Livingston International Income Fund reports record results for 2006 fourth quarter and year



    TORONTO, March 29 /CNW/ - Livingston International Income Fund (TSX:
LIV.UN), Canada's leading customs broker and trade services company, today
announced record fourth quarter and annual results, across key performance
measures, for the period ended December 31, 2006.
    "Our results for the fourth quarter and year were strong," said Peter
Luit, president and chief executive officer of Livingston International. "The
acquisition of the PBB Global Logistics Income Fund ("PBB") in January 2006 is
clearly having a positive impact on our numbers and the integration is going
well. We produced outstanding results despite the challenges presented by the
rising Canadian dollar and the general slowdown in the North American
economy."

    Quarterly results
    In the fourth quarter, Livingston increased revenues 79.3% to
$81.2 million from $45.3 million in the same quarter of 2005. It increased
EBITDA(1), or earnings before interest, taxes, other income or expense,
depreciation, amortization and impairment of goodwill, to $17.4 million in the
quarter, compared with $10.1 million for the fourth quarter of the previous
year. As a percentage of revenue, EBITDA(1) decreased slightly to 21.4% of
revenue from 22.4% a year earlier, as a result of lower margins in some of the
PBB businesses. The net loss for the quarter was $3.3 million compared with
net income of $4.8 million in the fourth quarter of 2005. The net loss in 2006
was primarily due to the recognition of an impairment of goodwill in the
amount of $11 million related to certain acquired entities in PBB's
transportation and logistics businesses.

    Annual results
    For the year ended December 31, 2006, Livingston International increased
revenues to a record $322.2 million, from $175.7 million in 2005. The Fund
increased EBITDA(1) to $68.2 million, 68.8% higher than the $40.4 million
reported for the previous year. The EBITDA(1) margin decreased to 21.2% from
23.0% in the prior year, mainly due to lower margins in some of the PBB
businesses. Net income in 2006 was $17.5 million, slightly lower than the
$19.1 million in 2005. Again, this was primarily due to the recognition of the
impairment of goodwill in the amount of $11 million in certain acquired
entities of PBB's transportation and logistics businesses.

    Distributions
    During the quarter, the Fund declared distributions of $11.6 million, or
0.426 per unit, compared with distributions of $6.4 million, or $0.387 per
unit, in the fourth quarter of 2005. The Fund generated $42.9 million of cash
flow from operating activities in the period. After deducting $25.9 million
for the net change in current assets and liabilities and $0.1 million for
other items, this resulted in cash available for distribution(2) of
$16.9 million, or $0.620 per unit, during the fourth quarter of 2006. This was
an increase over the $8.6 million, or $0.522 per unit, in the same period in
2005, as a result of a decrease in cash flows from operating activities of
$6.3 million in the fourth quarter of 2005, the addition of the net change in
assets and liabilities of $15.1 million and the deduction of other items
totalling $0.2 million. The Fund's payout ratio was 68.7% in the latest
quarter, compared with 74.2% a year ago.
    Total distributions declared for 2006 were $45.6 million, or $1.68 per
unit, compared with $23.4 million, or $1.45 per unit, in 2005. The Fund
generated $73.7 million of cash flows from operating activities in the year.
After deducting $15.3 million for the net change in current assets and
liabilities and adding $0.6 million for other items, this resulted in cash
available for distribution(2) of $59.0 million, or $2.196 per unit, for the
year. This compares to cash flows from operating activities of $50.4 million
in 2005. After deducting the net change in assets and liabilities of
$16.7 million and other items totalling $1.0 million, this resulted in cash
available for distribution(2) of $32.7 million, or $2.037 per unit, in 2005.
The Fund's payout ratio was 77.3%, higher than the previous year's level of
71.6%, due to the increase in distributions in March 2006. The average payout
ratio since the inception of the Fund to the end of December 2006 has been
77.8%.
    Livingston International Income Fund will provide its comprehensive
Management's Discussion and Analysis, full financial statements and
accompanying notes in its 2006 annual report, which will be mailed to
unitholders and filed with SEDAR in advance of the Fund's annual meeting. The
meeting is scheduled for May 11, 2007 at 10:00 a.m. ET in the Dominion Club, 1
King Street West, Toronto.

