Winpak Reports Fourth Quarter 2004.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. -- Winpak Winpak is a company based in Winnipeg, Manitoba, Canada. The company manufactures and distributes packaging materials and products that are used to protect perishable foods, beverages, and in health care applications. Ltd. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :WPK WPK Workers' Party of Korea (Communist Party, North Korea) WPK WordPerfect Keyboard (File Name Extension) ) The Board of Directors announces Winpak's 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: results for the fourth quarter and twelve months ended December December: see month. 31, 2004. These results are reported in U.S. dollars and accordingly, comparative results for the prior year originally 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 have been restated. 12 months to December 31, 2004 2004 2003 --------------------------------------------------------------------- (thousands of US dollars, except per share amounts) (Restated) Sales 395,092 363,276 --------------------------------------------------------------------- --------------------------------------------------------------------- Net earnings 26,037 29,697 --------------------------------------------------------------------- --------------------------------------------------------------------- Minority interest 913 1,743 Provision for income taxes 14,443 16,150 Interest 2,630 2,549 Depreciation and amortization 19,009 17,452 --------------------------------------------------------------------- EBITDA (1) 63,032 67,591 --------------------------------------------------------------------- --------------------------------------------------------------------- Basic and fully diluted net earnings per share 4.01 4.57 --------------------------------------------------------------------- --------------------------------------------------------------------- 3 months to December 31, 2004 2004 2003 --------------------------------------------------------------------- (thousands of US dollars, except per share amounts) (Restated) Sales 107,690 98,522 --------------------------------------------------------------------- --------------------------------------------------------------------- Net earnings 7,511 9,175 --------------------------------------------------------------------- --------------------------------------------------------------------- Minority interest 109 448 Provision for income taxes 3,322 5,136 Interest 712 630 Depreciation and amortization 4,981 4,575 --------------------------------------------------------------------- EBITDA (1) 16,635 19,964 --------------------------------------------------------------------- --------------------------------------------------------------------- Basic and fully diluted net earnings per share 1.16 1.41 --------------------------------------------------------------------- Caution: (1) 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 is not a recognized measure under 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. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . Management believes that in addition to net earnings, this measure provides useful supplemental information to investors including an indication of cash available for distribution prior to debt service, capital expenditures and income taxes. Investors should be cautioned, however, that this measure should not be construed as an alternative to net earnings, determined 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 GAAP, as an indicator of the Company's performance. The Company's method of calculating this measure may differ from other companies, and, accordingly, the results may not be comparable. The Company: Winpak Ltd. manufactures and distributes high-quality packaging materials and innovative packaging machines that are sold in combination with packaging materials. The Company's products are used primarily for the protection of perishable per·ish·a·ble adj. Subject to decay, spoilage, or destruction. n. Something, especially foodstuff, subject to decay or spoilage. Often used in the plural. foods, beverages, pharmaceuticals and in medical applications. 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 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. : Certain statements made in the following Management's Discussion and Analysis contain forward-looking statements including, but not limited to, statements concerning possible or assumed future results of operations of the Company. Forward-looking statements represent the Company's intentions, plans, expectations and beliefs, and are not guarantees of future performance. Such forward-looking statements represent our current views based on information as at the date of this report. They involve risks, uncertainties and assumptions and the Company's actual results could differ, which in some cases may be material, from those anticipated in these forward-looking statements. Unless otherwise required by applicable securities law, we disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance upon forward-looking statements. Change in accounting policy: Effective January January: see month. 