Improved Income and Distributions from Higher Coal Prices CALGARY,
Feb. 1 /PRNewswire-FirstCall/ -- Fording Canadian Coal Trust (TSX:
FDG.UN, NYSE: FDG) today announced strong fourth quarter results.
Cash available for distribution for the fourth quarter of 2005 was
$247 million ($1.68 per unit) compared with $61 million ($0.41 per
unit) in 2004. For the year, cash available for distribution was
$722 million ($4.91 per unit) in 2005 compared with $182 million
($1.25 per unit) in 2004. Per unit amounts for prior periods have
been restated to reflect the three-for-one unit split that occurred
in the third quarter of 2005. Net income was $218 million in the
fourth quarter, up from $85 million in 2004, largely due to higher
coal prices. Net income before unusual items and future income
taxes was $243 million in the fourth quarter compared with $57
million in 2004. On an annual basis, net income increased to $834
million from $150 million in 2004. Higher coal prices combined with
the reversal of a provision for future income taxes and the gain on
the completion of the Elkview transaction contributed to this
increase. For the year, income before unusual items and future
income taxes was $704 million compared with $146 million in 2004.
"Our fourth quarter results provided significant returns to the
Trust and its unitholders," said Jim Popowich, President of Fording
Canadian Coal Trust. "Higher coal prices allowed us to greatly
increase our fourth quarter distribution to unitholders compared
with 2004." Mr. Popowich continued: "Several major accomplishments
were achieved in 2005. In addition to benefiting from historically
high coal prices, Elk Valley Coal completed capacity additions at
two of its mines, achieved 10-year sales agreements with two major
customers, and secured a 5-year contract for rail rates and volumes
for the Elk Valley mines. In addition, the Trust completed the
first phase of its reorganization and a three-for-one unit split."
Overview of the Fourth Quarter: - Cash available for distribution
increased to $247 million from $61 million. - Coal sales volumes
decreased 15% from 2004 levels due to customer delays of shipments.
- Revenues were $540 million, a 66% increase over 2004 on the
strength of higher coal sales prices, partially offset by a higher
Canadian dollar and lower sales volumes. - Cost of product sold
increased 7% to $124 million compared with 2004 due to higher
mining and energy costs. - Elk Valley Coal's unit cost of product
sold increased 25% to $34.20 per tonne in the fourth quarter
primarily due to high energy costs as well as higher mine strip
ratios. - Total transportation costs were virtually the same in
2005 compared with 2004 as lower sales volumes offset the higher
rail and port rates, which contributed to a 15% increase in Elk
Valley Coal's unit transportation costs to $36.40 per tonne. - Elk
Valley Coal entered into a letter of intent with JFE Steel
Corporation for a 10-year sales contract for 2.5 million tonnes per
annum of metallurgical coal. Year at a Glance: - Cash available for
distribution increased to $722 million from $182 million in 2004. -
Coal sales volumes decreased 5% from 2004 levels due to rail
capacity constraints and delays in the arrival of new equipment in
the early part of the year as well as customer delay of contract
shipments in the latter half of 2005. - Revenues were $1,875
million, up 61% over 2004 due to higher coal prices. - Cost of
product sold was up 9% to $497 million due to a higher operating
cost environment, including energy, equipment parts and mining
supplies. - Elk Valley Coal's unit cost of product sold increased
16% to $32.40 per tonne for the year compared with 2004 levels
primarily due to high energy costs as well as higher mine strip
ratios. - Total transportation costs increased 15% to $518 million
and Elk Valley Coal's unit transportation costs were up 15% to
$35.30 per tonne, reflecting higher contract rail rates and higher
port rates tied to increased coal prices. - Elk Valley Coal and its
primary rail provider entered into a new five-year agreement for
west-bound rail rates and volumes for the Elk Valley mines,
providing more certainty for future coal transportation. - Elk
Valley Coal completed capacity addition projects at the Fording
River and Cardinal River operations, while expansion work is
underway at the Elkview operations. - The Trust's share of capital
expenditures was $121 million of which $41 million was sustaining
capital, and $80 million was expansion capital for projects such as
development of the Cardinal River operations and capacity expansion
at the Fording River and Elkview operations. - Elk Valley Coal
finalized agreements with POSCO and Nippon Steel Corporation that
provide for 10-year sales contracts with Elk Valley Coal and a 2.5%
equity investment by each company in the Elkview operations. - The
reorganization of the Trust's subsidiaries to create a flow-
through structure was completed. - The three-for-one unit split was
completed. This news release contains forward-looking information
relating, but not limited to, the Trust's expectations, intentions,
plans and beliefs. Forward- looking information can often be
identified by forward-looking words such as "anticipate",
"believe", "expect", "goal", "plan", "intend", "estimate", "ma y",
and "will" or similar words suggesting future outcomes, or other
expectations, beliefs, plans, objectives, assumptions, intentions
or statements about future events or performance. This news release
contains forward-looking information, including in, but not limited
to, the sections titled "Overview of the Fourth Quarter",
"Important Information Regarding News Release and Unaudited
Comparative Financial Statements", "Trust Reorganization", "Income
from Operations", "NYCO", "Other Income and Expenses", "Liquidity
and Capital Resources", "Outlook", "Cost of Product Sold",
"Transportation" and "Proposed Accounting Change". Unitholders and
prospective investors are cautioned not to place undue reliance on
forward-looking information. By its nature, forward-looking
information involves numerous assumptions, known and unknown risks
and uncertainties, of both a general and specific nature, that
could cause actual results to differ materially from those
suggested by the forward-looking information or contribute to the
possibility that predictions, forecasts or projections will prove
to be materially inaccurate. For a further discussion of the
assumptions, risks and uncertainties relating to the
forward-looking statements contained in this news release please
refer to the section entitled "Caution Regarding Forward-Looking
Statements" on page 14. Important Information Regarding News
Release and Unaudited Comparative Financial Information
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The financial information in this news release is unaudited and has
not been reviewed by Fording Canadian Coal Trust's (the Trust)
auditors. The Trust's management's discussion and analysis and
audited consolidated financial statements and notes for the year
ended December 31, 2005, will be issued on March 31, 2006. The
Trust reports its financial information in Canadian dollars and all
monetary amounts set forth herein are expressed in Canadian dollars
unless otherwise stated. This news release should be read in
conjunction with the Trust's management's discussion and analysis
and consolidated financial statements for the year ended December
31, 2004, and other public disclosure documents of the Trust and
its predecessors. Readers are cautioned that certain information
included in this news release for prior periods may not be directly
comparable because of reductions of the Trust's interest in Elk
Valley Coal effective April 1, 2004 and April 1, 2005 and
accounting changes related to asset retirement obligations, the
reclassification of certain sales transactions and the inclusion of
depreciation, depletion and amortization in the carrying value of
inventory. These items, which are described below, resulted in a
number of unusual items being included in income in 2004 and 2005.
