BFI Canada Income Fund Announces First Quarter Results for the Three Months Ended March 31, 2005.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- BFI Canada BFI Canada is a waste services company founded in 2000 presently active in five Canadian provinces and nine US states that started as a Canadian licensee of Browning-Ferris Industries. In the United States they have done business as "IESI Corporation" from 2005. Income Fund (the "Fund") (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BFC BFC Buffalo Field Campaign (West Yellowstone, Montana) BFC Betty Ford Center BFC British Fashion Council BFC Bicycle Friendly Community BFC Bible Fellowship Church BFC Boavista Futebol Clube .UN) today announced its financial results for the three months ended March 31, 2005. Financial highlights for the three months ended (in thousands of 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 otherwise stated) - Based on IESI's results from operations for the three months ended March 31, 2005, management is confident that IESI IESI Integrated Electronic Standby Instrument (Thales Avionics) IESI Independent Environmental Services Incorporated (Haltom City, TX) is on track to deliver the 12% accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the to free cash flow available for distribution(B) per weighted average trust unit and participating preferred share announced during the marketing of the Fund's subscription receipts offering that closed into escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. on January January: see month. 5, 2005. - Revenues and 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 (A) increased 218.7% and 183.5%, respectively, over the comparative three months ended March 31, 2004, primarily on account of the Ridge ridge (rij) a linear projection or projecting structure; a crest. dental ridge any linear elevation on the crown of a tooth. dermal ridges cristae cutis. landfill and IESI Corporation ("IESI") acquisitions completed in January 2005, and the Twin Oaks Twin Oaks may refer to any of the following:
- Excluding acquisitions, revenues and EBITDA(A) increased 8.8% and 9.4%, respectively, over the comparative three months ended March 31, 2004. Volume and price growth were the primary reasons for the increase over the comparative three months ended March 31, 2004. - IESI's revenues and U.S.-EBITDA(A), excluding the effect of foreign currency translation, for the three months ended March 31, 2005 increased 7.1% and 4.8%, respectively, over the comparative three month period ended March 31, 2004. Acquisitions, new contracts, volume and price growth, partially offset by higher fuel and insurance costs, were the primary reasons for the increase over the comparative three months ended March 31, 2004. - Excluding acquisitions, the Fund and IESI experienced a combined 5.4% organic revenue growth rate for the three months ended March 31, 2005. - Free cash flow available for distribution(B) for the three months ended March 31, 2005 totalled $24,183 and is $13,270 higher than the comparative three month period ended March 31, 2004. The principal reason for the increase is acquisitions completed during the last twelve months which contributed to a 183.5% increase in EBITDA(A), partially offset by higher interest expense attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher debt outstanding, higher maintenance capital expenditures to sustain a larger business base, and 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. withholding taxes The amount legally deducted from an employee's wages or salary by the employer, who uses it to prepay the charges imposed by the government on the employee's yearly earnings. on interest and dividends paid from IESI to 4264126 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 Limited, a subsidiary of the Fund. - Free cash flow available for distribution(B) per weighted average trust unit and participating preferred share for the three months ended March 31, 2005 amounted to $0.43 and is $0.02 higher than the comparative three month period ended March 31, 2004. The timing of maintenance capital expenditures are not consistent for the three months ended March 31, 2005 as compared to the three months ended March 31, 2004. Maintenance capital expenditures for the three months ended March 31, 2005, as a percentage of EBITDA(A), equals 20.7% versus 7.8% for the comparable three months ended March 31, 2004. Free cash flow available for distribution(B) per weighted average trust unit and participating preferred share, excluding maintenance capital expenditures, amounted to $0.57 for the three months ended March 31, 2005 versus $0.45 for the comparative three months ended March 31, 2004. - Aggregate distributions declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. on weighted average trust units and participating 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. totalled $21,998 for the three months ended March 31, 2005, representing a payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. of 91.0% of free cash flow available for distribution(B) on weighted average trust units and participating preferred shares outstanding. Including distributions made on weighted average subscription receipts outstanding equal to $1,175 for the period from January 1 to 20, 2005 while offering proceeds were held in escrow, aggregate distributions declared totalled $23,173 for the three months ended March 31, 2005. Other highlights - Fund completed the acquisition of the Ridge landfill near Chatham Chatham, city, Canada Chatham, city (1991 pop. 43,557), S Ont., Canada, E of Detroit, Mich., on the Thames River. It is an industrial center in a rich mixed farming and fruit-raising region. , Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. and IESI of Fort Worth, Texas Fort Worth is the fifth-largest city in the state of Texas, 18th-largest city in the United States[1], and voted one of "America’s Most Livable Communities. in January 2005. Concurrent At the same time. It implies that multiple processes are taking place simultaneously. See concurrent operation. with the closing of the IESI acquisition, Fund completed a $374,000 offering of trust units to finance a portion of these acquisitions, and entered into an amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and