1, 2004, the Company adopted the U.S. dollar as its reporting currency Reporting Currency The currency used in published reports and financial documents. Notes: All annual and quarterly reports state the currency in which their results are listed. . More than three-quarters Noun 1. three-quarters - three of four equal parts; "three-fourths of a pound" three-fourths common fraction, simple fraction - the quotient of two integers three-quarters npl → of Winpak's business is conducted in U.S. dollars and therefore the change in reporting currency to U.S. dollars will increase transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. by significantly reducing volatility of reported financial results due to fluctuations in the rate of exchange between the U.S. and Canadian currencies. The financial statements of prior periods have been restated for comparative purposes into U.S. dollars according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. GAAP as though the U.S. dollar had always been the reporting currency. Consequently, U.S. dollar denominated debt 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 can no longer be hedged by investments in U.S. subsidiaries, neither in current nor prior restated periods. Accordingly, foreign exchange adjustments arising on translation of this debt have been recorded in the Earnings Statement and reflected in the Statement of Cash Flows of the appropriate period. When the Company reported in Canadian dollars, these adjustments were recorded in the cumulative currency translation adjustments account. Results of Operations Fourth quarter net earnings of $1.16 per share exceeded those of the three preceding quarters but fell short of the comparative quarter of 2003 by 25 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , or 17.7 percent. Nearly half the decline, or 12 cents per share, was due to the stronger Canadian dollar. The remaining decline occurred consequent con·se·quent adj. 1. a. Following as a natural effect, result, or conclusion: tried to prevent an oil spill and the consequent damage to wildlife. b. to a gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction in flexible packaging and higher expenses, which overshadowed the impact of increased sales. The business has continued to grow with a quarter-on-quarter sales increment To add a number to another number. Incrementing a counter means adding 1 to its current value. of 9.3 percent. Volume growth was 6.0 percent, driven by lidding products, rigid containers, and biaxially-oriented nylon nylon, synthetic thermoplastic material characterized by strength, elasticity, resistance to abrasion and chemicals, low moisture absorbency, and capacity to be permanently set by heat. After 10 years of research E. I. film. In the twelve months of 2004, the Company's net earnings of $4.01 per share were generated on sales that grew 8.8 percent to $395.1 million. Net earnings were 56 cents per share less than in 2003 of which 41 cents was due to the continued strengthening of the Canadian dollar in 2004. The remaining net earnings decline of 15 cents per share included 50 cents per share due to the impact of a 1.4 percentage point contraction in the gross profit margin, partly offset by additional net earnings of 25 cents per share from 6.1 percent volume growth. The full-year volume growth included progress across all group companies. Notable successes were attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. in die cut and daisy chain Connected in series, one after the other. Transmitted signals go to the first device, then to the second and so on.  A SCSI Daisy Chain Both internal and external SCSI devices are daisy chained together. lids, along with condiment and custom thermoformed containers. In addition, imports of biaxially-oriented nylon film from a related European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. company provided growth in 2004 in advance of the additional capacity commercialized at American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Biaxis Inc. during the fourth quarter. This technically advanced film is likely to contribute robust growth in 2005. Capacity constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. brought on by exceptional growth in the modified atmosphere Modified atmosphere is a common technical definition that describes the practice of modifying the composition of the internal atmosphere of a package (commonly food packages, but this technique is also used for drugs) in order to improve the shelf life. packaging plant during 2003 impacted business growth into 2004. By the close of 2004, with capacity added during the year, the facility was operating to expected performance standards and is positioned to take advantage of future growth opportunities. In the quarter and year, the strengthening of the Canadian dollar against the Company's reporting currency, the U.S. dollar, augmented sales by $1.9 million and $7.1 million, respectively. Price/mix gains in the quarter and year of $1.4 million and $2.5 million, respectively, originated mainly with rigid containers and lidding products. Gross profit margins in the last three months of 2004 contracted primarily under the influence of raw material cost escalations and the lack of compensating price increases for flexible packaging products. In the full year, the margin tightening occurred from a combination of insufficient price increases to recover the upsurge in raw material costs and disproportionately dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por higher manufacturing costs associated with
underutilized capacity. The average unit purchase price of
Winpak's primary raw materials was 24 percent higher in the fourth
quarter of 2004 than in the equivalent quarter of 2003. However, these