    
    Highlights
    (in millions of dollars, except     Three months               12 months
    per unit amounts, unaudited)       ended Dec. 31           ended Dec. 31
                                    2006        2005        2006        2005
    -------------------------------------------------------------------------
    Revenue                         81.2        45.3       322.2       175.7
    -------------------------------------------------------------------------
    Net (loss) income               (3.3)        4.8        17.5        19.1
    -------------------------------------------------------------------------
    Cash flows from operating
     activities                     42.9        (6.3)       73.7        50.4
    -------------------------------------------------------------------------
    EBITDA(1)                       17.4        10.1        68.2        40.4
    -------------------------------------------------------------------------
    Cash available for
     distribution(2)                16.9         8.6        59.0        32.7
    -------------------------------------------------------------------------
    Distributions to unitholders    11.6         6.4        45.6        23.4
    -------------------------------------------------------------------------
    Cash available for
     distribution(2) per unit(*)   0.620       0.522       2.196       2.037
    -------------------------------------------------------------------------
    Cash available for
     distribution(2) per unit
     (diluted)(xx)                 0.620       0.522       2.196       2.037
    -------------------------------------------------------------------------
    Distributions per unit to
     unitholders(*)                0.426       0.387       1.697       1.459
    -------------------------------------------------------------------------
    Payout ratio                    68.7%       74.2%       77.3%       71.6%
    -------------------------------------------------------------------------

    (*)  The per-unit calculation is based on the weighted average number of
         units outstanding. See also notes for Table 2.
    (xx) The diluted per-unit calculation includes the impact of the
         1,502 restricted units not yet exercised as at December 31, 2006.
    

    Conference call
    Livingston International Income Fund invites interested investors,
analysts and financial media to dial in to its conference call to review its
fourth quarter and year-end financial results to be held on Friday, March 30,
2007 at 11:00 a.m. EST. The number to call is 1-877-888-4605 or, in the
Toronto area, 416-695-9706, citing confirmation number T642554L.
    A playback will also be available following the scheduled call, until
April 27, 2007, by dialing (416) 695-5275 in the Toronto area or
1-888-509-0081 and asking for the Livingston International 4th Quarter 2006
Financial Results conference call. The pass code for the playback is 642554
followed by the number sign. An audio webcast recording will also be archived
on Livingston's web site for one month following the call.

    About Livingston
    Livingston International Income Fund owns, among other companies,
Livingston International Inc., which is a leading North American provider of
customs, transportation and integrated logistics services. Headquartered in
Toronto, Ontario, Livingston International operates in four business segments:
Canadian customs brokerage services; U.S. customs brokerage services;
transportation and logistics services; and other services, which include
imported vehicle registration, international trade consulting, business
outsourcing services, specialized services for trade shows and special events,
corporate travel services and technology services. The Fund and its
subsidiaries have more than 3,200 employees located at key border points,
seaports and airports as well as other strategic locations across Canada and
the United States.

    Forward-looking statements
    Certain statements in this release are forward-looking statements, which
reflect management's current beliefs and expectations. Many factors could
cause actual results to differ materially from the results discussed in the
forward-looking statements, including risks related to dependence on
cross-border trade, economic conditions, tax matters, disruptions in border
crossings and regulatory change, among others. Undue reliance should not be
placed on forward-looking statements. Refer to the forward-looking statements
description on page 4 of Livingston's past interim financial statements filed
on www.sedar.com as well as at www.livingstonintl.com.

    Non-GAAP measures
    The Fund provides some non-GAAP (generally accepted accounting
principles) measures as supplementary information that management believes
would be useful to investors to explain the Fund's financial results. These
non-GAAP measures include EBITDA(1) and cash available for distribution(2).
Investors are cautioned that the Fund may calculate these measures differently
than other companies or income trusts do and that, therefore, they may not be
comparable.
    The Fund has reconciled these non-GAAP measures to the most comparable
Canadian GAAP items included in the consolidated financial statements. See
Tables 2 and 3 for these reconciliations.