restated $80,000 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 through BFI Canada Holdings Inc. ("Holdings") and a 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. ("U.S.") $385,000 credit facility through IESI. - The Ridge landfill has been successfully integrated with the Fund's operations and the Fund has been internalizing waste from its south-western Ontario operations into the Ridge landfill since January 4, 2005. - IESI completed three "tuck-in" acquisitions for the period January 21, 2005 to March 31, 2005 (the "IESI stub A small software routine placed into a program that provides a common function. Stubs are used for a variety of purposes. For example, a stub might be installed in a client machine, and a counterpart installed in a server, where both are required to resolve some protocol, remote procedure period"). Management Commentary "Based on the revenue and cash flow contributions delivered by IESI and the Ridge landfill and organic price and volume increases, we're we're Contraction of we are. we're we are off to a good start this year," said Keith Keith may refer to: People with the given name Keith:
Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. markets. Organic price and volume growth in our base Canadian business Canadian Business is the longest-publishing business magazine in Canada. It was founded in 1928 as The Commerce of the Nation, the organ of the Canadian Chamber of Commerce. The magazine was renamed Canadian Business in 1933. also contributed to revenue growth in the Fund's 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. segment. In the U.S., our IESI south and northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. business segments delivered a 7.1% period-over-period increase in revenue and a 4.8% increase in EBITDA(A), largely on the strength of market-focused pricing and volume strategies and "tuck-in" acquisitions. There is room for improvement in all of our segments and we will continue to employ local, market-focused strategies, and our acquisition strategy to grow the business and the success of all business segments." Mr. Carrigan said the integration of IESI and the Ridge landfill is progressing well and the exchange of best business practices is "delivering exactly the kind of incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. benefits we had envisioned. This is a period of significant development for our business and we are making the most of our opportunities as one of North America's largest non-hazardous solid waste management companies." Looking Forward The Fund's outlook has not changed since its last quarterly report. The Fund expects revenue and cash flows to advance on the strength of the contributions made by newly acquired businesses, complemented by organic growth through its market-focused strategies. It also anticipates achieving a payout ratio below 90% for 2005. "We intend to make the most of our new platforms while also driving continuous improvement across all operations," said Mr. Carrigan. "Our operating agenda for 2005 will allow us to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the expertise, capabilities and best practices of our expanded team. We are well positioned to achieve our vision and aggressive goals for the year."
Three months
ended March 31
(in thousands, except per trust unit, -----------------------
subscription receipt, and participating March 31
preferred share amounts) 2005 2004(1)
---------- ----------
(unaudited) (unaudited)
Revenues $ 134,418 $ 42,175
Operating expenses 76,111 21,452
Selling, general and administration expenses 18,232 6,589
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Income before the following 40,075 14,134
Amortization 30,008 10,566
Interest on long-term debt 5,275 1,176
Financing costs 36,710 -
Net gain on sale of capital assets - (24)
Gains on derivative financial instruments (4,693) -
Foreign exchange loss 3,325 -
Other expenses 1,074 -
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(Loss) income before income taxes and
non-controlling interest (31,624) 2,416
Income tax recovery (19,951) (946)
Non-controlling interest (3,211) -
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Net (loss) income $ (8,462) $ 3,362
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Net (loss) income per weighted average trust
unit, basic & diluted $ (0.21) $ 0.13
Weighted average number of trust
units outstanding 41,139 26,500
Weighted average number of participating
preferred shares outstanding 15,609 -
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Weighted average number of trust units and
participating preferred shares outstanding 56,748 26,500
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Maintenance capital and landfill expenditures $ 8,300 $ 1,105
Growth capital and landfill expenditures 8,663 1,351
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Total capital and landfill expenditures $ 16,963 $ 2,456
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Free cash flow available for distribution(B) $ 24,183 $ 10,913
Free cash flow available for distribution(B)
per weighted average trust unit and
participating preferred share $ 0.43 $ 0.41
Aggregate distributions declared on
weighted average trust units $ 15,624 $ 8,446
Aggregate distributions declared on weighted
average subscription receipts 1,175 -
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Aggregate distributions declared on weighted
average trust units and subscription receipts 16,799 8,446
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Distributions attributable to participating
preferred shareholders 6,374 -
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Aggregate distributions declared $ 23,173 $ 8,446
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Aggregate distributions declared per
weighted average trust units and
participating preferred shares $ 0.39 $ 0.32
Aggregate distributions declared per
weighted average subscription receipt $ 0.08 $ -
Aggregate distributions declared per
weighted average trust units,
participating preferred $ 0.41 $ 0.32
shares, and subscription receipts
Notes:
(1) The Fund acquired IESI effective January 21, 2005. Accordingly,
the operating results for the three months ended March 31, 2004
do not include the results of operations for IESI.
