Mechel FY 2005 results

• Mechel FY 2005 results press-release (PDF, 79 Kb)
• Mechel overview slide presentation (PDF, 3.4 Mb)
• A link to audio webcast of Mechel FY 2005 results conference call to be held in Moscow on May 18, 2006
  

MECHEL REPORTS FULL YEAR 2005 RESULTS
 -- Revenues increased 4.6% to $3.80 billion --
-- Operating income of $515.73 million --
-- Net income $381.18 million, $2.85 per ADR or $0.95 per diluted share --

Moscow, Russia - May 18, 2006 - Mechel OAO (NYSE: MTL), a leading Russian integrated mining and steel group, today announced results for the full year, ended December 31, 2005.  

US$ thousand FY 2005 FY 2004 Change Y-on-Y Revenues 3,804,995 3,635,955 4.6% Net operating income 515,728 750 807 - 31.3% Net operating margin 13.6% 20.7% - Net income 381,180 542,724 (2) - 29,8% EBITDA (1) 726,252 907,729 (2) - 20.0% EBITDA margin 19.1% 25.0% -

(1) See Attachment A.
(2) Net income and EBITDA for FY2004 were adjusted, not to include the gain on the sale of our shareholding in MMK.

Alexey Ivanushkin, Mechel’s Chief Operating Officer, commented: “2005 was a challenging year for Mechel, as higher raw material costs and a more competitive pricing environment negatively impacted our profitability. However, we remained committed to our strategy of expanding our mining segment in order to partially offset the weakness in the steel segment. While global prices are something that we can not control, we are confident that the strategic actions we undertook during the year will benefit both segments in the long-term. We also decided to increase our dividend payout ratio to 50% of net profits under US GAAP for the year ended 31 December 2005, to reward shareholders’ confidence and underscore our commitment to the best international corporate standards.”

Consolidated Results

Net revenue in 2005 rose 4.6% to $3.80 billion from $3.64 billion in 2004. Operating income was $515.73 million, or 13.6% of net revenue, versus operating income of $750.81 million, or 20.7% of net revenue, in 2004.

For 2005, Mechel reported consolidated net income of $381.18 million, or $2.85 per ADR ($0.95 per diluted share), compared to consolidated net income of $1.34 billion, or $10.77 per ADR in 2004.

Consolidated EBITDA was $726.25 million in 2005, compared to $907.73 million a year ago, reflecting the negative impact of unstable market conditions on average realized prices for the main categories of our products in the middle of 2005. Please see the attached tables for a reconciliation of consolidated EBITDA to net income.

Consolidated results were affected by a write-off of fixed assets in Romanian operations in the amount of $12.7 million, resulting from restructuring of production processes.

Also, in the year ended December 31, 2005, foreign exchange loss was $37.4 million, as compared to a gain of $1.9 million in the year ended December 31, 2004. This foreign exchange loss is primarily attributed to losses from devaluation of our cash balances in euro accounts.

In March, Mechel revised and optimized capital expenditure program, allocating substantial additional funds for the continuing development and expansion of the mining segment and to improve efficiencies in its steel segment. The revised overall capital expenditure program for the five-year period of 2006 - 2010  totals $1.1 billion. Approximately $100 million will be allocated to the development of the Erunakovskaya deposit in southern Kuzbass area; $100 million will be directed to the development of brownfield license areas of approximately 1 billion tonnes of predominantly coking coal. Steel segment projects will be mainly focused on Chelyabinsk Metallurgical Plant (CMP), Mechel's core steel-producing facility. These projects include completion of the construction of an additional continuous caster for approximately $50 million, in line with Mechel's target to raise the proportion of steel produced through continuous casting from the current 38% to 60% in 2007. Other projects include a new coking battery and reconstruction of rolling facilities.