    
    Consolidated Balance Sheet
    As at December 31, 2006 and 2005

                                                December 31,    December 31,
    (in thousands of dollars, unaudited)                2006            2005
    -------------------------------------------------------------------------

    Assets
    Current assets
    Cash and cash equivalents                         36,043          11,300
    Accounts receivable                              291,712         162,195
    Prepaid expenses                                   4,499           1,998
    Income taxes recoverable                             533               -
    Future income taxes                                2,862             557
    -------------------------------------------------------------------------
                                                     335,649         176,050

    Property, plant and equipment                     28,633          12,023
    Goodwill                                         328,169          89,955
    Intangible assets                                128,890          51,513
    Future income taxes                                5,394           3,457
    Employee future benefits - pension                 4,150           1,875
    Deferred finance fees - net of accumulated
     amortization of $819 (2005: $175)                 2,643             671
    Deferred acquisition costs                             -           3,489
    Other long-term assets                               994               -
    -------------------------------------------------------------------------
                                                     834,522         339,033
    -------------------------------------------------------------------------

    Liabilities
    Current liabilities
    Operating facility for government remittances     80,803          17,071
    Government remittances payable                   162,656          85,277
    Unitholder distributions payable                   3,867           2,117
    Accounts payable and accrued liabilities          76,496          33,291
    Income taxes payable                                   -           1,393
    Client deposits and advances                       9,472           9,024
    Current portion of long-term debt                  1,188             336
    -------------------------------------------------------------------------
                                                     334,482         148,509
    -------------------------------------------------------------------------

    Long-term debt                                   111,498          31,294
    Other liabilities                                  1,947           3,703
    Future income taxes                               29,227          14,182
    Employee future benefits                           8,582           7,979
    -------------------------------------------------------------------------
                                                     485,736         205,667

    Unitholders' equity
    Units                                            408,349         164,900
    Restricted units                                      34               -
    -------------------------------------------------------------------------
                                                     408,383         164,900
    -------------------------------------------------------------------------

    Accumulated earnings                              64,064          46,519
    Distributions to unitholders                    (123,661)        (78,053)
    -------------------------------------------------------------------------
    Deficit                                          (59,597)        (31,534)
    -------------------------------------------------------------------------
                                                     348,786         133,366
    -------------------------------------------------------------------------
                                                     834,522         339,033
    -------------------------------------------------------------------------



    Consolidated Statements of Income and Deficit
    For the periods ended December 31, 2006 and 2005

                                   Three       Three          12          12
                                  months      months      months      months
    (in thousands of dollars,      ended       ended       ended       ended
     except per unit             Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31,
     amounts, unaudited)            2006        2005        2006        2005
    -------------------------------------------------------------------------

    Net revenues                  80,444      44,661     319,331     173,808
    Interest income                  768         622       2,845       1,905
    -------------------------------------------------------------------------
                                  81,212      45,283     322,176     175,713

    Cost of services              45,835      24,800     179,624      95,523
    Selling, general and
     administrative expenses      17,045      10,364      70,897      39,786
    Costs related to the
     integration of PBB              947           -       3,465           -
    Depreciation                   3,091       1,433      10,970       5,618
    Amortization                   9,111       3,548      27,008      13,760
    Impairment of goodwill        11,000           -      11,000           -
    -------------------------------------------------------------------------

    (Loss) income before the
     undernoted                   (5,817)      5,138      19,212      21,026
    -------------------------------------------------------------------------

    Other (income) expense        (1,870)        191      (1,518)        346
    -------------------------------------------------------------------------
    Interest expense
      Long-term debt               1,934         446       7,586       1,659
      Other                          820         119       3,306         559
    -------------------------------------------------------------------------
                                   2,754         565      10,892       2,218
    -------------------------------------------------------------------------
    (Loss) income before income
     taxes                        (6,701)      4,382       9,838      18,462
    -------------------------------------------------------------------------