Operating highlights (all amounts are in thousands of Canadian dollars, except per trust unit and participating preferred shares amounts) Revenues of $134,418 were $92,243 or 218.7% higher than the comparative three month period ended March 31, 2004. Acquisitions of Twin Oaks and CDS completed during the year ended December December: see month. 31, 2004, and the Ridge landfill completed on January 4, 2005, contributed to the Canadian segment increase, with the balance due to price increases, organic growth, including higher volumes of accepted non-hazardous solid waste entering the Lachenaie landfill, and favourable commodity prices. The acquisition of IESI added an additional approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $80,100 of revenue for the IESI stub period. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of $76,111 were $54,659 higher than the comparative three months ended March 31, 2004. Strategic acquisitions in the Canadian segment, identified above, are the primary contributor's to this segments increase with the balance due to higher disposal and labour expenditures, related principally to the collection and acceptance of additional volumes of waste, landfill royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. costs related to the Lachenaie north expansion, and higher costs to service new and existing customers. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. fuel surcharges in the Canadian segment have offset increasing 2005 fuel costs at levels commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with 2004. The acquisition of IESI added an additional approximately $48,600 of operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. for the IESI stub period. Selling, general and administration ("SG&A") expenses of $18,232 were $11,643 higher than the comparative three month period ended March 31, 2004. The Canadian segment increase is attributable to the Twin Oaks, CDS and Ridge landfill acquisitions. The balance of the increase totalling approximately $10,300 is attributable to the consolidation of IESI for the IESI stub period. EBITDA(A) of $40,075 was $25,941 or 183.5% higher than the comparative three months ended March 31, 2004. Contributions to the increase from the Canadian segment include, strategic acquisitions, and price and volume growth, including an increase in accepted non-hazardous solid waste at BFI BFI - brute force and ignorance Canada-owned landfills, partially offset by landfill royalty costs related to the Lachenaie north expansion. The remainder of the increase is attributable to IESI's operating results for the IESI stub period, which contributed approximately $21,100 to the increase. Free cash flow available for distribution(B) totalled $24,183 for the three months ended March 31, 2005 versus $10,913 for the comparative period ended March 31, 2004. The increase is due in large part to the Fund's acquisitions of IESI and the Ridge landfill effective January 2005, and CDS and Twin Oaks effective November and April 2004, respectively, partially offset by higher interest expense attributable to higher outstanding 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. , higher maintenance capital and landfill expenditures to sustain a larger business base, and withholdings taxes on interest and dividends paid by IESI to 4264126 Canada Limited. Free cash flow available for distribution(B) per weighted average trust unit and participating preferred share for the three months ended March 31, 2005 amounted to $0.43 and is $0.02 higher than the comparative three months ended March 31, 2004. The timing of maintenance capital expenditures are not consistent period to period and the incurrence In`cur´rence n. 1. The act of incurring, bringing on, or subjecting one's self to (something troublesome or burdensome); as, the incurrence of guilt, debt, responsibility, etc. s> Noun 1. of maintenance capital expenditures during the three months ended March 31, 2005 resulted in maintenance capital expenditures as a percentage of EBITDA(A) equal to 20.7% versus 7.8% for the comparable three months ended March 31, 2004. Excluding maintenance capital expenditures from the calculation of free cash flow available for distribution(B) per weighted average trust unit and participating preferred share amounted to $0.57 for the three months ended March 31, 2005 versus $0.45 for the comparative three months ended March 31, 2004. The Fund paid cash distributions to trust unitholders and subscription receipt holders for the period January 1 to January 20, 2005, and trust unitholders and participating preferred shareholders for the IESI stub period, totalling $0.31 per weighted average trust unit, subscription receipt and participating preferred share for the three months ended March 31, 2005, and declared a distribution payable to unitholders of record on March 31, 2005, payable April 15, 2005, of $0.13 per trust unit and participating preferred share. In January 2005, the Fund increased its current distribution rate by 12.0% to an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate of $1.5708 per trust unit and participating preferred share beginning with the distribution payable on March 15, 2005 to trust unitholders and participating preferred shareholders of record on February February: see month. 