When Elk Valley Coal was formed in February 2003, the Trust had a
65% interest with the remainder held by Teck Cominco Limited (Teck
Cominco), the managing partner. The partnership agreement permitted
Teck Cominco to increase its interest in Elk Valley Coal by
achieving a certain level of synergies through its management of
the partnership assets. Teck Cominco achieved the synergy
objectives and the partners agreed that the Trust's interest would
be reduced to 62% effective April 1, 2004, 61% on April 1, 2005,
and to 60% on April 1, 2006. The financial results and other
information presented in this report reflect the Trust's 65%
interest in Elk Valley Coal from January 1, 2004 to March 31, 2004,
and a 60% interest thereafter. The Trust accounted for the
estimated effect of the 5% reduction in its interest in Elk Valley
Coal in its financial results in the second quarter of 2004, as
well as an estimate of additional entitlements to be received until
March 31, 2006. The additional distribution entitlements received
since March 31, 2004, have been or will be included in cash
available for distribution over the period ending March 31, 2006.
Readers are cautioned that certain information included in this
document for prior periods may not be directly comparable due to
the reduction of the Trust's interest in Elk Valley Coal effective
April 1, 2004. In addition, all per unit amounts and outstanding
units disclosed herein have been restated to reflect the
three-for-one unit split that occurred in the third quarter of
2005. Fording Canadian Coal Trust --------------------------- The
Trust is an open-ended mutual fund trust created pursuant to a
declaration of trust and governed by the laws of Alberta. The Trust
does not carry on any active business. Through investments in
metallurgical coal and industrial minerals mining and processing
operations, the Trust makes quarterly cash distributions to
unitholders. The Trust owns a 60% interest in the Elk Valley Coal
Partnership (Elk Valley Coal) and a 100% interest in NYCO. The
Trust holds its investment in Elk Valley Coal through its direct
and indirect investment in Fording Limited Partnership (Fording
LP), and its investment in NYCO directly. Elk Valley Coal
--------------- Elk Valley Coal is the second largest supplier of
seaborne hard coking coal in the world. Hard coking coal is a
premium coal used primarily for making coke by integrated steel
mills, which account for approximately 60% of worldwide steel
production. The seaborne hard coking coal market is characterized
by the global nature of international steel-making, the relative
concentration of quality metallurgical coal deposits in Australia,
Canada and the United States and the comparatively low cost of
seaborne transportation. Elk Valley Coal has an interest in six
mining operations. The Fording River, Coal Mountain, Line Creek and
Cardinal River operations are wholly owned by Elk Valley Coal and
are accounted for as such. The Greenhills operations are a joint
venture in which Elk Valley Coal has an 80% interest that is
accounted for on a proportionate basis for financial reporting
purposes. As of August 1, 2005, the Elkview operations are owned by
a limited partnership in which Elk Valley Coal owns a 95% interest.
For accounting purposes, the Elkview operations are consolidated
with those of Elk Valley Coal. The Fording River, Coal Mountain,
Line Creek, Elkview and Greenhills operations are located in the
Elk Valley region of southeast British Columbia. The Cardinal River
operations are located in west central Alberta. Elk Valley Coal
also owns numerous other properties, including the coal preparation
plant and coal resources at the former Quintette operations and
other coal resources in British Columbia as well as a 46% interest
in Neptune Bulk Terminals (Canada) Ltd., a coal and potash loading
facility located in Vancouver, British Columbia. The Trust's
results pertaining to its Elk Valley Coal segment consist of its
proportionate interest in the operations of Elk Valley Coal as well
as corporate costs related to these operations. This also includes
hedging gains and losses, mineral taxes and other items recorded in
Fording LP but attributable to Elk Valley Coal's earnings. NYCO
---- NYCO consists of subsidiaries of the Trust that operate
wollastonite mining operations in New York State and Mexico and a
tripoli mining operation in Missouri. NYCO is a leading producer of
wollastonite. Wollastonite is an industrial mineral that is used in
the manufacture of automotive composites, adhesives and sealants,
metallurgical fluxes, friction material, paints and
corrosion-resistant coatings, fire-resistant construction
wallboard, cement-based products and ceramics. Tripoli is an
industrial mineral that is used primarily in buffing and polishing
applications. Non-GAAP Financial Measures
--------------------------- This news release refers to certain
financial measures that are not determined in accordance with GAAP
in Canada or the United States. Financial measures such as cash
available for distribution, distributable cash and net income
before unusual items and future income taxes are not measures
recognized under GAAP and do not have standardized meanings
prescribed by GAAP. We discuss these measures, which have been
derived from our financial statements and applied on a consistent
basis, because we believe that they facilitate the understanding of
the results of our operations and financial position and are
relevant measures of the ability of the Trust to earn and
distribute cash returns to unitholders. These measures may differ
from those made by other issuers and accordingly, may not be
comparable with such measures as reported by other trusts or
corporations. Overview -------- The table below summarizes our
financial results and some of our key operating statistics on a
consolidated basis. Three months ended Year ended December 31
December 31 (millions of Canadian ----------------------
---------------------- dollars, except as noted) 2005 2004 2005
2004
-------------------------------------------------------------------------
Revenue $ 540.2 $ 324.9 $ 1,874.8 $ 1,167.2 Income from operations
$ 266.0 $ 57.1 $ 776.9 $ 170.1 Net income $ 218.3 $ 85.4 $ 834.2 $
150.1 Net income before unusual items and future income taxes $
243.3 $ 57.0 $ 704.4 $ 145.5 Basic and diluted earnings per unit:
Net income $ 1.49 $ 0.58 $ 5.67 $ 1.03 Net income before unusual
items and future income taxes $ 1.66 $ 0.39 $ 4.79 $ 1.00
Metallurgical Coal Statistics: Coal production (million tonnes) 3.7
3.9 15.4 15.2 Coal sales (million tonnes) 3.4 4.0 14.5 15.3 Average
sales price U.S.$/tonne $ 121.80 $ 57.30 $ 99.30 $ 52.20 CDN$/tonne
$ 153.50 $ 79.30 $ 126.40 $ 73.10 Operating expenses Cost of
product sold (CDN$/tonne) $ 34.20 $ 27.30 $ 32.40 $ 28.00
Transportation (CDN$/tonne) $ 36.40 $ 31.70 $ 35.30 $ 28.90
Industrial Minerals Statistics (Wollastonite): Sales (thousands of
tonnes) 22 21 90 82 Average sales price (U.S.$/tonne) $ 391 $ 395 $
388 $ 424 Trust Reorganization In May 2005, unitholders authorized
management to proceed with the reorganization of the Trust into a
royalty trust which would enable the Trust to take advantage of an