Mining Segment Results

US$ thousand 2005 2004 Change Y-on-Y Revenues from external customers 1,094,782 878,417 24.6% Operating income 401,252 384,053 4.5% Net income 313,736 328,350 - 4.5% EBITDA 465,710 458,068 1.7% EBITDA margin 42.5% 52.2% -

Mining segment output

Product FY 2005, thousand tonnes FY 2005 vs FY 2004, % Coal 15,646 0.0 Coking coal 8,583 - 8.0 Steam coal 7,063 + 12.0 Iron ore concentrate 4,522 + 17.0 Nickel  12.6 - 1.0

Mining segment revenue for 2005 totaled $1,094.78 million, or 28.8%, of consolidated net revenue, an increase of 24.6% over segment revenue of $878.42 million, or 24.2%, of consolidated net revenue, in the 2004 full year period. The increase in revenues reflects maintaining of good output, strong market positions four our coal, and large-scaled sales of mining products to third parties.

Operating income in 2005 in the mining segment increased 4.5% to $401.25 million, or 36.7%, of segment revenues from external customers, compared to operating income of $384.05 million, or 43.7% of segment revenues from external customers a year ago. EBITDA in the mining segment in 2005 was $465.71 million, 1.7% higher than EBITDA of $458.07 million in 2004. The EBITDA margin of the mining segment was 42.5% in 2005.

Mr. Ivanushkin commented on the results of the mining segment: “While the global steel market remains uncertain due to excessive supply, the market fundamentals for coal continue to strengthen.  During the year we were able to offset a decline in demand for coking coal resulting from a decline in demand from steel producers by increasing our output of steam coal and iron ore concentrate. While this decline in demand negatively impacted profitability in this segment, we were able to intensify our continued cost control initiatives to minimize negative consequences. In line with our strategy, we continued to further expand our coal reserves in 2005 through a number of transactions that have significantly enhanced the capabilities of our coal segment, acquiring additional coking coal licenses for license areas with a total reserves of 1.15 billion tonnes according to Russian reserve valuation standards. We remain committed to further expanding our mining segment, and believe it will provide significant value for our shareholders.”

Steel Segment Results

US$ thousand 2005 2004 Change Y-on-Y Revenues from external customers 2,710,213 2,757,538 - 1.7% Operating income 114,475 366,754 - 68.8% Net income 67,443 214,374 (1) - 68.5% EBITDA 260,542 449,661 (1) - 42.1% EBITDA margin  9.6% 16.3% -

(1) Net income and EBITDA were adjusted not to include the gain on the sale of our shareholding in MMK.

Steel segment output

Product FY 2005, thousand tonnes FY 2005 vs FY 2004, % Coke 2,589 - 12.0 Pig iron 3,349 - 14.0 Steel 5,899 - 5.0 Rolled products 4,600 - 2.0 Hardware 557 0.0

Revenue from Mechel’s steel segment decreased 1.7% in 2005 from $2.76 billion to $2.71 billion, or 71.2% of consolidated net revenue, as compared to 2004. 

For the 2005 full year period, the steel segment generated operating income of $114.48 million, or 4.2%, of segment revenues from external customers, compared to operating income of $366.75 million, or 13.3%, of segment revenues from external customers in the 2004 full year period. EBITDA in the steel segment for 2005 was $260.54 million. The EBITDA margin of the steel segment was 9.6% in 2005.

In April of 2005, the Company announced the commissioning of a new sinter palnt at CMP.  The first lines of this plant generated approximately $36.27 million in cost savings, as it allowed CMP to switch to iron feed based more on sinter, produced from Mechel’s iron ore concentrate. The expected effect in 2006 will be $37.21 in cost savings.

Mr. Ivanushkin commented, “Although pricing levels improved in the fourth quarter, the pricing environment remained difficult in the steel segment throughout 2005, and our profitability continued to be affected by higher raw material costs. In light of this, we have focused on controlling our cost structure, and began a number of initiatives during the year that will result in a steel segment better positioned to perform in the marketplace. While we expect these challenging conditions to continue in the short-term, we have seen a continued improvement in demand into the early part of 2006. The commissioning of our new sinter plant and concasting facilities at Chelyabinsk is progressing well and, as pricing firms, we would expect performance to return to more normalized levels.”