28, 2005. (A) All references to "EBITDA" in this press release are to "income before the following" on the 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: statements of operations. "Income before the following" excludes some or all of the following: "amortization, interest on long-term debt, financing costs, net gain on sale of capital and landfill assets or net (gain) loss on sale of capital and landfill assets, gains on derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. financial instruments, foreign exchange loss, write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of deferred financing costs, gain on settlement of bond forward contracts, other expenses, income taxes, and non-controlling interest". EBITDA is a term used by the Fund that does not have a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ") and is therefore unlikely to be comparable to similar measures used by other issuers. EBITDA is a measure of the Fund's operating profitability, and by definition, excludes certain items as detailed above. These items are viewed by management as either non-cash (in the case of amortization, certain financing costs, write-off of deferred financing costs, gains on derivative financial instruments, foreign exchange loss, and future income taxes) or non-operating (in the case of interest on long-term debt, net gain on sale of capital and landfill assets or net (gain) loss on sale of capital and landfill assets, certain financing costs, other expenses, gain on settlement of bond forward contracts, current income taxes, and non-controlling interest). EBITDA is a useful financial and operating metric for investors as it represents a starting point Noun 1. starting point - earliest limiting point terminus a quo commencement, get-go, offset, outset, showtime, starting time, beginning, start, kickoff, first - the time at which something is supposed to begin; "they got an early start"; "she knew from the in the determination of free cash flow available for distribution(B). The underlying reasons for exclusion exclusion /ex·clu·sion/ (eks-kloo´zhun) 1. a shutting out or elimination. 2. surgical isolation of a part, as of a segment of intestine, without removal from the body. of each item are as follows: Amortization - as a non-cash item amortization has no impact on the determination of free cash flow available for distribution(B). Interest on long-term debt - interest on long-term debt is a function of the Fund's debt/equity mix and interest rates; as such, it reflects the treasury/financing activities of the Fund and represents a different class of expense than those included in EBITDA. Financing costs - financing costs is a function of the Fund's treasury/financing activities and represents a different class of expense than those included in EBITDA. Net gain on sale of capital and landfill assets - the net gain on sale of capital and landfill assets has no impact on the determination of free cash flow available for distribution(B), because the proceeds were reinvested in other capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) . Net (gain) loss on sale of capital and landfill assets - the net (gain) loss on sale of capital and landfill assets has no impact on the determination of free cash flow available for distribution(B), because the proceeds were either reinvested in other capital assets or used to repay the Fund's revolving credit facility. Gains on derivative financial instruments - as non-cash items, gains on derivative financial instruments have no impact on the determination of free cash flow available for distribution(B). Foreign exchange loss - as a non-cash item, foreign exchange losses have no impact on the determination of free cash flow available for distribution(B). Write-off of deferred financing costs - as a non-cash item write-off of deferred financing costs has no impact on the determination of free cash flow available for distribution(B). Gain on settlement of bond forward contracts - the gain on settlement of bond forward contracts is a treasury/financing activity and represents a different class of revenue than the components of EBITDA. Other expenses - other expenses represent amounts paid to management of the Fund on the closing the IESI acquisition and are not considered an expense indicative indicative: see mood. of 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 . Accordingly, other expenses represent a different class of expense than those included in EBITDA. Income taxes - income taxes are a function of tax laws and rates and are affected by matters which are separate from the daily operations of the Fund. Non-controlling interest - non-controlling interest represents a direct non-controlling equity interest in IESI through participating preferred share holdings. Accordingly, non-controlling interest represents a different class of expense than those included in EBITDA. All references to "U.S.-EBITDA" in this press release are to "income before the following" on the consolidated statements of operations for IESI. "Income before the following" excludes some or all of the following: "amortization, interest on long-term debt, financing costs, (gains) losses on derivative financial instruments, transaction expenses, other expenses, and income taxes". U.S.-EBITDA is a term that does not have a standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and is therefore unlikely to be comparable to similar measures used by other issuers. U.S.