exemption from the non-resident ownership restriction in the Income
Tax Act (Canada). This reorganization would require an advance tax
ruling by the Canada Revenue Agency. The filing of an application
for the ruling was delayed by the Federal Government's moratorium
on advance tax rulings during the consultation process on taxation
of income trusts in the fall of 2005. The moratorium was lifted in
late November with the Federal Government's announcement that it
would not be proposing changes in the tax treatment of income
trusts. The Trust anticipates that it will file an application for
the advance tax ruling in the first quarter of 2006. Cash Available
for Distribution The increase in cash available for distribution in
the fourth quarter of 2005 reflects increased earnings from Elk
Valley Coal's metallurgical coal operations due to higher coal
prices. The quarterly distribution declared and paid for the fourth
quarter was $1.60 per unit. Distributions are declared by the
Trustees and may not equal cash available for distribution. Three
months ended Year ended December 31 December 31 (millions of
Canadian ---------------------- ---------------------- dollars,
except as noted) 2005 2004 2005 2004
-------------------------------------------------------------------------
Cash available for distribution $ 247.4 $ 60.8 $ 721.6 $ 182.2
Distributions declared $ 235.2 $ 63.7 $ 700.6 $ 213.5 Weighted
average number of units outstanding (in millions) 147.0 147.0 147.0
145.5 Per unit amounts: Cash available for distribution $ 1.68 $
0.41 $ 4.91 $ 1.25 Distributions declared $ 1.60 $ 0.43 $ 4.76 $
1.47 The calculation of cash available for distribution is shown in
Note 1 of the Trust's unaudited consolidated financial information
included in this news release. The reconciliation from net income
to net income before unusual items and future income taxes, which
is a non-GAAP measure, is provided in the following table: Three
months ended Year ended December 31 December 31 (millions of
Canadian ---------------------- ---------------------- dollars)
2005 2004 2005 2004
-------------------------------------------------------------------------
Net income per financial statements $ 218.3 $ 85.4 $ 834.2 $ 150.1
Add (deduct): Reduction of interest in Elk Valley Coal 4.1 - (5.4)
37.5 Income from change in inventory valuation - - - (10.8) Future
income tax expense (reversal) 19.6 (28.4) (97.2) (31.3) Loss (gain)
on issuance of partnership interest 1.3 - (27.2) -
---------------------- ---------------------- Net income before
unusual items and future income taxes $ 243.3 $ 57.0 $ 704.4 $
145.5 ---------------------- ----------------------
---------------------- ---------------------- Income from
Operations ---------------------- Elk Valley Coal(1) Three months
ended Year ended December 31 December 31 (millions of Canadian
---------------------- ---------------------- dollars, except as
noted) 2005 2004 2005 2004
-------------------------------------------------------------------------
Statistics Coal production (millions of tonnes) 3.7 3.9 15.4 15.2
Coal sales (millions of tonnes) 3.4 4.0 14.5 15.3 Average sales
price (per tonne) U.S.$ $ 121.80 $ 57.30 $ 99.30 $ 52.20 CDN$ $
153.50 $ 79.30 $ 126.40 $ 73.10 Operating expenses (per tonne) Cost
of product sold $ 34.20 $ 27.30 $ 32.40 $ 28.00 Transportation $
36.40 $ 31.70 $ 35.30 $ 28.90 Income from operations Revenues $
529.2 $ 314.2 $ 1,829.9 $ 1,118.1 Cost of product sold 118.0 108.9
469.2 428.2 Transportation 125.6 125.7 510.2 442.2 Selling, general
and administration 5.7 6.6 17.2 20.3 Depreciation and depletion
12.4 12.4 47.5 53.0 ---------------------- ----------------------
Income from operations $ 267.5 $ 60.6 $ 785.8 $ 174.4
---------------------- ----------------------
---------------------- ---------------------- (1) Amounts reflect
the Trust's 60% interest in Elk Valley Coal plus certain items of
Fording LP that relate to Elk Valley Coal operations. Sales volumes
were lower in the fourth quarter compared with 2004 due to customer
delays of shipments. Sales volumes for 2005 were also negatively
impacted from rail capacity constraints in the first half of the
year and delays in the arrival of new mining equipment. Production
volumes in the fourth quarter and for the year were comparable with
2004 levels. Revenues increased substantially for both the fourth
quarter and for the year compared with 2004 as a result of higher
average 2005 coal year prices, offset by lower sales volumes and to
a lesser degree, by a higher Canadian dollar. Cost of product sold
increased 8% in the fourth quarter and 10% for the year compared
with the same periods in 2004 as a result of a higher operating
cost environment. Unit cost of product sold increased 25% in the
fourth quarter and 16% for the year compared with 2004 levels
primarily due to high energy costs as well as higher mine strip
ratios. Transportation costs in the fourth quarter were comparable
to 2004 due to lower sales volumes. Transportation costs on a total
and unit basis were up 22% and 15%, respectively, for the year
compared with 2004, reflecting increases in rail rates due to the
new west-bound rail contract and increases in port rates resulting
from higher coal prices. Selling, general and administration costs
decreased 14% in the fourth quarter and 15% for the year compared
with 2004 largely due to costs incurred in 2004 pursuant to change
in control agreements with certain former senior executives. The
expansion at Cardinal River operations was completed as planned in
the fourth quarter of 2005, providing capacity to produce at a rate
of 2.8 million tonnes per year. At the Elkview operations, capacity
additions are continuing. NYCO Three months ended Year ended
December 31 December 31 (millions of Canadian
---------------------- ---------------------- dollars, except as
noted) 2005 2004 2005 2004
-------------------------------------------------------------------------
Statistics - Wollastonite Sales (thousands of tonnes) 22 21 90 82
Average sales price (U.S.$ per tonne) $ 391 $ 395 $ 388 $ 424
Average sales price (CDN$ per tonne) 459 483 470 559 Income from
operations Revenues $ 11.0 $ 10.7 $ 44.9 $ 49.1 Cost of product
sold 6.0 6.7 28.2 26.2 Transportation 1.9 1.5 7.3 7.0 Selling,
general and administration 1.2 1.6 4.3 5.2 Depreciation and
depletion 1.1 1.0 4.4 5.0 ----------------------
---------------------- Income (loss) from operations $ 0.8 $ (0.1)
$ 0.7 $ 5.7 ---------------------- ----------------------
---------------------- ---------------------- Income from NYCO's
operations increased by $1 million in the fourth quarter of 2005
compared with the corresponding period in 2004 due to lower cost of
product sold and increased sales volumes. Income for the year was
down approximately $5 million compared with 2004, primarily due to
lower average U.S. sales prices combined with the impact of a
higher Canadian dollar and higher cost of product sold. Cost of
product sold increased as a result of higher sales volumes and
mining costs as well as reduced yields. The Trust is assessing a
range of strategic alternatives for NYCO to identify opportunities
to maximize the value of this investment. This process is
anticipated to be completed in the first half of 2006. Other Income
