LABRADOR IRON ORE ROYALTY CORPORATION - RESULTS FOR THE THIRD QUARTER ENDED<br>SEPTEMBER 30, 2010
TORONTO, Oct. 29 /CNW/ - Labrador Iron Ore Royalty Corporation (TSX: LIF.UN) announced its results for the third quarter ended September 30, 2010.
Since inception in 1995, we have reported to our unitholders as an income trust. Commencing with this report we are reporting to the holders of stapled units (the "Unitholders") as Labrador Iron Ore Royalty Corporation ("LIORC"). The conversion from a trust to a corporation took place with effect on July 1, 2010. Stapled units consist of subordinated notes and common shares of LIORC. Unitholders will notice differences in the financial statements, in that previously the reported income of the Trust was also the net income to the Unitholders. Under the stapled unit arrangement, the income of the Unitholders will be the total of the net income of LIORC plus the interest from the $248 million LIORC subordinated notes. Thus all net income, adjusted cash flow and per unit figures referred to in this report use the totals according to the financial statements plus (where applicable) the $7,488,000 ($0.234 per unit) interest on the subordinated notes payable to the Unitholders by LIORC. Note 1 to the Financial Statements explains in detail the basis of their presentation.
Royalty income for the third quarter of 2010 amounted to $40.59 million as compared to $15.51 million for the third quarter of 2009. The Unitholders' cash flow from operating activities after adjustments for changes in amounts receivable, accounts payable and income taxes payable (adjusted cash flow) for the third quarter was $85.86 million or $2.68 per unit as compared to $18.81 million or $0.59 per unit for the same period in 2009. Net income to Unitholders was $64.43 million or $2.01 per unit compared to $13.63 million or $0.43 per unit for the same period in 2009.
The 2010 third quarter improvement resulted from the substantial increases in prices for concentrate and pellets as compared to 2009. Sales volume was lower than expected, due to the timing of shipments but this should be reflected in fourth quarter sales.
In 2010, the majority of seaborne traded iron ore contract volumes is reported to have moved from being priced on an annual to a quarterly basis (generally quarterly prices are based on spot prices for the three months preceding the month before the start of the quarter) to better reflect the significantly increased volatility in iron demand and contract servicing of customers in recent years. After reviewing industry pricing trends and extensive discussions with a range of customers, Iron Ore Company of Canada ("IOC") is also moving to use quarterly pricing for term contract shipments in 2010, together with spot pricing for non-term contract sales. Quarterly index pricing was first applied in the Asian iron ore market and is based on the concept of equalized delivered prices to Asia for ore of similar quality. Applying index pricing in a North American and European context and for products where no recognized market index yet exists has required extensive consultation with customers on the implementation of the quarterly pricing mechanism. IOC has agreed quarterly pricing with most of its customers with provisional pricing being used for the balance. Where quarterly pricing arrangements have been implemented, average pellet price increases will exceed 100% and concentrate price increases approximate 90% compared to 2009. IOC sees 2010 as a period of transition for iron ore pricing mechanisms and it is not yet clear how these may further evolve in the future.
Equity earnings from IOC amounted to $38.12 million ($1.19 per unit) as compared to $3.26 million ($0.10 per unit) in 2009. The substantial increase in earnings resulted mainly from the substantial price increase from last year's level. IOC declared a dividend during the quarter, payable on October 6, 2010. Our share was U.S. $60.4 million or CDN $62.2 million ($1.94 per unit).