    Provision for (recovery of)
     income taxes
      Current                       (812)        189        (263)      3,134
      Future                      (2,592)       (613)     (7,444)     (3,724)
    -------------------------------------------------------------------------
                                  (3,404)       (424)     (7,707)       (590)
    -------------------------------------------------------------------------

    Net (loss) income for the
     period                       (3,297)      4,806      17,545      19,052
    Deficit - beginning of
     period                      (44,694)    (29,988)    (31,534)    (27,189)
    Distributions to unitholders (11,606)     (6,352)    (45,608)    (23,397)
    -------------------------------------------------------------------------
    Deficit - end of period      (59,597)    (31,534)    (59,597)    (31,534)
    -------------------------------------------------------------------------

    Net (loss) income per unit     (0.12)       0.29        0.65        1.19
    -------------------------------------------------------------------------

    Net (loss) income
     per unit, diluted             (0.12)       0.29        0.65        1.19
    -------------------------------------------------------------------------



    Consolidated Statements of Cash Flows
    For the periods ended December 31, 2006 and 2005

                                   Three       Three          12          12
                                  months      months      months      months
                                   ended       ended       ended       ended
    (in thousands of dollars,    Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31,
     unaudited)                     2006        2005        2006        2005
    -------------------------------------------------------------------------
    Cash provided by (used in)
    Operating activities
    Net (loss) income for the
     period                       (3,297)      4,806      17,545      19,052
    Adjustment for non-cash items
      Depreciation and
       amortization               12,202       4,981      37,978      19,378
      Future income taxes         (2,592)       (613)     (7,444)     (3,724)
      Other liabilities              (28)        (69)       (114)       (158)
      Non-cash interest and other
       expense                       203          77         820         337
      Change in the value in
       interest-rate swaps          (141)          -        (141)          -
      Employee future benefits      (472)       (484)     (1,672)     (1,557)
      Restricted units                10           -         535           -
      Impairment of goodwill      11,000           -      11,000           -
      Foreign-exchange loss
       (gain)                         80          17         (95)        353
    -------------------------------------------------------------------------
                                  16,965       8,715      58,412      33,681
    Net change in current assets
     and liabilities              25,949     (15,052)     15,309      16,669
    -------------------------------------------------------------------------
                                  42,914      (6,337)     73,721      50,350
    -------------------------------------------------------------------------

    Investing activities
    Acquisition of businesses     (8,133)       (803)      1,480     (24,835)
    Property, plant and equipment (2,769)     (1,761)     (9,211)     (4,215)
    Increase in deferred
     acquisition costs                 -      (2,325)          -      (3,489)
    -------------------------------------------------------------------------
                                 (10,902)     (4,889)     (7,731)    (32,539)
    -------------------------------------------------------------------------

    Financing activities
    Distributions to unitholders (11,606)     (6,352)    (43,858)    (23,047)
    Issuance of units - net of
     issuance costs                    -           -           -      20,789
    Increase in long-term debt     5,000       2,700      80,000       2,700
    Repayment of long-term debt     (392)        (87)    (76,180)       (278)
    Increase (decrease) in
     operating facility              601       8,737       1,341     (16,179)
    Increase in deferred
     financing costs                   -           -      (2,616)          -
    -------------------------------------------------------------------------
                                  (6,397)      4,998     (41,313)    (16,015)
    -------------------------------------------------------------------------

    Foreign-exchange gain (loss)
     on cash held in foreign
     currency                        349         182          66        (298)
    -------------------------------------------------------------------------

    Increase (decrease) in cash
     and cash equivalents         25,964      (6,046)     24,743       1,498
    Cash and cash equivalents -
     beginning of period          10,079      17,346      11,300       9,802
    -------------------------------------------------------------------------
    Cash and cash equivalents -
     end of period                36,043      11,300      36,043      11,300
    -------------------------------------------------------------------------
    Cash disbursements made for:
      Income taxes                 1,458       1,213       6,768       3,117
      Interest                     2,551         488      10,072       1,881



