VANCOUVER, Nov. 2 /CNW/ - Westshore Terminals Income Fund (TSX: WTE.UN) announced today its earnings for the third quarter ending September 30, 2007. Please see attached Report to Unitholders for details.
Westshore Terminals Income Fund
Third Quarter Report
For the nine months ended September 30, 2007
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Dear Unitholders:
The earnings and distributable cash of Westshore Terminals Income Fund (the "Fund") are wholly dependent on the results of Westshore Terminals Limited Partnership ("Westshore"). Westshore's results are determined largely by the volume of coal shipped by its coal mine customers for sale in the export market, the U.S. dollar denominated price received by Westshore's customers for coal, the Canadian-U.S. dollar exchange rate and Westshore's costs. Westshore's throughput charges for approximately half of the coal it handles are calculated at present by reference to coal prices (see particulars under "Outlook" section on page 7). Lower prices for hard coking coal resulted in Elk Valley Coal Partnership (the "Coal Partnership"), which is Westshore's principal customer, achieving lower average settlement prices for the 2007/08 coal year compared to the 2006/07 coal year. The weighted average price of 2007 calendar year coal sales by the Coal Partnership is expected to be approximately US$96 per tonne, down approximately 15% from US$113 in 2006. Furthermore, as Westshore has exposure to fluctuations in exchange rates as a result of pricing mechanisms under its customer contracts, Westshore engages in periodic currency hedging arrangements to provide partial shielding from material short-term swings in the CDN/US dollar exchange rate.
Westshore Terminals Income Fund
- Management's Discussion and Analysis of Financial Condition and
Results of Operations
This management's discussion and analysis refers to certain measures other than those prescribed by Canadian Generally Accepted Accounting Principles ("GAAP"). These measures do not have standardized meanings and may not be comparable to similar measures presented by other trusts or corporations. They are however determined by reference to the Fund's financial statements. These non-GAAP measures are discussed because the Fund believes that they provide investors with information in understanding the results of the Fund's operations and financial position. The unaudited financial results along with management's discussion and analysis contained in this report should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Fund's Annual Report for the year ended December 31, 2006. The date of this management's discussion and analysis and results of operations is November 3, 2007.
The following table sets out selected consolidated financial information for the Fund for the quarter ended September 30, 2007. As at November 3, 2007, the Fund had 74,250,016 issued and outstanding trust units.
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(In thousands of dollars Three Months Three Months
except per unit amounts) Ended Ended
September 30, September 30,
2007 2006
$ $
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REVENUE
Coal 36,937 36,741
Other 2,361 1,184
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39,298 37,925
EXPENSES
Operating 16,870 17,980
Administrative 1,798 1,857
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18,668 19,837
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Earnings before depreciation and income taxes 20,630 18,088
Depreciation 5,553 5,405
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Earnings before income taxes 15,077 12,683
Recovery of (provision for) income taxes (413) 9
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Net earnings for the period 14,664 12,692
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Net earnings per trust unit 0.197 0.180
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Standardized Distributable Cash(1) 27,251 25,202
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Distributions declared 21,533 21,818
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Distributions declared per trust unit 0.290 0.310
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(1) Refer to page 6 for Standardized Distributable Cash calculation.
(2) Units issued and outstanding for 2006 were 70,381,111 and for 2007
are 74,250,016
The following tables set out selected consolidated financial information
for the Fund on a quarterly basis for the last eight quarters.
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(In thousands of dollars Three Months Ended
except per unit amounts) -----------------------------------------------
Sept 30, June 30, Mar 31, Dec 31,
2007 2007 2007 2006
$ $ $ $
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Revenue
Coal 36,937 45,790 36,553 41,067
Other 2,361 2,370 1,058 (1,212)
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39,298 48,160 37,611 39,855
Expenses
Operating 16,870 17,906 17,113 16,287
Administration 1,798 1,583 1,947 2,700
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18,668 19,489 19,060 18,987
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Earnings before depreciation
and income taxes 20,630 28,671 18,551 20,868
Depreciation 5,553 5,552 5,553 5,470
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Earnings before income taxes 15,077 23,119 12,998 15,398
Recovery of (provision for)
income taxes (413) (6,589)(1) - -
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Net earnings for the period 14,664 16,530 12,998 15,398
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Net earnings per trust unit 0.197 0.223 0.175 0.219
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Cash Distributions
declared(2) 21,533 18,563 19,305(3) 23,578
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Cash Distributions per unit 0.290 0.250 0.260(3) 0.335
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Distribution of units in
lieu of cash - - - 6,194
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Distribution of units in lieu
of cash per unit - - - 0.088
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(1) Non-cash tax provision recorded as a result of change in tax laws for
income trusts. Refer to page 5.