Results for the three months and nine months ended September 30 are summarized below:
| 3 Months | 3 Months | 9 Months | 9 Months | ||
| Ended | Ended | Ended | Ended | ||
| Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||
| 2010 | 2009 | 2010 | 2009 | ||
| (Unaudited) | |||||
| Revenue (in millions) | $40.93 | $15.84 | $110.15 | $52.10 | |
| Adjusted cash flow (in millions) | $85.86 | $18.81 | $138.67 | $42.50 | |
| Adjusted cash flow per unit | $ 2.68 | $ 0.59 | $ 4.33 | $ 1.33 | |
| Net income (in millions) | $ 64.43 | $ 13.63 | $ 148.91 | $ 47.94 | |
| Net income per unit | $ 2.01 | $ 0.43 | $ 4.65 | $ 1.50 | |
"Adjusted cash flow" (defined as cash flow from operating activities as shown on the attached financial statements adjusted for changes in amounts receivable, accounts payable and income taxes payable) is not a recognized measure under Canadian GAAP. The Directors believe that adjusted cash flow is a useful analytical measure as it better reflects cash available for distributions to Unitholder
A summary of IOC's sales in millions of tonnes is as follows:
|
3 Months Ended Sept. 30, 2010 |
3 Months Ended Sept. 30, 2009 |
9 Months Ended Sept. 30, 2010 |
9 Months Ended Sept. 30, 2009 |
Year Ended Dec. 31, 2009 |
|
| Pellets | 2.41 | 2.08 | 8.08 | 5.70 | 9.01 |
| Concentrates | 0.97 | 1.17 | 2.73 | 3.92 | 5.23 |
| Total | 3.38 | 3.25 | 10.81 | 9.62 | 14.24 |
Reorganization
The reorganization that was approved by the unitholders at the Annual Special Meeting on May 19, 2010 became effective on July 1 and each Unitholder is now the direct holder of one common share and a 12.08% $7.75 subordinated note of LIORC for each unit held. These securities are trading as stapled units on the Toronto Stock Exchange. In effect the securities that were previously held by Labrador Iron Ore Royalty Income Fund are now held directly by the Unitholders. Owners of the stapled units will continue to receive regular quarterly payments of interest and dividends, as in the past.
Outlook
Although there is volatility in the markets, the general tone remains positive. With IOC expecting to sell all the iron ore it can produce and pricing in U.S. dollars approaching record levels, we expect 2010 to be a very satisfactory year. The strength of the Canadian dollar against its U.S. counterpart will have a negative effect on revenue but should only marginally offset the positive effect of increased volume and pricing. The demand in iron ore markets in Asia remains strong with most of the rest of the world showing gradual improvement back to more normal levels, although some markets, including North America, remain relatively weak. Spot prices, although below the peak reached in the second quarter, remain about double 2009 levels.
Respectfully submitted on behalf of the Directors of Labrador Iron Ore Royalty Corporation,
Bruce C. Bone
President and Chief Executive Officer
October 29, 2010
Management's Discussion and Analysis
The following discussion and analysis should be read in conjunction with the Management's Discussion and Analysis section of Labrador Iron Ore Royalty Income Fund's (the "Fund") 2009 Annual Report and the interim financial statements and notes contained in this report. Although management believes that expectations reflected in forward-looking statements are reasonable, such statements involve risk and uncertainties including the factors discussed in the Fund's 2009 Annual Report.
The Corporation's revenues are entirely dependent on the operations of Iron Ore Company of Canada ("IOC") as its principal assets relate to the operations of IOC and its principal source of revenue is the 7% royalty it receives on all sales of iron ore products by IOC. In addition to the volume of iron ore sold, the Corporation's royalty revenue is affected by the price of iron ore and the Canadian - U.S. dollar exchange rate.
The sales of IOC are usually 15% - 20% of the annual volume in the first quarter, with the balance spread fairly evenly throughout the other three quarters. Because of the size of individual shipments some quarters may be affected by the timing of the loading of ships that can be delayed from one quarter to the next.
Since inception in 1995, we have reported to our unitholders as an income trust. Commencing with this report we are reporting to the holders of stapled units (the "Unitholders") as Labrador Iron Ore Royalty Corporation ("LIORC" or the "Corporation"). The conversion from a trust to a corporation took place with effect on July 1, 2010 and stapled units consist of subordinated notes and common shares of LIORC. Unitholders will notice differences in the financial statements, in that previously the reported income of the Trust was also the net income to the Unitholders. Under the stapled unit arrangement, the income of the Unitholders will be the total of the net income of LIORC plus the interest from the $248 million LIORC subordinated notes they own. Thus all net income, adjusted cash flow and per unit figures referred to in this report use the totals according to the financial statements plus (where applicable) the $7,488,000 ($0.234 per unit) interest on the subordinated notes payable to the Unitholders by LIORC. Note 1 to the Financial Statements explains in detail the basis of their presentation.
Royalty income for the third quarter of 2010 amounted to $40.59 million as compared to $15.51 million for the third quarter of 2009. The Unitholders' cash flow from operating activities after adjustments for changes in amounts receivable, accounts payable and income taxes payable (adjusted cash flow) for the third quarter was $85.86 million or $2.68 per unit as compared to $18.81 million or $0.59 per unit for the same period in 2009. Net income to Unitholders was $64.43 million or $2.01 per unit compared to $13.63 million or $0.43 per unit for the same period in 2009.
The 2010 third quarter improvement resulted from the substantial increases in prices for concentrate and pellets as compared to 2009. Sales volume was lower than expected, due to the timing of shipments but this should be reflected in fourth quarter sales.