-EBITDA is a measure of operating profitability, and by definition, excludes certain items as detailed above. These items are viewed by management as either non-cash (in the case of amortization, certain financing costs, (gains) losses on derivative financial instruments, and future income taxes) or non-operating (in the case of interest on long-term debt, certain financing costs, transaction expenses, other expenses, and current income taxes). U.S.-EBITDA is a useful financial and operating metric for investors as it permits investors to compare operating performance across periods. The underlying reasons for exclusion of each item are as follows: Amortization - amortization includes various fair value adjustments occurring on acquisition. Amortization is therefore not comparative between periods. Interest on long-term debt - interest on long-term debt is a function of the debt/equity mix and interest rates. On the closing of the Fund's acquisition of IESI, IESI's underlying debt structure has changed and results in interest on long-term debt not being comparable. Financing costs - financing costs is a function of treasury/financing activities. On closing of the Fund's acquisition of IESI, IESI incurred fees in connection with the extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of long-term debt and results in financing costs not being comparable. (Gains) losses on derivative financial instruments - (gains) losses on derivative financial instruments are a function of treasury/financing activities. On the closing of the Fund's acquisition of IESI, IESI entered into various foreign currency exchange derivative financial instruments to hedge its Canadian dollar obligations and as such (gains) losses on derivative financial instruments are not a function of operations. Transaction expenses - transaction expenses represent amounts paid to various advisors in respect of the Fund's acquisition of IESI and are not considered an expense indicative of continuing operations. Accordingly, transaction expenses represent a different class of expense than those included in U.S.-EBITDA. Other expenses - other expenses represent amounts paid to management on the closing the IESI acquisition and are not considered an expense indicative of continuing operations. Accordingly, other expenses represent a different class of expense than those included in U.S.-EBITDA. Income taxes - income taxes are a function of tax laws and rates and are affected by matters which are separate from daily operations. EBITDA and U.S.-EBITDA should not be construed as a measure of income or of cash flows. The reconciling items between EBITDA and net income are detailed in the consolidated statements of operations beginning with "income before the following" and ending with "net income". US-EBITDA is presented herein for information purposes only and is not presented in the consolidated statements of operations. (B) The Fund has adopted a measurement called free cash flow available for distribution to supplement net income as a measure of operating performance. Free cash flow available for distribution is a term which does not have a standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures used by other issuers. The objective of presenting this non-GAAP measure is to calculate the amount which is available for distribution to trust unitholders and participating preferred shareholders. Participating preferred share holdings are presented as non-controlling interest in 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 of the Fund, however management of the Fund have elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to include the shareholdings of the participating preferred shareholders in the calculation of free cash flow available for distribution as participating preferred shares receive distributions that are economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: equivalent to those received by trust unitholders and participating preferred shares are exchangeable on a one-to-one one-to-one adj. 1. Allowing the pairing of each member of a class uniquely with a member of another class. 2. Mathematics basis for trust units of the Fund. Free cash flow available for distribution is calculated as EBITDA(A) less amortization of capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. landfill asset closure and post-closure costs, interest on long-term debt, current income taxes, other expenses, maintenance capital expenditures and the effect of the foreign currency hedge Currency hedge Applies mainly to international equities. Hedging technique to guard against foreign exchange fluctuations (i.e., short Euro l00 mm when holding a long position of Euro l00 mm in stocks). to support current period Canadian dollar distributions. Additionally, the Fund's gain on settlement of two bond forward contracts on June June: see month. 25, 2004 will be amortized to free cash flow available for distribution over the underlying terms of the senior secured debentures. Free cash flow available for distribution is not necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to cash flow as a measure of liquidity. All references in this press release to "free cash flow available for distribution" have the meaning set out in this note. 