increases were 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. through cost savings from technical improvements in product formulations, internal synergies, advance buying of raw materials consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. during the period and the benefit of materials that did not incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. any cost increase. As a result, the average unit cost of raw materials consumed and sold in the quarter was 4.4 percent higher than in the fourth quarter of 2003, excluding foreign exchange differences. The Company expects that selling price increases implemented in 2004 and planned for 2005 should exceed higher raw material costs in 2005. Unutilized manufacturing capacity at December 31, 2004 should facilitate volume growth in 2005 without an equivalent increase in manufacturing costs. Continued initiatives to reduce manufacturing costs are likely to improve margins in 2005. Expenses in the quarter and year included pre-production expenses of $1.0 and $1.2 million, respectively, to bring major new extrusion equipment in Winnipeg to commercialization. The expense for the Company's cash-based senior management incentive plan was adjusted downwards down·ward adv. or down·wards 1. In, to, or toward a lower place, level, or position: floating downward. 2. by $1.0 million in the fourth quarter of 2003. Excluding these factors and the impacts of foreign exchange, the quarter-on-quarter increase in total expenses was 5.5 percent, slightly less than volume growth. The strengthening Canadian dollar reduced 2004 net earnings by 41 cents per share. This comprises decreased translation gains (see Note 3 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 ) in 2004 of $3.9 million, or 47 cents per share, 13 cents consequent to the conversion of transactions from the stronger Canadian dollar into the U.S. dollar, partly offset by gains of 19 cents per share arising from foreign exchange differences on inventory. After removing these foreign exchange differences from both years, EBITDA was $2.7 million, or 3 per cent, lower than in the prior year. The lack of EBITDA growth despite the increment in sales was attributed to the lower gross profit margin and the increase in pre-production expenses. In the quarter, non-taxable non-taxable adj → nicht steuerpflichtig non-taxable adj non-taxable income → reddito non imponibile portions of Canadian foreign exchange translation gains and greater taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. in lower tax-rate jurisdictions drove the unusually low effective rate of income tax. In the year, the effective rate of income tax increased by 1.0 percentage point due to less impact in 2004 of non-taxable foreign exchange gains 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. in Canada partially offset by the greater amount of taxable earnings in lower tax-rate jurisdictions. Assuming no impact from foreign exchange differences on debt in Canada, Winpak's effective income tax rate on the current mix of taxable profits in the various jurisdictions would increase to slightly more than 36 percent. Capital Resources, Cash Flow and Liquidity Fourth quarter cash flow provided by operating activities of $17.1 million was $4.9 million greater than in the prior-year quarter. The lower net earnings and non-cash items were more than offset by the reduced income tax receivable and requirement for working capital. Investing activities in the quarter and year reached new highs, totaling $15.5 million and $46.0 million, respectively, and reflect the Company's policy to extend and realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. capacity with the best-available technology. In the fourth quarter, the Company purchased inventory, equipment and intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. for the new case-ready trays n. pl. 1. See Trais. product line, which when supplemented with other new capacity from complementary technology expected in the first half of 2005, should provide future growth. Winpak is confident that sufficient resources are available to fund cash needs for the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future, including ongoing investments in property, plant and equipment and potential acquisitions. Looking Forward Winpak anticipates that in 2005, revenues from selling price increases will exceed the impact of raw material cost escalations. Realized savings in manufacturing costs are expected to offset the margin decline due to the projected appreciation of the Canadian dollar from the average exchange rate in 2004 of 1.304 to a forecasted average rate of 1.20 in 2005. Assuming no unforeseen circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , organic growth should exceed 6 percent and net earnings are estimated to advance between 9 and 15 percent. Capital expenditures in 2005 are predicted to approach $30 million.
Corporate Office
100 Saulteaux Crescent
Winnipeg, Manitoba
Canada R3J 3T3
Tel. (204) 889-1015
Fax (204) 888-7806
Internet: www.winpak.com
Winpak Ltd.
Interim Consolidated Financial Statements
December 31, 2004
These interim consolidated financial statements have not been audited or reviewed by the Company's independent external auditors The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , PricewaterhouseCoopers LLP LLP - Lower Layer Protocol .
Winpak Ltd.
Consolidated Balance Sheets
(thousands of US dollars)
(2004 Unaudited)
December 31, 2004 December 31, 2003
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(Restated, note 2)
Assets
Current Assets:
Cash 11,654 1,845
Accounts receivable 51,841 45,259
Inventories 63,802 55,994
Prepaid expenses 1,935 1,777
Future income taxes 2,234 2,302
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131,466 107,177
Property, plant and equipment
(net) 200,870 162,335
Other assets 5,920 8,695
Intangible assets (net) 13,198 14,075
Goodwill 16,140 15,551
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367,594 307,833
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Liabilities and Shareholders'
Equity
Current Liabilities:
Accounts payable and accrued
liabilities 36,348 23,717
Long-term debt 59,000 54,000
Deferred credits 9,669 6,716
Future income taxes 28,704 23,758
Postretirement benefits 894 894
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134,615 109,085
Minority interest 10,971 10,058
Shareholders' Equity:
Share capital 29,195 29,195
Retained earnings 160,856 137,435
Cumulative currency translation
adjustments 31,957 22,060
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222,008 188,690
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367,594 307,833
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See accompanying notes to consolidated financial statements.