    Table 1
    Consolidated Financial and Segmented Information
    For the periods ended December 31, 2006 and 2005

                                   Three       Three          12          12
                                  months      months      months      months
                                   ended       ended       ended       ended
    (in thousands of dollars,    Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31,
     unaudited)                     2006        2005        2006        2005
    -------------------------------------------------------------------------
    Revenues
      Canadian brokerage(*)(+)    38,548      21,731     147,897      85,973
      U.S. brokerage              13,827       9,869      55,653      38,088
      Transportation and
       logistics(*)               17,473       5,937      76,036      21,973
      Other services              11,364       7,746      42,590      29,679
    -------------------------------------------------------------------------
                                  81,212      45,283     322,176     175,713
    -------------------------------------------------------------------------
    Cost of services
      Canadian brokerage         (16,527)     (9,617)    (64,439)    (38,978)
      U.S. brokerage              (6,411)     (5,556)    (28,771)    (20,613)
      Transportation and
       logistics                 (15,923)     (4,179)    (59,367)    (14,647)
      Other services              (6,974)     (5,448)    (27,047)    (21,285)
    -------------------------------------------------------------------------
                                 (45,835)    (24,800)   (179,624)    (95,523)
    -------------------------------------------------------------------------
    Contribution margin
      Canadian brokerage          22,021      12,114      83,458      46,995
      U.S. brokerage               7,416       4,313      26,882      17,475
      Transportation and
       logistics                   1,550       1,758      16,669       7,326
      Other services               4,390       2,298      15,543       8,394
    -------------------------------------------------------------------------
                                  35,377      20,483     142,552      80,190
    -------------------------------------------------------------------------
    Contribution margin, as a
     per cent of revenue
      Canadian brokerage            57.1%       55.7%       56.4%       54.7%
      U.S. brokerage                53.6%       43.7%       48.3%       45.9%
      Transportation and
       logistics                     8.9%       29.6%       21.9%       33.3%
      Other services                38.6%       29.7%       36.5%       28.3%
    -------------------------------------------------------------------------
                                    43.6%       45.2%       44.2%       45.6%
    -------------------------------------------------------------------------

    Selling, general and
     administrative expenses     (17,045)    (10,364)    (70,897)    (39,786)
    -------------------------------------------------------------------------
      As a per cent of revenue    (21.0%)     (22.9%)     (22.0%)     (22.6%)
    -------------------------------------------------------------------------
    Costs related to the
     integration of PBB             (947)          -      (3,465)          -
    -------------------------------------------------------------------------
    EBITDA(1)                     17,385      10,119      68,190      40,404
    -------------------------------------------------------------------------
    EBITDA(1) margin, as a
     per cent of revenue            21.4%       22.4%       21.2%       23.0%
    -------------------------------------------------------------------------
    Net (loss) income             (3,297)      4,806      17,545      19,052
    -------------------------------------------------------------------------

    (*) In the fourth quarter, revenue in the amount of $1.5 million that was
        included in the transportation and logistics segment for the nine
        months ended September 30, 2006 was reclassified to the Canadian
        brokerage segment to conform with Livingston's segmented reporting.
    (+) The Canadian brokerage reporting segment includes interest income.



