Extract
BCI Announces 2005 Results.
MONTREAL -- As a result of the adoption on July 17, 2002 of BCI's Plan of Arrangement, BCI's annual audited consolidated financial statements for 2005 reflect only the activities of BCI as a holding company.Such audited consolidated financial statements together with management's discussion and analysis (the "MD&A") thereon are attached hereto and readers are encouraged to refer to such documents for full details.
2005 Highlights BCI's cash and cash equivalents together with temporary investments and accrued interest thereon as at December 31, 2005 were $231.4 million up by $7.4 million from December 31, 2004.This increase was due principally to the receipt of a $7.5 million shareholder distribution from Canbras in December 2005. Estimated future net assets of BCI at June 30, 2007 are $279.3 million ($6.98 per share), unchanged from the estimate prepared on October 28, 2005 in connection with the Corporation's third quarter 2005 results. 2005 Operating Results Net loss for 2005 was $65.5 million, or $1.64 per share reflecting primarily the recognition of net income tax expense of $62.0 million in connection with the Corporation's Loss Monetization Plan (as defined below).In addition, the Corporation recorded administrative expenses of $8.6 million, net interest income of $5.1 million, a gain on its Canbras investment of $1.2 million and foreign exchange losses and other expense of $1.2 million.Administrative expenses are comprised of employee and office costs of $5.8 million, legal, tax and auditor fees of $1.2 million and other administrative expenses of $1.5 million.Employee and office costs include the impact of an increase of $3.6 million in the accrual for pension and other post retirement benefits based in part on negotiations with BCE Inc. ("BCE")who is considering the assumption of these liabilities in light of the pending dissolution of BCI; such increased accrual was also based in part on a decrease in the discount rate used to measure the Corporation's pension and other post retirement benefit liabilities.Other administrative expenses include the net cost associated with lawsuits dismissed by the Court during the third quarter of $0.6 million partially offset by an insurance recovery of $0.3 million in connection with a lawsuit by certain former common shareholders that was dismissed by the Supreme Court of Canada in the first quarter of 2005.Foreign exchange losses and other expense include an increase in the Corporation's accrual for contingencies. As at December 31, 2005, BCI's shareholders' equity was $212.3 million, down by $65.1 million from December 31, 2004. This decrease was the result of the net loss realized during the year. Accounts payable and accrued liabilities were $19.9 million at the end of 2005, and comprised mainly of employee related costs, such as pension and other post retirement benefits, typical for a company in a wind-down process.Accounts payable and accrued liabilities are up $4.0 million from December 31, 2004, mainly as a result of an increase of $3.6 million in the accrual for pension and other post retirement benefits and an increase in the accrual for contingencies partially offset by a reduction in various other accrued liabilities during the year. Litigation Update On September 23, 2005, the Quebec Superior Court rendered its decision in a lawsuit filed by a former employee of the Corporation and awarded the employee an amount of approximately $44 thousand.An estimated amount of the Corporation's exposure to this claim had previously been expensed.On October 21, 2005, the plaintiff in this action filed an appeal with the Quebec Court of Appeal seeking to have the amount awarded to him increased by an amount that the Corporation estimates to be less than $500 thousand, calculated on a present value basis.In a cross appeal which the Corporation filed in November 2005, BCI is seeking to have the original damage assessment of approximately $44 thousand reversed and is also contesting the plaintiff's argument that the amount originally awarded should be further increased.A decision in this matter is expected no sooner than the second quarter of 2007. Timing of Potential Shareholder Distribution BCI expects to be in a position to make an initial distribution to shareholders during the second quarter of 2006, but is not currently in a position to estimate the amount of the initial distribution.The assumptions that have been made in connect...See the full content of this document
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