment, net and amortizable intangible assets, net. In 2024, we recorded depreciation and amortization of $170.8 million and no impairment charges. Depreciation and amortization and impairment charges are based on accounting estimates.
Long-Lived Assets As of December 31, 2025, we had long-lived assets recorded in our Consolidated Balance Sheet of $1,141.6 ( 69 ) million. These long-lived assets include property, plant and equipment, net and amortizable intangible assets, net.
Based upon our 2024 sales volume and assuming all other factors remain ( 62 ) constant, each $10.00 per Mfbm change in lumber price yields a change in lumber revenues of approximately $4.7 million. Fiber Costs. Our main raw material is fiber in the form of wood chips, pulp logs, sawlogs and lumber.
As a result, our earnings are sensitive to lumber price changes. Based upon our 2025 sales volume and assuming all other factors remain constant, each $10.00 per Mfbm change in lumber price yields a change in lumber revenues of approximately $4.6 million. Fiber Costs.
In the future we may make acquisitions of businesses or assets or commitments to additional capital projects. To achieve the long-term goals of expanding our assets and earnings, including through acquisitions, capital resources will be required. Depending on the size of a transaction, the capital resources that will be required can be substantial.
In the future we may make commitments to additional capital projects or make acquisitions to achieve our long-term goals, including expanding our assets and earnings, which may require capital resources. Capital resources may also be required to repay or refinance our maturing debt over the longer term. Such capital resources may be substantial.
Adjusting for inventory impairments of $9.0 million, a decrease in inventories provided cash of $23.9 million in 2024 and adjusting for inventory impairments of $58.6 million, an increase in inventories used cash of $15.8 million in 2023. A decrease in accounts payable and accrued expenses used cash of $17.7 million in 2024 and $98.2 million in 2023.
An increase in accounts payable and accrued expenses provided cash of $7.2 million in 2025 and a decrease in accounts payable and accrued expenses used cash of $17.7 million in 2024.
In 2024, we had a positive impact of approximately $26.8 million on Segment Operating EBITDA due to foreign exchange compared to 2023 primarily as a result of foreign exchange gains on dollar denominated accounts receivable held at our operations as the dollar strengthened relative to the euro and Canadian dollar at the end of 2024.
In 2025, we had a negative foreign exchange impact of approximately $53.8 million on our operating loss compared to 2024. This negative impact was primarily due to the effect of a weaker dollar on our euro denominated costs and expenses and on the revaluation of dollar denominated accounts receivable held at our foreign operations.
For example, a one-percentage point change in any one of the following assumptions would have increased (decreased) our 2024 net periodic benefit cost and our accrued benefit obligation as follows: Net periodic benefit cost Accrued benefit obligation 1% increase 1% decrease 1% increase 1% decrease (in thousands) Assumptions Discount rate $ (292 ) $ 351 $ (16,260 ) $ 13,026 Return on assets $ (869 ) $ 870 $ — $ — Rate of compensation $ 557 $ (206 ) $ 2,276 $ (2,694 ) Health care cost trend rate $ 103 $ (98 ) $ 441 $ (478 ) Deferred Income Taxes As of December 31, 2024, we had a deferred income tax liability of $74.8 million and a deferred income tax asset of $17.8 million, resulting in a net deferred income tax liability of $57.0 million.
For example, a one-percentage point change in any one of the following assumptions would have increased (decreased) our 2025 net periodic benefit cost and our accrued benefit obligation as follows: Net periodic benefit cost Accrued benefit obligation 1% increase 1% decrease 1% increase 1% decrease (in thousands) Assumptions Discount rate $ (208 ) $ 194 $ (10,687 ) $ 12,827 Return on assets $ (919 ) $ 920 $ — $ — Rate of compensation $ 360 $ (421 ) $ 2,173 $ (2,659 ) Health care cost trend rate $ 101 $ (95 ) $ 426 $ (457 ) Deferred Income Taxes As of December 31, 2025, we had a deferred income tax liability of $58.3 million and a deferred income tax asset of $7.8 million, resulting in a net deferred income tax liability of $50.5 million.
