Agricore United: Initial Recovery Across Business Segments.

WINNIPEG Winnipeg, city, Canada
Winnipeg (wĭn`ĭpĕg), city (1991 pop. 616,790), provincial capital, SE Man., Canada, at the confluence of the Red and Assiniboine rivers. , Manitoba Manitoba (mănĭtō`bə), province (2001 pop. 1,119,583), 250,934 sq mi (650,930 sq km), including 39,215 sq mi (101,580 sq km) of water surface, W central Canada. -- Agricore United Agricore United was a farmer-directed agri-business in Canada. It supplied crop nutrition and crop protection products, and offered grain handling and marketing services. It was created on November 1, 2001 by the merger of Agricore and United Grain Growers. (TSX TSX Toronto Stock Exchange (TSE before April, 2002)
TSX Transfer from Stack Pointer to Index
TSX True Space Extension :AU.LV)announced today that its operating performance for fiscal 2005 has materially improved across all business segments. This positive momentum has also contributed to a material improvement in the Company's balance sheet.

Agricore United's sales of crop nutrients, crop protection products and seed increased by $35 million to $192 million for the six months ended April 30, 2005, compared to the same period last year, and have continued to exceed prior year results to the end of May 2005. Grain shipments and livestock livestock

Farm animals, with the exception of poultry. In Western countries the category encompasses primarily cattle, sheep, pigs, goats, horses, donkeys, and mules; other animals (e.g., buffalo, oxen, or camels) may predominate in other areas. services sales also saw an increase for the six months ending April 30, 2005 with Agricore United handling 4.9 million tonnes, or 35 percent of industry grain shipments. In addition, the average margin per tonne tonne

measure of weight or mass; 1 tonne=1000 kg. See also ton. on grain increased to $20.46 for the quarter compared to $18.78 per tonne for the same period last year.

Seed sales increased 18 percent to $37 million in the quarter, accounting for about 98 percent of seed sales during the first six months of the current year. Fertilizer fertilizer, organic or inorganic material containing one or more of the nutrients—mainly nitrogen, phosphorus, and potassium, and other essential elements required for plant growth. tonnes sold in the latest quarter increased 20 percent over 2004. Average margins were consistent with the prior year.

Feed sales increased by 53,000 tonnes to 497,000 tonnes for the latest six months. As a result of increased tonnes sold and a 5 percent higher margin of $45 per tonne, gross profit from feed tonnes sold improved for the six months by $3 million to $22 million, reflecting the continued resiliency The ability to recover from a failure. The term may be applied to hardware, software or data. of the western Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. livestock market. Profits from the Company's interest in The Puratone Corporation and its other livestock interests also improved significantly in the quarter and six months.

"A recent favourable ruling concerning hog duties, increasing slaughter slaughter

1. the killing of animals for the preparation of meat for human consumption. Many methods are used. See also emergency slaughter, captive bolt pistol, carbon dioxide anesthesia, jewish slaughter, muslim slaughter, pithing, puntilla, shechita, sikh slaughter.

2. capacity in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and improved access to world markets have helped the livestock industry and a similar favourable ruling from NAFTA NAFTA
in full North American Free Trade Agreement

Trade pact signed by Canada, the U.S., and Mexico in 1992, which took effect in 1994. Inspired by the success of the European Community in reducing trade barriers among its members, NAFTA created the world's concerning U.S. duties on Canadian wheat wheat, cereal plant of the genus Triticum of the family Gramineae (grass family), a major food and an important commodity on the world grain market. Wheat Varieties and Their Uses
will hopefully assist the grain sector as well," said Brian Hayward

For other people named Hayward, see Hayward (disambiguation).

Brian Hayward (b. June 25, 1960 in Georgetown, Ontario) was a Canadian professional ice hockey goaltender. , Chief Executive Officer. "An early start to the western Canadian growing season growing season, period during which plant growth takes place. In temperate climates the growing season is limited by seasonal changes in temperature and is defined as the period between the last killing frost of spring and the first killing frost of autumn, at which , good moisture moisture

wetness due to any liquid; usually refers to water as a component, e.g. in feed.

moisture free
a substance heated at 220°F (105°C) to constant weight. Called also oven-dry or 100% dry matter. levels and advanced seeding in Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. and Saskatchewan Saskatchewan, province, Canada
Saskatchewan (səskăch`əwən, –wän', săs'–), province (2001 pop. 978,933), 251,700 sq mi (651,903 sq km), W Canada. improved the most recent quarter's results and bodes well for the balance of the growing season assuming sunny days ahead."

The balance sheet also improved substantially with overall funded debt Funded Debt

Long-term debt that matures after more than one year.

Notes:
This is usually issued as a bond or a long-term note.
See also: Bond, Debt, Maturity, Note

Funded debt

Debt maturing after more than one year. decreasing $117 million to $580 million. The Company's weighted average trailing twelve-month leverage ratio based on net funded debt to capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. improved from 46.3% last year to 43.2% at April 30, 2005. At the same time, the Company's unused short-term Short-term

Any investments with a maturity of one year or less.

short-term

1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowing capacity increased $164 million to $198 million at April 30, 2005.

The Company's earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.

:EBITDA = Operating Revenue – Operating Expenses + Other Revenue

for the six months increased $4.5 million to $18.3 million. Agricore United incurred a loss of $5.4 million ($0.13 per share) for the quarter compared to a loss of $17.7 million ($0.40 per share) for the same quarter last year. Operating General and Administrative (OG&A) expenses declined $1.8 million in the quarter, due to one time recoveries of $700,000 in hog duties and recoveries of provincial capital Noun 1. provincial capital - the capital city of a province
capital - a seat of government

city, metropolis, urban center - a large and densely populated urban area; may include several independent administrative districts; "Ancient Troy was a great city" taxes and property taxes on port terminals in Thunder Bay Thunder Bay, city (1991 pop. 113,946), SW Ont., Canada, on Thunder Bay inlet of Lake Superior. The city was created in 1970 by the amalgamation of the twin cities of Fort William and Port Arthur and two adjoining townships. . Cash flow provided by operations of $6.7 million for the quarter ($0.14 per share) improved by $17.6 million or $0.39 per share over the same period last year.

"Throughout all divisions of the company we are seeing positive trends in earnings and cash flow," said Hayward Hayward, city (1990 pop. 111,498), Alameda co., W Calif.; settled 1851, inc. 1876. It is an important commercial and distribution center for farm products. Manufactures include wire, plastics, metal and paper products, textiles, machinery, and motor vehicles. . "We continue to successfully manage those aspects of our business which we can directly control - namely margin, market share and costs."

Agricore United is one of Canada's leading agri-businesses. The prairie-based company is diversified diversified (di·verˑ·s into sales of crop inputs and services, grain merchandising merchandising

Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. , livestock production services and financial markets. Agricore United's shares are publicly traded on the Toronto Stock Exchange Toronto Stock Exchange (TSE)

Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol "AU.LV".

REPORT TO SHAREHOLDERS

SECOND QUARTER

REPORT FOR THE QUARTER ENDED APRIL 30, 2005

Q2 Highlights

- Improved Grain Handling Margin per Tonne - The Company's grain handling volume for the six months ended April 30, 2005 increased by 157,000 tonnes (or 3.3%) compared with an increase in industry shipments of 543,000 tonnes (or 4%). The average margin per tonne increased to $20.46 per tonne for the quarter and $20.66 per tonne for the six months compared to $18.78 per tonne and $19.62 per tonne for the same periods last year, respectively.

- Higher Crop Nutrient nutrient /nu·tri·ent/ (noo´tre-int)
1. nourishing; providing nutrition.

2. a food or other substance that provides energy or building material for the survival and growth of a living organism. Sales and Margin - Crop Production Services ("CPS (1) (Characters Per Second) The measurement of the speed of a serial printer or the speed of a data transfer between hardware devices or over a communications channel. CPS is equivalent to bytes per second. ") sales of crop nutrients, crop protection products and seed increased $34.9 million (or 22%) to $191.6 million for the latest six months, excluding a $23.7 million (or 27%) increase in deferred sales revenue (prepaid pre·pay
tr.v. pre·paid, pre·pay·ing, pre·pays
To pay or pay for beforehand.

pre·payment n. sales not yet delivered) to $110.3 million at April 30, 2005.

- Higher Feed Tonne Sales and Margin - The Company's feed sales increased by 53,000 tonnes (or 12%) for the six months to 497,000 tonnes while the average margin increased to $44.90 per tonne from $42.86 per tonne for the same period last year. Gross profit and net revenue from services for non-feed business increased $2.8 million to $5.9 million for the same six-month period.

- Operating, General & Administrative ("OG&A") Expenses - OG&A expenses for the quarter declined $1.8 million due to one-time one-time
adj.
1. or one·time
a. Occurring or undertaken only once: a one-time winner in 1995.

b. recoveries of $707,000 in hog duties paid in prior quarters and recoveries of provincial capital taxes as well as property taxes on port terminals in Thunder Bay. OG&A expenses for the six months increased $10.8 million over last year.

- Higher EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become and EBIT EBIT

See: Earnings Before Interest and Taxes

EBIT

See earnings before interest and taxes (EBIT). (1) EBITDA for the six months increased $4.5 million to $18.3 million and EBIT increased $5.5 million over the same period.

- Improved Net Earnings - The loss of $5.4 million (or $0.13 basic and diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.

2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share) for the quarter and the loss of $24.9 million ($0.56 basic and diluted loss per share) for the six months improved over a loss of $17.7 million ($0.40 basic and diluted loss per share) and a loss of $31.3 million ($0.70 basic and diluted loss per share) for the same periods last year, respectively.

- Improved Cash Flow from Operations Cash flow from operations

A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses - Cash flow provided by operations of $6.7 million ($0.14 per share) for the quarter and cash flow used in operations of $8.4 million ($0.20 loss per share) for the six months improved by $17.6 million ($0.39 per share) and $7.3 million ($0.16 per share) over the same periods last year, respectively.

- Improved Liquidity - The Company's available uncommitted short-term revolving facility at April 30, 2005 increased by $163.8 million to $197.5 million although the current ratio at April 30, 2005 declined to 1.10 to 1 from 1.14 to 1 at the same date last year.

Consolidated con·sol·i·date
v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates

v.tr.
1. To unite into one system or whole; combine: Financial Results

The following Management's Discussion and Analysis Management's discussion and analysis (MD&A)

A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial ("MD&A") as at June June: see month. 9, 2005 is based on the accompanying ac·com·pa·ny
v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies

v.tr.
1. To be or go with as a companion.

2. financial information that has been prepared using Canadian GAAP GAAP

See: Generally Accepted Accounting Principles

GAAP

See generally accepted accounting principles (GAAP). . All amounts are reported in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin"
loonie

dollar - the basic monetary unit in many countries; equal to 100 cents unless specifically stated to the contrary.

Crop Production Services

Sales of crop nutrients, crop protection products and seed increased by $34.9 million to $191.6 million for the six months ended April 30, 2005 compared to the same period in 2004, due in part to an earlier start to the growing season in many parts of western Canada

This article is about the region in Canada. For the school in Calgary, see Western Canada High School.

Western Canada, commonly referred to as the West . Fertilizer tonnes sold in the latest quarter and six month period increased 19.9% and 12.7%, respectively, over 2004. Seed sales increased 18.2% to $37.3 million in the latest quarter and accounted for about 98% of seed sales during the first six months of the current year consistent with the same quarter ended April 30, 2004. About 35% to 40% of annual seed sales typically occur in this quarter and about 85% of crop protection product sales normally occur in the quarter ending July July: see month. 31. Consequently, sales of crop protection products for the six months ended April 30, 2005 were relatively modest and comparable to the same period last year.

While the Company does not record sales until products are delivered or services are rendered to customers, deferred sales revenue (prepaid sales not yet delivered) amounted to $110.3 million at April 30, 2005 compared to $86.6 million at April 30, 2004. This $23.7 million increase in deferred sales as well as the increase in recorded sales resulted from both fertilizer sales delayed from the quarter ended October October: see month. 31, 2004 (due to a late harvest (tool, networking) Harvest - A highly scalable, customisable system for discovering resources on the Internet.

Version: 1.3.

http://tardis.ed.ac.uk/harvest/. and unfavourable weather) and producers purchasing seed earlier than in 2004 (due to more favourable weather conditions). Other sales and revenue from services for the six months decreased by $702,000 from last year due primarily to lower interest revenue earned and crop protection product rebates carried forward from the prior year, offset by higher agri-services revenue (agronomy agronomy (əgrŏn`əmē), branch of agriculture dealing with various physical and biological factors—including soil management, tillage, crop rotation, breeding, weed control, and climate—related to crop production. , custom application and fertilizer application services See ASP and Web services. ) related to higher underlying crop inputs sales activity.

In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.^[]

As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with its existing accounting policy, the Company defers the recognition of gross profit from inter-company sales until product is sold to a third party. During the first quarter of 2005, the Company modified mod·i·fy
v. mod·i·fied, mod·i·fy·ing, mod·i·fies

v.tr.
1. To change in form or character; alter.