and Expenses ------------------------- Three months ended Year
ended December 31 December 31 ----------------------
---------------------- (millions of dollars) 2005 2004 2005 2004
-------------------------------------------------------------------------
Interest expense $ (3.0) $ (2.4) $ (11.3) $ (12.8) Other income
(expense), net 3.0 3.3 2.1 17.3 Gain (loss) on issuance of
partnership interest (1.3) - 27.2 - Reduction of interest in Elk
Valley Coal (4.1) - 5.4 (37.5) ----------------------
---------------------- $ (5.4) $ 0.9 $ 23.4 $ (33.0)
---------------------- ----------------------
---------------------- ---------------------- Interest expense for
the fourth quarter of 2004 is lower than in 2005 due to the
capitalization of a portion of interest for capital projects. Other
income (expense) includes interest, foreign exchange gains and
losses and miscellaneous items. Other income (expense) in the
fourth quarter and for the year of 2005 included interest on cash
balances partially offset by interest on bank debt and Nippon and
POSCO's share of the Elkview operations. Also included in 2005
other income (expenses) were foreign exchange gains from the U.S. /
Canadian dollar exchange rate. In 2004, a change in accounting
practice resulted in other income of $11 million, related to the
inclusion of depreciation and depletion in the valuation of product
inventories on hand at the start of the year. The loss on the
reduction of the Trust's interest in Elk Valley Coal that was
recorded in the second quarter of 2004 was partially offset by an
estimate of cash to be received for the additional distribution
entitlements of 2% for the twelve months ended March 31, 2005 and
1% for the twelve months ended March 31, 2006. The estimate of cash
to be received for the additional distribution entitlement of 1%
for the twelve months ended March 31, 2006 was revised during the
year to reflect expected operating results. The net effect of these
revisions was a $5 million net favourable adjustment. Income Taxes
------------ Income tax expense has consisted primarily of Canadian
corporate income taxes, British Columbia mineral taxes and Alberta
Crown royalties assessed on the cash flows of Elk Valley Coal and,
to a lesser extent, foreign income tax related to NYCO. Income tax
expense for 2005 largely reflects increased mineral taxes due to
high cumulative net cash flows generated by Elk Valley Coal, offset
by the reversal of a provision for future income taxes of $164
million. The reversal was a non-cash item and had no impact on
distributable cash for the year. During the quarter, the Trust
recognized a future mineral tax asset of $23 million relating to
Elk Valley Coal's acquisition of the Line Creek operations in
February 2003. Of this amount, $10 million was charged to future
mineral tax expense in the quarter. Three months ended Year ended
December 31 December 31 ----------------------
---------------------- (millions of dollars) 2005 2004 2005 2004
-------------------------------------------------------------------------
Current income tax expense (reversal): Canadian corporate income
taxes $ - $ 0.5 $ 3.9 $ 2.6 Provincial mineral taxes and Crown
royalties 22.0 - 58.7 11.7 Foreign income taxes 0.7 0.5 0.7 4.0
---------------------- ---------------------- 22.7 1.0 63.3 18.3
Future income tax expense (reversal): Canadian corporate income
taxes - (28.9) (128.3) (31.4) Provincial mineral taxes and Crown
royalties 19.8 2.5 31.3 1.8 Foreign income taxes and other (0.2)
(2.0) (0.2) (1.7) ---------------------- ----------------------
19.6 (28.4) (97.2) (31.3) ----------------------
---------------------- Total income tax expense (reversal) $ 42.3 $
(27.4) $ (33.9) $ (13.0) ----------------------
---------------------- ----------------------
---------------------- Liquidity and Capital Resources
------------------------------- Cash and cash equivalents increased
to $100 million in the fourth quarter of 2005 compared with 2004.
Cash flows from operating activities are largely influenced by the
results of Elk Valley Coal. These cash flows increased
substantially in the fourth quarter of 2005 compared with 2004 due
to the increase in income, driven by higher coal sales prices. Cash
flows from operating activities include changes in working capital
that can fluctuate from period to period. Accounts receivable
increased due to the increase in coal prices and timing of
shipments. Inventories reflect the build-up of clean coal
inventories. Investing activities during the fourth quarter
included capital expenditures of approximately $28 million.
Expansion capital expenditures amounted to $16 million primarily
related to the Elkview operations. Fourth quarter spending for
sustaining projects was $12 million, the majority of which was for
the Fording River, Elkview and Greenhills operations. The increase
in cash from financing activities for the year included the Trust's
share of proceeds from the issuance of a 2.5% partnership interest
in the Elkview operations to each of Nippon Steel Corporation and
POSCO. In the quarter, debt increased by $18 million primarily due
to borrowings by Elk Valley Coal for working capital purposes. The
Trust's borrowings and Elk Valley Coal's outstanding letters of
credit remained constant at U.S.$167 million and CDN$81 million,
respectively. The Trust's share of unused bank facilities at
December 31, 2005, was $231 million, comprised of $205 million from
the Trust's facility, which is used to fund capital requirements,
and $26 million, which is the Trust's share of the Elk Valley Coal
facility. Subsequent to year end, the syndicate of banks agreed to
increase Elk Valley Coal's loan facility to $200 million from $150
million and extend the maturity date to February 11, 2011. An
amendment to the credit facility is anticipated to be concluded in
the first quarter of 2006. Adequate credit facilities are available
to fund working capital, expected capital spending requirements for
expansion plans and other short- term requirements. We anticipate
that Elk Valley Coal and NYCO will be able to generate sufficient
funds from operating and financing activities to maintain their
productive capacity and to fund current planned growth and
development activities. Outlook ------- Our financial results, and
therefore the amount of cash available for distribution to
unitholders, are highly dependent on key variables such as coal
prices, coal production and sales volumes, forward contracts, the
U.S./Canadian dollar exchange rate, production and transportation
costs, sustaining capital expenditures and other financial and
legal requirements. Changes in any of these factors could have a
material impact on our results and cash available for distribution
to unitholders. Elk Valley Coal's production capacity is expected
to be restricted in 2006 to approximately 24 to 25 million tonnes
due to a global shortage of haulage truck tires. Elk Valley Coal
has been advised by its suppliers that tires will be allocated
among their customers due to substantial growth in tire demand and
limited manufacturing capacity. The Trust anticipates this tire
shortage will continue into 2007 and may contribute to constraining
Elk Valley Coal's production of hard coking coal over this period.