In 2010, the majority of seaborne traded iron ore contract volumes is reported to have moved from being priced on an annual to a quarterly basis (generally quarterly prices are based on spot prices for the three months preceding the month before the start of the quarter) to better reflect the significantly increased volatility in iron demand and contract servicing of customers in recent years. After reviewing industry pricing trends and extensive discussions with a range of customers, Iron Ore Company of Canada ("IOC") is also moving to use quarterly pricing for term contract shipments in 2010, together with spot pricing for non-term contract sales. Quarterly index pricing was first applied in the Asian iron ore market and is based on the concept of equalized delivered prices to Asia for ore of similar quality. Applying index pricing in a North American and European context and for products where no recognized market index yet exists has required extensive consultation with customers on the implementation of the quarterly pricing mechanism. IOC has agreed quarterly pricing with most of its customers with provisional pricing being used for the balance. Where quarterly pricing arrangements have been implemented, average pellet price increases will exceed 100% and concentrate price increases approximate 90% compared to 2009. IOC sees 2010 as a period of transition for iron ore pricing mechanisms and it is not yet clear how these may further evolve in the future.
Equity earnings from IOC amounted to $38.12 million ($1.19 per unit) as compared to $3.26 million ($0.10 per unit) in 2009. The substantial increase in earnings resulted mainly from the substantial price increase from last year's level. IOC declared a dividend during the quarter, payable on October 6, 2010. Our share was U.S. $60.4 million or CDN $62.2 million ($1.94 per unit).
The nine month results were affected by the same factors as the quarter and reflect the increased volume and substantially higher pricing which have occurred as a result of the substantially improved iron ore markets.
The following table sets out Unitholders' quarterly revenue, net income and cash flow data for 2010, 2009 and 2008:
| Revenue | Net Income | Net Income per Unit | Adjusted Cash Flow(1) | Adjusted Cash Flow per Unit(1) | Distributions Declared per Unit | ||||
| (in millions except per Unit information) | |||||||||
| 2010 | |||||||||
| First Quarter | $16.7 | $15.4 | $0.48 | $22.3(3) | $0.70 | $0.75 | |||
| Second Quarter | $52.5 | $69.1 | $2.16 | $30.5 | $0.95 | $0.75 | |||
| Third Quarter(2) | $40.9 | $64.4 | $2.01 | $85.9(4) | $2.68 | $1.00 | |||
| 2009 | |||||||||
| First Quarter | $16.6 | $16.5 | $0.52 | $11.1 | $0.35 | $0.50 | |||
| Second Quarter | $19.7 | $17.8 | $0.55 | $12.6 | $0.39 | $0.50 | |||
| Third Quarter | $15.8 | $13.6 | $0.43 | $18.8(5) | $0.59 | $0.50 | |||
| Fourth Quarter | $24.9 | $27.2 | $0.85 | $15.8 | $0.49 | $0.50 | |||
| 2008 | |||||||||
| First Quarter | $16.6 | $10.8 | $0.34 | $10.4 | $0.32 | $0.35 | |||
| Second Quarter | $58.1 | $73.9 | $2.31 | $32.9 | $1.03 | $1.00 | |||
| Third Quarter | $43.7 | $65.6 | $2.05 | $104.1(6) | $3.25 | $3.00 | |||
| Fourth Quarter | $45.0 | $26.2 | $0.82 | $27.5 | $0.86 | $0.50 | |||
| Notes: | (1) | "Adjusted cash flow" (see below) | |||||||
| (2) | Commencing with third quarter 2010, all distributions, net income, adjusted cash flow and per unit figures referred to in this table use the totals according to the financial statements plus (where applicable) the $7.488,000 ($0.234 per unit) interest on the subordinated notes payable to the Unitholders by LIORC | ||||||||
| (3) | Includes a $11.5 million IOC dividend | ||||||||
| (4) | Includes a $62.2 million IOC dividend | ||||||||
| (5) | Includes a $8.2 million IOC dividend | ||||||||
| (6) | Includes a $77.9 million IOC dividend | ||||||||
Standardized Cash Flow and Adjusted Cash Flow
For the Corporation, standardized cash flow is the same as cash flow from operating activities as recorded in the Corporation's cash flow statements as the Corporation does not incur capital expenditures or have any restrictions on distributions. Standardized cash flow per share was $0.93 for the quarter (2009 - $0.56). Cumulative standardized cash flow from inception of the trust is $25.68 per unit and total cash distributions since inception are $25.43 per unit, for a payout ratio of 99%.