In 2024, our net loss was $85.1 million, or $1.27 per share, compared to $242.1 million, or $3.65 per share in 2023. The net loss in 2024 included a total of $57.9 million, or $0.87 per share, related to the non-cash goodwill impairment and the non-cash loss recognized on disposal of our CPP joint venture investment.
The net loss in 2024 included a total of $57.9 million related to the non-cash goodwill impairment and the non-cash loss recognized on disposal of our CPP joint venture investment. In 2025, Operating EBITDA decreased to negative $22.0 million from positive $243.7 million in 2024.
We estimate that annual maintenance downtime in 2024 adversely impacted our Segment Operating EBITDA by approximately $78.0 million, comprised of approximately $56.1 million in direct out-of-pocket expenses and the balance in reduced production.
We estimate that planned annual maintenance downtime in 2025 adversely impacted our Segment Operating EBITDA by approximately $120.8 million, comprised of approximately $85.5 million in direct out-of-pocket expenses and the balance in reduced production. Many of our competitors that report their financial results using International Financial Reporting Standards capitalize their direct costs of maintenance downtime.
Sensitivities The following sensitivity analysis provides only a limited point-in-time view of the pulp price, lumber price, fiber costs, foreign exchange rates and inflation discussed. The actual impact of the underlying price, rate and inflation changes may differ materially from that shown in the sensitivity analysis. Our earnings are sensitive to, among other things, fluctuations in: Pulp Price.
The actual impact of the underlying price, rate and inflation changes may differ materially from that shown in the sensitivity analysis. Our earnings are sensitive to, among other things, fluctuations in: Pulp Price. Pulp is a global commodity that is priced in dollars, whose markets are highly competitive and cyclical in nature.
Third-party industry quoted ( 60 ) average net prices for NBHK pulp in China were approximately $645 per ADMT in 2024 compared to approximately $592 per ADMT in 2023.
The third-party industry quoted average list price for NBHK pulp in North America was approximately $1,245 per ADMT in 2025 compared to approximately $1,356 per ADMT in 2024. The third-party industry quoted average net price for NBHK pulp in China was approximately $539 per ADMT in 2025 compared to approximately $645 per ADMT in 2024.
These exposures and proceedings can be significant and the ultimate negative outcomes could be material to our operating results or liquidity in any given quarter or year. New Accounting Standards See Note 1 to our consolidated financial statements included in Item 15 of this Annual Report on Form 10-K.
New Accounting Standards See Note 1 to our consolidated financial statements included in Item 15 of this Annual Report on Form 10-K.
The calculation of depreciation and amortization of long-lived assets requires us to apply judgment in selecting the remaining useful lives of the assets. The remaining useful life of an asset must address both physical and economic considerations. The remaining economic life of a long-lived asset may be shorter than its physical life.
The remaining useful life of an asset must address both physical and economic considerations. The remaining economic life of a long-lived asset may be shorter than its physical life. The pulp industry has historically been characterized by considerable uncertainty in business conditions.
Solid wood segment revenues modestly increased to $486.0 million in 2024 from $472.1 million in 2023 as a result of higher manufactured products revenues partially offset by lower pallets, energy and wood residuals revenues. Lumber revenues in 2024 were flat at $217.5 million compared to $217.9 million in 2023 as higher sales realizations were offset by lower sales volumes.
Solid wood segment revenues decreased by approximately 4% to $467.4 million in 2025 from $486.0 million in 2024 as higher lumber revenues were more than offset by lower revenues from manufactured products. Lumber revenues in 2025 increased by approximately 14% to $247.6 million from $217.5 million in 2024 primarily due to higher sales realizations partially offset by lower sales volumes.
In October 2024, S&P confirmed its outlook is negative and confirmed its rating on our Senior Notes is B. In October 2024, Fitch assigned its first time rating on our Senior Notes as B+ and issued a stable rating for its outlook.
In October 2025, S&P downgraded its rating on our Senior Notes from B to B- and revised its outlook to stable from negative. In January 2026, Fitch downgraded its rating on our Senior Notes from B+ to B- and maintained its outlook as negative.
