Mechel Provides Supplemental Information Regarding 2007 Full Year Financial Results
OAO (NYSE: MTL), a leading
Russian integrated mining and steel group, today announced its cash flow for
the full year ended
December 31, 2007. The following cash flow statement
supplements information included in Mechel's announcement of 2007 financial
results, which was issued earlier today.
Consolidated Statements of Cash Flows
(in thousands of U.S. dollars)
Year ended Year ended
December 31, December 31,
2007 2006
Cash Flows from Operating Activities
Net income $913,050 603,249
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 250,333 177,303
Depletion and amortization 39,982 18,924
Foreign exchange (gain) loss (54,700) (58,773)
Deferred income taxes (18,320) 22,299
(Recovery of) provision for doubtful
accounts 1,411 2,722
Inventory write-down 1,228 525
Accretion expense 3,101 7,433
Loss on write-off of property, plant and
equipment - 2,418
Minority interest 116,234 31,528
Revaluation of trading securities to
fair value - (50,688)
(Income) loss from equity investments (8) 17,426
Non-cash interest on long-term tax and
pension liabilities 6,942 6,173
Loss (gain) on sale of property, plant
and equipment 10,581 1,320
(Gain) loss on sale of long-term investments 13,426 5,047
Gain on disposed asset retirement
obligations in the current period (14,430) (2,112)
Loss from discontinued operations (158) (543)
Gain on accounts payable with expired
legal term (12,158) (843)
Gain on forgiveness of fines and penalties (8,311) (69,767)
Stock-based compensation expense - 260
Amortization of capitalized costs on
bonds issue - 673
Pension service cost and amortization of
prior year service cost 2,681 3,510
Provision for short-term investment 4,124 -
Net change before changes in working capital 1,255,008 718,084
Changes in working capital items, net of
effects from acquisition of new subsidiaries:
Trading securities 257,185 -
Accounts receivable (118,101) (9,004)
Inventories (254,342) (159,103)
Trade payable to vendors of goods and
services (19,909) (47,940)
Advances received (56,697) 35,128
Accrued taxes and other liabilities (67,155) 24,715
Settlements with related parties (3,237) 3,430
Current assets and liabilities of
discontinued operations (234) (187)
Deferred revenue and cost of inventory
in transit, net 13,373 (12,316)
Other current assets (76,573) 2,116
Prepayments to non-state pension funds (38,981) -
Effect of FIN48 on current tax (13,582) -
Dividends received 4,622 -
Net cash provided by operating activities 881,377 554,923
Cash Flows from Investing Activities
Acquisition of subsidiaries, less
cash acquired - (2,153)
Acquisition of Moscow Coke and Gas Plant (4,181) (156,474)
Investment in Yakutugol (1,580,004) -
Acquisition of Elgaugol (345,861) -
Acquisition of SKPP (280,853)
Acquisition of BFP (186,665)
Acquisition of KPSC (78,304)
Acquisition of Transkol (7,165)
Acquisition of Temryuk-Sotra (6,108)
Acquisition of minority interest in
subsidiaries (2,378) (4,016)
Purchases of investments in affiliates (73,539)
Investments in other marketable securities (3,289) (2,016)
Proceeds from disposal of discontinued
operations
Proceeds from disposal of non-marketable
securities - 6,507
Short-term loans issued (4,151)
Repayments of short-term loans issued 18,709 -
Proceeds from disposals of property, plant
and equipment 456 3,456
Purchases of property, plant and equipment (830,024) (391,460)
Purchase of mineral licenses (3,517) (6,382)
Net cash provided from (used in) investing
activities (3,386,874) (552,538)
Cash Flows from Financing Activities
Proceeds from short-term borrowings 4,047,426 883,307
Repayment of short-term borrowings (3,156,410) (1,116,762)
Dividends paid (317,895) (189,583)
Purchase of treasury stock - (36,449)
Proceeds from disposal of treasury stock - 1,248
Proceeds from long-term debt 2,004,780 415,345
Loans and notes (issued) to/received
from related parties -
Repayment of obligations under
finance lease (21,434) (9,048)
Repayment of long-term debt (6,586) (110,840)
Net cash provided by financing activities 2,549,881 162,782
Effect of exchange rate changes on cash
and cash equivalents 19,781 21,236
Net increase (decrease) in cash and cash
equivalents 64,165 (139,161)
Cash and cash equivalents at beginning of year 172,614 311,775
Cash and cash equivalents at end of year $236,779 172,614
Mechel OAO
Alexander Tolkach
Head of International Relations & Investor Relations
Mechel OAO
Phone: 7-495-221-88-88
Fax: 7-495-221-88-00
alexander.tolkach@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.
SOURCE Mechel OAO