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. This document may contain forward-looking statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Fund's operations or to the environment in which it operates, which are based on the Fund's operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond the Fund's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in the Fund's Annual Information Form for the period ended December 31, 2004. Consequently, readers should not rely on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, the Fund cannot assure unitholders that actual results will be consistent with these forward looking statements, and the Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Fund, through its operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , is one of North America's largest full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. waste management companies, providing non-hazardous solid waste collection and disposal services for municipal, commercial, industrial and residential customers in five provinces and nine states in the United States ("U.S."). The Fund serves approximately 1 million customers with vertically integrated collection and disposal assets. The Fund's Canadian segment operates under the BFI Canada brand and is one of Canada's largest full-service waste management companies providing integrated non-hazardous solid waste collection and landfill disposal services in the provinces of British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography , 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. , 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. , Ontario and Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. . The Canadian segment operates one and owns and operates four landfills, carries on solid waste collection operations in 19 markets and operates four transfer collection stations, seven material recovery facilities ("MRFs") and one landfill gas to energy facility. The Fund's U.S. operations provide integrated non-hazardous solid waste collection and landfill disposal services in two geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. regions as follows: the south, consisting of various service areas in Texas, Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). , Arkansas Arkansas, river, United StatesArkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. and Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. , and the northeast,
consisting of various service areas in New York New York, state, United StatesNew York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , New Jersey, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York and Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). . The U.S. south and northeast segments operate in 37 markets, and include 43 collection operations, 23 transfer stations, 17 landfills and six recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. facilities. The Fund's units are listed 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 BFC.UN. For more information on the Fund, visit www.bficanada.com. Management will hold a conference call on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , May 13, 2005 at 8:30 am (ET) to discuss results for the three months ended March 31, 2005. To access the call, participants should dial 800-814-4861, at approximately 8:20 am. The conference call will also be Webcast live at www.bficanada.com or www.ccnmatthews.com and subsequently archived on the BFI Canada site. A rebroadcast of the call will be available until midnight on Friday, May 20, 2005. To access the rebroadcast, dial 877-289-8525 and quote the reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 21123363#.
BFI CANADA INCOME FUND
Consolidated Balance Sheets
March 31, 2005 (unaudited) and December 31, 2004
(in thousands of dollars)
---------------------------------------------------------------------
March 31, December 31,
2005 2004
--------- -------------
ASSETS
CURRENT
Cash and cash equivalents $ 22,614 $ 13,282
Accounts receivable 81,483 33,348
Other receivables 1,385 1,403
Prepaid expenses 11,949 2,568
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117,431 50,601
OTHER RECEIVABLES 2,753 3,028
FUNDED LANDFILL POST-CLOSURE COSTS 765 570
INTANGIBLES 99,845 72,856
GOODWILL 485,905 50,889
DEFERRED COSTS 9,290 12,159
DEFERRED FINANCING COSTS 6,436 1,860
CAPITAL ASSETS 293,768 95,325
LANDFILL ASSETS 765,433 110,382
FUTURE INCOME TAX ASSETS 1,364 -
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$ 1,782,990 $ 397,670
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LIABILITIES
CURRENT
Accounts payable $ 39,193 $ 23,206
Accrued charges 34,046 7,501
Distribution payable 8,510 3,097
Income taxes payable 1,558 636
Deferred revenues 14,743 6,623
Current portion of long-term debt 37,699 22,224
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135,749 63,287
LONG-TERM DEBT 392,110 105,240
LANDFILL CLOSURE AND POST-CLOSURE COSTS 75,717 6,143
OTHER LIABILITIES 1,459 -
FUTURE INCOME TAX LIABILITIES 43,098 13,907
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648,133 188,577
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NON-CONTROLLING INTEREST 486,257 -
UNITHOLDERS' EQUITY 648,600 209,093
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$ 1,782,990 $ 397,670
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BFI CANADA INCOME FUND
Consolidated Statements of Operations
For the period ended March 31, 2005 (unaudited -
in thousands of dollars, except net income