The following table sets out our total capital expenditures and interest expense for the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Capital expenditures $ 84,318 $ 136,324 (1) Cash paid for interest expense (2) $ 105,483 $ 79,620 Interest expense (3) $ 109,150 $ 88,246 (1) Capital expenditures in 2023 included expenditures to rebuild the wood chip conveying systems at the Stendal mill which were damaged by a fire in 2022.
The following table sets out our total capital expenditures and interest expense for the periods indicated: Year Ended December 31, 2025 2024 (in thousands) Capital expenditures $ 88,583 $ 84,318 Cash paid for interest expense (1) $ 108,046 $ 105,483 Interest expense (2) $ 114,834 $ 109,150 (1) Amounts differ from interest expense which includes non-cash items.
In our solid wood segment, we currently expect U.S. lumber prices to increase slightly in the first half of 2025 as a result of limited supply. In Europe, we currently expect lumber prices to modestly increase due to stronger demand driven by improved economic conditions in certain European countries.
In our solid wood segment, we currently expect U.S. and European lumber prices to modestly increase in the first half of 2026. In the U.S., the increase is driven by reduced overall supply, resulting from lower production from Canadian producers. In Europe, the increase is due to rising fiber costs.
In 2024, we had an income tax recovery of $1.8 million, or an effective tax rate of approximately 2% primarily due to the non-deductibility of the non-cash goodwill impairment recognized in 2024 and because we do not recognize a tax recovery for certain entities which we do not expect to realize a tax benefit.
Our effective tax rates were different from the statutory rates of the jurisdictions in which we operate as we do not recognize tax recoveries for certain entities which we do not expect to realize a tax benefit. In 2024, the effective tax rate was also impacted by the non-deductibility of the non-cash goodwill impairment.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest change( 73 ) The following table provides information about our exposure to interest rate fluctuations for the financial instruments sensitive to such fluctuations as of December 31, 2024 and expected cash flows from these instruments: As of December 31, 2024 Expected maturity date Total Fair Value 2025 2026 2027 2028 2029 Thereafter (in thousands other than percentages) Liabilities Long-term debt: Fixed rate ($) (1) 400,000 430,580 — — — 400,000 — — Interest rate 12.875% 12.875% 12.875% Fixed rate ($) (2) 875,000 756,341 — — — — 875,000 — Interest rate 5.125% 5.125% 5.125% Variable rate ($) (3) 168,822 168,822 — — 168,822 — — — Interest rate 4.470% 4.470% 4.470% Variable rate ($) (4) 347 347 — — 347 — — — Interest rate 5.450% 5.450% 5.450% (1) 2028 Senior Notes bearing interest at 12.875%, principal amount $400.0 million.
Biggest change( 74 ) The following table provides information about our exposure to interest rate fluctuations for the financial instruments sensitive to such fluctuations as of December 31, 2025 and expected cash flows from these instruments: As of December 31, 2025 Expected maturity date Interest Rate Principal Value ($) Fair Value ($) 2026 2027 2028 2029 (in thousands other than percentages) Liabilities Fixed rate long-term debt: 2028 Senior Notes 12.875% 400,000 310,088 — — 400,000 — 2029 Senior Notes 5.125% 875,000 558,049 — — — 875,000 Variable rate long-term debt: German Revolving Facility (1) 3.310% 200,925 200,925 — 200,925 — — Canadian Revolving Facility (2) 4.270% 94,758 94,758 — 94,758 — — (1) The German Revolving Facility bearing interest by way of: Euribor plus a variable margin ranging from 1.40% to 2.35% dependent on conditions including but not limited to a prescribed leverage ratio.
We may use derivatives to reduce our potential losses or to augment our potential gains, depending on our management’s perception of future economic events and developments. These types of derivatives are generally highly speculative in nature. They are also very volatile as they are highly leveraged given that margin requirements are relatively low in proportion to notional amounts.
We may use derivatives to reduce our potential losses or to augment our potential gains, depending on our perception of future economic events and developments. These types of derivatives are generally highly speculative in nature. They are also very volatile as they are highly leveraged given that margin requirements are relatively low in proportion to notional amounts.