(2) Refer to page 6 for a comparison of cash distributions to
Standardized Distributable Cash.
(3) Includes an extraordinary distribution of $0.035. Refer to page 6.
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(In thousands of dollars Three Months Ended
except per unit amounts) -----------------------------------------------
Sept 30, June 30, Mar 31, Dec 31,
2006 2006 2006 2005
$ $ $ $
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Revenue
Coal 36,741 41,583 38,463 43,523
Other 1,184 2,869 858 1,898
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37,925 44,452 39,321 45,421
Expenses
Operating 17,980 15,256 15,739 16,436
Administration 1,857 2,577 1,739 2,077
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19,837 17,833 17,478 18,513
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Earnings before depreciation
and income taxes 18,088 26,619 21,843 26,908
Depreciation 5,405 5,404 5,405 6,224
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Earnings before income taxes 12,683 21,215 16,438 20,684
Recovery of income taxes 9 - - 42,267
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Net earnings for the period 12,692 21,215 16,438 62,951
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Net earnings per trust unit 0.180 0.301 0.234 0.894
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Cash Distributions
declared(1) 21,818 19,003 20,410 27,097
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Cash Distributions per unit 0.310 0.270 0.290 0.385
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Distribution of units in lieu
of cash - - - 1,540
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Distribution of units in lieu
of cash per unit - - - 0.022
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(1) Refer to page 6 for a comparison of cash distributions to
Standardized Distributable Cash.
Results of Operations
In the third quarter of 2007, Westshore shipped approximately 5.4 million tonnes of coal, compared with 4.8 million tonnes shipped during the same period in 2006. Based on information currently available, Westshore is anticipating total throughput for 2007 to be between 20 and 21 million tonnes.
Coal loading revenue of $36.9 million in the third quarter of 2007 compares to similar revenue levels of $36.7 million in the third quarter of 2006. The slight increase in revenue was due to an increase in volumes offset by lower throughput rates, which reflect lower coal prices for the 2007/08 coal contract year compared to the 2006/07 coal year and a stronger Canadian dollar against the US dollar year over year. The average loading rate in the third quarter of 2007 was $6.89 per tonne compared to $7.73 per tonne for the same period in 2006.
Other revenue was $2.4 million in the third quarter of 2007 as compared to $1.2 million in the third quarter of 2006. Unrealized hedging gains were $0.2 million in the three months ended September 30, 2007, compared to unrealized losses of $1.6 million in the third quarter of 2006. Realized hedging gains in the third quarter of 2007 decreased by $1.4 million from the third quarter in 2006 (See "Currency Fluctuations"). Interest income for the quarter increased by approximately $0.2 million because the Fund has on hand the proceeds of the equity financings undertaken to fund the equipment upgrade project (See "Equipment Upgrade Project"). Demurrage and train detention costs declined by $0.2 million from the same period in 2006.
Operating expenses decreased from $18.0 million in the third quarter of 2006 to $16.9 million for the third quarter of 2007. This was primarily due to lower maintenance costs in the third quarter of 2007 partially offset by higher lease costs as a result of higher volumes. In the third quarter of 2006, maintenance costs included a major retrofit of one of the stacker/reclaimers. Administrative expenses declined from $1.9 million in 2006 to $1.8 million in 2007. Overall for 2007, the Fund is expecting lower cash distributions per unit than the prior year, which will result in a smaller incentive fee for the manager being accrued in 2007.
As a result of the foregoing, Westshore's earnings before depreciation and income taxes increased to $20.6 million for the third quarter of 2007 compared to $18.1 million for the same period in 2006.
Contract Rate Review
Under the contract that governs coal from the Elkview mine (the "Elkview Contract"), the Elk Valley Coal Partnership (the "Coal Partnership") gave notice on September 30, 2004 requesting a review of the loading rate, with a view to changing the rate effective April 1, 2005. The matter was heard before an arbitrator, as provided for in the Elkview Contract, and a decision was made in favour of Westshore in July 2006 confirming that there would be no changes to the formula for determining the loading rate which will remain in effect through the end of the contract term on March 31, 2010. The Supreme Court of British Columbia granted the Coal Partnership leave to appeal the arbitrator's decision to the Supreme Court of British Columbia. Westshore appealed that decision and this appeal is expected to be heard in early 2008.