"Adjusted cash flow" is defined as cash flow from operating activities as shown on the attached financial statements adjusted for changes in amounts receivable, accounts payable and income taxes payable. It is not a recognized measure under Canadian GAAP. The Directors believe that adjusted cash flow is a useful analytical measure as it better reflects cash available for distributions to Unitholders.
The following reconciles cash flow from operating activities of the Corporation to adjusted cash flow:
| 3 Months Ended Sept. 30, 2010 | 3 Months Ended Sept. 30, 2009 | 9 Months Ended Sept. 30, 2010 | 9 Months Ended Sept. 30, 2009 | ||
| Standardized cash flow from operating activities | $29,759,422 | $17,849,913 | $67,661,394 | $31,053,382 | |
| Excluding: changes in amounts receivable, accounts and income taxes payable | 48,612,888 | 961,659 | 63,523,464 | 11,448,989 | |
| Adjusted cash flow | $78,372,310 | $18,811,572 | $131,184,858 | $42,502,371 | |
| Adjusted cash flow per unit | $2.45 | $0.59 | $4.10 | $1.33 |
Liquidity
The Corporation has a $50 million revolving credit facility with a term ending September 18, 2013 with provision for annual one-year extensions. No amounts are currently drawn under this facility (2009 - nil) leaving $50 million available to provide for any capital required by IOC or other Corporation requirements.
Transition to International Financial Reporting Standards ("IFRS")
The CICA Accounting Standards Board requires all Canadian publicly accountable enterprises to adopt International Financial Reporting Standards for the years beginning on or after January 1, 2011. The objective of the change is to move towards the use of a single set of world-wide accounting standards and improve financial reporting and transparency. The Corporation will adopt IFRS starting January 1, 2011.
The current focus of the Corporation's transition plan to IFRS relates to its investment in shares of IOC accounted for under the equity method. In coordination with IOC and its advisors, a plan has been developed including preliminary study, project set-up, component evaluations, preparation of IFRS financial statements and, finally, integration. Component evaluations are being made to analyze IFRS/Canadian GAAP accounting differences. Certain accounting principles currently followed by IOC that differ from IFRS standards have been identified in the following significant areas:
- Property, plant and equipment
- Deferred stripping costs
- Impairment of assets
- Asset retirement obligations
- Employee benefits
The project is on schedule to be completed in the fourth quarter of this year, at which point IOC will be in a position to make final decisions as to what impact the change to IFRS will have on its earnings and hence the Corporation's reported share of those earnings.
Reorganization
The reorganization that was approved by the unitholders at the Annual Special Meeting on May 19, 2010 became effective on July 1 and each Unitholder is now the direct holder of one common share and a 12.08% $7.75 subordinated note of LIORC for each unit held. These securities are trading as stapled units on the Toronto Stock Exchange. In effect the securities that were previously held by Labrador Iron Ore Royalty Income Fund are now held directly by the Unitholders. Owners of the stapled units will continue to receive regular quarterly payments of interest and dividends, as in the past.
Outlook
Although there is volatility in the markets, the general tone remains positive. With IOC expecting to sell all the iron ore it can produce and pricing in U.S. dollars approaching record levels, we expect 2010 to be a very satisfactory year. The strength of the Canadian dollar against its U.S. counterpart will have a negative effect on revenue but should only marginally offset the positive effect of increased volume and pricing. The demand in iron ore markets in Asia remains strong with most of the rest of the world showing gradual improvement back to more normal levels, although some markets, including North America, remain relatively weak. Spot prices, although below the peak reached in the second quarter, remain about double 2009 levels.
