1333274--3/2/2007--MERCER_INTERNATIONAL

related topics

{cost, regulation, environmental}

{cost, contract, operation}

{personnel, key, retain}

{condition, economic, financial}

{competitive, industry, competition}

{operation, international, foreign}

{system, service, information}

{provision, law, control}

{acquisition, growth, future}

{stock, price, operating}

{debt, indebtedness, cash}

{loss, insurance, financial}

{cost, operation, labor}

{customer, product, revenue}

Our level of indebtedness could negatively impact our financial condition and results of operations. Our business is highly cyclical in nature. Cyclical Fluctuations in the price and supply of our raw materials could adversely affect our business. We operate in highly competitive markets. Our Stendal mill is subject to risks commonly associated with a new large complex mill. Increases in our capital expenditures or maintenance costs could have a material adverse effect on our cash flow and our ability to satisfy our debt obligations. Any failure by us to efficiently and effectively manage our growth could adversely affect our business. We are exposed to currency exchange rate and interest rate fluctuations. We use derivatives to manage certain risk which has caused significant fluctuations in our operating results. We are subject to extensive environmental regulation and we could have environmental liabilities at our facilities. We are subject to risks related to our employees. We rely on German federal and state government grants and guarantees. The sale of emission allowances is relatively new and volatile and subject to governmental amendment. We are dependent on key personnel. We may experience material disruptions to our production. We rely on third parties for transportation services. Our insurance coverage may not be adequate. Washington State law and our Articles of Incorporation may have anti-takeover effects which will make an acquisition of our Company by another company more difficult.

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1333274--3/2/2007--MERCER_INTERNATIONAL_INC.