Fiber is a market-priced commodity and, as such, is subject to fluctuations in prices based on supply and demand. Increases in the prices of fiber will tend to increase our operating costs and reduce our operating margins. Inflation Risk Our key production input costs are for fiber, chemicals and energy.
Fiber is a market-priced commodity and, as such, is subject to fluctuations in prices based on supply and demand. Increases in the price of fiber will tend to increase our operating costs and reduce our operating margins. Inflation Risk Our key production input costs are for fiber, chemicals and energy.
The principal derivatives we have periodically previously used are interest rate derivatives, pulp price derivatives, energy derivatives and foreign exchange derivatives. Many of our strategies, including the use of derivatives, and the types of derivatives selected by us, are based on historical trading patterns and correlations and our management’s expectations of future events.
The principal derivatives we have periodically previously used are interest rate derivatives, pulp price derivatives, energy derivatives and foreign exchange derivatives. Many of our strategies, including the use of derivatives, and the types of derivatives selected by us, are based on historical trading patterns and correlations and our expectations of future events.
However, in the future, we may from time to time use foreign exchange derivatives to convert some of our costs (including currency swaps relating to our long-term indebtedness) from euros or Canadian dollars to dollars as our principal product is priced in dollars.
( 75 ) However, in the future, we may from time to time use foreign exchange derivatives to convert some of our costs (including currency swaps relating to our long-term indebtedness) from euros or Canadian dollars to dollars as our principal product is priced in dollars.
In general, our products are commodities that are widely available from other producers and, because these products have few distinguishing qualities from producer to producer, competition is based primarily on price which is determined by supply relative to demand.
In general, our products are commodities that are widely available from other producers and, because these products have few distinguishing qualities from producer to producer, competition is based primarily on price which is generally determined by supply relative to demand.
(4) The Canadian Revolving Facility bearing interest by way of: (i) Canadian dollar denominated advances, which bear interest at a designated prime rate per annum; (ii) Canadian dollar denominated advances, which bear interest at the applicable Adjusted CORRA plus 1.20% to 1.45% per annum; (iii) dollar denominated base rate advances at the greater of the federal funds rate plus 0.50%, an Adjusted Term SOFR for a one month tenor plus 1.00% and the bank’s applicable reference rate for dollar denominated loans; and (iv) dollar denominated SOFR advances, which bear interest at Adjusted Term SOFR plus 1.20% to 1.45% per annum.
(2) The Canadian Revolving Facility bearing interest by way of: (i) Canadian dollar denominated advances, which bear interest at a designated prime rate per annum; (ii) Canadian dollar denominated advances, which bear interest at the applicable Adjusted CORRA plus 1.20% to 1.45% per annum; (iii) dollar denominated base rate advances at the greater of the federal funds rate plus 0.50%, an Adjusted Term SOFR for a one month tenor plus 1.00% and the bank’s applicable reference rate for dollar denominated loans; and (iv) dollar denominated SOFR advances, which bear interest at Adjusted Term SOFR plus 1.20% to 1.45% per annum.
For a discussion of our earnings sensitivities to pulp and lumber prices, fiber costs, foreign exchange rates and inflation, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Sensitivities” on page 62 hereof. Foreign Currency Exchange Risk We compete with producers from around the world, particularly Europe and North America, in our product lines.
For a discussion of our earnings sensitivities to pulp and lumber prices, fiber costs, foreign exchange rates and inflation, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Sensitivities” on page 64 hereof. Foreign Currency Exchange Risk We compete with producers from around the world, particularly Europe and North America, in our product lines.
An appreciation of these currencies against the dollar will increase the fair value of such financial instrument assets and a depreciation of these currencies against the dollar will decrease the fair value of financial instrument liabilities, thereby increasing our fair value.
An appreciation of these currencies against the dollar ( 73 ) will increase the fair value of such financial instrument assets and a depreciation of these currencies against the dollar will decrease the fair value of financial instrument liabilities, thereby increasing our fair value.
We may also from time to time use derivatives to reduce or limit our exposure to interest rate and currency risks. We may also use derivatives to reduce or limit our exposure to fluctuations in pulp and lumber prices.