2. its estimate of deferred gross profits on fertilizer products sold by its subsidiary, Westco, to the Company and still held by the Company pending sale to third parties. This change in estimate increased deferred gross profit from Westco by $3.3 million for the six months ended April 30, 2005 to $9 million, reducing gross profit and net revenue from services for the six months to $46 million, or $221,000 higher than the same period last year. Since the sale of fertilizer to third parties is substantively sub·stan·tive
adj.
1. Substantial; considerable.

2. Independent in existence or function; not subordinate.

3. Not imaginary; actual; real.

4. complete by the Company's third quarter ending July 31, as existing prepaid sales and future sales of fertilizer are completed, the effect of the change in estimate decreased the recognition of gross profit in the first quarter, increased the recognition in the Company's second quarter and will increase recognition in the third quarter by approximately ap·prox·i·mate
adj.
1. Almost exact or correct: the approximate time of the accident.

2. offsetting amounts.

In accordance with GAAP, this change in accounting estimate has been applied on a prospective basis commencing with the quarter ended January January: see month. 31, 2005, without restating prior periods. However, in order to provide comparative information using the same basis of estimation estimation

In mathematics, use of a function or formula to derive a solution or make a prediction. Unlike approximation, it has precise connotations. In statistics, for example, it connotes the careful selection and testing of a function called an estimator. , the following table summarizes the pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts.

The phrase pro forma (2) effect only of this change in accounting estimate on fiscal 2004 earnings.

Pro forma Financial Information
For the 2004 quarters ended (in thousands)
(Unaudited)

---------------------------------------------------------------------
Increase (decrease) in       January 31  April 30  July 31 October 31
 Gross Profit, EBITDA, EBIT
---------------------------------------------------------------------
  Quarter-to-date             $ (10,316)  $ 2,054  $ 7,824    $ 1,070
---------------------------------------------------------------------
  Year-to-date                  (10,316)   (8,262)    (438)       632
---------------------------------------------------------------------

Had the Company's current estimation procedure been applied in fiscal 2004, gross profit for the six months ended April 30, 2004 would have decreased by $8.3 million, although the quarter ended April 30, 2004 would have increased by $2.1 million with a further increase of $7.8 million in the third quarter of fiscal 2004. The impact of applying the change in estimate to fiscal 2004, while not material, would be to understate un·der·state
v. un·der·stat·ed, un·der·stat·ing, un·der·states

v.tr.
1. To state with less completeness or truth than seems warranted by the facts.

2. gross profit, EBITDA, EBIT and pre-tax pre-tax adj → anterior al impuesto

pre-tax adj → avant impôt(s)

pre-tax adj → al lordo d'imposta earnings for fiscal 2004 by $632,000.

Crop Production Services
For the periods ended April 30 (in thousands)
(Unaudited)
               Second Quarter        Six Months  Change in  Pro forma
                 2005    2004      2005     2004  Estimate       2004
---------------------------------------------------------------------

Gross profit
 and net
 revenue
 from
 services     $32,693 $24,813   $45,961  $45,740   $(8,262)  $37,478
Operating,
 general
 and
 administrative
 expenses     (24,811)(26,341)  (50,263) (48,304)        -   (48,304)
---------------------------------------------------------------------
EBITDA          7,882  (1,528)   (4,302)  (2,564)   (8,262)  (10,826)
Depreciation
 and
 amortization  (5,100) (5,231)   (9,966) (10,221)        -   (10,221)
---------------------------------------------------------------------
EBIT           $2,782 $(6,759) $(14,268)$(12,785)  $(8,262) $(21,047)
---------------------------------------------------------------------
---------------------------------------------------------------------

Operating
 Highlights
 Seed, Crop
  Nutrition,
  Crop
  Protection
  & Other
  Sales      $121,562 $99,516  $191,642 $156,792    $    -  $156,792
 Margin (% of
  Sales)         26.9%   24.9%     24.0%    29.2%               23.9%

Gross profit and net revenue from services for the six months ended April 30, 2005 increased $8.5 million compared to the pro forma results for the same period last year, including a $1.8 million one-time recovery related to the operations of Canadian Fertilizers Limited (a joint venture investment of the Company's investee, Westco). The average crop nutrition nutrition, study of the materials that nourish an organism and of the manner in which the separate components are used for maintenance, repair, growth, and reproduction. Nutrition is achieved in various ways by different forms of life. retail margin per tonne (excluding Westco) for the latest six months improved 3.7% over 2004. The Company also realized higher gross profit on fertilizer sales from its proportionate pro·por·tion·ate
adj.
Being in due proportion; proportional.

tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates
To make proportionate. share in Westco. Seed and crop protection product gross profit increased based on higher underlying sales. Other net revenue decreased modestly in the quarter, associated with lower interest revenue and crop protection product rebates carried forward from the prior year, offset by improved agri-services net revenue.

CPS OG&A expenses of $24.8 million for the latest quarter decreased $1.5 million (or 5.8%) from 2004, due to a combination of lower country operations costs, lower advertising and promotions expenses and lower costs associated with the Company's consolidated share of Westco OG&A expenses. For the six months to April 30, 2005, CPS OG&A expenses of $50.3 million increased by $2 million, comprised of a $744,000 increase in advertising and promotion costs (associated with an advanced marketing campaign in the current year), a $447,000 increase in the Company's consolidated share of Westco OG&A expenses (largely reflecting costs associated with Westco's adoption of the CICA CICA Competition In Contracting Act of 1984 (USA)
CICA Canadian Institute of Chartered Accountants
CICA Competition In Contracting Act
CICA Criminal Injuries Compensation Authority (UK)  accounting policy change concerning asset retirement obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1].

Firms must recognize the ARO liability in the period it was acquired, generally acquisition. ), a $394,000 increase related to advanced seed germination germination, in a seed, process by which the plant embryo within the seed resumes growth after a period of dormancy and the seedling emerges. The length of dormancy varies; the seed of some plants (e.g. testing and varietal va·ri·e·tal
adj.
Of, indicating, or characterizing a variety, especially a biological variety.

n.
A wine made principally from one variety of grape and carrying the name of that grape. seed development costs, and an $845,000 increase in payroll payroll

a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. costs.

As a result, compared to the pro forma results of the prior year, CPS EBITDA loss improved by $6.5 million to a loss of $4.3 million for the six months ended April 30, 2005. A $255,000 reduction in depreciation and amortization expenses contributed to an EBIT loss of $14.3 million, $1.5 million higher than the $12.8 million EBIT loss reported for the same six-month period last year, but $6.8 million better than the pro forma loss for the same period.

Grain Handling

The Canadian Grain Commission The Canadian Grain Commission is a Canadian government department responsible for the grain industry.

The Minister of Agriculture and Agri-food is responsible for the Canadian Grain Commission. External links

Canadian Grain Commission Official Website Portal

("CGC CGC Canine Good Citizen (AKC Dog Title)
CGC Commission Géologique du Canada (Geological Survey of Canada)
CGC Confédération Générale des Cadres (French labor union) ") reported industry shipments of 14.2 million tonnes of the six major grains (wheat, barley barley, annual cereal plant (Hordeum vulgare and sometimes other species) of the family Gramineae (grass family), cultivated by humans probably as early as any cereal. , oats oats, cereal plants of the genus Avena of the family Gramineae (grass family). Most species are annuals of moist temperate regions. The early history of oats is obscure, but domestication is considered to be recent compared to that of the other , canola canola

see brassicanapus. , flax flax, common name for members of the Linaceae, a family of annual herbs, especially members of the genus Linum, and for the fiber obtained from such plants. The flax of commerce (several varieties of L. , peas) for the six months ended April 30, 2005, an increase of 543,000 tonnes (or 4%) over 2004. Agricore United shipped 4.9 million tonnes of grain in the same six months, an increase of 157,000 tonnes (or 3.3%) over 2004. The increase in Company shipments was entirely in Canadian Wheat Board The Canadian Wheat Board (known at times as the Canada Wheat Board or by the acronym CWB) was established by the Parliament of Canada in 1935 as a producer marketing system for wheat and barley. It is headquartered in Winnipeg, Manitoba, Canada. ("CWB CWB Canadian Wheat Board
CWB Central Weather Bureau
CWB Canadian Welding Bureau
CWB Causeway Bay (Hong Kong)
CWB Corpus Workbench
CWB Certified Wildlife Biologist
CWB Child Welfare Board ") grains. The ratio of Company to industry grain shipments of 34.5% for the six months was largely unchanged from the same period last year and from the Company's fiscal year ended October 31, 2004.

The Company handled 2.5 million tonnes of grain through its port terminals in Vancouver Vancouver, city, Canada
Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. and Thunder Bay during the six months ended April 30, 2005 (2004 - 2.3 million tonnes) representing an increase of 227,000 tonnes (or 9.9%). The Company's ratio of terminal handle to the Company's grain shipments of 51.3% for the six months increased 3.2% over the same period in 2004. The ratio of Company terminal handle to industry receipts of 35% for the latest six months increased modestly from 34.7% last year.

Grain Handling
For the periods ended April 30 (in thousands)
(Unaudited)
                                 Second Quarter          Six Months
                                2005       2004       2005      2004
---------------------------------------------------------------------

Gross profit and net
 revenue from services      $ 49,300   $ 46,601  $ 101,192  $ 93,060
Operating, general and
 administrative expenses     (34,876)   (36,142)   (73,307)  (66,891)
---------------------------------------------------------------------
EBITDA                        14,424     10,459     27,885    26,169
Depreciation and
 amortization                 (7,539)    (7,969)   (15,314)  (15,941)
---------------------------------------------------------------------
EBIT                         $ 6,885    $ 2,490   $ 12,571  $ 10,228
---------------------------------------------------------------------
---------------------------------------------------------------------

Operating Highlights
 Industry shipments
  (tonnes)                     7,046      6,837     14,204    13,661
 Grain shipments -
  country elevators
  (tonnes)                     2,410      2,481      4,899     4,742
 Terminal Handle (tonnes)      1,129      1,102      2,510     2,283

 Market share (%)               34.2%      36.3%      34.5%     34.7%
 Margin ($ per grain
  tonne shipped)             $ 20.46    $ 18.78    $ 20.66   $ 19.62

Grain Handling gross profit and net revenue from services of $49.3 million ($20.46 per tonne) for the latest quarter increased $2.7 million from $46.6 million ($18.78 per tonne) in 2004, reflecting a $1.68 per tonne increase in margin, offset by a modest 2.9% decrease in grain shipments. Commodity margins per tonne strengthened in the quarter primarily due to a higher proportion of grain handled through the Company's port terminals and improved port terminal margins per tonne, offset by modestly lower merchandising margins per tonne. Added to the improved first quarter results, grain handling gross profit and net revenue from services for the six months ended April 30, 2005 increased to $101.2 million ($20.66 per tonne) from $93.1 million ($19.62 per tonne) last year.

Grain Handling OG&A expenses of $34.9 million for the quarter ended April 30, 2005 decreased by $1.3 million (or 3.5%) from 2004, due to a $1 million non-recurring recovery of property tax expense in Thunder Bay and $1.1 million in provincial capital tax recoveries. Grain Handling OG&A expenses of $73.3 million for the latest six months increased $6.4 million over 2004 largely as a result of non-recurring expense recoveries last year of $4.5 million from property tax reassessments on the Company's port terminals in Thunder Bay and credit expense recoveries of $577,000. Apart from these non-recurring items, the expense increase included $797,000 for vehicle and travel expenses (primarily associated with higher fuel prices), $371,000 in credit expenses (including bad debt provisions), $590,000 on utilities costs related to increased grain drying revenues, $822,000 of risk and insurance costs (primarily related to the Company's integrated insurance program which commenced January 1, 2004), and $439,000 (or 1.2%) in increased payroll and benefit costs.

As a result, EBITDA improved $1.7 million to $27.9 million for the six months to April 30, 2005. Depreciation and amortization expenses of $15.3 million for the six months decreased modestly from $15.9 million last year. Consequently, Grain Handling EBIT of $12.6 million for the six months improved by $2.3 million over 2004.

Livestock Services

Feed sales of $104.9 million ($211 per tonne) for the six months ended April 30, 2005 decreased modestly from sales of $107 million ($241 per tonne) last year, despite increased tonnes sold. As a result of the expanded availability of lower cost feed inputs, average sales prices in the current year declined $30 per tonne from last year. Feed prices tend to fluctuate in response to underlying input costs and accordingly, the profitability of feed manufacturing tends to be more closely correlated cor·re·late
v. cor·re·lat·ed, cor·re·lat·ing, cor·re·lates

v.tr.
1. To put or bring into causal, complementary, parallel, or reciprocal relation.

2. to tonnes sold rather than gross sales Gross Sales

A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. revenue.

