Badger Income Fund releases United States tax information


    CALGARY, Feb. 28 /CNW/ - The following information is being provided to
assist individual U.S. holders of fund units of Badger Income Fund who hold
their units through a broker or other intermediary in reporting dividends
received from Badger Income Fund on their IRS Form 1040 - U.S. Individual
Income Tax Return for the calendar year 2007. The information is intended as a
general guideline and should not be considered legal advice to any particular
existing or potential holder of fund units. The information is not intended to
cover all possible U.S. income tax considerations. Holders or potential
holders of fund units of Badger Income Fund should consult their own legal and
tax advisors as to specific U.S. tax consequences of holding the fund units of
Badger Income Fund.
    We believe for U.S. federal income tax purposes, that the units of Badger
Income Fund are more likely than not treated as equity in a corporation,
rather than as debt, and that distributions paid to its individual U.S.
unitholders will more likely than not be taxable dividends provided they do
not represent a return of capital. The portion of the trust distributions that
is considered a dividend for U.S. income tax purposes is determined based upon
the greater of Badger Income Fund's current or accumulated earnings and
profits ("E&P") as determined in accordance with U.S. income tax principals.
With respect to cash distributions declared in 2007 to U.S. individual
unitholders, 100 percent should be reported as taxable dividends.
    As the Badger Income Fund is a qualified foreign corporation the portion
of the distributions made during 2007 that are considered to be dividends
should be `qualify dividends' and therefore be eligible for the reduced rate
of tax applicable to net capital gains. Badger Income Fund is not required to
issue Form 1099 DIV's; however, U.S. unitholders may receive a Form 1099 DIV
from a broker or intermediary that may not reflect the dividend as a
'qualifying dividend'. As a result of this, U.S. unitholders should consult
their brokers and tax advisors to ensure that this information is accurately
reflected on their tax returns. Brokers and/or intermediaries may or may not
be required to issue amended Form 1099 DIVs. Readers should consult their own
legal or tax advisors as to their particular tax consequence of holding Badger
Income Fund units.
    Canadian resident taxpayers should note that the above information has no
impact on any disclosed Canadian tax information.

    Badger Income Fund is an open-ended trust that is North America's largest
provider of non-destructive excavating services. Badger traditionally works
for contractors and facility owners in the utility and petroleum industries.
Our key technology is the Badger Hydrovac, which is used primarily for safe
digging in congested grounds and challenging conditions. The Badger Hydrovac
uses a pressurized water stream to liquefy the soil cover, which is then
removed with a powerful vacuum system and deposited into a storage tank.
Badger manufactures its truck-mounted hydrovac units.
    Badger Income Fund's business model involves the provision of excavating
services through two distinct entities: the Operating Partners (franchisees in
the United States and agents in Canada), and Badger Corporate. Badger
Corporate works with its Operating Partners to provide Hydrovac service to the
end user. In this partnership, Badger provides the expertise, the trucks, and
North American marketing and administration support. The Operating Partners
deliver the service by operating the equipment and developing their local
markets. All work is invoiced by Badger and then shared with the Operating
Partner based upon a revenue sharing formula. In certain locations Badger has
established corporate run operations to market and deliver the service in the
local area.

    This press release contains forward-looking statements subject to various
risk factors and uncertainties, which may cause the actual results,
performances or achievements of Badger to be materially different from any
future results, performances or achievements expressed or implied by such
forward-looking statements. Such factors include, but are not limited to,
fluctuations in the market for oil and gas related products and services,
political and economic conditions, the demand for services provided by Badger,
industry competition and Badger's ability to attract and retain key personnel.

    The Toronto Stock Exchange has neither approved nor disapproved the
    information contained herein.

    %SEDAR: 00020566E

For further information:

For further information: Tor Wilson, President and CEO, 2820, 715 - 5th
Avenue SW, Calgary, Alberta, T2P 2X6; Greg Kelly, CA, Vice President Finance
and CFO, Phone (403) 264-8500, Fax (403) 228-9773

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