Fording Announces First Quarter Cash Distribution, Update for First and Second Quarters and Notice of its Annual Meeting
16 Marzo 2004 - 10:40PM
PR Newswire (US)
Fording Announces First Quarter Cash Distribution, Update for First
and Second Quarters and Notice of its Annual Meeting CALGARY, March
16 /PRNewswire-FirstCall/ -- Fording Canadian Coal Trust (TSX:
FDG.UN, NYSE: FDG) today announced that its first quarter cash
distribution of $1.00 per unit will be paid on April 15, 2004 to
unitholders of record on March 31, 2004. The ex-distribution date
is March 29, 2004. This distribution is in respect of the period
from January 1, 2004 until March 31, 2004. The Trust has paid or
declared cash distributions totalling $5.49 per unit from February
28, 2003 when the Trust was formed to March 31, 2004, based on the
number of units outstanding at each record date. Update - First and
Second Quarters 2004 The Trust expects improved operating results
will be achieved in 2004 compared with 2003. Contracted coal prices
will rise from 2003 levels, sales and production of coal are
expected to increase and to be at or near capacity, and cost of
coal product sold is expected to decline. However, the results for
the first and second quarters this year will be adversely impacted
by three factors. First, coal inventories at the ports are low and
difficulties have been experienced with rail shipments. As a
result, Elk Valley Coal's sales volumes for the first quarter are
expected to be approximately 5.5 million tonnes (net 3.6 million
tonnes). Actual sales will depend on rail and port loading
services. Rail service has now returned to normal levels and we
anticipate total sales for 2004 to reach the previous estimate of
approximately 25 million tonnes (net 16 million tonnes).
Difficulties with rail shipments will also result in demurrage
charges in the first and second quarters for vessel waiting times.
For the Trust, these demurrage charges are expected to be
approximately $12 million. Actual demurrage costs will depend on
rail and port loading services and the arrival times of vessels. Of
the total demurrage charges of $12 million, nearly $11 million is
expected in the first quarter. Second, the low inventories and rail
difficulties will result in a carryover of 2003 coal year pricing
into the second quarter as the commitments to our customers are
satisfied for the 2003 coal year. Accordingly, the 20 percent
average price increase for the 2004 coal year sales beginning April
1, 2004 described in the Trust's news release dated December 19,
2003 may not be reflected in our results until May 2004. However,
the Trust continues to expect an average price of US$48 for coal
sales during calendar 2004. Third, the Trust's results for the
first quarter of 2004 will include a $5 million charge pursuant to
change of control agreements. These items, on the whole, will serve
to lower the operating income, net income and cash available for
distribution of the Trust for the first quarter and, to a lesser
degree, the second quarter compared with the balance of the year.
Annual Meeting of Unitholders Fording Canadian Coal Trust's Annual
Meeting of Unitholders will be held on May 6, 2004 at 10:00 a.m.
(MT) in the Alberta Room of the Fairmont Palliser Hotel in Calgary,
Alberta. The close of business on March 31, 2004 has been fixed as
the Record Date for determination of those unitholders entitled to
receive notice and to vote at the meeting. Tax Information for Cash
Distributions For unitholders resident in Canada, income
distributed by the Trust will generally be treated as ordinary
income from property except where the income is sourced from
capital gains realized by the Trust or from dividends received by
the Trust. In these cases, the Trust intends to make appropriate
designations in its tax returns so that the capital gains or
dividends will retain their character when distributed to
unitholders and will be subject to income tax accordingly.
Distributions to unitholders made in a year that are greater than
the net income of the Trust for the year will not be included in
unitholders income but will be considered a return of capital and a
reduction ofthe cost base of the units. Income distributed by the
Trust to non-residents of Canada will be subject to Canadian
withholding tax of 25% subject to reduction under the provisions of
any applicable tax treaty or conventions. Canadian withholding tax
is generally 15% for U.S. holders. The Trust has made an election
to be taxed as a corporation for U.S. tax purposes. Accordingly,
distributions by the Trust will be considered foreign- source
dividend income to the extent paid out of current or accumulated
earnings and profits of the Trust, determined under U.S. income tax
principles. Assuming that applicable unitholder-level requirements
are met, these distributions are "qualified dividends," eligible
for taxation at reduced rates under recent U.S. federal income tax
legislation. Payments in excess of current or accumulated earnings
and profits will be applied first to reduce the cost base of the
units and then as a capital gain should the cost base of the units
be reduced to zero. It is expectedthat the Trust will issue a
statement after the close of its fiscal year (December 31) that
will provide information for Canadian and U.S. resident investors
about the final characterization of Trust distributions for income
tax purposes. Unitholders should consult their own tax advisors for
advice with respect to the income tax consequences based on their
particular circumstances. 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 subsidiary, Fording Inc., holds a 65%
ownership of Elk Valley Coal and is the world's largest 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, capable of
supplying approximately 25 million tonnes of high-quality coal
products annually to the international steel industry. DATASOURCE:
Fording Canadian Coal Trust CONTACT: Mark Gow, CA, Director,
Investor Relations, Fording Canadian Coal Trust, 403-260-9834,
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