    Table 2
    Reconciliation of Cash Flows from Operating Activities to Cash Available
    for Distribution(2)
    For the periods ended December 31, 2006 and 2005

                                   Three       Three
    (in thousands of              months      months   12 months   12 months
     dollars, except               ended       ended       ended       ended
     per unit amounts,            Dec.31,     Dec.31,     Dec.31,     Dec.31,
     unaudited)                     2006        2005        2006        2005
    -------------------------------------------------------------------------
    Cash flows from
     operating activities         42,914      (6,337)     73,721      50,350
    -------------------------------------------------------------------------
    Net change in current
     assets and liabilities      (25,949)     15,052     (15,309)    (16,669)
    Maintenance capital
     expenditures(*)                (589)       (879)     (2,822)     (2,730)
    Costs related to the
     integration of PBB              947           -       3,465           -
    Tax impact of
     integration costs(xx)           886           -           -           -
    -------------------------------------------------------------------------
                                  18,209       7,836      59,055      30,951
    -------------------------------------------------------------------------
    Other liabilities                 28          69         114         158
    Employee future benefits         472         484       1,672       1,557
    Restricted units                 (10)          -        (535)          -
    Change in value of
     interest-rate swaps             141           -         141           -
    Unrealized foreign-
     exchange (loss) gain            (80)        (17)         95        (353)
    Other (income) expense        (1,870)        191      (1,518)        346
    -------------------------------------------------------------------------
    Cash available for
     distribution(2)              16,890       8,563      59,024      32,659
    -------------------------------------------------------------------------
    Distributions to
     unitholders(xxx)             11,606       6,352      45,608      23,397
    -------------------------------------------------------------------------
    Excess of cash available
     for distribution(2) over
     actual distributions          5,284       2,211      13,416       9,262
    -------------------------------------------------------------------------
    Payout ratio(+)                68.7%       74.2%       77.3%       71.6%
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Per unit in dollars
    Cash available for
     distribution(2)               0.620       0.522       2.196       2.037
    -------------------------------------------------------------------------
    Cash available for
     distribution(2), diluted      0.620       0.522       2.196       2.037
    -------------------------------------------------------------------------
    Distributions to
     unitholders(xxx)              0.426       0.387       1.697       1.459
    -------------------------------------------------------------------------
    Excess of cash available
     for distribution(2) over
     actual distributions          0.194       0.135       0.499       0.578
    -------------------------------------------------------------------------
    Excess of cash available
     for distribution(2) over
     actual distributions,
     diluted                       0.194       0.135       0.499       0.578
    -------------------------------------------------------------------------
    Payout ratio since
     Fund's inception(+)           77.8%       78.2%       77.8%       78.2%
    -------------------------------------------------------------------------
    Weighted average number
     of units(++)             27,242,675  16,413,200  26,880,958  16,032,582
    -------------------------------------------------------------------------
    Weighted average number
     of units, diluted(++)    27,244,177  16,413,200  26,882,460  16,032,582
    -------------------------------------------------------------------------

    (*)   Maintenance capital expenditures are additions, replacements or
          improvements to property, plant and equipment to maintain
          Livingston's business operations. These expenditures involve the
          replacement of information technology equipment and software as
          well as the improvement of facilities.
    (xx)  In the three months ended December 31, 2006, the company recorded
          an additional valuation allowance against the future tax assets of
          certain entities due to the uncertainty of realizing the benefits.
          Since the benefit of these deductions for the integration accrual
          have not been recognized in the financial statements, the
          integration costs have not been tax-effected.
    (xxx) Distributions are the amounts declared in the quarter, not what was
          actually paid.
    (+)   The payout ratio is calculated by dividing the distributions to
          unitholders by cash available for distribution(2).
    (++)  On March 2, 2005, as part of the Great Lakes acquisition, an
          additional 210,600 Fund units were issued from treasury. On
          April 26, 2005, in a public offering, the Fund issued 1,100,000
          Fund units from treasury. These two transactions increased the
          number of Fund units outstanding to 16,413,200 from 15,102,600. On
          January 11, 2006, as part of the PBB acquisition, an additional
          10,699,636 Fund units were issued from treasury, increasing the
          number of Fund units outstanding to 27,112,836. From June 15 to
          December 31, 2006, 134,771 restricted units were converted to Fund
          units, increasing the number of Fund units outstanding at the
          year's end to 27,247,607. The weighted average Fund units
          outstanding, diluted, is calculated by adding the restricted units
          outstanding as at December 31, 2006 to the weighted average number
          of Fund units outstanding.