In late August 2006, the Coal Partnership sent notice to Westshore requesting a review of the charges under the Port Services Contract that governs coal from the Fording River, Greenhills and Coal Mountain mines, effective April 1, 2007. Discussions concerning the possibility of a change in rate commenced as provided for under the agreement. If the matter cannot be resolved between the parties, the matter would be determined by arbitration, likely to be held in late 2008.
Equipment Upgrade Project
Westshore is proceeding with the upgrade to its existing equipment previously announced. The cost of the upgrade is anticipated to be approximately $49 million based on firm bids received and negotiated this year. It is anticipated that the project will be completed in the fourth quarter of 2009. Funding for the upgrade has been provided through $40 million in equity financing, which was completed in March 2007. The balance of the funds required will be sourced from Westshore's cash on hand.
Taxation on Trusts in Canada
Bill C-52 Budget Implementations Act, 2007 which contains legislative provisions to implement the proposals to tax publicly traded income trusts in Canada became law on June 22, 2007. Under these rules, distributions declared by the Fund after January 1, 2011 will be taxed at a rate of 31.5% and the distributions will be treated as taxable dividends in the hands of unitholders. Unitholders will be entitled to a dividend tax credit which will give credit for the level of taxation incurred by the Fund.
The Fund has not provided for current income taxes in 2007 as the income of the Fund is distributed to and taxed in the hands of unitholders. The future taxation of distributions makes relevant for accounting purposes the timing differences between the recognition of certain assets and liabilities for tax and accounting purposes. For the quarter ended June 30, 2007, the Fund provided for a future income tax expense of $6.6 million. This was a non-cash item and was a one time charge to set up the provision for future taxes. An additional non-cash provision of $0.4 million has been recorded in the quarter ended September 30, 2007 to reflect changes in assets and liabilities and their expected recognition for tax purposes. This future income tax expense does not affect current distributions.
Distribution Reinvestment Plan
On April 5, 2007 the Fund announced a distribution reinvestment plan (the "Plan"). Under the Plan, Canadian resident Unitholders will be able to designate that all or a portion of the quarterly distributions payable on their Fund Units be applied towards the purchase of existing Fund Units through the facilities of the Toronto Stock Exchange at prevailing market prices. No additional units will be issued from treasury under the Plan. The first distribution to which the Plan was applicable was the distribution paid on July 15, 2007. Unitholders should contact their brokers or Computershare Investor Services Inc. if they wish to participate in the Plan. Additional information on the Plan is also available on the Fund's website at www.westshore.com.
Currency Fluctuations
Since April 1, 2003, the loading rates under most of Westshore's long-term handling contracts have depended in whole or in part on the Canadian dollar price realized for coal handled by Westshore. Since the contract price for coal is set in U.S. dollars, the exchange rate affects the Canadian dollar price and Westshore's loading rate. To mitigate the resulting risk, Westshore has engaged in periodic hedging activities. In view of the continuing changes in the value of the Canadian dollar relative to the US dollar, the exposure of Westshore's revenues to such uncertainty and the amount of US dollar pricing-based revenue that Westshore experiences, Westshore has recently adopted a formal policy under which it will hedge by April 1 of each year not less than 50% of its anticipated US dollar related revenues for the ensuing coal year, based on the annual budget. Westshore has hedges in place through December 17, 2007 but currently has no hedges in place for any period thereafter. Westshore will continue to review opportunities for additional future hedging.
In the financial statements, the effect of currency fluctuations is shown as impacting coal loading revenues before taking into account the effect of hedging activities, the financial effect of which is accounted for as other revenue. As stated in the audited Financial Statements of the Fund for the year ending December 31, 2006, because Westshore's hedging transactions do not qualify for "hedge accounting", the value of Westshore's forward exchange contracts must be "marked to market" at each period end. On this basis, other revenue for the first nine months ended September 30, 2007 was reduced by $0.8 million of unrealized losses on forward exchange contracts, compared to unrealized losses of $3.2 million for the first nine months of 2006. Unrealized gains and losses are non-cash items. The cash effect of the hedging program is recognized in other revenue as the forward exchange contracts mature. For the nine months ended September 30, 2007, other revenue included a realized gain of $2.6 million, compared to a realized gain of $5.3 million for the same period in 2006. When the unrealized and realized gains and losses are considered together, the net foreign exchange gain for the nine months ended September 30, 2007 is $1.8 million compared to $2.1 million for the same period in 2006.