The Company sold 497,000 tonnes of feed and ingredients during the latest six months, an increase of 53,000 tonnes (or 12%) over the 444,000 tonnes sold in the same period ended April 30, 2004. The increase in manufactured feed sold reflects the relative strength of western Canada's hog, poultry poultry, domesticated fowl kept primarily for meat and eggs; including birds of the order Galliformes, e.g., the chicken, turkey, guinea fowl, pheasant, quail, and peacock; and natatorial (swimming) birds, e.g., the duck and goose. and dairy dairy

1. a retail outlet for milk products.

2. the feeding and milking sheds on a dairy farm.

3. pertaining to or emanating from an animals or other thing concerned in the production of milk, e.g. dairy goat, dairy cleanser. markets, the annualization of operations associated with the purchase of Vertech Feeds Ltd. in February February: see month. 2004, as well as an increased number of beef cattle on feed.

Livestock Services
For the periods ended April 30 (in thousands)
(Unaudited)
                               Second Quarter           Six Months
                              2005       2004        2005       2004
---------------------------------------------------------------------

Gross profit and net
 revenue from services      14,402     11,581    $ 28,240   $ 22,175
Operating, general and
 administrative expenses    (8,055)    (8,835)    (16,822)   (16,850)
---------------------------------------------------------------------
EBITDA                       6,347      2,746      11,418      5,325
Depreciation and
 amortization               (1,056)      (826)     (2,114)    (1,639)
---------------------------------------------------------------------
EBIT                       $ 5,291    $ 1,920     $ 9,304    $ 3,686
---------------------------------------------------------------------
---------------------------------------------------------------------

Operating Highlights
 Livestock Services Feed
  Sales (tonnes)               239        220         497        444
 Feed Margin ($ per feed
  tonne sold)              $ 45.76    $ 43.53     $ 44.90    $ 42.86
 Gross profit and net
  revenue from services -
  non-feed                 $ 3,466    $ 2,004     $ 5,926    $ 3,144

Gross profit from feed tonnes sold of $10.9 million ($45.76 per tonne) for the quarter and $22.3 million ($44.90 per tonne) for the six months improved from $9.6 million ($43.53 per tonne) and $19 million ($42.86 per tonne), respectively, in 2004.

Swine sales of $35.8 million for the latest six months increased by $8.5 million (or 31%) over last year, reflecting continued strength in hog demand and prices in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding.

See also: Spite duties imposed by the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. on the import of Canadian hogs prior to April 27, 2005. Gross profit of $3.5 million on swine sales in the six months increased by $2.7 million compared to 2004. Reductions in freight revenue and interest earned (due to expansion of Unifeed Financial) largely offset a $1.3 million improvement from the Company's investment in The Puratone Corporation for the six months.

As a result, Livestock Services gross profit and net revenue from services increased $6.1 million to $28.2 million for the six months ended April 30, 2005.

OG&A expenses for the quarter decreased $780,000, including the accrued ac·crue
v. ac·crued, ac·cru·ing, ac·crues

v.intr.
1. To come to one as a gain, addition, or increment: interest accruing in my savings account.

2. recovery of $707,000 in U.S. hog duties as a result of a decision by the International Trade Commission and the U.S. Department of Commerce to suspend any further such duties and refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid.
     2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies those paid. Credit expenses decreased for the latest six-month period (as the credit worthiness of the segment's customer base continues to recover and strengthen), offset by a $446,000 increase in payroll costs associated with increased feed manufacturing activity (including costs associated with Vertech Feeds Ltd. which was acquired in February 2004). Consequently, OG&A expenses of $16.8 million for the six months decreased marginally over last year. The six-month depreciation and amortization expense increased $475,000 to $2.1 million - associated with the Company's new replacement feed mill opened near Edmonton Edmonton (ĕd`məntən), city (1991 pop. 616,741), provincial capital, central Alta., Canada, on the North Saskatchewan River. The center of the largest metropolitan area in Alberta, Edmonton, known as the "Gateway to the North," is located in August 2004. As a result of the modest increase in total expenses, EBIT increased by $3.4 million to $5.3 million for the quarter and by $5.6 million to $9.3 million for the six months ended April 30, 2005.

Financial Markets and Other Investments

Financial Markets revenue of $4.3 million from Agricore United Financial ("AU Financial") and Unifeed Financial for the six months ended April 30, 2005 increased $1.3 million over last year, including a $422,000 one-time increase in AU Financial's fees in the quarter. Credit recoveries of $153,000 for the latest six months were $263,000 lower than in the same period in 2004 as the level of receivables Receivables

An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed retained by the Company continued to decline. The Company mitigated mit·i·gate
v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates

v.tr.
To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve.

v.intr.
To become milder. a $1.2 million reduction in earnings from equity investments in Canadian Pool Agencies and Pool Insurance Company by eliminating $1 million in foreign exchange trading Foreign Exchange Trading or FX Trading, clients are able to hedge against, or speculate upon, changes in the exchange rate of two currencies. For example, a speculator can long EUR/USD in foreign exchange market in order to profit from capturing the appreciation of Euro against the losses incurred last year.

Financial Markets and Other Investments
For the periods ended April 30 (in thousands)
(Unaudited)
                                  Second Quarter         Six Months
                                  2005      2004       2005     2004
---------------------------------------------------------------------

Gross profit and net revenue
 from services                 $ 2,163     $ 599    $ 4,417  $ 3,491
Operating, general and
 administrative expenses        (1,040)     (118)    (2,366)     (45)
---------------------------------------------------------------------
EBITDA                           1,123       481      2,051    3,446
Depreciation and
 amortization                      (49)      (20)       (95)     (40)
---------------------------------------------------------------------
EBIT                           $ 1,074     $ 461    $ 1,956  $ 3,406
---------------------------------------------------------------------
---------------------------------------------------------------------

OG&A expenses increased $2.3 million for the six months ended April 30, 2005 to $2.4 million, reflecting an increase of $1.6 million related to the timing of indemnity Recompense for loss, damage, or injuries; restitution or reimbursement.

An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. provisions and $578,000 higher credit adjudication The legal process of resolving a dispute. The formal giving or pronouncing of a judgment or decree in a court proceeding; also the judgment or decision given. The entry of a decree by a court in respect to the parties in a case. costs associated with the introduction of Unifeed Financial and earlier credit adjudication within AU Financial. The Company previously accrued indemnity provisions based on underlying sales but now accrues the cost in relation to outstanding receivables. Although the Company recognized the cost of its indemnity provisions earlier this year, it does not expect the higher cost in the latest six months will result in any significant increase in indemnity provisions over the course of the entire fiscal year.

The increase in OG&A expenses for the six months ended April 30, 2005 more than offset improved revenue, resulting in a $1.4 million reduction in EBITDA to $2.1 million. After modest depreciation and amortization expenses, Financial Markets and Other Investments recorded EBIT of $1.1 million and $2 million for the latest quarter and six-months, respectively.

Corporate Expenses

Corporate OG&A expenses increased $896,000 for the latest quarter, resulting in marginally higher OG&A expenses of $18.8 million for the six months ended April 30, 2005. Increased pension, governance Governance makes decisions that define expectations, grant power, or verify performance. It consists either of a separate process or of a specific part of management or leadership processes. Sometimes people set up a government to administer these processes and systems. , communication costs and other external services largely offset an $854,000 reduction in rent and property taxes, resulting from the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of leased properties in Calgary Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial and Winnipeg in late 2004. A $611,000 reduction in depreciation and amortization expenses for the six months resulted in a $461,000 reduction in total Corporate expenses to $22 million.

Corporate Expenses
For the periods ended April 30 (in thousands)
(Unaudited)

                               Second Quarter           Six Months
                             2005        2004        2005       2004
---------------------------------------------------------------------

EBITDA                  $ (10,020)   $ (9,124)  $ (18,756) $ (18,606)
Depreciation and
 amortization              (1,470)     (1,723)     (3,259)    (3,870)
---------------------------------------------------------------------
EBIT                    $ (11,490)  $ (10,847)  $ (22,015) $ (22,476)
---------------------------------------------------------------------
---------------------------------------------------------------------

Gross Profit and Net Revenue from Services, EBITDA and EBIT

The Company's gross profit and net revenue from services for the six months increased $23.6 million (15.1%) compared to last year on a pro forma(3) basis due to higher sales of crop inputs and increased grain shipments at improved margins. A change in accounting estimate for CPS implemented on a prospective basis in the first quarter limited the increase in gross profit and net revenue from services for the six months ended April 30, 2005 to $15.3 million.

Selected Consolidated Financial Information
For the periods ended April 30 (in thousands)
(Unaudited)
                                                                 Pro
              Second Quarter        Six Months    Change in  forma(3)
               2005     2004      2005      2004 Estimate(3)    2004
---------------------------------------------------------------------

Gross
 profit and
 net
 revenue
 from
 services   $98,558  $83,594  $179,810  $164,466    $(8,262)$156,204
Operating,
 general
 and
 administrative
 expenses   (78,802) (80,560) (161,514) (150,696)         - (150,696)
---------------------------------------------------------------------
EBITDA       19,756    3,034    18,296    13,770     (8,262)   5,508

 Depreciation
 and
 amorti-
 zation     (15,214) (15,769)  (30,748)  (31,711)         -  (31,711)
---------------------------------------------------------------------
EBIT          4,542  (12,735)  (12,452)  (17,941)    (8,262) (26,203)
Gain on
 disposal
 of assets       87      308        82       383          -      383
Interest
 and
 securiti-
 zation
 expenses   (13,447) (13,993)  (26,394)  (28,466)         -  (28,466)
---------------------------------------------------------------------
             (8,818) (26,420)  (38,764)  (46,024)    (8,262) (54,286)
Recovery
 of income
 taxes        3,389    8,756    13,851    14,734      2,974   17,708
---------------------------------------------------------------------
Loss for
 the
 period     $(5,429)$(17,664) $(24,913) $(31,290)   $(5,288)$(36,578)
---------------------------------------------------------------------
---------------------------------------------------------------------

OG&A expenses for the quarter decreased by $1.8 million (2.2%) to $78.8 million compared to the same period last year. The recovery in the second quarter of about $707,000 in hog duties paid in prior quarters, as well as non-recurring recoveries on both provincial capital taxes and property taxes on port terminal properties in Thunder Bay, accounted for most of the decrease. As a result of $12.6 million higher OG&A expenses in the first quarter, OG&A expenses for the six months increased $10.8 million over last year. The weighted average equivalent full-time full-time
adj.
Employed for or involving a standard number of hours of working time: a full-time administrative assistant.

full ("EFT eft: see newt.

(Electronic Funds Transfer) The transfer of money from one account to another by computer. See ACH.

EFT - electronic funds transfer ") staff(4) of 2,792 for the 12 months ended April 30, 2005 increased modestly over 2,788 EFTs at October 31, 2004 and 0.9% over 2,767 EFTs at April 30, 2004.

Depreciation and amortization expenses declined 3% to $30.7 million for the latest six months compared with $31.7 million for the same period in 2004.

The EBIT loss of $12.5 million for the six months ended April 30, 2005 improved by $5.4 million compared to the EBIT loss of $17.9 million for the same period last year. The Company's prospective change in accounting estimate defers the recognition of a portion of CPS gross profit to later quarters. As a result, the EBIT loss for the latest six months would have improved by $13.7 million compared to 2004 had the change been applied to 2004 on a pro forma basis.

Gain on Disposal of Assets

The nominal Trifling, token, or slight; not real or substantial; in name only.

Nominal capital, for example, refers to extremely small or negligible funds, the use of which in a particular business is incidental.

NOMINAL. Relating to a name. gain on disposal of assets for the quarter and six months ended April 30, 2005 and the gain on disposal of $383,000 for the same six months last year reflect the disposition of assets in the normal course of business. Proceeds on disposition of assets of $2 million for the latest six-month period was comparable to the proceeds on disposition of assets of $2.5 million in 2004.

Interest and Securitization Securitization

The process of creating a financial instrument by combining other financial assets and then marketing them to investors.

Notes:
Mortgage backed securities are a perfect example of securitization.

May also be spelled as "securitisation. Expenses

Interest and securitization expenses of $26.4 million for the six months ended April 30, 2005 decreased $2.1 million (or 7.3%) from last year and included $16 million of interest on long-term debt Long-Term Debt

Loans and financial obligations lasting over one year.

Notes:
For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , $4.7 million of interest on the 9% convertible unsecured Unsecured

A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. subordinated debentures subordinated debenture

An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before (the "Debentures"), $5.8 million on short-term debt Short-term debt

Debt obligations, recorded as current liabilities, requiring payment within the year. , $1.2 million in securitization expenses and other charges net of capitalized interest Capitalized interest

Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. of $182,000, offset by $1.1 million in carrying charges Payments made to satisfy expenses incurred as a result of ownership of property, such as land taxes and mortgage payments. Disbursements paid to creditors, in addition to interest, for extending credit.

Consumer Protection laws require full disclosure of all carrying charges. recovered from the CWB in respect of grain purchased on its behalf. Interest and securitization expenses of $13.4 million for the latest quarter declined modestly from $14 million last year.