Recent Highlights

• Mechel announced that it would increase its annual dividend from 15% to 50% of net profits under US GAAP, starting with the dividend paid with respect to the 2005 fiscal year.
• In March of 2006, Mechel established a 100%-owned subsidiary, Mechel Hardware OOO to sell hardware produced at its Beloretsk Metallurgical Plant, Vyartsilya Metal Products Plant, and Mechel Nemunas to the Russian and international markets.

• Mechel recently announced the resolution adopted by the Board of Directors to place two issues, Series 02 and 03, of documentary interest-bearing inconvertible bonds with the par value of RUR 1,000.00, the amount of each issue to be RUR 5.0 billion, at the Moscow Interbank Currency Exchange (MICEX).  The funds from the bond placement will be utilized to refinance the debt under the previous bond issues and to finance the long term investment programs of the Company's subsidiaries.

• In April of 2006, Mechel announced the acquisition of a 100% stake in Metals Recycling OOO, a Chelyabinsk-based metal scrap processing company through its subsidiary, Mechel Service OOO for approximately US$6.0 million. The transaction was a part of Mechel's policy to ensure its steel segment's self-sufficiency in raw materials.
• During 2005, Mechel announced a number of transactions that have significantly expanded the capabilities of its coal segment. These include various successes at license auctions to develop coal deposits in the Olzherasskaya Mine plot, Razvedochny plot, Sorokinsky plot, Erunakovskaya-1 Mine and Erunakovskaya-3 Mine plots. Total license areas attributable to new licenses acquired is  1.15 billion tonnes, according to Russian reserve valuation standards, of which the vast majority is coking coal of high quality.
• In January of 2005, Mechel also won an auction for the sale of ordinary shares in Yakutugol OAO that constitute 25 % + 1 share of the company's charter capital for approximately $411.2 million. Yakutugol’s annual output is approximately 9 million tonnes, of which approximately 5.0 million tonnes is coking coal. The acquisition further expands Mechel’s mining holdings while also increasing its exposure to the Asia-Pacific region.
• Continued progress on Mechel’s commitment to investing in its operations to reduce operating costs and increase efficiency. In September of 2005, Mechel announced the start-up of the second line of a new, four-line sinter plant at its Chelyabinsk Metallurgical Plant subsidiary. The new plant will increase Mechel’s ability to internally source its iron ore requirements from its iron ore mine, Korshunov Mining Plant. Once fully operational, the plant, which will cost approximately $150 million, will generate approximately $70 million in annual cost savings.
• To diversify the cargo flow of our coal and steel products and to improve our logistics, Mechel acquired 90.36% stake in Kambarka Port OAO - one of Russia’s largest river ports. The facility specializes in the transshipment of bulk cargo, including ore, iron ore concentrate and coal.

Mr. Ivanushkin concluded, “We have always believed that Mechel’s position as an integrated producer of both coal and steel products would benefit us in difficult market periods. This was proven in 2005, as the diversity of our operations allowed us to remain significantly profitable despite the challenging conditions we faced in several of our markets. Over the course of the year we have taken a number of actions that we believe position us well for the future. We have made significant investments in our coal operations, and undertaken actions to improve the profitability of our steel business.  At the same time, we have seen indications of a recovery in demand within the steel sector, which should benefit both sides of our business. As we move into 2006, we will continue to concentrate on the overall profitability of our business, by controlling costs and enhancing operational efficiencies. We are confident that the continued execution of our strategy will drive our results going forward.” 

Financial Position

Cash expenditure on mineral licenses, property, plant and equipment for the 2005 full year amounted to $520.6 million, of which $260.1 million was invested in the mining segment and $260.5 million in the steel segment.

For the 2005 full year, Mechel spent $488.6 million on acquisitions, comprised of $411.2 million for 25%+1 share of Yakutugol Holding Company OAO, $3.5 million for 90.4% of the shares of Port Kambarka OAO, $16.0 million for 25.1% of the shares of Izhstal OAO, $52.9 million for 6.8% of the shares of Chelyabinsk Metallurgical Plant OAO,  $3.4 million for 10.5% of the shares of Korshunov Mining Plant and $1.6 million was spent on acquisition of minority interest in other subsidiaries. 