Winpak Ltd.
Consolidated Statements of Earnings
(thousands of US dollars, except per share amounts)
(Unaudited)
For the three months For the twelve months
ended December 31 ended December 31
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---------------------------------------------------------------------
2004 2003 2004 2003
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(Restated, (Restated,
note 2) note 2)
Sales $ 107,690 $ 98,522 $ 395,092 $ 363,276
Cost of sales 78,148 68,574 282,979 255,684
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Gross profit 29,542 29,948 112,113 107,592
Expenses
Selling, general &
administrative
(note 3) 14,241 12,357 57,636 49,313
Research and technical 2,436 1,905 8,958 7,583
Pre-production 1,211 297 1,496 557
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Earnings from
operations 11,654 15,389 44,023 50,139
Interest 712 630 2,630 2,549
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Earnings before
income taxes
and minority
interest 10,942 14,759 41,393 47,590
Provision for
income taxes 3,322 5,136 14,443 16,150
Minority interest 109 448 913 1,743
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Net earnings $ 7,511 $ 9,175 $ 26,037 $ 29,697
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Basic and fully
diluted
earnings per
share $ 1.16 $ 1.41 $ 4.01 $ 4.57
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Average number
of shares
outstanding
(000's) 6,500 6,500 6,500 6,500
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Consolidated Statements of Retained Earnings
(thousands of US dollars)
(Unaudited)
For the three months For the twelve months
ended December 31 ended December 31
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---------------------------------------------------------------------
2004 2003 2004 2003
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Retained earnings,
beginning of
period $ 154,002 $ 128,907 $ 137,435 $ 110,304
Net earnings 7,511 9,175 26,037 29,697
Dividends declared (657) (647) (2,616) (2,566)
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Retained earnings,
end of period $ 160,856 $ 137,435 $ 160,856 $ 137,435
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See accompanying notes to consolidated financial statements.
Winpak Ltd.
Consolidated Statements of Cash Flows
(thousands of US dollars)
(Unaudited)
For the three months For the twelve months
ended December 31 ended December 31
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2004 2003 2004 2003
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(Restated, (Restated,
note 2) note 2)
Cash provided by
(used in):
Operating activities:
Net earnings for the
period $ 7,511 $ 9,175 $ 26,037 $ 29,697
Items not involving
cash:
Depreciation 4,471 4,064 16,965 15,411
Amortization -
intangible
assets 510 511 2,044 2,041
Pension plan and
postretirement
benefits 600 149 1,979 1,425
Future income taxes 309 2,528 3,650 4,728
Foreign exchange gain
on long-term
debt (1,850) (1,166) (2,301) (6,128)
Minority interest 109 448 913 1,743
Other (150) 347 78 571
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Cash flow from
operating
activities before
change in working
capital 11,510 16,056 49,365 49,488
Change in working
capital:
Accounts receivable 1,927 4,128 (1,241) (184)
Inventories (4,380) (1,185) (5,236) (5,621)
Prepaid expenses 605 632 (46) 279
Accounts payable and
accrued liabilities 5,148 (6,079) 9,357 (9,456)
Pension plan
and postretirement
benefits payments (702) (1,369) (2,679) (1,821)
Income tax
receivable 3,029 - 3,029 -
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17,137 12,183 52,549 32,685
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Investing activities:
Acquisition of
property, plant
and equipment (14,297) (7,648) (44,785) (27,548)
Acquisition of
intangible
assets (1,171) - (1,171) -
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(15,468) (7,648) (45,956) (27,548)
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Financing activities:
Proceeds from
long-term debt 4,000 - 5,000 -
Repayments of
long-term debt - - - (2,000)
Dividends paid (762) (722) (2,979) (2,724)
---------------------------------------------------------------------
3,238 (722) 2,021 (4,724)
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Foreign exchange
translation
adjustment on
cash 441 (243) 1,195 (204)
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Change in cash 5,348 3,570 9,809 209
Cash (bank
indebtedness),
beginning of
period 6,306 (1,725) 1,845 1,636
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Cash, end of
period $ 11,654 $ 1,845 $ 11,654 $ 1,845
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Supplemental
disclosure of
cash flow
information:
Cash paid during
the period for:
Interest expense $ 300 $ 231 $ 2,982 $ 2,948
Income tax expense 639 3,482 6,561 17,207
See accompanying notes to consolidated financial statements.