Short-term interest costs for the six months declined $1.1 million from last year as a result of a $69 million reduction in average short-term indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421.
2. over the six months ended April 30, 2005 compared to the same period in 2004, offset by a modest increase in the cost of short-term borrowing. Capitalized interest related to capital expenditures declined by $424,000 to $182,000 for the six months, associated with a reduction in the number and value of large capital projects undertaken in the current year.

The average value of grain inventory held on behalf of the CWB of $53 million over the six months declined by $6 million (or 10%) compared to the same period last year largely due to year-over-year reductions in the price of CWB grain purchased. A similar reduction in the average value of CWB grain securitized securitized

Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. to $49 million was the primary reason for the $168,000 reduction in related securitization expenses. Carrying charges recovered from the CWB in the six months in respect of grain purchased on the CWB's behalf increased $246,000 over 2004.

Income Taxes

The Company's effective tax recovery rate on the pre-tax loss was 35.7% for the six months ended April 30, 2005 (2004 - 32%). The lower tax recovery rate for the prior year mainly reflected the effect of the federal Large Corporation Tax (which effectively levies a flat tax rate on capital employed Capital Employed

1. The total amount of capital used for the acquisition of profits.

2. The value of all the assets employed in a business.

3. Fixed assets plus working capital.

4. Total assets less current liabilities. at the end of the year). The impact of the federal Large Corporation Tax in the current year was substantially offset by a $680,000 one-time recovery of prior year taxes.

As at April 30, 2005, the Company had loss carry-forwards of about $374 million (2004 - $357 million) available to reduce income taxes otherwise payable in future years, with about $168 million (2004 - $184 million) expiring ex·pire
v. ex·pired, ex·pir·ing, ex·pires

v.intr.
1. To come to an end; terminate: My membership in the club has expired.

2. between October 2008 and 2015. Management regularly assesses the Company's ability to realize net future income tax assets based on all relevant information available and has concluded that it is more likely than not that these loss carry-forwards can be fully utilized prior to expiry. Accordingly, the Company has not recorded a valuation allowance related to these assets.

Loss for the Period

The $5.4 million loss ($0.13 basic and diluted loss per share) for the quarter ended April 30, 2005 was $12.3 million better than the $17.7 million loss ($0.40 basic and diluted loss per share) in 2004. The loss of $24.9 million ($0.56 basic and diluted loss per share) for the six months ended April 30, 2005 was $6.4 million better than the loss of $31.3 million ($0.70 basic and diluted loss per share) for the same period last year. Per share calculations increase the loss by $552,000 (2004 - $552,000) for the six months, being the pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share.

In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. cost of the annual preferred share dividend.

If the change in accounting estimate described under "Consolidated Financial Results - Crop Production Services" were applied to 2004 on a pro forma basis, the loss for the comparative six-month period in 2004 would increase by $5.3 million to $36.6 million ($0.82 basic and diluted loss per share).

Selected Quarterly Information

The following affects the comparability of the quarterly summary of financial data:

As outlined under "Consolidated Financial Results - Crop Production Services", the Company implemented a change in accounting estimate in 2005 that increased the first quarter deferral deferral - Waiting for quiet on the Ethernet. of gross profit from fertilizer sales, offset by increased recognition of gross profits from fertilizer sales in the Company's second and third quarters.

Selected Quarterly Financial Information
For the quarters ended ($millions - except per share amounts)
(Unaudited)
                                           2005       2004      2003
---------------------------------------------------------------------

Sales and revenue from services
 January 31                             $ 548.1    $ 651.0   $ 524.7
 April 30                                 640.0      638.1     518.8
 July 31                                           1,146.6   1,030.8
 October 31                                          612.4     653.9

Net income (loss) from continuing
 operations
 January 31                             $ (19.5)   $ (13.6)  $ (20.5)
 April 30                                  (5.4)     (17.7)    (23.9)
 July 31                                              41.8      44.1
 October 31                                          (24.2)    (18.0)

 Basic earnings (loss) from
  continuing operations per share
  January 31                            $ (0.44)   $ (0.31)  $ (0.46)
  April 30                                (0.13)     (0.40)    (0.53)
  July 31                                             0.92      0.97
  October 31                                         (0.54)    (0.40)

 Diluted earnings (loss) from
  continuing operations per share
  January 31                            $ (0.44)   $ (0.31)  $ (0.46)
  April 30                                (0.13)     (0.40)    (0.53)
  July 31                                             0.72      0.75
  October 31                                         (0.54)    (0.40)

Net income (loss)
 January 31                             $ (19.5)   $ (13.6)  $ (20.2)
 April 30                                  (5.4)     (17.7)    (22.9)
 July 31                                              41.8      44.0
 October 31                                          (24.2)     (6.4)

 Basic earnings (loss) per share
  January 31                            $ (0.44)   $ (0.31)  $ (0.45)
  April 30                                (0.13)     (0.40)    (0.51)
  July 31                                             0.92      0.97
  October 31                                         (0.54)    (0.15)

 Diluted earnings (loss) per share
  January 31                            $ (0.44)   $ (0.31)  $ (0.45)
  April 30                                (0.13)     (0.40)    (0.51)
  July 31                                             0.72      0.75
  October 31                                         (0.54)    (0.15)

Other Matters

Related Party Transactions

The Company transacts with related parties in the normal course of business at commercial rates and terms. The Company receives a shipper's return for grain movement through its investment in the port terminal at Prince Rupert Prince Rupert, city (1991 pop. 16,620), W British Columbia, Canada, on Kaien Island, in Chatham Sound near the mouth of the Skeena River, S of the Alaska border. . The Company purchases crop protection products through a member-owned purchasing cooperative purchasing cooperative,
n a group of dental professionals pooling their financial resources to purchase large quantities of supplies and equipment for the purpose of obtaining a discount. , Inter-provincial Cooperative Limited, which entitles the Company to receive patronage Patronage
See also Philanthropy.

Alidoro

fairy godfather to Italian Cinderella. [Ital. Opera: Rossini, Cinderella, Westerman, 120–121]

Alphonso, Don

supports Bias in return for political favors. [Fr. Lit. earnings. The Company also sells commodities to its principal shareholder Archer Daniels Midland The Archer Daniels Midland Company (NYSE: ADM), is a conglomeration based in Decatur, Illinois. ADMoperates more than 270 plants worldwide, where cereal grains and oilseeds are processed into numerous products used in food, beverage, nutraceutical, industrial and animal feed Company and its subsidiaries and associated companies associated company associate n → Partnerfirma f

associated company n → società collegata .

Total sales to non-consolidated related parties were $50.6 million for the six-months ended April 30, 2005 (2004 - $68.3 million) and total purchases from related parties over the same period were $25.6 million (2004 - $29.1 million). At April 30, 2005, accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying from and accounts payable to related parties totaled $2.5 million (2004 - $9.1 million) and $262,000 (2004 - $539,000), respectively.

Accounting Policy Changes

Asset Retirement Obligations

Effective November November: see month. 1, 2004, the Company adopted CICA Handbook

For the handbook about Wikipedia, see .

This article is about reference works. For the subnotebook computer, see .

"Pocket reference" redirects here.

Section 3110, Asset Retirement Obligations ("AROs"). The Company has identified asset retirement obligations related to site restoration for certain property leases. However, these obligations are not material either individually or in aggregate and, as such, a liability for AROs has not been recognized. The majority of these obligations were provided for under existing merger-related provisions and are expected to be settled within the next five years.

Westco, a joint venture of the Company, has determined its previously recognized reclamation Reclamation

A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. obligation qualifies as an ARO and has accounted for it accordingly. Given that the ARO balance approximates the previously established reclamation provision and the retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question.

A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a income statement impact to date is not material, the Company has recognized Westco's adoption of Section 3110 prospectively without a restatement Restatement

A revision in a company's earlier financial statements.

Notes:
The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of opening retained earnings Retained Earnings

The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. . As at November 1, 2004, the Company's proportionate share of Westco's ARO balance, which represents the discounted future value of the estimated cash flows required to settle the obligation, was $18.3 million, comparable to the previous reclamation provision prior to the adoption of AROs.

Variable Interest Entities

Effective November 1, 2004, the Company adopted CICA Accounting Guideline guideline Medtalk A series of recommendations by a body of experts in a particular discipline. See Cancer screening guidelines, Cardiac profile guidelines, Gatekeeper guidelines, Harvard guidelines, Transfusion guidelines. AcG-15, Consolidation of Variable Interest Entities ("VIE"). A VIE is any legal structure used to conduct activities or hold assets which is not controlled by voting interests Voting interest in business and accounting is a percentage of voting stock owned. This notion is different from economic interest that refers to a percentage of all the equity issued, including preferred stock, warrants, and so on. but rather by contractual or other interests that change with that entity's underlying net asset value. The application of these rules to specific situations is complex and the interpretation of the rules is evolving. The Company currently accounts for its subsidiaries in accordance with the Company's principles of consolidation. Based on its assessment of the entities in which it has contractual and other interests, the Company has concluded that these entities are either not VIEs or the adoption of AcG-15 did not result in a material change to the consolidated financial statements Consolidated Financial Statements

The combined financial statements of a parent company and its subsidiaries.

Notes:
Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge . As a result, the adoption of this guideline had no material impact on the Company's consolidated financial statements for the quarter and six months ended April 30, 2005.

Liquidity and Capital Resources

Debt Ratings

On March 11, 2005, Dominion Bond Rating Service Dominion Bond Rating Service is a credit rating agency based in Toronto, Ontario. Founded in 1976, it is one of the largest credit rating agencies in Canada. It is one of five Nationally Recognized Statistical Rating Organizations in the United States, though significantly smaller Limited ("DBRS DBRS Dominion Bond Rating Service ") confirmed its January 22, 2004 debt ratings on the Company. Debt ratings on the Company issued by Standard & Poor's ("S&P") remain unchanged since the Company's last quarterly report dated March 10, 2005.

---------------------------------------------------------------------
                                                    9%
                                           convertible     Series 'A'
                                             unsecured   Convertible
           Senior Long-     Series 'A'    subordinated     Preferred
              term Debt   & 'B' Notes       debentures        Shares
---------------------------------------------------------------------
Standard &
 Poor's(1)     BB            BB                    B+            na
---------------------------------------------------------------------
Dominion Bond
 Rating Service
 Limited(2)    BB (low)      B (high)              na   Pfd-5 (high)
---------------------------------------------------------------------
(1) As at December 23, 2004
(2) As at March 11, 2005

Contractual Obligations

The Company's contractual obligations due for each of the next five years and thereafter are summarized below:

Contractual Obligations (in thousands)
(Unaudited)                            Payments Due by Period
---------------------------------------------------------------------
                                   Less
                                 than 1     2 to 3   4 to 5     After
                        Total      Year      Years    Years   5 Years
---------------------------------------------------------------------

Balance Sheet
 Obligations
 Long-term Debt     $ 339,971  $ 39,305  $ 130,455 $ 38,643 $ 131,568
 9% convertible
  unsecured
  subordinated
  debentures          105,000         -    105,000        -         -
 Reclamation
  provision            17,999     3,596      8,165    2,884     3,354
 Other long-term
  obligations           5,674         -        674        -     5,000
---------------------------------------------------------------------

                      468,644    42,901    244,294   41,527   139,922
---------------------------------------------------------------------

Other Contractual
 Obligations
 Operating leases      54,191    15,658     17,883    6,707    13,943
 Purchase
  obligations(i)     321,370   287,800     29,737    3,523       310
---------------------------------------------------------------------

                      375,561   303,458     47,620   10,230    14,253
---------------------------------------------------------------------

Total Contractual
 Obligations        $ 844,205 $ 346,359  $ 291,914 $ 51,757 $ 154,175
---------------------------------------------------------------------
---------------------------------------------------------------------

(i) Substantially all of the purchase obligations represent
    contractual commitments to purchase commodities and products for
    resale.

Pension Plan

At April 30, 2005, the market value of aggregate plan assets of the Company's various defined benefit plans Defined benefit plan

A pension plan obliging the sponsor to make specified dollar payments to qualifying employees at retirement. The pension obligations are effectively the debt obligation of the plan sponsor. Related: Defined contribution plan exceeded the aggregate accrued benefit obligations. The Company has applied to the Office of the Superintendent of Financial Institutions The Office of the Superintendent of Financial Institutions or OSFI is an independent agency of the Government of Canada reporting to the Minister of Finance created "to contribute to public confidence in the Canadian financial system". ("OSFI OSFI Office of the Superintendent of Financial Institutions (Canadian)
OSFI Open Standards Fabric Initiative
OSFI Open System File Interface ") to amalgamate two defined benefit plans with an aggregate surplus of $17.2 million and two defined benefit plans with an aggregate deficit of $7.7 million, which would result in the Company having two defined benefit plans. If OSFI were to decline the amalgamation amalgamation /amal·ga·ma·tion/ (ah-mal´gah-ma´shun) trituration (3).

amalgamation ( application, the Company may be required to fund the defined benefit plan deficits over a period of five to 15 years. The Company reported a deferred pension asset of $13 million in Other Assets other assets

Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. at April 30, 2005. It made $176,000 in cash contributions to the defined benefit plans and $1.3 million in cash contributions to the defined contribution and multi-employer plans for the six months ended April 30, 2005 (compared to the pension expense of $2.8 million recorded in the financial statements).