The fundamentals for the hard coking coal market remain positive
and are expected to continue until new supplies of hard coking coal
come into the market or demand for integrated steel products
declines. In the latter half of 2005, Elk Valley Coal experienced
delays in some shipments. A number of its customers overbought
metallurgical coal earlier in the year to protect against the
potential for underperformance by coal suppliers in tight market
conditions. However, supply interruptions were minimal. Elk Valley
Coal sells the majority of its coal through long-term evergreen
contracts based on fixed annual volumes. However, the Trust
cautions that variations in contract performance do occur. The
10-year sales contract announced in the fourth quarter with JFE
Steel Corporation for 2.5 million tonnes per annum for the 2006 to
2015 coal years is expected to be signed early in 2006. Elk Valley
Coal has commenced negotiations with its customers for 2006
contract year sales prices. The Trust will provide further
information when sufficient contracts are settled to establish the
2006 coal year prices. Cost of Product Sold Elk Valley Coal
continues to focus on managing key operating variables that
directly influence mining costs, such as mine and plant
productivities, yields, strip ratios and haul distances in order to
maximize cash flows over the long-term. Higher mining and
processing input costs such as fuel, steel, tires, labour,
contractor charges and maintenance parts and supplies also have a
significant impact on the cost of producing coal. Future operations
could be impacted if Elk Valley Coal experiences difficulties
obtaining equipment and supplies on a timely basis. These factors,
combined with the growth in global mining activities, are expected
to result in a continuation of this high operating cost environment
throughout 2006. As the operating variables of the mines change
with ongoing development, the cost of product sold will vary. Strip
ratios are expected to remain relatively constant over the next two
years. Haul distances will increase as overburden from new pits is
placed on existing spoils or new spoils that are beyond the limits
of future mining areas. Also, coal yields can vary as the
characteristics of the coal seams change. Elk Valley Coal operates
in a competitive environment for attracting labour to fill new
mining jobs and the jobs of retiring employees. It also takes time
for these new employees to train and gain the experience necessary
to achieve higher rates of productivity. These factors could affect
production, productivity and costs at Elk Valley Coal's operations,
and could have a material adverse effect on cash available for
distribution to unitholders. Collective Agreements A four-year
collective agreement at the Line Creek operations was reached in
January 2006, covering the period from June 1, 2005, to May 31,
2009. Coal Mountain operations entered into a new five-year
collective agreement early in 2005 which expires December 31, 2009.
The collective agreement at the Elkview operations expired at the
end of October 2005 and negotiations are ongoing. The agreement at
the Fording River operations expires in April of 2006 while the
Cardinal River operations' agreement expires in 2007. Should an
agreement not be reached at one or more of these operations, work
stoppages could occur that could have a material adverse effect on
cash available for distribution to unitholders. Cardinal River
Operations In November, the Alberta Energy and Utilities Board
denied a third party request for reconsideration of the Cheviot
mine permit at the Cardinal River operations. There are no
outstanding challenges to permits in respect to this operation.
Transportation Railways servicing Elk Valley Coal's operations are
working to meet the current capacity requirements of all
industries. In the early part of 2005, rail service did not meet
Elk Valley Coal's needs and negatively impacted sales volumes.
Looking forward, rail service levels are expected to be sufficient
to move Elk Valley Coal's planned production volumes in 2006. Elk
Valley Coal has given notice to Westshore Terminals that it is
requesting a review of the loading rate for the Elkview operations
contract effective April 1, 2005. Failing agreement between the two
parties, the contract provides for an arbitrator to determine the
rates. Under the terms of the contract, the loading rate is linked
to the Canadian dollar price received for coal. Rail capacity
issues, prolonged labour stoppages, availability of trains,
congestion in the Vancouver corridor, weather related issues or
other factors that prevent the railways or the ports from providing
their services could seriously impact Elk Valley Coal's sales
volumes and financial results, and could have material adverse
effect on cash available for distribution to unitholders. Foreign
Exchange Forward Contracts To help manage exposure to currency
fluctuations and their effect on unitholder distributions, foreign
exchange forward contracts are sometimes used to fix the rate at
which certain future anticipated flows of U.S. dollars are
exchanged into Canadian dollars. The majority of the outstanding
forward contracts as December 31, 2005, will be settled by March
31, 2006. The following table summarizes the Trust's outstanding
hedged positions at December 31, 2005. Amount Hedged (millions of
U.S.$) Average Exchange Rates ------------------------------------
---------------------------- Fording EVCP Trust's (U.S.$1 (CDN$1
Year LP 60% Total equals CDN$) equals U.S.$)
-------------------------------------------------------------------------
2006 $ 380 $ 57 $ 437 1.31 0.76 2007 16 - 16 1.46 0.69
------------------------------------ $ 396 $ 57 $ 453
------------------------------------
------------------------------------ At December 31, 2005, the
Trust's portion of unrealized gains on foreign exchange forward
contracts was $58.9 million (2004 - $116.2 million; 2003 - $124.1
million) based on the year-end U.S./Canadian dollar exchange rate
of U.S. $0.86. Proposed Accounting Change Canadian accounting
standard setters, through the CICA Emerging Issues Committee, have
issued Draft Abstract D56, "Accounting for Stripping Costs in the
Mining Industry". This Draft Abstract, if adopted in its current
form, will require the Trust to change its accounting policy with
respect to in-process raw coal. The Trust currently considers raw
coal exposed in the mining bench and stockpiled in the pit to be
in-process inventory. This in-pit raw coal accounts for $32 million
of total in-process raw coal inventory at the end of 2005. In-pit
raw coal is not considered to be extracted from the mine under the
Draft Abstract and, accordingly, would not be considered inventory.
In the period during which this change of accounting policy would
be adopted, net income will be negatively affected as existing
in-pit raw coal is processed and sold and costs previously
associated with in-pit raw coal inventories are treated as current
period costs on a go-forward basis. This change of accounting
policy is not expected to impact cash available for distribution.
Trust Units ----------- There were approximately 147 million trust
units outstanding on December 31, 2005, and February 1, 2006.
Approximately 92,400 options were outstanding under the exchange
option plan as of December 31, 2005 and 91,500 options as of
February 1, 2006. To maintain its status as a mutual fund trust
under the Income Tax Act (Canada), the Trust cannot be established
or maintained primarily for the benefit of non-residents of Canada.