Winpak Ltd.
Notes to Consolidated Financial Statements
For the twelve months ended December 31, 2004 and 2003
(thousands of US dollars, unless otherwise indicated)
(Unaudited)
1. Basis of Presentation: The unaudited consolidated interim financial statements have been prepared in accordance with 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". They have been prepared using the same accounting policies and methods of application as disclosed in the Company's audited consolidated financial statements for the year ended December 31, 2003 except for the changes discussed in note 2. These unaudited consolidated interim financial statements do not include all of the information and notes to the financial statements Notes to the financial statements A detailed set of notes immediately following the financial statements in an annual report that explain and expand on the information in the financial statements. required by GAAP for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report for the year ended December 31, 2003. 2. Accounting Policies: U.S. Dollar Reporting On January 1, 2004, the Company adopted the U.S. dollar as its reporting currency. The Company decided, for financial statement reporting purposes, to effect the change to U.S. dollar reporting as of January 1, 1999. In accordance with GAAP, all opening assets, liabilities and 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. were translated into US dollars using the exchange rate in effect on that date. For periods subsequent to January 1, 1999, assets and liabilities of self-sustaining self-sus·tain·ing adj. Able to sustain oneself or itself independently. self -sus·tain subsidiaries denominated in Canadian dollars are
translated into U.S. dollars at the period-end exchange rate. Sales,
costs and expenses are translated at the average exchange rate for the
period. Unrealized exchange gains or losses on the net investment in
self-sustaining subsidiaries are deferred and included in cumulative
currency translation adjustments in shareholders' equity.Consequent to the change in reporting currency, the net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of self-sustaining subsidiaries denominated in US dollars no longer qualify as a hedge against the U.S. dollar long-term debt held in Canada. Accordingly, foreign exchange adjustments arising on translation of this long-term debt are included in net earnings. Hedging Relationships Effective January 1, 2004, the Company adopted 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 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. No. 13, "Hedging Relationships". This guideline addresses the identification, designation DESIGNATION, wills. The expression used by a testator, instead of the name of the person or the thing he is desirous to name; for example, a legacy to. the eldest son of such a person, would be a designation of the legatee. Vide 1 Rop. Leg. ch. 2. 2. , documentation, and effectiveness of hedging relationships for the purpose of applying hedge accounting Why is hedge accounting necessary? Many financial institutions and corporate businesses (entities) use derivative financial instruments to hedge their exposure to different risks (eg interest rate risk, foreign exchange risk, commodity risk, etc). . In accordance with the guideline, the information on the Company's hedging relationships is documented and subject to effectiveness testing on a quarterly basis to demonstrate that they are and will continue to be effective. Any derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. financial instrument that does not qualify for hedge accounting is reported on a mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. basis, with adjustments included in net earnings. The adoption of this guideline had no impact on the interim consolidated financial statements. 3. Selling, general & administrative expenses: Included within selling, general & administrative expenses are the following amounts:
For the three months For the twelve months
ended December 31 ended December 31
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2004 2003 2004 2003
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Foreign exchange
translation
gains (1,249) (1,195) (893) (4,768)
Defined benefit
pension plan
expense 198 284 1,350 1,272
Foreign exchange translation gains represents the realized and unrealized foreign exchange differences recognized upon translation of monetary assets and liabilities Monetary assets and liabilities Assets and liabilities with contractual payoffs. (including long-term debt) and realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of cumulative currency translation adjustments. 4. Seasonality: The Company experiences seasonal variation in sales, with sales typically being the highest in the second and fourth quarters, and lowest in the first quarter. 5. Comparative Interim Amounts: Comparative interim amounts have been restated into US dollars as described in note 2. Certain comparative interim amounts have also been reclassified to conform with the presentation in the current period. WINPAK LTD. (TSX:WPK) |
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