Agricore United Financial and Unifeed Financial

Outstanding credit of $108.6 million at April 30, 2005, advanced by a Canadian Schedule One chartered bank Chartered Bank

A financial institution whose primary roles are to accept and safeguard monetary deposits from individuals and organizations, and to lend money out. The details vary from country to country, but usually a chartered bank in operation has obtained government permission under AU Financial, increased from outstanding credit of $93.8 million at the same date last year, largely due to increased underlying sales activity. At the same time, credit over 90 days has declined modestly to 4.1% of total outstanding receivables from 4.5% a year earlier. Over 84% of outstanding credit is related to the Company's highest credit rating categories, comparable to 86% the prior year.

Unifeed Financial provides additional working capital financing, through a Canadian Schedule One chartered bank, for livestock producers to purchase feeder feeder

abbreviation for self-feeders. Used in feeding groups of animals at intervals of several days. Feed has to be dry and comminuted so that it will run down the spouts from the hopper into the troughs. cattle, feeder hogs and related feed inputs under terms that do not require payment until the livestock is sold. The Company has indemnified the bank for aggregate credit losses of $3.7 million based on the first 20% to 33% of new credit issued on an individual account as well as for credit losses, shared on an equal basis, of up to 5% on the aggregate qualified portfolio balance. The Company's aggregate indemnity will vary at any given time with the credit rating of underlying accounts and the aggregate credit outstanding.

Securitization Arrangement

As at April 30, 2005, the Company had securitized $56.6 million of amounts it is entitled en·ti·tle
tr.v. en·ti·tled, en·ti·tling, en·ti·tles
1. To give a name or title to.

2. To furnish with a right or claim to something: to receive in respect of CWB grain compared with $65 million at April 30, 2004. About $2.6 million of such receivables remained unsecuritized at April 30, 2005 compared with $3.8 million at April 30, 2004.

Short-term Debt

Member and Employee Loans of $22.5 million outstanding at April 30, 2005 decreased $1.3 million from April 30, 2004 due to maturities and normal course redemptions (including a decrease of $662,000 since October 31, 2004).

Bank loans of $217.4 million at April 30, 2005 were $82.6 million lower than a year earlier as sources of cash exceeded uses. For the twelve months ended April 30, 2005, the Company generated cash flow of $170.1 million comprised of cash flow provided by operations of $54.2 million and a $115.9 million decrease in non-cash working capital (excluding $669,000 of working capital acquired in acquisitions and $2.7 million in reductions in merger provisions). Over the same 12 months, cash used in investing and financing activities of $87.5 million included $39.7 million in net capital expenditures and investments, $33 million in scheduled debt repayments net of advances, $6.6 million dividends paid, $4.4 million in deferred financing and other costs, a $2.7 million increase in cash on deposit and $1.3 million of member and employee loan redemptions offset by $210,000 in share capital issued net of issue costs.

The Company had outstanding letters of credit of $62.7 million at April 30, 2005, a decrease of $29.1 million compared to the prior year related to substituting letter of credit security provided to the CGC with a more cost effective credit insurance program underwritten by a major international insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual.

An insurer is frequently an insurance company and is also known as an underwriter. . The remaining outstanding letters of credit are issued in support of the Company's grain volume insurance program, debt related to the Company's interest in the Cascadia The name Cascadia, which is derived from the name of the Cascade Range, can refer to:

Cities:

Cascadia, Oregon, a ghost town
Cascadia, Washington, a planned community

Geology:

Cascadia subduction zone

Terminal, the CGC for various subsidiaries and security for electronic data interchange See EDI.

(application, communications) electronic data interchange - (EDI) The exchange of standardised document forms between computer systems for business use. EDI is part of electronic commerce. and other wire payments.

The Company's available uncommitted short-term revolving facility at April 30, 2005 increased by $163.8 million to $197.5 million compared with an uncommitted facility Uncommitted Facility

A credit facility with no restrictions placed upon the lending institution regarding the amount of funds to be lent.

Notes:
Under this arrangement, the lending institution is not under any obligation to provide a specific sum to the borrowing company. of $33.7 million at the same time last year.

Cash Flow Used in Operations

Cash flow provided by operations of $6.7 million ($0.14 per share) for the quarter ended April 30, 2005 improved $17.6 million from $10.9 million ($0.25 loss per share) used in the same quarter in 2004. Cash flow used in operations of $8.4 million ($0.20 loss per share) for the six months ended April 30, 2005 improved $7.3 million from $15.7 million ($0.36 loss per share) used in the same six-month period last year. Per share calculations add the six-month pro rata effect of the preferred share dividend of $552,000 (2004 - $552,000) to cash flow used in operations. The $7.3 million improvement in the six-month cash flow provided by operations results from an increase in EBITDA of $4.5 million, $2.1 million lower interest and securitization expenses, $636,000 higher non-cash compensation expenses, a $352,000 increase in other non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash
disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) and a $490,000 decrease in current income taxes, offset by $829,000 in lower cash equity earnings from investments.

If the change in accounting estimate described under "Consolidated Financial Results - Crop Production Services" were applied to 2004 on a pro forma basis, the cash flow used in operations for the comparative periods would decrease by $2.1 million to $8.8 million ($0.20 loss per share) for the quarter and increase by $8.3 million to $23.9 million ($0.53 loss per share) for the six-months ended April 30, 2004.

Cash flow provided by operations of $54.2 million for the 12 months ended April 30, 2005 exceeded the $39.7 million invested in property, plant, equipment and other assets by $14.5 million. Principal repayments on long-term debt and shareholder dividends totaled $40.2 million over the same twelve-months.

Working Capital

The current ratio at April 30, 2005 was 1.10 to 1, a decline from 1.14 to 1 at the same date last year.

Working capital of $81.2 million at April 30, 2005 was $33.9 million lower than at April 30, 2004, the result of a $112.5 million decrease in non-cash working capital, a $5.6 million increase in the current portion of long-term debt Current Portion Of Long-Term Debt

A portion of the balance sheet that represents the total amount of long-term debt that must be paid within the next year. The balance sheet has a liability section, which is broken down into long-term and current debt. and a $2.4 million decrease in the current portion of future taxes recoverable, offset by an $83.9 million decrease in short-term debt and a $2.7 million increase in cash and cash equivalents.

The $2.7 million increase in cash and cash equivalents compared to the same date last year includes a $1.8 million increase in the Company's consolidated share of cash held by its subsidiaries and joint ventures pending the settlement of trade credit obligations or the distribution of cash to the subsidiaries' shareholders and joint venturers.

The $112.5 million decrease in non-cash working capital reflects a $47.4 million decrease in accounts receivable (associated with lower grain handling receivables as a result of lower commodity prices and increased financing of livestock services receivables under Unifeed Financial), a $1.2 million decrease in prepaid expenses Prepaid Expense

An asset that arises on a balance sheet because of the payment of something in advance (prepayment). Services for the payment will be received in the near future. and a $76.2 million increase in accounts payable (including $36.6 million higher supplier trade accounts consistent with higher inventory levels as well as $23.7 million increase in customer deposits related to deferred sales revenue), offset by a $12.3 million increase in inventories. Seed inventories increased by $10.8 million (reflecting higher stocks in store to meet higher levels of pre-season sales), crop nutrition inventories by $12 million (from higher purchase costs and increased stocks in store in expectation of higher spring sales) and crop protection supplies by $20.9 million (associated with advanced timing of purchases), offset by $28.8 million in reduced non-CWB grain inventories (primarily a result of lower grain prices) and a reduction in other inventory of $2.6 million (including a $1.2 million reduction in feed inventories due to improved feed sales).

Capital Expenditures, Acquisitions and Divestitures

Capital expenditures of $23.1 million for the six months ended April 30, 2005 increased $7.8 million over the same period last year. Individually large capital expenditures include $4.9 million for the expansion of the Carman Car´man

n. 1. A man whose employment is to drive, or to convey goods in, a car or car. Bean Plant, $3.6 million for thirteen fertilizer storage upgrade projects, $3.4 million for replacement of air filtration filtration: see sewerage; water supply.

Filtration

The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids systems in Thunder Bay terminals and $1.9 million for four strategic grain storage expansion projects. The Company expects to use cash flow provided by operations to fund between $35 million and $40 million in capital expenditures in fiscal 2005.

Leverage

The Company's total funded debt (excluding the Debentures), net of cash, of $529 million at April 30, 2005 decreased $119.6 million compared to the same date last year due to cash flow provided by operations and the reduction in non-cash working capital noted above.

The Company's leverage ratio (net funded debt to capitalization) fluctuates materially from month-to-month month-to-month adj. referring to a tenancy in which the tenant pays monthly rent and has no lease, and the tenancy can be terminated by the landlord at any time on thirty-days notice. (See: tenancy, landlord and tenant) due to underlying seasonal variations in working capital requirements Capital requirements

Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. , reflecting increased purchases of grain beginning in the fall and crop inputs inventory through the winter and early spring, as well as price volatility Volatility

1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time.

2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in the commodities handled, all of which cannot be financed entirely with trade credit. The Company's leverage ratio typically declines to its lowest point at July 31, representing the Company's core non-seasonal level of working capital. Measured on a weighted average trailing twelve-month basis, the Company's leverage ratio improved to 43.2% for the period ended April 30, 2005 from 46.3% and 45.3% for the twelve months ended April 30, 2004 and October 31, 2004, respectively.

The Company's ratio of net funded debt to net tangible assets Net Tangible Assets

Calculated as the total assets of a company, minus any intangible assets such as goodwill, patents and trademarks, less all liabilities and the par value of preferred stock. Also known as "net asset value" or "book value". at April 30, 2005 was 53.3% (2004 - 57.4%).

Market Capitalization Market Capitalization

A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap.

The market capitalization of the Company's 45,351,169 issued and outstanding Limited Voting Limited voting is a voting system in which electors have fewer votes than there are positions available. The positions are awarded to the candidates who receive the most votes absolutely. Common Shares at June 6, 2005 was $363.3 million or $8.01 per share compared with the Company's book value of $9.75 per share(5) ($9.23 per share fully diluted) at April 30, 2005. The issued and outstanding Limited Voting Common Shares at June 6, 2005, together with securities convertible into Limited Voting Common Shares, are summarized in the following table.

As at June 6, 2005
(Unaudited)
---------------------------------------------------------------------
Issued and outstanding Limited Voting Common Shares        45,351,169
Securities convertible into Limited Voting Common Shares:

 $105,000,000 - 9% convertible unsecured subordinated
  debentures, maturing November 30, 2007, convertible at   14,000,000
  133.3333 shares per $1,000 principal amount

 Series "A" convertible preferred shares, non-voting, $1
  dividend per share, cumulative, convertible (1:1 basis),  1,104,369
  callable at $24

 Stock Options                                                894,205
---------------------------------------------------------------------
                                                           61,349,743
---------------------------------------------------------------------
---------------------------------------------------------------------

Outlook

The pace of crop input sales across western Canada continued to accelerate following April 30, 2005. Crop nutrient sales of $347.6 million to May 31, 2005 compared to $276.7 million to May 31, 2004. Seed sales of $90.6 million to May 31, 2005 exceeded 2004 levels by $9.7 million (or 12%). The sale of crop protection products typically peak in June with the emergence of weeds 1. weeds - Refers to development projects or algorithms that have no possible relevance or practical application. Comes from "off in the weeds". Used in phrases like "lexical analysis for microcode is serious weeds."
2. . The Company expects to see continued strong performance from CPS in the third quarter consistent with the seasonal nature of this segment as outlined in Note 3 to the Consolidated Financial Statements since 70% to 75% of the Company's annual CPS sales occur in the quarter ending July 31.

Precipitation precipitation, in chemistry
precipitation, in chemistry, a process in which a solid is separated from a suspension, sol, or solution. In a suspension such as sand in water the solid spontaneously precipitates (settles out) on standing. from September September: see month. 1, 2004 to May 25, 2005 has been average to above average across most of the arable land In geography, arable land (from Latin arare, to plough) is an agricultural term, meaning land that can be used for growing crops.

Of the earth's 148,000,000 km² (57 million square miles) of land, approximately 31,000,000 km² (12 million square miles) are in western Canada compared with the same period last year - and in parts of northwestern north·west
n.
1. Abbr. NW The direction or point on the mariner's compass halfway between due north and due west, or 45° west of due north.

2. An area or region lying in the northwest.

3. Saskatchewan and southwestern south·west
n.
1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north.

2. An area or region lying in the southwest.

3. Manitoba, precipitation is in the 90th percentile percentile,
n the number in a frequency distribution below which a certain percentage of fees will fall. E.g., the ninetieth percentile is the number that divides the distribution of fees into the lower 90% and the upper 10%, or that fee level compared to the historical distribution. Consistent with the prior year, southern Alberta's precipitation levels have been generally about 60% to 85% of average. Moisture levels across the prairies prairies, generally level, originally grass-covered and treeless plains of North America, stretching from W Ohio through Indiana, Illinois, and Iowa to the Great Plains region. have not deteriorated since the release of the Company's first quarter report dated March 10, 2005.