Bruce C. Bone
President and Chief Executive Officer
Toronto, Ontario
October 29, 2010
| LABRADOR IRON ORE ROYALTY CORPORATION | |||||
| CONSOLIDATED BALANCE SHEETS | |||||
| As at | |||||
| September 30 | December 31 | ||||
| 2010 | 2009 | ||||
| (Unaudited) | |||||
| Assets | |||||
| Current | |||||
| Cash and cash equivalents | $ | 9,864,407 | $ | 6,203,013 | |
| Amounts receivable | 104,408,169 | 24,987,043 | |||
| 114,272,576 | 31,190,056 | ||||
| Deferred charges | 248,000 | 310,000 | |||
|
Iron Ore Company of Canada ("IOC"), royalty and commission interests |
|
293,268,775 |
|
297,489,943 | |
| Investment in IOC | 226,315,031 | 210,950,091 | |||
| $ | 634,104,382 | $ | 539,940,090 | ||
| Liabilities and Shareholders'/Unitholders' Equity | |||||
| Current | |||||
| Accounts payable | $ | 8,637,886 | $ | 5,233,229 | |
| Income taxes payable | 5,514,567 | 509,562 | |||
| Interest payable on subordinated notes | 7,488,000 | - | |||
| Distributions payable to shareholders/unitholders | 24,512,000 | 16,000,000 | |||
| 46,152,453 | 21,742,791 | ||||
| Subordinated notes (note 3) | 248,000,000 | - | |||
| Future income tax liability | 105,890,000 | 105,050,000 | |||
| 400,042,453 | 126,792,791 | ||||
| Equity (note 4) | |||||
| Share capital / Trust units | 69,708,147 | 317,708,147 | |||
| Retained earnings | 164,353,782 | 95,439,152 | |||
| 234,061,929 | 413,147,299 | ||||
| $ | 634,104,382 | $ | 539,940,090 | ||
| LABRADOR IRON ORE ROYALTY CORPORATION | ||||||
| CONSOLIDATED STATEMENTS OF INCOME AND | ||||||
| COMPREHENSIVE INCOME AND UNDISTRIBUTED INCOME | ||||||
| For the Three Months | ||||||
| Ended September 30, | ||||||
| 2010 | 2009 | |||||
| (Unaudited) | ||||||
| Revenue | ||||||
| IOC royalties | $ | 40,591,042 | $ | 15,514,566 | ||
| IOC commissions | 314,834 | 320,284 | ||||
| Interest and other income | 24,162 | 4,363 | ||||
| 40,930,038 | 15,839,213 | |||||
| Expenses | ||||||
| Newfoundland royalty taxes | 8,118,208 | 3,102,913 | ||||
| Amortization of royalty and commission interests | 1,425,809 | 1,332,629 | ||||
| Administrative expenses (note 5) | 1,181,534 | 447,476 | ||||
| Interest expense: | ||||||
| Credit facility | 115,187 | 115,187 | ||||
| Subordinated notes (note 3) | 7,488,000 | - | ||||
| 18,328,738 | 4,998,205 | |||||
| Income before equity earnings and income taxes | 22,601,300 | 10,841,008 | ||||
| Equity earnings in IOC | 38,121,091 | 3,261,695 | ||||
| Income before income taxes | 60,722,391 | 14,102,703 | ||||
| Provision for (recovery of) income taxes | ||||||
| Current | 7,833,099 | 1,582,827 | ||||
| Future | (4,050,000) | (1,110,000) | ||||
| 3,783,099 | 472,827 | |||||
| Net income and comprehensive | ||||||
| income for the period | 56,939,292 | 13,629,876 | ||||
| Retained earnings, beginning of period | 131,926,490 | 86,682,164 | ||||
| Dividends/distributions to shareholders/unitholders | (24,512,000) | (16,000,000) | ||||
| Retained earnings, end of period | $ | 164,353,782 | $ | 84,312,040 | ||
| Net income per common share / unit | $ | 1.78 | $ | 0.43 | ||
| LABRADOR IRON ORE ROYALTY CORPORATION | ||||
| CONSOLIDATED STATEMENTS OF INCOME AND | ||||
| COMPREHENSIVE INCOME AND UNDISTRIBUTED INCOME | ||||
| For the Nine Months | ||||
| Ended September 30, | ||||
| 2010 | 2009 | |||
| (Unaudited) | ||||
| Revenue | ||||
| IOC royalties | $109,069,404 | $ | 51,016,686 | |
| IOC commissions | 1,009,820 | 947,045 | ||
| Interest and other income | 73,297 | 134,831 | ||
| 110,152,521 | 52,098,562 | |||
| Expenses | ||||
| Newfoundland royalty taxes | 21,851,956 | 10,203,337 | ||
| Amortization of royalty and commission interests | 4,221,168 | 3,373,768 | ||
| Administrative expenses (notes 3 and 5) | 2,622,164 | 1,346,269 | ||
| Interest expense: | ||||
| Credit facility | 342,479 | 342,479 | ||
| Subordinated notes (note 3) | 7,488,000 | - | ||
| 36,525,767 | 15,265,853 | |||
| Income before equity earnings and income taxes | 73,626,754 | 36,832,709 | ||
| Equity earnings in IOC | 89,027,626 | 17,305,381 | ||