As of December 31, 2005, total debt  was at $435.0 million. Cash and cash equivalents amounted to $311.8 million at the end of the year and net debt amounted to $123.2 million (net debt is defined as total debt outstanding less cash and cash equivalents).

* One American Depositary Share is equivalent to three diluted shares.

The management of Mechel will host a conference call today at 10 a.m. New York time (3 p.m. London time, 6 p.m. Moscow time) to review Mechel’s financial results and comment on current operations.  The call may be accessed via the Internet at http://www.mechel.com, under the Investor Relations section.

¹Total debt is comprised of short-term borrowings and long-term debt

***

Mechel OAO
Irina Ostryakova
Director of Communications
Phone: 7-095-258-18-28
Fax: 7-095-258-18-38
irina.ostryakova@mechel.com

***

Mechel is one of the leading Russian mining and metals companies. Mechel unites producers of coal, iron ore, nickel, steel, rolled products, and hardware. Mechel products are marketed domestically and internationally.

***

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel files from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our Form 20-F, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.

Attachments to the FY 2005 Earnings Press Release

Attachment A

Non-GAAP financial measures. This press release includes financial information prepared in accordance with accounting principles generally accepted in the United States of America, or US GAAP, as well as other financial measures referred to as non-GAAP. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with US GAAP.

Earnings Before Interest, Depreciation and Amortization (EBITDA) and EBITDA margin. EBITDA represents earnings before interest, depreciation and amortization. EBITDA margin is defined as EBITDA as a percentage of our net revenues. Our EBITDA may not be similar to EBITDA measures of other companies; is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. We believe that EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions and other investments and our ability to incur and service debt. While interest, depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our EBITDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the metals and mining industry. EBITDA can be reconciled to our consolidated statements of operations as follows:

US$ thousands 2005 20041 Net income 381,180 542,724 Add: Depreciation, depletion and amortization Interest expense Income taxes   167,600 40,829 136,643   137,820 51,409 175,776 Consolidated EBITDA 726,252 907,729

EBITDA margin can be reconciled as a percentage to our Revenues as follows:

US$ thousands 2005 20041 Revenue, net 3,804,995 3,635,955 EBITDA 726,252 907,729 EBITDA margin 19,1% 25.0%

¹Excluding MMK gain

MECHEL OAO
CONSOLIDATED BALANCE SHEETS
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

(in thousands of U.S. dollars, except share amounts) 2005 2004 ASSETS Cash and cash equivalents $ 311 775 $ 1 024 761 Accounts receivable, net of allowance for doubtful accounts of $17,509 in 2005 and $20,850 in 2004 140 649 135 597 Due from related parties 4 473 16 474 Inventories 496 658 568 545 Deferred cost of inventory in transit 49 893 0 Current assets of discontinued operations 88 1 247 Deferred income taxes 8 965 7 491 Prepayments and other current assets 346 981 349 090 Total current assets 1 359 483 2 103 205 Long-term investments in related parties 408 709 9 270 Other long-term investments 16 148 66 663 Non-current assets of discontinued operations 97 165 Intangible assets, net 7 590 6 379 Property, plant and equipment, net 1 508 984 1 274 722 Mineral licenses, net 242 006 166 483 Deferred income taxes 17 487 11 940 Goodwill 39 580 39 441 Total assets 3 600 083 3 678 268 LIABILITIES AND SHAREHOLDERS' EQUITY Short-term borrowings and current portion of long-term debt 389 411 348 880 Accounts payable and accrued expenses: Advances received 47 367 94 964 Accrued expenses and other current liabilities 79 405 68 147 Taxes and social charges payable 144 715 145 527 Trade payable to vendors of goods and services 210 228 186 233 Due to related parties 2 937 3 748 Current liabilities of discontinued operations 109 30 Asset retirement obligation 4 236 8 219 Deferred income taxes 26 557 26 521 Deferred revenue 55 267 760 Pension obligations 8 189 6 261 Finance lease liabilities 887 0 Total current liabilities 969 308 889 290 Long-term debt, net of current portion 45 615 216 313 Restructured taxes and social charges payable, net of current portion 33 866 87 364 Asset retirement obligations, net of current portion 54 816 66 758 Pension obligations, net of current portion 43 510 40 720 Deferred income taxes 105 481 105 330 Other long-term liabilities 0 240 Finance lease liabilities, net of current portion 9 179 0 Commitments and contingencies 0 0 Minority interests 127 834 214 824 SHAREHOLDERS' EQUITY Common shares (10 Russian rubles par value; 497,969,086 shares authorized, 416,270,745 shares issued and 403,118,680 shares outstanding as of December 31, 2005 and 2004) 133 507 133 507 Treasury shares, at cost (13,152,065 common shares as of December31, 2005 and 2004) -4 187 -4 187 Additional paid-in capital 321 864 304 404 Accumulated other comprehensive income 42 046 93 687 Retained earnings 1 717 244 1 530 218 Total shareholders' equity 2 210 474 2 057 629 Total liabilities and shareholders' equity 3 600 083 3 678 268

CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

(in thousands of U.S. dollars, except share amounts) 2005 2004 2003 Cash Flows from Operating Activities Net income 381 180 1 342 706 143 508 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 147 117 120 444 83 980 Depletion and amortization 20 483 17 376 17 709 Foreign exchange loss (gain) 37 435 -1 884 2 867 Deferred income taxes -12 535 -11 217 -6 905 Provision for (recovery of) doubtful accounts 3 569 -7 859 10 011 Inventory write-down 5 938 2 183 4 624 Accretion expense 3 248 2 081 2 433 Loss on write-off of property, plant and equipment 12 667 0 0 Minority interest 6 879 11 673 -18 980 Effect of change in accounting principle 0 0 3 788 Income from equity investments -12 426 -4 621 -1 221 Non-cash interest on long-term tax and pension liabilities 13 749 11 425 13 302 Loss on sale of property, plant and equipment 1 801 5 736 4 111 Gain on sale of long-term investments -2 743 -803 405 -2 417 Loss from discontinued operations 1 157 15 211 5 790 Gain on accounts payable with expired legal term -23 347 -1 250 -1 400 Gain on forgiveness of fines and penalties -38 383 -18 296 -9 588 Stock-based compensation expense 0 1 400 2 200 Amortization of capitalized costs on bonds issue 1 553 1 525 835 Pension service cost and amortization of prior year service cost 2 511 2 187 0 Extraordinary gain 0 -271 -5 740 Net change before changes in working capital 549 853 685 144 248 907 Changes in working capital items, net of effects from acquisition of new subsidiaries: Accounts receivable 23 602 -2 831 -4 031 Inventories 14 614 -170 726 -97 783 Trade payable to vendors of goods and services 60 087 -1 305 -14 468 Advances received -46 269 4 902 13 316 Accrued taxes and other liabilities 14 868 4 176 19 328 Settlements with related parties 12 658 1 253 -12 815 Current assets and liabilities of discontinued operations 57 -4 134 -17 036 Deferred revenue and cost of inventory in transit, net 4 624 -22 607 13 949 Other current assets -15 219 -197 734 -29 509 Net cash provided by operating activities 618 875 296 137 119 858 Cash Flows from Investing Activities Acquisition of subsidiaries, less cash acquired -3 497 0 -20 919 Acquisition of minority interest in subsidiaries -79 936 -37 021 -3 776 Investment in Korshunov Mining Plant 0 0 -82 793 Investment in Yakutugol -411 182 0 0 Acquisition of Izhstal 0 -22 742 0 Acquisition of Port Posiet 0 -29 966 0 Acquisition of Kaslinsky Architectural Casting Plant 0 -996 0 Investments in other non-marketable securities -7 554 -29 762 -28 525 Proceeds from disposal of discontinued operations 0 0 5 162 Proceeds from disposal of non-marketable equity securities 19 388 875 967 33 577 Proceeds from disposals of property, plant and equipment 2 628 3 647 3 813 Purchases of mineral licenses -93 033 0 0 Purchases of property, plant and equipment -427 521 -303 411 -116 856 Net cash (used in) provided by investing activities -94 707 455 716 -210 317 Cash Flows from Financing Activities Proceeds from short-term borrowings 1 577 984 954 733 781 525 Repayment of short-term borrowings -1 686 578 -941 340 -747 815 Dividends paid -194 154 -5 145 -26 282 Dividends received 2 000 0 0 Proceeds from issuance of common stock 0 220 873 0 Proceeds from long-term debt 14 815 75 241 112 736 Repayment of long-term debt -20 180 -52 093 -23 482 Loans and notes received from related parties 0 0 6 397 Repayment of obligations under finance lease -757 0 0 Net cash (used in) provided by financing activities -306 870 252 269 103 079 Effect of exchange rate changes on cash and cash equivalents -30 284 1 360 991 Net (decrease) increase in cash and cash equivalents -712 986 1 005 482 13 611 Cash and cash equivalents at beginning of year 1 024 761 19 279 5 668 Cash and cash equivalents at end of year 311 775 1 024 761 19 279 Supplementary cash flow information: Interest paid, net of amount capitalized -43 354 -62 835 -32 394 Income taxes paid -171 774 -136 473 -53 884 Non-cash Activities: Net assets of subsidiaries contributed by minority shareholders in exchange for shares issued by SKCC 17 460 340 4 428 Acquisition of plant and equipment in exchange for goods 0 3 071 0 Acquisition of equipment under finance lease 10 291 0 0 Assumption of debt in business combination 0 0 2 673 Treasury shares issued to subsidiary 0 9 723 0