The Company's shipments of CWB grain in the six months ended April 30, 2005 were lower than anticipated and lower than the same period in the 2001 benchmark A performance test of hardware and/or software. There are various programs that very accurately test the raw power of a single machine, the interaction in a single client/server system (one server/multiple clients) and the transactions per second in a transaction processing system. year - the year prior to the effects of the 2001 and 2002 droughts. As noted in the first quarter, grain shipments through the balance of fiscal 2005 remain dependent upon several key drivers, namely: producer decisions to deliver their 2004 crop and the timing of those decisions; timely and effective execution by the railways of grain movement to port terminals and other North American North American

named after North America.

North American blastomycosis
see North American blastomycosis.

North American cattle tick
see boophilusannulatus. destinations over the next few months; and the execution of the CWB marketing program which is also tied to producer decisions on grain delivery. These factors are further complicated by the possibility of concentrated deliveries by producers during the summer and early fall that could strain the grain handling and railway industries' ability to execute purchase and delivery to end-use customers.

Agriculture and Agrifood Canada ("AAFC AAFC Agriculture and Agri-Food Canada
AAFC All-America Football Conference (1940s)
AAFC Australian Air Force Cadets
AAFC American Association of Fundraising Counsel
AAFC African-American Family Commission
AAFC Anti-Aircraft Fire Control ") estimated total production of 51.1 million tonnes of the six major grains from the 2004 growing season. Over the 10 years ended July 31, 2002 (including the effects of the 2001 drought drought, abnormally long period of insufficient rainfall. Drought cannot be defined in terms of inches of rainfall or number of days without rain, since it is determined by such variable factors as the distribution in time and area of precipitation during and before but excluding the effects of the unusual 2002 drought), an average of about 67% of total production was delivered into the primary elevator elevator, in machinery
elevator, in machinery, device for transporting people or goods from one level to another. The term is applied to the enclosed structures as well as the open platforms used to provide vertical transportation in buildings, large ships, system operated by licenced grain handlers handlers

persons involved in the handling of, for example, circus animals. Includes grooms, milkers, herdsmen, strappers. Used mostly in referring to persons handling animals for show or auction. . Based on these averages, the primary elevator network would expect to take delivery of about 34 million tonnes of the 2004 crop for shipment in 2005. Since industry grain shipments of 14.2 million tonnes over the most recent six months represent only 42% of the estimated 34 million tonnes of the 2004 crop to be received, there remains a reasonable expectation for higher future receipts and shipments, without considering the effect of the 2005 crop or the possibility of higher inventory carry-out levels.

Canadian livestock and poultry producers continue to benefit from reduced feed costs due to large feed grain supplies in western Canada. The Company does not expect a material downturn Downturn

The transition point between a rising, expanding economy to a falling, contracting one.

downturn

A decline in security prices or economic activity following a period of rising or stable prices or activity. in manufactured feed volumes compared to recent months, apart from normal seasonal fluctuations, despite continued import trade restrictions A trade restriction is an artificial restriction on the trade of goods between two countries. It is the result of protectionism. However, the term is not uncontroversial since what one part may see as a trade restriction another may see as a way to protect consumers from inferior, imposed by the United States on Canadian live cattle. A flattening

Ellipticity redirects here. For the mathematical topic of ellipticity, see elliptic operator.

The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. of the commodity price component in feed may place pressure on industry feed margins which may in turn contribute to further rationalization rationalization, in psychology: see defense mechanism. among existing feed manufacturers.

The Company processed $963 million of AU Financial credit applications for the 2005 growing season, compared to $915 million last year, of which $282 million in credit had been drawn as at May 31, 2005 (2004 - $247 million). Overall credit ratings underlying AU Financial's approved credit have also improved. Unifeed Financial has approved $40.3 million (2004 - $20.2 million) in credit applications of which $19 million (2004 - $4.2 million) was drawn at May 31, 2005.

The Company's available uncommitted short-term revolving credit Revolving Credit

A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility at June 1, 2005 was $187.7 million (on a $300 million credit facility) compared to $186 million (on a $375 million credit facility) at June 1, 2004. In May 2005, the Company added an additional Schedule One Canadian chartered bank, Sumitomo Mitsui Banking Corporation

''For other uses, see Smbc (disambiguation).

Sumitomo Mitsui Banking Corporation (SMBC, Mitsui Sumitomo Ginkō, 三井住友銀行) is a Japanese bank based in Tokyo, Japan. of Canada ("SMBC SMBC Sumitomo-Mitsui Banking Corporation
SMBC Stockport Metropolitan Borough Council (UK)
SMBC South Main Baptist Church
SMBC Single Mother by Choice
SMBC Stowe Mountain Bike Club (Stowe, VT) "), to its banking syndicate Syndicate

organized crime unit throughout major cities of the United States. [Am. Hist.: NCE, 2018]

See : Gangsterism . SMBC joins The Bank of Nova Scotia Nova Scotia (nō`və skō`shə) [Lat.,=new Scotland], province (2001 pop. 908,007), 21,425 sq mi (55,491 sq km), E Canada. Geography
, HSBC Bank Canada HSBC Bank Canada (Traditional Chinese: 加拿大滙豐銀行; Pinyin: ), formerly the Hongkong Bank of Canada , Rabobank

For the cycling team sponsored by the Rabobank, go to Rabobank (cycling); for the Bakersfield Arena, go to Rabobank Arena

Rabobank (Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. International, Canadian Imperial Bank of Commerce The Canadian Imperial Bank of Commerce TSX: CM NYSE: CM, better known to most customers as CIBC, is one of Canada's major banks. CIBC is classified as a Domestic Chartered Bank (Schedule I). , Bank of Montreal “BMO” redirects here. For the mathematics competition, see British Mathematical Olympiad.
Bank of Montreal/Banque de Montréal (TSX: BMO, NYSE: BMO) is Canada's fourth largest bank^[1], and is classified as a Domestic Chartered Bank (Schedule I). , National Bank of Canada This article is about a commercial bank. For Canada's central bank, see Bank of Canada.

National Bank of Canada (Banque Nationale du Canada) TSX: NA is the sixth largest bank in Canada, and so is one of the Big Six banks. and Royal Bank of Canada Bank of Canada

Canada's central bank, established under the Bank of Canada Act (1934). It was founded during the Great Depression to regulate credit and currency. The Bank acts as the Canadian government's fiscal agent and has the sole right to issue paper money. as a participant Participant

A party of a funding. It usually refers to the lowest rank or smallest level of funding. in the Company's revolving credit facility and syndicated term loan.

The Company signed an agreement with a third party on May 6, 2005 to sell its former United Grain Growers United Grain Growers, or UGG, was a Canadian grain distributor. Founded in 1906 in Winnipeg, UGG was active in grain sales, crop inputs and livestock production services. Limited Vancouver grain terminal pursuant to a consent agreement with the Commissioner of Competition. The proceeds of such a sale may be utilized for general corporate purposes, including the non-scheduled repayment Repayment

The act of paying back a debt.

Notes:
Everyone has to repay their debts eventually.
See also: Debt, Defeasance, Loan of debt or sustaining capital reinvestment Reinvestment

Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash.

1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. . The sale is expected to close on August 1, 2005, subject to certain closing conditions and regulatory reg·u·late
tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates
1. To control or direct according to rule, principle, or law.

2. approval, and is not expected to have a material impact on the Company's results for the fourth quarter. The Company intends to consolidate Consolidate

To combine the assets, liabilities, and other financial items of two or more entities into one.

Notes:
This term is generally used in the context of consolidated financial statements. its Vancouver grain handling operations through two other terminals in which it has an interest and as a result, the sale is not expected to materially impact on the Company's results from future continuing operations continuing operations

Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the .

Additional Information

Additional information relating to relating to relate prep → concernant

relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company, including the Company's 2004 Annual Information Form ("AIF AIF Annual Information Form
AIF Apoptosis-Inducing Factor
AIF Agence Intergouvernementale de la Francophonie (French: Intergovernmental Agency for Francophony)
AIF Australian Imperial Force "), is available on SEDAR SEDAR System for Electronic Document Analysis and Retrieval
SEDAR Southeast Data, Assessment, and Review at www.sedar.com.

Certain statements in this report may constitute forward-looking statements forward-looking statement

A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . The results or events predicted in these statements may differ materially from actual results or events. These forward-looking statements can generally be identified by the use of statements that include phrases such as "believe", "expect", "anticipate", "intend", "plan", "likely", "will" or similar words or phrases. Similarly, statements that describe the Company's objectives, plans or goals are or may be forward-looking statements.

These forward-looking statements are based on the Company's current expectations and its projections about future events. However, whether actual results and developments will conform with the Company's expectations and projections is subject to a number of risks and uncertainties, including, among other things, the risks and uncertainties associated with poor weather, agricultural commodity prices, international trade and political uncertainty, competition, domestic regulation, environmental risks, labour disruptions, credit risk and foreign exchange risk. For a more detailed discussion of these risks and their potential impact, see the Company's 2004 AIF and the MD&A included on pages 18 to 33 of its 2004 Annual Report. These are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of the Company's forward-looking statements. Other known and unpredictable factors could also harm its results. Consequently, there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Consolidated Balance Sheets
As at April 30 (in thousands)                            October 31,
(Unaudited)                           2005         2004         2004
---------------------------------------------------------------------
ASSETS
Current Assets
  Cash and cash equivalents       $ 50,792     $ 48,058     $ 50,214
  Accounts receivable (Note 6)     173,956      221,333      185,232
  Inventories                      659,503      647,238      383,914
  Prepaid expenses                  20,551       21,764       19,888
  Future income taxes                3,377        4,894        6,801
---------------------------------------------------------------------
                                   908,179      943,287      646,049
Property, Plant and Equipment      660,115      675,453      664,396
Other Assets                        51,227       63,131       53,456
Goodwill                            28,905       27,980       28,903
Intangible Assets                   16,500       16,502       16,502
Future Income Taxes                 62,997       52,959       40,316
---------------------------------------------------------------------
                               $ 1,727,923  $ 1,779,312  $ 1,449,622
---------------------------------------------------------------------
---------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS'
 EQUITY
Current Liabilities
  Bank and other loans (Note 7)  $ 239,868    $ 323,723    $ 132,121
  Accounts payable and accrued
   expenses                        543,187      467,007      326,706
  Dividends payable                  1,360        1,359        2,464
  Current portion of
   long-term debt                   39,305       33,663       39,189
  Future income taxes                3,274        2,436          345
---------------------------------------------------------------------
                                   826,994      828,188      500,825
Long-term Debt                     300,666      339,314      322,065
Convertible Debentures             105,000      105,000      105,000
Other Long-term Liabilities         35,843       36,256       35,814
Future Income Taxes                  6,778        4,975        6,527
---------------------------------------------------------------------
Shareholders' Equity
  Share capital (Note 8)           460,129      459,894      459,957
  Contributed surplus                1,593        1,044        1,044
  Retained earnings (deficit)       (9,080)       4,641       18,390
---------------------------------------------------------------------
                                   452,642      465,579      479,391
---------------------------------------------------------------------
                               $ 1,727,923  $ 1,779,312  $ 1,449,622
---------------------------------------------------------------------
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Consolidated Statements of Earnings and Retained Earnings
For the periods ended April 30
(in thousands, except per
 share amounts)             Second Quarter             Six Months
(Unaudited)                2005       2004         2005         2004
---------------------------------------------------------------------
Sales and revenue from
 services (Note 4)    $ 639,990  $ 638,125  $ 1,188,100  $ 1,289,108
---------------------------------------------------------------------
Gross profit and net
 revenue from services
 (Note 4)                98,558     83,594      179,810      164,466
Operating, general and
 administrative expenses
 (Note 4)               (78,802)   (80,560)    (161,514)    (150,696)
---------------------------------------------------------------------
Earnings before the
 undernoted (Note 4)     19,756      3,034       18,296       13,770
Depreciation and
 amortization (Note 4)  (15,214)   (15,769)     (30,748)     (31,711)
---------------------------------------------------------------------
                          4,542    (12,735)     (12,452)     (17,941)
Gain on disposal of
 assets                      87        308           82          383
Interest and
 Securitization
 Expenses               (13,447)   (13,993)     (26,394)     (28,466)
---------------------------------------------------------------------
                         (8,818)   (26,420)     (38,764)     (46,024)
Recovery of income taxes  3,389      8,756       13,851       14,734
---------------------------------------------------------------------
Loss for the period      (5,429)   (17,664)     (24,913)     (31,290)
Retained earnings
 (deficit), beginning
 of period               (2,292)    23,663       18,390       38,648
Dividends                (1,359)    (1,358)      (2,557)      (2,717)
---------------------------------------------------------------------
Retained earnings
 (deficit), end of
 period                $ (9,080)   $ 4,641     $ (9,080)     $ 4,641
---------------------------------------------------------------------
---------------------------------------------------------------------