    Table 3
    Reconciliation of Net Income to EBITDA(1) and Cash Available for
    Distribution(2)
    For the periods ended December 31, 2006 and 2005

                                   Three       Three
    (in thousands of              months      months   12 months   12 months
     dollars, except               ended       ended       ended       ended
     per unit amounts,            Dec.31,     Dec.31,     Dec.31,     Dec.31,
     unaudited)                     2006        2005        2006        2005
    -------------------------------------------------------------------------
    Net (loss) income             (3,297)      4,806      17,545      19,052
    Add (deduct):
      Recovery of income taxes    (3,404)       (424)     (7,707)       (590)
      Interest expense             2,754         565      10,892       2,218
      Other (income) expense      (1,870)        191      (1,518)        346
      Depreciation                 3,091       1,433      10,970       5,618
      Amortization                 9,111       3,548      27,008      13,760
      Impairment of goodwill      11,000           -      11,000           -
    -------------------------------------------------------------------------
    EBITDA(1)                     17,385      10,119      68,190      40,404
    -------------------------------------------------------------------------
    Add:
      Costs related to the
       integration of PBB            947           -       3,465           -
    Less:
      Tax impact of
       integration costs(+)          886           -           -           -
    -------------------------------------------------------------------------
                                  19,218      10,119      71,655      40,404
    -------------------------------------------------------------------------
    Less:
      Cash interest
       expense(++)                 2,551         488      10,072       1,881
      Maintenance capital
       expenditures(+++)             589         879       2,822       2,730
      Cash income
       taxes(++++)                  (812)        189        (263)      3,134
    -------------------------------------------------------------------------
    Cash available for
     distribution(2)              16,890       8,563      59,024      32,659
    -------------------------------------------------------------------------

    (+)    In the three months ended December 31, 2006, the company recorded
           an additional valuation allowance against the future tax assets of
           certain entities due to the uncertainty of realizing the benefits.
           Since the benefit of these deductions for the integration accrual
           have not been recognized in the financial statements, the
           integration costs have not been tax-effected.
    (++)   Cash interest expense is interest expense calculated in accordance
           with GAAP less amortization of deferred finance fees and imputed
           interest related to the earn-out obligation included in other
           liabilities.
    (+++)  Maintenance capital expenditures are additions, replacements or
           improvements to property, plant and equipment to maintain
           Livingston's business operations. These expenditures involve the
           replacement of information technology equipment and software as
           well as the improvement of facilities.
    (++++) Cash income taxes are current income taxes calculated in
           accordance with GAAP.

    ---------------------------
    (1) While EBITDA (earnings before interest, taxes, other (income)
        expense, depreciation, amortization and impairment of goodwill) is
        not a recognized measure under Canadian generally accepted accounting
        principles (GAAP), management believes it to be a useful supplemental
        measure. Investors are cautioned that EBITDA should not be construed
        as an alternative to net income as an indicator of Livingston's
        performance or cash flows. Livingston's method of calculating EBITDA
        may differ from that of other companies or income trusts and may not
        be comparable to measures used by other companies or income trusts.
        Table 2 above provides a reconciliation of cash flows from operating
        activities to cash available for distribution(2) and Table 3 provides
        a reconciliation of net income to EBITDA(1) and cash available for
        distribution(2).

    (2) Cash available for distribution, or distributable cash, is not
        intended to be representative of cash flow or results of operations
        determined in accordance with GAAP and does not have a standardized
        meaning prescribed by GAAP. Cash available for distribution may not
        be comparable to similar measures used by other companies or income
        trusts. Table 2 above provides a reconciliation of cash flows from
        operating activities to cash available for distribution and Table 3
        provides a reconciliation of net income to EBITDA(1) and cash
        available for distribution.
    





For further information:

For further information: Dawneen MacKenzie, Vice-President, Public
Affairs, 1-800-387-7582 ext. 3109

Organization Profile

LIVINGSTON INTERNATIONAL INCOME FUND

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Livingston International Inc.

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