Liquidity and Capital Resources
The Fund is obliged to distribute to Unitholders its cash inflows less administrative costs of the Fund (and amounts, if any, which may be paid in connection with any cash redemption of units). The Fund has no fixed distribution requirements, distributions being solely a function of amounts received by the Fund. Because the Fund's investment in Westshore is of a passive nature, it is not anticipated that the Fund will require significant capital resources to maintain its investment in Westshore on an ongoing basis. The cost of ongoing maintenance and refurbishment of the equipment is well within Westshore's financial capacity based solely on revenues less expenses without any need for financing. The equipment upgrade is being funded entirely from equity and cash resources, which will avoid any liquidity concerns with debt service. As a result, the Fund does not anticipate any liquidity concerns with the ongoing operations of Westshore.
Westshore has in place with a Canadian chartered bank a $1 million secured operating facility which, if required, can be utilized to meet working capital requirements. This facility was not used during the third quarter and remained undrawn at September 30, 2007. Westshore's distribution policy involves leaving sufficient earnings before depreciation and unrealized gains or losses on forward exchange contracts to cover cash requirements such as capital expenditures and pension contributions.
Quarterly Distributions
On October 15, 2007, the Fund distributed $21,532,505 (representing $0.29 per trust unit) in cash for the third quarter of 2007 to Unitholders of record on September 30, 2007 as compared with $21,818,144 ($0.31 per unit) in cash for the third quarter of 2006. The Q3 2007 distribution for unitholder income tax purposes was comprised entirely of income. This may vary when calculated for the year as a whole.
Standardized Distributable Cash
References to "Standardized Distributable Cash" are to cash from operating activities less capital expenditures, both measures recognized under GAAP. Standardized Distributable Cash is a useful financial measure as an indication of the Fund's ability to make distributions. It is a measure that has been recommended by the CICA's Canadian Performance Reporting Board for use by income funds in Canada as an indicator of financial performance. As one of the factors that may be considered relevant by investors is the cash available to be distributed by the Fund relative to the price of the Units, the Fund believes that Standardized Distributable Cash is a useful supplemental measure that may assist investors to assess an investment in the Units.
The Standardized Distributable Cash of the Fund is solely comprised of distributions from Westshore which are impacted by the operating results of Westshore. The following table sets out the Standardized Distributable Cash calculation for the three and nine month periods ended September 30, 2007.
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3 months ended 9 months ended
Sept 30 Sept 30
2007 2006 2007 2006
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Cash flows from operating
activities 40,506 26,129 82,848 66,207
Less: Capital expenditures (13,255) (927) (17,933) (2,813)
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Standardized
Distributable Cash 27,251 25,202 64,915 63,394
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Cash Distributions declared 21,533 21,818 59,401 61,231
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Basic and diluted
Standardized Distributable
Cash per unit 0.367 0.358 0.874 0.901
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Cash Distributions per unit 0.290 0.310 0.800 0.870
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Change in Accounting Policies
The Canadian Institute of Chartered Accountants issued new accounting rules on financial instruments, hedges and comprehensive earnings that will require the Fund to account for derivatives and financial assets held for trading or available for sale at fair values. Loans, receivables and investments held to maturity will be measured at amortized cost using the effective interest rate method. Other financial liabilities will be measured at fair value or at amortized cost using the effective interest rate method. The effective interest rate method establishes the discount rate which equates the estimated future cash flows with the net carrying amount of the financial asset or liability.
Other comprehensive earnings is the method used to record revenues, expenses, gains and losses on net financial assets that are not required to be included in earnings. Foreign currency translation gains and losses on self-sustaining foreign operations will be included in other comprehensive earnings. Comprehensive earnings are the sum of earnings for the period plus other comprehensive earnings.
The new rules do not have a significant impact on the Fund's financial statements.
Outlook
The Fund's cash inflows are entirely dependent on Westshore's operating results and are significantly influenced by four variables: the volume of coal shipped through the Terminal; the US dollar denominated price received by Westshore's customers for that coal; the Canadian-US dollar exchange rate; and Westshore's operating and administrative costs.