To enable the Trust to monitor its level of non-resident ownership,
the Declaration of Trust provides that the Trustees may require
declarations of residency from unitholders. Having regard for the
recent 3 for 1 unit split, the Trustees have decided it is prudent
to require unitholders to provide residency declarations in the
first quarter of 2006. Risk Factors ------------ Unitholders should
refer to the 'Risk Factors' in the Trust's 2004 Annual Report and
in the Management Information Circular dated April 2, 2005 for
other factors that could potentially impact the Trust's financial
performance and its ability to meet its targets. Caution Regarding
Forward-looking Information
--------------------------------------------- This news release
contains forward-looking information relating, but not limited to,
the Trust's expectations, intentions, plans and beliefs. Forward-
looking information can often be identified by forward-looking
words such as "anticipate", "believe", "expect", "goal", "plan",
"intend", "estimate", "ma y", and "will" or similar words
suggesting future outcomes, or other expectations, beliefs, plans,
objectives, assumptions, intentions or statements about future
events or performance. This news release contains forward-looking
information, including in, but not limited to, the sections titled
"Overview of the Fourth Quarter", "Important Information Regarding
News Release and Unaudited Comparative Financial Statements",
"Trust Reorganization", "Income from Operations", "NYCO", "Other
Income and Expenses", "Liquidity and Capital Resources", "Outlook",
"Cost of Product Sold", "Transportation" and "Proposed Accounting
Change". Unitholders and prospective investors are cautioned not to
place undue reliance on forward-looking information. By its nature,
forward-looking information involves numerous assumptions, known
and unknown risks and uncertainties, of both a general and specific
nature, that could cause actual results to differ materially from
those suggested by the forward-looking information or contribute to
the possibility that predictions, forecasts or projections will
prove to be materially inaccurate. These factors include, but are
not limited to: the dependency of the Trust on cash distributions
from Elk Valley Coal; interest rate fluctuations and other factors
affecting yield; the potential liability of the Trust for income
tax; potential changes in the taxation of income trusts; the nature
of the Trust's units, particularly that distributions on the
Trust's units are not fixed; changing levels of non- resident
ownership and the effectiveness of measures required to limit non-
resident ownership; dilution resulting from the issuance of
additional units; the magnitude of capital expenditures incurred by
Elk Valley Coal or NYCO; the negative impact of paying for unfunded
liabilities such as pension, post- retirement benefits or asset
retirement obligations; restrictions on potential growth resulting
from the payout of available cash to unitholders; the availability
of credit facilities for capital expenditure requirements,
limitations imposed by credit facilities restricting the ability of
the Trust or Elk Valley Coal to incur debt, dispose of assets or
pay distributions; conflicts of interest between the Trust, Elk
Valley Coal and the managing partner of Elk Valley Coal;
operational risks affecting funds available to the Trust for
distribution to unitholders; operational issues at mine sites;
disruption or delays in construction at mine sites; shortage and
quality of mining equipment and related operating supplies,
including haul truck tires; cost increases for mining equipment and
services; increasing mining and energy costs; foreign currency
exchange rate fluctuations; risks inherent in the use of derivative
instruments; dependency on major customers; the ability of Elk
Valley Coal and NYCO to attract and retain skilled personnel; the
lack of new applications for wollastonite and other industrial
minerals; health issues associated with tremolite and tripoli;
changes in environmental laws which could have a negative impact on
Elk Valley Coal's operations and profitability; uncertainties
surrounding applications for permits and permitting processes;
accuracy of liability accruals; assertion of aboriginal rights
claims; changes in commodity prices; changes in steel-making
methods and other technological changes; the strength of the
various economies that purchase significant amounts of coking coal
or steel products; difficulties and uncertainties inherent in
operating and selling products in foreign countries; changes in
regulations relating to the use of metallurgical coal and
industrial minerals; the magnitude of the Trust's interest in Elk
Valley Coal; the effectiveness of the managing partner of Elk
Valley Coal in managing the partnership's affairs; the effects of
competition and pricing pressures in the metallurgical coal and
industrial minerals markets; risks inherent in the mining industry
and the inability of Elk Valley Coal or the Trust to insure against
certain of these risks; the oversupply of, or lack of demand for,
metallurgical coal and/or industrial minerals; events which could
disrupt operations and/or the transportation of products, including
labour stoppages related to industrial accidents, work stoppages,
renegotiation of collective agreements and/or severe or abnormal
weather conditions or natural disasters; demand for, availability
and pricing of rail, port and other transportation services;
management's ability to anticipate and manage the risks to which
Elk Valley Coal and/or the Trust are exposed; uncertainty involving
the geology of mineral deposits; uncertainty of estimates of the
size or composition of mineral deposits; uncertainty of estimates
of reserves and resources; uncertainty of projections relating to
costs of production and transportation or estimates of market
prices for the mineral; the possibility of delays in mining
activities; changes in plans with respect to exploration,
development projects or capital expenditures; risks relating to
health, safety and environmental matters; and general economic,
business and market conditions. The forward-looking statements
contained in this news release are based, in part, upon certain
assumptions made by the Trust, including, but not limited to, the
following: no material disruption in production; no material
variation in anticipated coal sales volumes, coal prices or cost of
product sold; no material variation in the forecasted yields, strip
ratios, haul distances and productivity for each mine in which the
Trust has an interest; no material increases in the global supply
of hard coking coal other than what is currently projected by
management; weaker coking coals will not be substituted for hard
coking coal; continued strength in global steel markets; no
material disruption in construction or operations at mine sites; no
variation in availability or allocation of haul truck tires to Elk
Valley Coal until late 2007; settlement of current collective
bargaining disputes on terms acceptable to management and an
absence of labour disputes in the forecast period; no material
increase in the cost of labour; no material variations in the
markets and pricing of metallurgical coal other than anticipated
variations; no material variation in anticipated mining, energy or
transportation costs; continued availability of and no material
disruption in rail service and port facilities; no material delays
in the current timing for completion of ongoing projects; financing
will be available on terms favourable to the Trust and Elk Valley
Coal; no material variation in the operations of Elk Valley Coal's
customers which could impact coal purchases; no material variation
in historical coal purchasing practices of customers; coal sales
contracts will be entered into with new customers; delayed coal
shipments in 2005 will not materially impact customer demand in
2006; existing inventories will not result in decreased sales
volumes; no further moratoriums on advance tax rulings for the
Canada Revenue Agency; parties execute and deliver contracts
currently under negotiation; and no material variations in the
current tax and regulatory environment. The Trust cautions that the
list of factors and assumptions set forth above is not exhaustive.