MECHEL OAO
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

(in thousands of U.S. dollars, except share amounts) 2005 2004 2003 Revenue, net (including related party amounts of $65,431, $68,806 and $211,943 during 2005, 2004 and 2003, respectively) 3 804 995 3 635 955 2 028 051 Cost of goods sold (including related party amounts of $74,795, $12,756 and $212,492 during 2005, 2004 and 2003, respectively) -2 469 134 -2 225 088 -1 422 987 Gross margin 1 335 861 1 410 867 605 064 Selling, distribution and operating expenses: Selling and distribution expenses -450 238 -367 514 -213 977 Taxes other than income tax -90 683 -69 285 -44 716 Accretion expense -3 248 -2 081 -2 433 Loss on write-off of property, plant and equipment -12 667 0 0 (Provision for) recovery of doubtful accounts -3 569 7 859 -9 056 General, administrative and other operating expenses -259 728 -229 039 -137 201 Total selling, distribution and operating expenses -820 133 -660 060 -407 383 Operating income 515 728 750 807 197 681 Other income and (expense): Income from equity investees 12 426 4 621 1 221 Interest income 10 049 2 375 2 274 Interest expense -40 829 -51 409 -48 516 Other income, net 65 920 836 817 26 333 Foreign exchange (loss) gain -37 435 1 884 -2 867 Total other income and (expense) 10 131 794 288 -21 555 Income before income tax, minority interest, discontinued operations, extraordinary gain and change in accounting principles 525 859 1 545 095 176 126 Income tax expense -136 643 -175 776 -47 759 Minority interest in (income) loss of subsidiaries -6 879 -11 673 18 979 Income from continuing operations 382 337 1 357 646 147 346 Loss from discontinued operations, net of tax -1 157 -15 211 -5 790 Extraordinary gain, net of tax 0 271 5 740 Income before cumulative effect of change in accounting principle 381 180 1 342 706 147 296 Change in accounting principle, net of tax 0 – -3 788 Net income 381 180 1 342 706 143 508 Currency translation adjustment -53 822 49 116 46 921 Adjustment of available-for-sale securities 2 181 -2 350 0 Comprehensive income 329 539 1 389 472 190 429 Basic and diluted earnings per share: Earnings per share from continuing operations 0.95 3.63 0.39 Loss per share effect of discontinued operations (0.00) (0.04) (0.01) Earnings per share effect of extraordinary gain 0.00 0.00 0.02 Earnings per share effect of a change in accounting principle 0.00 0.00 (0.01) Net income per share 0.95 3.59 0.39 Weighted average number of common shares outstanding 403 118 680 373 971 312 366 178 815