Critical to Westshore's ongoing success will be the ability of the Coal Partnership to maintain and increase its coal export volumes while competing with other suppliers for sales worldwide. Based on information currently available, Westshore anticipates throughput volume to be between 20 and 21 million tonnes in 2007, at lower average loading rates than 2006, and with the average loading rates in the last six months of 2007 being lower than in the first six months. To date, Westshore has experienced no material impact to throughput volumes from the equipment upgrade. Westshore shipped 1.7 million tonnes in October even though only half of the site was accessible because of the installations of new conveyors for most of the month.
As announced in the Fording Canadian Coal Trust news release on July 30, 2007, the Coal Partnership has settled its customer contracts and this has resulted in its average price for coal sales in the period April 1, 2007 to March 31, 2008 to be approximately US$91 per tonne. This represents a reduction of approximately 15% from the US dollar prices realized by the Coal Partnership from the prior coal year. These prices represent sales for all products, not only those exported through Westshore. These prices and the recent further rise in the Canadian dollar relative to the US dollar, indicate that Westshore's loading rate for tonnage shipped at a variable rate, and hence its average loading rate, for the 2007/08 coal year will be lower than for the 2006/07 coal year.
For 2007 and based on current tonnage estimates as of the date of this report, tonnages shipped at fixed rates are expected to account for approximately 24% of the Terminal's throughput; tonnages shipped at variable rates but subject to a cap, in effect for this year, are expected to account for approximately 36% of throughput; and finally, tonnages shipped at full variable rates are expected to account for approximately 40% of throughput at the Terminal.
Because of a combination of possible variations in tonnage, the US dollar denominated coal price and exchange rates, it is not possible for the Fund to predict accurately the level of its distributions for 2007. The third quarter distribution was $0.29 per unit and distributions for the nine month period ending September 30, 2007 were $0.765 per unit. If distributions for the calendar year 2007 exceed $1.035 per unit, incentive fees will be payable by Westshore to the Manager under the Management Agreement, as was the case in 2006.
Forward-looking Statements
The foregoing statements concerning tonnages, coal prices, exchange rates, loading rates and variability of distributions are forward-looking statements but reflect the current expectations of the Fund and Westshore with respect to future events and performance. Wherever used, the words "may," "will," "anticipate," "intend," "expect," "plan," "believe," and similar expressions identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at which, such performance or results will be achieved.
Forward-looking statements are based on information available at the time they are made, assumptions made by management, and management's good faith belief with respect to future events, and are subject to the risks and uncertainties outlined in the Fund's Annual Information Form that could cause actual performance or results to differ materially from those reflected in the forward-looking statements, historical results or current expectations.
All forward-looking statements will be impacted by and are subject to the risks set out under Risk Factors in the Fund's Annual Information Form.
Additional Information
Additional information relating to the Fund, including the Fund's latest Annual Report and Annual Information Form, are available on SEDAR at www.sedar.com and on Westshore's website at www.westshore.com.
On behalf of the Trustees,
(signed)
William W. Stinson
Chairman
November 3, 2007
The enclosed financial statements have not been reviewed by the Fund's or
Westshore's auditors.