Basic and diluted loss
 per share (Note 1)     $ (0.13)   $ (0.40)     $ (0.56)     $ (0.70)
---------------------------------------------------------------------
---------------------------------------------------------------------



Consolidated Statements of Cash Flows
For the periods ended
 April 30 (in thousands)      Second Quarter           Six Months
(Unaudited)                 2005        2004        2005        2004
---------------------------------------------------------------------
CASH FLOWS FROM OPERATING
 ACTIVITIES:

Loss for the period     $ (5,429)  $ (17,664)  $ (24,913)  $ (31,290)
Adjustments for:
  Depreciation and
   amortization           15,214      15,769      30,748      31,711
  Employee future benefits   833         393       1,622       1,133
  Future income taxes     (3,737)     (9,806)    (16,077)    (17,450)
  Equity loss (earnings)
   from investments, net of
   distributions            (451)        932        (849)        (20)
  Stock-based compensation   430         402         549         402
  Gain on disposal of
   assets                    (87)       (308)        (82)       (383)
  Other long-term
   liabilities               (91)       (607)        565         213
---------------------------------------------------------------------

Cash flow provided by
 (used in) operations      6,682     (10,889)     (8,437)    (15,684)
Changes in non-cash
 working capital         (44,648)    (61,128)    (48,333)    (96,739)
---------------------------------------------------------------------
                         (37,966)    (72,017)    (56,770)   (112,423)
---------------------------------------------------------------------
CASH FLOWS FROM INVESTING
 ACTIVITIES:

Business acquisitions,
 net of cash acquired          -      (4,734)          -      (4,734)
Property, plant and
 equipment expenditures  (12,382)     (6,934)    (23,075)    (15,305)
Proceeds from disposal of
 property, plant and
 equipment                   613       1,590       2,028       2,457
Decrease (increase) in
 other assets             (2,912)      2,355      (2,912)     (1,982)
---------------------------------------------------------------------
                         (14,681)     (7,723)    (23,959)    (19,564)
---------------------------------------------------------------------
CASH FLOWS FROM FINANCING
 ACTIVITIES:

Increase in bank and
 other loans              49,717      85,070     107,747     147,296
Proceeds from long-term
 debt                        374           -         675           -
Long-term debt repayments (7,463)     (4,651)    (21,958)    (15,022)
Deferred financing
 expenditures               (596)       (850)       (596)     (1,124)
Increase (decrease) in
 other liabilities          (886)         71        (910)       (342)
Share capital issued
 (redeemed)                   80        (203)        172        (180)
Share issue costs              -        (680)          -        (680)
Dividends                 (1,359)     (1,358)     (3,823)     (3,822)
---------------------------------------------------------------------
                          39,867      77,399      81,307     126,126
---------------------------------------------------------------------
CHANGE IN CASH AND CASH
 EQUIVALENTS             (12,780)     (2,341)        578      (5,861)

Cash and cash equivalents
 at beginning of period   63,572      50,399      50,214      53,919
---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
 AT END OF PERIOD       $ 50,792    $ 48,058    $ 50,792    $ 48,058
---------------------------------------------------------------------
---------------------------------------------------------------------

SUPPLEMENTARY DISCLOSURE
 OF CASH FLOW INFORMATION

Cash payments of
 interest              $ (11,881)  $ (13,202)  $ (26,295)  $ (28,886)
---------------------------------------------------------------------
---------------------------------------------------------------------
Cash payments of taxes  $ (2,156)   $ (2,255)   $ (5,702)   $ (4,906)
---------------------------------------------------------------------
---------------------------------------------------------------------



Notes to the Consolidated Financial Statements
(Unaudited)

1. Earnings Per Share

Six months ended
 April 30                    2005                       2004
(in thousands,
 except per share
 amounts -                            Per                        Per
 unaudited)          Loss  Shares   Share       Loss  Shares   Share
---------------------------------------------------------------------

Loss for the
 period         $ (24,913)                 $ (31,290)
Less:
 Preferred share
  dividend           (552)                      (552)
---------------------------------------------------------------------
Basic &
 Diluted
 loss per
 share          $ (25,465) 45,331 $ (0.56) $ (31,842) 45,244 $ (0.70)
---------------------------------------------------------------------
---------------------------------------------------------------------


Second quarter ended
 April 30                    2005                       2004
(in thousands,
 except per share
 amounts -                            Per                        Per
 unaudited)          Loss  Shares   Share       Loss  Shares   Share
---------------------------------------------------------------------

Loss for the
 period          $ (5,429)                 $ (17,664)
Less:
 Preferred share
  dividend           (276)                      (276)
---------------------------------------------------------------------
Basic &
 diluted
 loss per
 share           $ (5,705) 45,337 $ (0.13) $ (17,940) 45,174 $ (0.40)
---------------------------------------------------------------------
---------------------------------------------------------------------

Basic earnings per share is derived de·rive
v. de·rived, de·riv·ing, de·rives

v.tr.
1. To obtain or receive from a source.

2. by deducting the pro rata share of annual dividends on preferred shares Preferred shares

Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. from earnings for the period and dividing this total by the weighted average number of Limited Voting Common Shares outstanding for the period.

The effect of potentially dilutive securities (convertible unsecured subordinated debentures and preferred shares) was not included in the calculation of diluted earnings per share diluted earnings per share

An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter and six months ended April 30, 2005 and 2004 as the result would be anti-dilutive. In addition, executive stock options have been excluded from the calculation of diluted earnings per share as the exercise price exceeds the average trading value of the shares in the respective periods.

2. Accounting Principles

These interim unaudited consolidated financial statements are based on accounting principles consistent with those used and described in the October 31, 2004 annual consolidated financial statements except as described in Note 10. However, these financial statements do not include all of the information and disclosures required for annual financial statement presentation. The interim consolidated financial statements should be read in conjunction with the Company's consolidated financial statements for the year ended October 31, 2004.

3. Seasonal Nature of Business

The Company's earnings follow the seasonal activity pattern of Prairie prairie

Level or rolling grassland, especially that found in central North America. Decreasing amounts of rainfall, from 40 in. (100 cm) at the forested eastern edge to less than 12 in. grain production. Activity peaks in the spring as new crops are sown sown
v.
A past participle of sow¹.

Adj. 1. sown - sprinkled with seed; "a seeded lawn"
seeded

planted - set in the soil for growth and in the fall as mature crops are harvested. Sales of Crop Production Services products (seed, crop nutrients and crop protection products) peak during May through July, corresponding with the start of the growing season, followed by increased levels of crop nutrient sales in the late fall. Although relatively steady throughout the year, Livestock Services feed sales tend to peak during the winter months as feed consumption increases. Financial Markets agency fees follow the related pattern of sales of the underlying activity of either Crop Production Services or Livestock Services. Sales patterns have a significant impact on the level of earnings and generally result in lower earnings throughout the early months of the fiscal year, with significant increases occurring in the third quarter ended July 31.

4. Segment Information

For the periods ended
 April 30 (in thousands)    Second Quarter             Six Months
(Unaudited)                 2005      2004         2005         2004
---------------------------------------------------------------------

SALES AND REVENUE FROM
 SERVICES
Grain Handling         $ 447,679 $ 472,429    $ 858,424  $ 1,005,011
Crop Production Services 124,812   102,996      197,633      163,505
Livestock Services        71,013    70,157      140,848      132,861
Financial Markets &
 Other Investments         2,163       599        4,417        3,491
---------------------------------------------------------------------
                         645,667   646,181    1,201,322    1,304,868
Less: Intersegment
 Sales(i)                (5,677)    (8,056)     (13,222)     (15,760)
---------------------------------------------------------------------
                      $ 639,990  $ 638,125  $ 1,188,100  $ 1,289,108
---------------------------------------------------------------------

GROSS PROFIT AND NET
 REVENUE FROM SERVICES
Grain Handling         $ 49,300   $ 46,601    $ 101,192     $ 93,060
Crop Production
 Services                32,693     24,813       45,961       45,740
Livestock Services       14,402     11,581       28,240       22,175
Financial Markets &
 Other Investments        2,163        599        4,417        3,491
---------------------------------------------------------------------
                       $ 98,558   $ 83,594    $ 179,810    $ 164,466
---------------------------------------------------------------------

OPERATING, GENERAL
 AND ADMINISTRATIVE
 EXPENSES
Grain Handling        $ (34,876) $ (36,142)   $ (73,307)   $ (66,891)
Crop Production
 Services               (24,811)   (26,341)     (50,263)     (48,304)
Livestock Services       (8,055)    (8,835)     (16,822)     (16,850)
Financial Markets &
 Other Investments       (1,040)      (118)      (2,366)         (45)
Corporate               (10,020)    (9,124)     (18,756)     (18,606)
---------------------------------------------------------------------
                      $ (78,802) $ (80,560)  $ (161,514)  $ (150,696)
---------------------------------------------------------------------
---------------------------------------------------------------------

EBITDA
Grain Handling         $ 14,424   $ 10,459     $ 27,885     $ 26,169
Crop Production Services  7,882     (1,528)      (4,302)      (2,564)
Livestock Services        6,347      2,746       11,418        5,325
Financial Markets &
 Other Investments        1,123        481        2,051        3,446
Corporate               (10,020)    (9,124)     (18,756)     (18,606)
---------------------------------------------------------------------
                       $ 19,756    $ 3,034     $ 18,296     $ 13,770
---------------------------------------------------------------------
---------------------------------------------------------------------

DEPRECIATION AND
 AMORTIZATION
Grain Handling         $ (7,539)  $ (7,969)   $ (15,314)   $ (15,941)
Crop Production
 Services                (5,100)    (5,231)      (9,966)     (10,221)
Livestock Services       (1,056)      (826)      (2,114)      (1,639)
Financial Markets &
 Other Investments          (49)       (20)         (95)         (40)
Corporate                (1,470)    (1,723)      (3,259)      (3,870)
---------------------------------------------------------------------
                      $ (15,214) $ (15,769)   $ (30,748)   $ (31,711)
---------------------------------------------------------------------
---------------------------------------------------------------------

EBIT
Grain Handling          $ 6,885    $ 2,490     $ 12,571     $ 10,228
Crop Production
 Services                 2,782     (6,759)     (14,268)     (12,785)
Livestock Services        5,291      1,920        9,304        3,686
Financial Markets &
 Other Investments        1,074        461        1,956        3,406
Corporate               (11,490)   (10,847)     (22,015)     (22,476)
---------------------------------------------------------------------
                        $ 4,542  $ (12,735)   $ (12,452)   $ (17,941)
---------------------------------------------------------------------
---------------------------------------------------------------------

(i)INTERSEGMENT SALES
Grain Handling         $ (5,669)  $ (8,056)   $ (13,214)   $ (15,732)
Crop Production
 Services                    (8)         -           (8)         (28)
---------------------------------------------------------------------
                       $ (5,677)  $ (8,056)   $ (13,222)   $ (15,760)
---------------------------------------------------------------------
---------------------------------------------------------------------

5. Change in Accounting Estimate

In accordance with its existing accounting policy, the Company defers the recognition of gross profit from inter-company sales until product is sold to a third party. During 2005, the Company modified its method of estimating deferred gross profits on fertilizer products sold by its subsidiary, Western Cooperative Fertilizers Limited ("Westco"), to the Company and still held by the Company pending sale to third parties to more accurately reflect the amount of gross profit deferred and the timing of when the gross profit is realized. As a result, the amount of gross profit deferred for the quarter ended April 30, 2005 decreased by $5.3 million to $9 million. Since the sale of fertilizer to third parties is substantively completed by the Company's third quarter ending July 31 following the spring sales season, the effect of the change in estimate is to decrease the recognition of gross profit in the first quarter and increase the recognition in the Company's second and third quarters.

6. Securitization

At April 30, 2005, grain held for the account of the CWB is reported net of securitized amounts of $56.6 million (2004 - $65 million). The table below summarizes certain cash flows related to the transfer of receivables during the period:

As at April 30, 2005 (in thousands)
(Unaudited)
---------------------------------------------------------------------
Proceeds from new securitizations                            $ 53,900
Proceeds from collections reinvested                          $ 2,683
---------------------------------------------------------------------
---------------------------------------------------------------------

The net cost of these transactions is included in interest and securitization expenses in the Consolidated Statements of Earnings and Retained Earnings.

7. Bank and Other Loans

On March 11, 2005, the Company replaced its $375 million revolving facility, which matured February 28, 2005, with a renewed re·new
v. re·newed, re·new·ing, re·news

v.tr.
1. To make new or as if new again; restore: renewed the antique chair.

2. facility which was revised to provide seasonal limits of $475 million between January 1st and May 31st, $300 million between June 1st and August 31st, and $425 million between September 1st and December December: see month. 31st. Apart from the seasonal limit changes and the addition of a Canadian Schedule One chartered bank to the banking syndicate, the financial terms and underlying security are consistent with those described in Note 8 of the October 31, 2004 annual consolidated financial statements.