| Income before income taxes | 162,654,380 | 54,138,090 | ||
| Provision for income taxes | ||||
| Current | 20,387,750 | 5,966,202 | ||
| Future | 840,000 | 230,000 | ||
| 21,227,750 | 6,196,202 | |||
| Net income and comprehensive | ||||
| income for the period | 141,426,630 | 47,941,888 | ||
| Retained earnings, beginning of period | 95,439,152 | 84,370,152 | ||
| Dividends/distributions to shareholders/unitholders | (72,512,000) | (48,000,000) | ||
| Retained earnings, end of period | $164,353,782 | $ | 84,312,040 | |
| Net income per common share / unit | $4.42 | $ | 1.5 | |
| LABRADOR IRON ORE ROYALTY CORPORATION | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| For the Three Months | ||||||
| Ended September 30, | ||||||
| 2010 | 2009 | |||||
| (Unaudited) | ||||||
| Net inflow (outflow) of cash related | ||||||
| to the following activities | ||||||
| Operating | ||||||
| Net income for the period | $ | 56,939,292 | $ | 13,629,876 | ||
| Items not affecting cash: | ||||||
| Equity earnings in IOC | (38,121,091) | (3,261,695) | ||||
| Future income taxes | (4,050,000) | (1,110,000) | ||||
| Amortization of royalty and commission interests | 1,425,809 | 1,332,629 | ||||
| Amortization of deferred charges | 20,666 | 20,666 | ||||
| Common share dividend from IOC | 62,157,634 | 8,200,096 | ||||
| Change in amounts receivable, accounts and income taxes payable | (48,612,888) | (961,659) | ||||
| Cash flow from operating activities | 29,759,422 | 17,849,913 | ||||
| Financing | ||||||
| Distributions paid to unitholders | (24,000,000) | (16,000,000) | ||||
| Cash flow used in financing activities | (24,000,000) | (16,000,000) | ||||
| Increase in cash and cash equivalents during the period | 5,759,422 | 1,849,913 | ||||
| Cash and cash equivalents, beginning of period | 4,104,985 | 8,999,039 | ||||
| Cash and cash equivalents, end of period | $ | 9,864,407 | $ | 10,848,952 | ||
| Cash and cash equivalents are comprised of: | ||||||
| Cash in bank | $ | 864,708 | $ | 143,826 | ||
| Term deposits | 8,999,699 | 10,705,126 | ||||
| $ | 9,864,407 | $ | 10,848,952 | |||
| Cash income taxes paid | $ | 10,286,745 | $ | 4,849,155 | ||
| Cash interest paid | $ | 93,493 | $ | 93,493 | ||
| LABRADOR IRON ORE ROYALTY CORPORATION | |||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
| For the Nine Months | |||||
| Ended September 30, | |||||
| 2010 | 2009 | ||||
| (Unaudited) | |||||
| Net inflow (outflow) of cash related | |||||
| to the following activities | |||||
| Operating | |||||
| Net income for the period | $ | 141,426,630 | $47,941,888 | ||
| Items not affecting cash: | |||||
| Equity earnings in IOC | (89,027,626) | (17,305,381) | |||
| Future income taxes | 840,000 | 230,000 | |||
| Amortization of royalty and commission interests | 4,221,168 | 3,373,768 | |||
| Amortization of deferred charges | 62,000 | 62,000 | |||
| Common share dividend from IOC | 73,662,686 | 8,200,096 | |||
| Change in amounts receivable, accounts and income taxes payable | (63,523,464) | (11,448,989) | |||
| Cash flow from operating activities | 67,661,394 | 31,053,382 | |||
| Financing | |||||
| Distributions paid to unitholders | (64,000,000) | (48,000,000) | |||
| Cash flow used in financing activities | (64,000,000) | (48,000,000) | |||
| Increase/(decrease) in cash and cash equivalents during the period | 3,661,394 | (16,946,618) | |||
| Cash and cash equivalents, beginning of period | 6,203,013 | 27,795,570 | |||
| Cash and cash equivalents, end of period | $ | 9,864,407 | $10,848,952 | ||
| Cash and cash equivalents are comprised of: | |||||
| Cash in bank | $ | 864,708 | $143,826 | ||
| Term deposits | 8,999,699 | 10,705,126 | |||
| $ | 9,864,407 | $10,848,952 | |||
| Cash income taxes paid | $ | 15,382,745 | $32,943,452 | ||
| Cash interest paid | $ | 280,480 | $280,480 | ||
%SEDAR: 00030172E
For further information:
Bruce C. Bone
President and Chief Executive Officer
(416) 863-7133
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