Consolidated Statements of Earnings, Comprehensive Earnings and
Cumulative Earnings
(in thousands of dollars, Three months ended Nine months ended
except per unit amounts) September 30 September 30
$ $
2007 2006 2007 2006
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUE
Coal 36,937 36,741 119,280 116,787
Other 2,361 1,184 5,789 4,911
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39,298 37,925 125,069 121,698
EXPENSES
Operating 16,870 17,980 51,889 48,975
Administrative 1,798 1,857 5,328 6,173
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18,668 19,837 57,217 55,148
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Earnings before depreciation
and income taxes 20,630 18,088 67,852 66,550
Depreciation 5,553 5,405 16,658 16,214
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Earnings before income taxes 15,077 12,683 51,194 50,336
Recovery of (provision for)
income taxes (413) 9 (7,002) 9
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Net and comprehensive
earnings for the period 14,664 12,692 44,192 50,345
Cumulative earnings
- Beginning of period 465,627 408,009 436,099 370,356
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Cumulative earnings
- End of period 480,291 420,701 480,291 420,701
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Basic and diluted earnings
per trust unit 0.197 0.180 0.595 0.715
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Weighted average number
of trust units
outstanding 74,250,016 70,381,111 74,250,016 70,381,111
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Consolidated Statements of Cash Flows
(in thousands of dollars) Three months ended Nine months ended
September 30 September 30
$ $
2007 2006 2007 2006
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from operating
activities
Net earnings for the period 14,644 12,692 44,192 50,345
Items not affecting cash
Unrealized losses
(gains) on forward
exchange contracts (202) 1,456 771 3,213
Depreciation 5,553 5,405 16,658 16,214
Future income tax expense 413 - 7,002 -
Increase (decrease) in
deferred employee
future benefits costs 413 55 228 (148)
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20,841 19,608 68,851 69,624
Decrease (increase) in
non-cash working capital 19,665 6,521 13,997 (3,417)
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40,506 26,129 82,848 66,207
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Cash flows from financing
activities
Distributions paid to
unitholders (18,563) (19,003) (61,446) (66,511)
Issuance of units, net of
share issuance costs - - 40,430 -
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(18,563) (19,003) (21,016) (66,511)
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Cash flows from investing
activities
Additions to plant
and equipment (13,255) (927) (17,933) (2,813)
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(13,255) (927) (17,933) (2,813)
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Increase (decrease) in cash
and cash equivalents 8,688 6,199 43,839 (3,117)
Cash and cash equivalents
- Beginning of period 69,706 30,588 34,555 39,904
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Cash and cash equivalents
- End of period 78,394 36,787 78,394 36,787
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Supplemental cash flow
information
Cash received for interest 749 546 1,839 1,261
Income taxes received - 1,625 - 1,791
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Consolidated Balance Sheets
(in thousands of dollars) September 30, December 31,
2007 2006
$ $
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(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents 78,394 34,555
Accounts receivable 10,451 15,211
Inventories 6,261 6,102
Prepaid expenses 4,861 3,975
Other assets 1,075 1,845
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101,042 61,668
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Plant and equipment
At cost 484,809 466,831
Accumulated depreciation (358,848) (342,205)
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125,961 124,626
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Employee future benefits 21,069 19,907
Goodwill 365,541 365,541
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613,613 571,762
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LIABILITIES & UNITHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities 27,650 17,367
Distribution payable to unitholders 21,533 23,578
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49,183 40,945
Employee future benefits 19,150 17,760
Future income taxes 7,002 -
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75,335 58,705
Unitholders' Equity
Capital contributions 704,032 663,602
Cumulative earnings 480,291 436,099
Cumulative distributions declared (646,045) (586,644)
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538,278 513,057
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613,613 571,762
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Notes to Financial Statements
1. Basis of presentation
These interim financial statements do not contain all the information
required for annual financial statements and should be read in
conjunction with the financial statements and notes included in the
Fund's Annual Report for the year ended December 31, 2006. These
interim financial statements have not been audited or reviewed by
external auditors.
2. Significant accounting policies
These interim financial statements have been prepared in accordance
with Canadian generally accepted accounting principles and follow the
same accounting principles and methods of application as set out in
Note 2 of the Fund's annual financial statements for the year ended
December 31, 2006.
3. Financial Instruments
Effective January 1, 2007, the Fund adopted the new accounting
standards issued by the Canadian Institute of Chartered Accountants
for financial instruments, hedges and comprehensive earnings. The
recommendations required the Fund to account for derivatives and
financial assets held for trading or available for sale at fair
values. Loans, receivables and investments held to maturity are
measured at amortized cost using the effective interest rate method.
Other financial liabilities will be measured at fair value or at
amortized cost using the effective interest rate method. The
effective interest rate method establishes the discount rate which
equates the estimated future cash flows with the net carrying amount
of the financial asset or liability.
Other comprehensive earnings is the method used to record revenue,
expenses, gains and losses on net financial assets that are not
required to be included in earnings. Foreign currency translation
gains and losses on self-sustaining foreign operations will be
included in other comprehensive earnings. Comprehensive earnings are
the sum of earnings (loss) for the period plus other comprehensive
earnings (loss).
The new rules do not have a significant impact on the Fund's
financial statements.
4. Employee future benefits
Three months ended Nine months ended
September 30 September 30
2007 2006 2007 2006
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Pension plan benefits $ 11 $ (509) $ (1,162) $ (1,527)
Other retirement
and post-employment
benefits 402 564 1,390 1,379
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Employee future
benefits expense
(recovery) $ 413 $ 55 $ 228 $ (148)
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