Some of the risks, uncertainties and other factors which negatively
affect the reliability of forward-looking information are discussed
in the Trust's public filings with the Canadian securities
regulatory authorities, including its most recent management
information circular, annual information form, quarterly reports,
material change reports and news releases, and with the United
States Securities and Exchange Commission, including the Trust's
most recent annual report on form 40-F as supplemented by its
filings on form 6-K. Copies of the Trust's Canadian public filings,
including its annual information form are available at
http://www.sedar.com/. The Trust's U.S. public filings are
available at http://www.sec.gov/. The Trust further cautions that
information contained on, or accessible through, these websites is
current only as of the date of such information and may be
superseded by subsequent events or filings. The Trust undertakes no
obligation to update publicly or otherwise revise any information,
including any forward- looking information, whether as a result of
new information, future events or other such factors that affect
this information except as required by law.
__________________________________ Conference Call and Webcast A
conference call to discuss these results will be held Thursday,
February 2 at 8:00 a.m. Mountain time, 10:00 a.m. Eastern time. To
participate in the conference call, please dial 1-800-814-4890 or
416-640-1907 approximately 10 minutes prior to the call. A live and
archived audio webcast of the conference call will also be
available on the Trust's website http://www.fording.ca/. About
Fording Fording Canadian Coal Trust is an open-ended mutual fund
trust. Through investments in metallurgical coal and industrial
minerals mining and processing operations, the Trust makes
quarterly cash distributions to unitholders. The Trust, through its
wholly owned subsidiaries, holds a 60% interest in the Elk Valley
Coal Partnership and a 100% interest in NYCO, a leading producer of
the industrial mineral wollastonite. Elk Valley Coal, comprised of
Canada's senior metallurgical coal mining properties, is the
world's second largest exporter of metallurgical coal, supplying
high-quality coal products to the international steel industry. The
Trust's shares are traded on the Toronto Stock Exchange under the
ticker symbol FDG.UN and on the New York Stock Exchange under the
symbol FDG. CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three
months ended Year ended (millions of Canadian December 31 December
31 dollars, except per unit ----------------------
---------------------- amounts) 2005 2004 2005 2004
-------------------------------------------------
---------------------- Revenues $ 540.2 $ 324.9 $ 1,874.8 $ 1,167.2
Expenses Cost of product sold 124.0 115.6 497.4 454.4
Transportation 127.5 127.2 517.5 449.2 Selling, general and
administration 9.2 10.9 30.7 32.8 Depreciation and depletion 13.5
14.1 52.3 60.7 ----------------------- --------------------- 274.2
267.8 1,097.9 997.1 ----------------------- ---------------------
Income from operations 266.0 57.1 776.9 170.1 Other income
(expense) Interest expense (3.0) (2.4) (11.3) (12.8) Other income
(expense), net 3.0 3.3 2.1 17.3 Gain on issuance of partnership
interest (1.3) - 27.2 - Reduction of interest in EVCP (4.1) - 5.4
(37.5) ----------------------- --------------------- Income before
taxes 260.6 58.0 800.3 137.1 Income tax (reversal) expense 42.3
(27.4) (33.9) (13.0) ---------------------- ----------------------
Net income $ 218.3 $ 85.4 $ 834.2 $ 150.1 ----------------------
---------------------- ----------------------
---------------------- Weighted average number of units outstanding
(millions) 147.0 147.0 147.0 145.5 Basic and diluted earnings per
unit $ 1.49 $ 0.58 $ 5.67 $ 1.03 CONSOLIDATED STATEMENTS OF
ACCUMULATED EARNINGS (unaudited) Three months ended Year ended
December 31 December 31 (millions of Canadian
---------------------- ---------------------- dollars) 2005 2004
2005 2004 -------------------------------------------------
---------------------- Balance - beginning of period $ 956.5 $
255.2 $ 340.6 $ 190.5 Net income for the period 221.3 85.4 837.2
150.1 ---------------------- ---------------------- Balance - end
of period $ 1,177.8 $ 340.6 $ 1,177.8 $ 340.6
---------------------- ----------------------
---------------------- ---------------------- CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited) Three months ended Year ended
December 31 December 31 (millions of Canadian
---------------------- ---------------------- dollars) 2005 2004
2005 2004 -------------------------------------------------
---------------------- Operating activities Net income $ 218.3 $
85.4 $ 834.2 $ 150.1 Items not using (providing) cash: Depreciation
and depletion 13.5 14.1 52.3 60.7 Loss (gain) on reduction of
interest in EVCP 3.4 - (6.1) 35.2 Provision for asset retirement
obligations, net 1.1 0.4 3.2 3.0 Future income taxes 19.6 (28.4)
(97.2) (31.3) Income from change in inventory valuation - - -
(10.8) Loss on disposal of assets 0.2 0.1 0.3 0.2 Gain on issuance
of partnership interest 1.3 - (27.2) - Non-controlling interest 2.5
- 3.9 - Other items, net (0.5) 1.1 0.5 0.3 ----------------------
---------------------- 259.4 72.7 763.9 207.4 Decrease (increase)
in non-cash working capital (26.1) 28.3 (123.0) 62.1
---------------------- ---------------------- Cash from operating
activities 233.3 101.0 640.9 269.5 ----------------------
---------------------- Investing activities Additions to capital
assets (28.2) (26.7) (120.7) (72.8) Proceeds from issuance of
partnership interest - - 36.4 - Proceeds on disposal of assets 0.5
0.5 1.5 1.1 Other investing activities, net 7.0 3.3 (2.2) 12.2
---------------------- ---------------------- Cash used in
investing activities (20.7) (22.9) (85.0) (59.5)
---------------------- ---------------------- Financing activities
Increase (decrease) in long-term debt 15.6 - 17.3 (99.0) Issuance
of units, net - 0.9 1.8 100.4 Other financing activities, net (0.5)
(0.8) (10.4) (2.7) ---------------------- ----------------------
Financing activities, before distributions 15.1 0.1 8.7 (1.3)
Distributions declared (235.2) (63.7) (700.6) (213.5) Increase
(decrease) in distributions payable (29.4) 9.8 171.6 16.8
---------------------- ---------------------- Distributions paid
(264.6) (53.9) (529.0) (196.7) ----------------------
---------------------- Cash used in financing activities (249.5)
(53.8) (520.3) (198.0) ----------------------
---------------------- Increase (decrease) in cash and equivalents
(36.9) 24.3 35.6 12.0 Cash and cash equivalents - beginning of
period 137.0 40.2 64.5 52.5 ----------------------
---------------------- Cash and cash equivalents - end of period $
100.1 $ 64.5 $ 100.1 $ 64.5 ----------------------
---------------------- ----------------------
---------------------- CONSOLIDATED BALANCE SHEETS (unaudited)
December 31 December 31 (millions of Canadian dollars) 2005 2004
-------------------------------------------------------------------------
Assets Current assets Cash and cash equivalents $ 100.1 $ 64.5
Accounts receivable 153.3 86.8 Inventory 188.0 113.0 Prepaid
expenses 3.5 2.6 ------------------------ 444.9 266.9 Capital
assets 695.2 635.8 Goodwill 21.6 44.4 Other assets 20.9 21.1
------------------------ $ 1,182.6 $ 968.2 ------------------------
------------------------ Liabilities Current liabilities Accounts
payable and accrued liabilities $ 116.2 $ 132.6 Income taxes
payable 36.2 10.7 Distribution payable 235.2 63.7 Current portion
of long-term debt 1.8 1.7 ------------------------ 389.4 208.7
Long-term debt 215.2 205.2 Other long-term liabilities 103.1 91.9
Future income taxes 60.2 180.4 Commitments and contingencies - -
------------------------ 767.9 686.2 ------------------------
Unitholders' equity Trust units 359.4 357.7 Accumulated earnings
1,174.8 340.6 Accumulated cash distributions (1,124.4) (423.8)
Foreign currency translation adjustments 4.9 7.5
------------------------ 414.7 282.0 ------------------------ $
1,182.6 $ 968.2 ------------------------ ------------------------
Notes to Consolidated Financial Statements (unaudited)
------------------------------------------------------------------------
1. DISTRIBUTABLE CASH Distributable cash is a term defined in the
Declaration of Trust and generally refers to the net cash received
by the Trust that is available for payment to unitholders on a
quarterly basis. Available cash generated by Fording LP and paid to
the Trust is the principal source of distributable cash paid to
unitholders. Fording LP distributes its available cash to the Trust
in a quarter, which is derived from results for the quarter and
takes into account other considerations such as expected future
performance, variations in levels of quarterly operating and
capital activities and other financial or legal requirements.