8. Share Capital

The table below summarizes the issued and outstanding Limited Voting Common Shares and securities convertible into Limited Voting Common Shares:

As at April 30
(Unaudited)                                          2005        2004
---------------------------------------------------------------------
Issued and outstanding Limited Voting
 Common Shares                                 45,337,418  45,296,636
Securities convertible into Limited Voting
 Common Shares:

  9% convertible unsecured subordinated
   debentures, maturing November 30, 2007,
   convertible at 133.3333 shares per $1,000
   principal amount                            14,000,000  14,000,000

  Series "A" convertible preferred shares,
   non-voting, $1 dividend per share,
   cumulative, convertible (1:1 basis),
   callable at $24                              1,104,369   1,104,790

  Stock options                                   894,205     734,231
---------------------------------------------------------------------
                                               61,335,992  61,135,657
---------------------------------------------------------------------
---------------------------------------------------------------------

As at April 30, 2005, the Company had reserved a further 341,428 Limited Voting Common Shares (April 30, 2004 - 301,402) for granting under the Executive Stock Option Plan and 108,359 Limited Voting Common Shares (April 30, 2004 - 28,012) for granting under the Directors Share Compensation Plan.

At its Annual General Meeting on February 9, 2005, the Company's shareholders approved a resolution increasing the number of Limited Voting Common Shares available for granting under the Executive Stock Option Plan by 200,000 shares and a resolution increasing the number of Limited Voting Common Shares available for granting under the Directors Share Compensation Plan by 100,000 shares.

Stock options outstanding at April 30, 2005 have a range of exercise prices from $7.64 to $11.50 and a weighted average life of 6.82 years.

Weighted
                                                              Average
For the six months ended April 30, 2005           Number of  Exercise
(Unaudited)                                         Options     Price
---------------------------------------------------------------------
Outstanding at the beginning of the period          732,045    $ 9.96
Granted                                             165,000      7.64
Forfeited                                            (2,840)     9.70
---------------------------------------------------------------------
Outstanding at end of period                        894,205    $ 9.53
---------------------------------------------------------------------
Exercisable at end of period                        587,766    $ 9.97
---------------------------------------------------------------------

9. Commitments, Contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. and Guarantees

a) Letters of Credit - The Company has provided banking letters of credit to third parties for activities that are inherent in the nature of the agriculture industry. The terms range in duration and expire expire /ex·pire/ (ek-spi´er)
1. to exhale.

2. to die.

ex·pire
v.
1. To breathe one's last breath; die.

2. To exhale. at various dates from October 2005 to August 2006. The amounts vary depending on underlying business activity or the specific agreements in place with the third parties. As at April 30, 2005, the outstanding banking letters of credit were $62.7 million (2004 - $91.8 million).

In April 2005, the Company entered into a new credit insurance program underwritten by a major international insurer, replacing $34.4 million in letter of credit security previously provided to the Canadian Grain Commission.

b) Indemnification Indemnification

Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from of Accounts Receivable - Under the terms of an agreement with a Canadian Schedule One chartered bank (as described in note 4 of the October 31, 2004 annual consolidated financial statements), the Company indemnifies the bank for 50% of future losses under AU Financial to a maximum limit of 5% of the aggregate qualified portfolio balance. As at April 30, 2005, the Company provided $3.2 million (2004 - $700,000) for actual and expected future losses.

Under the terms of an agreement with a Canadian Schedule One chartered bank, the Company indemnifies the bank for credit losses under Unifeed Financial based on the first 20% to 33% of new credit issued on an individual account, depending on the account's underlying credit rating, with losses in excess of these amounts shared on an equal basis with the bank up to 5% on the aggregate qualified portfolio balance. As at April 30, 2005, the Company provided $162,000 (2004 - $20,000) for actual and expected future losses.

c) Loan Guarantees - The Company is contingently con·tin·gent
adj.
1. Liable to occur but not with certainty; possible: "All salaries are reckoned on contingent as well as on actual services" Ralph Waldo Emerson. liable liable adj. responsible or obligated. Thus, a person or entity may be liable for damages due to negligence, liable to pay a debt, liable to perform an act for which he/she/it contracted to do, or liable to punishment for commission of a crime. under several guarantees given to third-party lenders who have provided long-term financing Long-term financing

Liabilities repayable in more than one year plus equity. to certain independent hog producers. As at April 30, 2005, the current outstanding balance of these guarantees was $4 million. These guarantees reduce as the underlying loans are repaid and expire between 2006 and 2014.

On February 8, 2005, the Company issued an unsecured guarantee in support of financing provided to a wholly-owned foreign subsidiary for a maximum of 2 billion Yen or approximately $24 million.

10. Accounting Policy Changes

a) Asset Retirement Obligations - Effective November 1, 2004, the Company adopted CICA Handbook Section 3110, Asset Retirement Obligations ("AROs"). The Company identified asset retirement obligations related to site restoration for certain property leases, however, these obligations are not material individually and in aggregate and, as such, a liability for AROs has not been recognized. The majority of these obligations were provided for under existing merger-related provisions and are expected to be settled within the next five years.

Westco, a joint venture of the Company, has determined its previously recognized reclamation obligation (described in Note 11 to the 2004 annual financial statements) qualifies as an ARO and has accounted for it accordingly. Given the ARO balance approximates the previously established reclamation provision and that the retroactive income statement impact to date is insignificant, the Company has recognized Westco's adoption of AROs prospectively without a restatement of opening retained earnings. As at November 1, 2004, the Company's proportionate share of Westco's ARO balance, which represents the discounted future value of the estimated cash flows required to settle the obligation, was $18.3 million (previous reclamation provision recognized by the Company as of the same date was $18.1 million). As of April 30, 2005, the Company's proportionate share of the estimated undiscounted inflation-adjusted cash flows required to settle the obligation is $19.9 million, which is expected to be settled between 2005 and 2014. The total accretion expense In accounting, accretion expense is the expense created when updating the present value(PV) of a financial instrument.

For example, if one originally recognizes the present value of a liability at $650, which has a future value (FV) of $1000, every year one must increase the included in the Company's latest six months is $565,000.

b) Variable Interest Entities - Effective November 1, 2004, the Company adopted CICA Accounting Guideline AcG-15, Consolidation of Variable Interest Entities ("VIE"). A VIE is any legal structure used to conduct activities or hold assets which are not controlled by voting interests but rather by contractual or other interests that change with that entity's underlying net asset value. The application of these rules to specific situations is complex and the interpretation of the rules is evolving. The Company currently accounts for its subsidiaries in accordance with the Company's principles of consolidation. Based on its assessment of the entities in which it has contractual and other interests, the Company has concluded that these entities are either not VIEs or the adoption of AcG-15 did not result in a material change to the consolidated financial statements.

11. Subsequent Event

The Company signed an agreement with a third party on May 6, 2005 to sell its former United Grain Growers Limited Vancouver grain terminal pursuant to a consent agreement with the Commissioner of Competition. The proceeds of such a sale may be utilized for general corporate purposes, including the non-scheduled repayment of debt or sustaining capital reinvestment. The sale is expected to close on August 1, 2005, subject to certain closing conditions and regulatory approval, and is not expected to have a material impact on the Company's results for the fourth quarter. The Company intends to consolidate its Vancouver grain handling operations through two other terminals in which it has an interest and as a result, the sale is not expected to materially impact on the Company's results from future continuing operations.

12. Comparative Amounts

Certain comparative amounts have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?"
fit, meet

coordinate - be co-ordinated; "These activities coordinate well" current year presentation.

---------------------------------------------------------------------

Shareholder Information

For the periods ended
 April 30                     Second Quarter               Six Months
Trading Activity (on
 Toronto Stock Exchange)    2005        2004        2005         2004
---------------------------------------------------------------------
Limited Voting Common
 Shares (Symbol: AU.LV)

  High                    $ 9.25      $ 9.75      $ 9.25       $ 9.99
  Low                     $ 8.11      $ 7.50      $ 7.50       $ 7.50
  Close                   $ 8.22      $ 7.93      $ 8.22       $ 7.93
  Volume               1,343,222   4,777,846   3,008,304   10,004,919

Series "A" Preferred
 shares (Symbol: AU.PR.A)

  High                   $ 15.70     $ 15.90     $ 15.70      $ 15.90
  Low                    $ 14.55     $ 14.60     $ 14.30      $ 13.80
  Close                  $ 15.50     $ 15.50     $ 15.50      $ 15.50
  Volume                  16,415      17,476      48,598       28,645

9% convertible unsecured
 subordinated debentures
 (Symbol: AU.DB)

  High (per $100
   principal)           $ 126.50    $ 145.00    $ 130.00     $ 147.00
  Low (per $100
   principal)           $ 112.00    $ 120.00    $ 112.00     $ 120.00
  Close (per $100
   principal)           $ 112.50    $ 130.00    $ 112.50     $ 130.00
  Volume                 239,000   5,936,000   3,560,000   10,533,000
---------------------------------------------------------------------
---------------------------------------------------------------------


As at April 30
(Unaudited)
---------------------------------------------------------------------
Book value per share                                  $ 9.75  $ 10.03
---------------------------------------------------------------------
---------------------------------------------------------------------
Fully diluted book value per share                    $ 9.23   $ 9.45
---------------------------------------------------------------------
---------------------------------------------------------------------

Book value per share is derived by dividing the shareholders' equity Shareholders' Equity

A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. at the end of the period by the total number of Limited Voting Common Shares outstanding at the end of the period as if the Series "A" Preferred Shares had been converted on a 1:1 basis. The fully diluted book value per share is derived by dividing the shareholders' equity (including the Debentures and the value of executive stock options) at the end of the period by the total number of Limited Voting Common Shares outstanding at the end of the period as if the Series "A" preferred Shares, executive stock options and the Debentures had been fully converted.

(1) Earnings before interest, taxes, depreciation and amortization, gains or losses on asset disposals, discontinued operations Discontinued operations

Divisions of a business that have been sold or written off and that no longer are maintained by the business. net of tax and unusual items ("EBITDA") and earnings before interest, taxes, gains or losses on asset disposals, discontinued operations net of tax and unusual items ("EBIT") are provided to assist investors in determining the ability of the Company to generate cash from operations to cover financial charges before income and expense items from investing activities, income taxes and items not considered to be in the ordinary course of business. A reconciliation of such measures to net income is provided in the Consolidated Statements of Earnings and Retained Earnings and Note 4 to the Consolidated Financial Statements below. The items are excluded in the determination of such measures as they are non-cash in nature, income taxes, financing charges or are otherwise not considered to be in the ordinary course of business. EBITDA and EBIT provide important management information concerning business segment performance since the Company does not allocate To reserve a resource such as memory or disk. See memory allocation. financing charges or income taxes to these individual segments.Such measures should not be considered in isolation of or as a substitute for (i) net income or loss, as an indicator of the Company's operating performance or (ii) cash flows from operating, investing and financing activities, as a measure of the Company's liquidity. Such measures do not have any standardized standardized

pertaining to data that have been submitted to standardization procedures.

standardized morbidity rate
see morbidity rate.

standardized mortality rate
see mortality rate. meanings prescribed pre·scribe
v. pre·scribed, pre·scrib·ing, pre·scribes

v.tr.
1. To set down as a rule or guide; enjoin. See Synonyms at dictate.

2. To order the use of (a medicine or other treatment). by Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records.

Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP") and are therefore unlikely to be comparable to similar measures presented by other companies.

(2) The pro forma adjustments and financial information (which adjustments have been applied and which financial information has been presented on a non-GAAP basis) have been provided to assist investors in comparing results between periods after giving effect to the Company's modification A change or alteration in existing materials.

Modification generally has the same meaning in the law as it does in common parlance. The term has special significance in the law of contracts and the law of sales. of its estimate of deferred gross profits on fertilizer products sold by its subsidiary, Westco.The 2004 financial results for the Company have been adjusted on a pro forma basis to show the Company's financial results as if the modification of its estimate of deferred gross profits, applied prospectively in accordance with GAAP beginning in 2005, had been applied in fiscal 2004.

(3) See Footnote Text that appears at the bottom of a page that adds explanation. It is often used to give credit to the source of information. When accumulated and printed at the end of a document, they are called "endnotes." 2 concerning the inclusion of pro forma adjustments and financial information for the comparative quarter in fiscal 2004.

(4) Including staff related to its wholly-owned subsidiaries and joint venture in Cascadia Terminal.

(5) Book value per share is derived by dividing the shareholders' equity at the end of the period by the total number of Limited Voting Common Shares outstanding at the end of the period as if the Series "A" convertible preferred shares had been converted on a 1:1 basis. The fully diluted book value per share is derived by dividing the shareholders' equity (including the Debentures and the value of executive stock options) at the end of the period by the total number of Limited Voting Common Shares outstanding at the end of the period as if the Series "A" convertible preferred shares, executive stock options and the Debentures had been fully converted.

Agricore United (TSX:AU.LV)

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Date:	Jun 9, 2005
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