per trust unit amounts)
---------------------------------------------------------------------
Three months ended
--------------------------
2005 2004
------------ -----------
REVENUES $ 134,418 $ 42,175
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EXPENSES
OPERATING 76,111 21,452
SELLING, GENERAL AND ADMINISTRATION 18,232 6,589
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INCOME BEFORE THE FOLLOWING 40,075 14,134
AMORTIZATION 30,008 10,566
INTEREST ON LONG-TERM DEBT 5,275 1,176
FINANCING COSTS 36,710 -
NET GAIN ON SALE OF CAPITAL ASSETS - (24)
GAINS ON DERIVATIVE FINANCIAL INSTRUMENTS (4,693) -
FOREIGN EXCHANGE LOSS 3,325 -
OTHER EXPENSES 1,074 -
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(LOSS) INCOME BEFORE INCOME TAXES AND
NON-CONTROLLING INTEREST (31,624) 2,416
INCOME TAX EXPENSE (RECOVERY)
Current 374 105
Future (20,325) (1,051)
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(19,951) (946)
---------------------------------------------------------------------
(LOSS) INCOME BEFORE NON-CONTROLLING INTEREST (11,673) 3,362
NON-CONTROLLING INTEREST (3,211) -
---------------------------------------------------------------------
NET (LOSS) INCOME $ (8,462) $ 3,362
---------------------------------------------------------------------
---------------------------------------------------------------------
Net (loss) income per trust unit,
basic and diluted $ (0.21) $ 0.13
Weighted average number of trust
units outstanding
(thousands), basic 41,139 26,500
Weighted average number of trust
units outstanding
(thousands), fully diluted 56,748 26,500
BFI CANADA INCOME FUND
Consolidated Statements of Cash Flows
For the period ended March 31, 2005 (unaudited -
in thousands of dollars)
Three months ended
--------------------------
2005 2004
------------ -----------
NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net (loss) income $ (8,462) $ 3,362
Items not affecting cash
Amortization of intangibles 4,983 3,097
Amortization of deferred financing costs 296 220
Amortization of capital assets 12,193 3,800
Amortization of landfill assets 12,536 3,449
Gain on disposal of capital assets - (24)
Deferred costs 789 -
Write-off of deferred financing costs 367 -
Accretion of landfill closure and
post-closure costs 603 49
Foreign exchange loss 3,325 -
Future income taxes (20,325) (1,051)
Gains on derivative financial instruments (4,693) -
Non-controlling interest (3,211) -
Landfill closure and post-closure
expenditures (1,123) (76)
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(2,722) 12,826
Changes in non-cash working capital items (13,586) (2,413)
---------------------------------------------------------------------
Cash (utilized in) generated from
operating activities (16,308) 10,413
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INVESTING
Acquisitions (128,475) -
Investment in other receivables - (262)
Proceeds from other receivables 221 233
Funded landfill post-closure costs (216) -
Purchase of capital assets (8,457) (1,634)
Purchase of landfill assets (8,506) (822)
Proceeds on disposal of capital assets - 30
Deferred costs (246) (543)
---------------------------------------------------------------------
Cash utilized in investing activities (145,679) (2,998)
---------------------------------------------------------------------
FINANCING
Payment of deferred financing costs (4,033) -
Proceeds from term and revolving loan 404,823 -
Repayment of revolving loan and
acquired long-term debt (563,493) -
Issuance of trust units net
of issuance costs 351,717 -
Distributions paid to trust and
exchange unitholders (17,754) (8,446)
---------------------------------------------------------------------
Cash generated from (utilized in)
financing activities 171,260 (8,446)
---------------------------------------------------------------------
Effect of foreign exchange changes on foreign
cash and cash equivalents 59 -
---------------------------------------------------------------------
NET CASH INFLOW (OUTFLOW) 9,332 (1,031)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 13,282 6,704
---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 22,614 $ 5,673
---------------------------------------------------------------------
---------------------------------------------------------------------
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents are
comprised of:
Cash $ 14,391 $ 2,846
Cash equivalents 8,223 2,827
---------------------------------------------------------------------
$ 22,614 $ 5,673
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BFI CANADA INCOME FUND
Consolidated Statements of Unitholders' Equity
For the period ended March 31, 2005 (unaudited -
in thousands of dollars)
---------------------------------------------------------------------
Three months ended
--------------------------
2005 2004
------------ -----------
BALANCE, BEGINNING OF PERIOD $ 209,093 $ 224,326
Net (loss) income (8,462) 3,362
Issuance of trust units, net of issuance
costs and related tax effect 385,719 -
Issuance of trust units on exchange of
participating preferred shares 90,006 -
Distributions (16,799) (8,446)
Cumulative foreign currency translation
adjustment (10,957) -
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BALANCE, END OF PERIOD $ 648,600 $ 219,242
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BFI Canada Income Fund (TSX:BFC.UN) |
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