Future distributions of available cash will take into account these
factors and any amounts paid in prior periods that were greater or
less than the actual distributable cash for those prior periods.
Three months ended Nine months ended December 31 December 31
(millions of ---------------------- ---------------------- Canadian
dollars) 2005 2004 2005 2004
-------------------------------------------------
---------------------- Cash Available for Distribution Cash flows
from operating activities $ 233.3 $ 101.0 $ 640.9 $ 269.5 Add
(deduct): Increase (decrease) in non-cash working capital 26.1
(28.3) 123.0 (62.1) Sustaining capital expenditures (12.2) (12.0)
(40.7) (27.2) Capital lease payments (0.6) - (2.2) (0.7) Unrealized
foreign exchange (gain) loss on debt 0.8 - (8.0) - Other - 0.1 8.6
2.7 Cash reserve - - - - ----------------------
---------------------- Cash available for distribution $ 247.4 $
60.8 $ 721.6 $ 182.2 ---------------------- ----------------------
---------------------- ---------------------- Distributions
declared $ 235.2 $ 63.7 $ 700.6 $ 213.5 ----------------------
---------------------- ----------------------
---------------------- Distributable cash and cash available for
distribution have no standardized meaning and are not defined by
generally accepted accounting principles in Canada. Accordingly,
distributable cash and cash available for distribution as it is
presented above may not be comparable to similarly named measures
presented by other trusts. 2. SEGMENT INFORMATION Three months
ended Year ended December 31 December 31 (millions of
---------------------- ---------------------- Canadian dollars)
2005 2004 2005 2004
-------------------------------------------------------------------------
Elk Valley Coal Revenues $ 529.2 $ 314.2 $ 1,829.9 $ 1,118.1 Cost
of product sold (118.0) (108.9) (469.2) (428.2) Transportation
(125.6) (125.7) (510.2) (442.2) Selling, general and administration
(5.7) (6.6) (17.2) (20.3) Depreciation and depletion (12.4) (12.4)
(47.5) (53.0) ---------------------- ---------------------- Income
from operations 267.5 60.6 785.8 174.4 Interest expense (0.2) (0.3)
(0.9) (1.1) Other income (2.7) 1.1 (8.5) 12.6 Gain on issuance of
partnership interest (1.3) - 27.2 - Income tax reversal (expense)
(41.8) 26.0 34.4 15.4 ---------------------- ----------------------
Income 221.5 87.4 838.0 201.3 ----------------------
---------------------- NYCO Revenues 11.0 10.7 44.9 49.1 Cost of
product sold (6.0) (6.7) (28.2) (26.2) Transportation (1.9) (1.5)
(7.3) (7.0) Selling, general and administration (1.2) (1.6) (4.3)
(5.2) Depreciation and depletion (1.1) (1.0) (4.4) (5.0)
---------------------- ---------------------- Income (loss) from
operations 0.8 (0.1) 0.7 5.7 Interest expense - - - (0.1) Other
income (expense) (0.1) - (0.3) 0.5 Income tax reversal (expense)
(0.5) 1.4 (0.5) (2.4) ---------------------- ----------------------
Income (loss) 0.2 1.3 (0.1) 3.7 ----------------------
---------------------- Corporate Selling, general and
administration (2.3) (2.7) (9.2) (7.3) Depreciation and depletion -
(0.7) (0.4) (2.7) ---------------------- ----------------------
Loss from operations (2.3) (3.4) (9.6) (10.0) Interest expense
(2.8) (2.1) (10.4) (11.6) Other income 5.8 2.2 10.9 4.2 Reduction
of interest in EVCP (4.1) - 5.4 (37.5) ----------------------
---------------------- Loss before discontinued operations (3.4)
(3.3) (3.7) (54.9) ---------------------- ----------------------
Consolidated Revenues 540.2 324.9 1,874.8 1,167.2 Cost of product
sold (124.0) (115.6) (497.4) (454.4) Transportation (127.5) (127.2)
(517.5) (449.2) Selling, general and administration (9.2) (10.9)
(30.7) (32.8) Depreciation and depletion (13.5) (14.1) (52.3)
(60.7) ---------------------- ---------------------- Income from
operations 266.0 57.1 776.9 170.1 Interest expense (3.0) (2.4)
(11.3) (12.8) Other income 3.0 3.3 2.1 17.3 Gain on issuance of
partnership interest (1.3) - 27.2 - Reduction of interest in EVCP
(4.1) - 5.4 (37.5) Net income tax reversal (expense) (42.3) 27.4
33.9 13.0 ---------------------- ---------------------- Net income
$ 218.3 85.4 $ 834.2 $ 150.1 ----------------------
---------------------- ----------------------
---------------------- DATASOURCE: Fording Canadian Coal Trust
CONTACT: Susan J. Soprovich, Director, Investor Relations, Ph:
(403) 260-9834, E: ; Catherine Hart, Investor Relations Analyst,
(403) 260-9817, E: ; Website: http://www.fording.ca/
Copyright