We may also from time to time use derivatives to reduce or limit our exposure to interest rate and currency risks. We may also use derivatives to reduce or limit our exposure to fluctuations in pulp, lumber and energy prices.
We record unrealized gains and losses on our outstanding derivatives when they are marked to market at the end of each reporting period and realized gains or losses on them when they are settled. We determine market valuations based primarily upon valuations provided by our counterparties.
We record unrealized gains and losses on our outstanding derivatives when they are marked-to-market at the end of each reporting period and realized gains or losses on them when they are settled. We determine market valuations based primarily upon observable market data or valuations provided by our counterparties.
As a result, our earnings can be subject to the potentially significant effect of foreign currency translation gains or losses in respect of these euros and Canadian dollar items.
As a result, our earnings can be subject to the potentially significant effect of foreign currency translation gains or losses in respect of these euro and Canadian dollar denominated financial instruments.
However, these strategies may not be effective in all market environments or against all types of risks. Unexpected market developments may affect our risk management strategies during this time, and unanticipated ( 74 ) developments could impact our risk management strategies in the future.
However, these strategies may not be effective in all market environments or against all types of risks. Unexpected market developments may affect our risk management strategies during this time, and unanticipated developments could impact our risk management strategies in the future. If any of the variety of instruments and strategies we utilize are not effective, we may incur significant losses.
( 72 ) The following table provides information about our exposure to foreign currency exchange rate fluctuations for the carrying amount of financial instruments sensitive to such fluctuations as of December 31, 2024 and expected cash flows from these instruments: As of December 31, 2024 Expected maturity date Carrying Value Fair Value 2025 2026 2027 2028 2029 Thereafter (in thousands) Financial Instruments in euros Cash and cash equivalents 30,756 30,756 30,756 — — — — — Accounts receivable, net 95,118 95,118 95,118 — — — — — Accounts payable and other 107,874 107,874 107,874 — — — — — Long-term debt 162,501 162,501 — — 162,501 — — — in Canadian dollars Cash and cash equivalents 19,477 19,477 19,477 — — — — — Accounts receivable, net 5,595 5,595 5,595 — — — — — Accounts payable and other 68,406 68,406 68,406 — — — — — Long-term debt 500 500 — — 500 — — — Product Price Risk Historically, economic and market shifts, fluctuations in capacity and changes in foreign currency exchange rates have created cyclical changes in prices, sales volume and margins for our principal products, being kraft pulp and lumber.
The following table provides information about our exposure to foreign currency exchange rate fluctuations for the carrying amount of financial instruments sensitive to such fluctuations as of December 31, 2025 and the expected cash flows from these instruments: As of December 31, 2025 Expected maturity date Carrying Value Fair Value 2026 2027 2028 2029 2030 Thereafter (in thousands) Financial Instruments in euros Cash and cash equivalents 52,331 52,331 52,331 — — — — — Accounts receivable, net 67,103 67,103 67,103 — — — — — Accounts payable and other 101,404 101,404 101,404 — — — — — Long-term debt 171,000 171,000 — 171,000 — — — — in Canadian dollars Cash and cash equivalents 34,158 34,158 34,158 — — — — — Accounts receivable, net 8,870 8,870 8,870 — — — — — Accounts payable and other 70,189 70,189 70,189 — — — — — Long-term debt 91,500 91,500 — 91,500 — — — — Product Price Risk Historically, economic and market shifts, fluctuations in capacity and changes in foreign currency exchange rates have created cyclical changes in prices, sales volumes and margins for our principal products, being kraft pulp and lumber.
If any of the variety of instruments and strategies we utilize is not effective, we may incur significant losses. As of December 31, 2024 and December 31, 2023, we had no outstanding derivatives.
As of December 31, 2025 and December 31, 2024, we had no outstanding derivatives measured at fair value.
Removed
(2) 2029 Senior Notes bearing interest at 5.125%, principal amount $875.0 million. (3) The German Revolving Facility bearing interest by way of: Euribor plus a variable margin ranging from 1.40% to 2.35% dependent on conditions including but not limited to a prescribed leverage ratio.

Other MERC 10-K year-over-year comparisons