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BFI Canada Income Fund announces Q4 and 2004 year-end results

BFI Canada Income Fund (TSX:BFC.UN) has announced its financial results for the three months and year ended Decembe...


BFI Canada Income Fund (TSX:BFC.UN) has announced its financial results for the three months and year ended December 31, 2004.

Financial highlights for the three months ended (stated in thousands of Canadian dollars):

Revenues and EBITDA increased 19.9 per cent and 15.7 per cent, respectively, over the comparative three months ended December 31, 2003. Free cash flow available for distribution for the three months ended December 31, 2004 totalled $10,307 and is $2,501 higher than the comparative three months ended December 31, 2003. Higher EBITDA partially offset by higher interest expense, maintenance capital expenditures and a revision to estimated future cash flows for closure costs is the principal reason for the increase. Excluding the revision to estimated future cash flows for closure costs, free cash flow available for distribution would have been $12,070 or $4,264 higher than the comparative three months ended December 31, 2003.

Aggregate distributions declared totaled $9,292 for the three months ended December 31, 2004, representing a payout ratio of 90.2 per cent of free cash flow available for distribution. Excluding the revision to estimated future cash flows amounting to $1,763 for the three months ended December 31, 2004, due principally to closure costs specific to the non-operating portion of the Fund’s Lachenaie landfill, the payout ratio would have been 77.0 per cent of free cash flow available for distribution.

Acquisitions and volume and price growth are the principal reasons for the Fund’s revenue and EBITDA growth.

Free cash flow available for distribution for the year ended December 31, 2004 totaled $41,438 and is $4,759 higher than the comparative year ended December 31, 2003. Higher EBITDA partially offset by higher interest expense, maintenance capital expenditures and a revision to estimated future cash flows for closure costs is the principal reason for the increase.

Excluding the revision to estimated future cash flows for closure costs, free cash flow available for distribution would have been $43,340 or $6,661 higher than the comparative year ended December 31, 2003.

Aggregate distributions declared totaled $35,195 for the year ended December 31, 2004, representing a payout ratio of 84.9 per cent of free cash flow available for distribution. Excluding the revision to estimated cash flows amounting to $1,902 for the year ended December 31, 2004, due principally to closure costs specific to the non-operating portion of the Fund’s Lachenaie landfill, the payout ratio would have been 81.2 per cent of free cash flow available for distribution.

Acquisitions and volume and price growth are the principal reasons for the Fund’s revenue and EBITDA(A) growth.

Other highlights for the year ended (stated in thousands of Canadian dollars):
Fund completed the refinancing of its term and revolving loans in June 2004, and issued $47,000, 6.123 per cent 5 year, and $58,000, 7.015 per cent 10 year, debentures and concurrently entered into a new $60,000 revolving credit facility.

The fund completed the acquisition of Twin Oaks Environmental Ltd. and Complete Disposal Services Ltd. in April and November 2004, respectively.

The fund entered into agreements in 2004 to acquire the Ridge landfill and IESI Corporation (IESI), one of the leading regional, full service non-hazardous solid waste management companies in the United States. Both transactions closed in January 2005.

Management commentary

"By all measures, 2004 was a strong year for BFI Canada as we continued our growth, both organically and through acquisitions, resulting in revenue, EBITDA(A) and free cash flow available for distribution(B) increases of 14.5 per cent, 12.7 per cent and 13.0 per cent, respectively," said Keith Carrigan, president and CEO. "The results for the year represent a new benchmark for us and one we can grow from for 2005."

Mr. Carrigan said the Fund "benefited from many organic initiatives to increase volumes and improve efficiencies in each of our operating locations in Canada. Of the 14.5 per cent growth in revenues for 2004, approximately 2 per cent was due to higher volumes of non-hazardous solid waste entering the Lachenaie landfill; approximately 6 per cent was a result of our collection operations benefiting from the acquisition of Twin Oaks and CDS during the year; with the balance, approximately 7 per cent, resulting from ongoing measures geared to continue organic growth and optimize results."

"Over the last three years as a public company BFI Canada has demonstrated an ability to grow revenue, EBITDA(A) and free cash flow available for distribution in the Canadian waste management industry, thus validating our business’s alignment with the income trust structure," said Mr. Carrigan. "We have grown our business and increased distributions declared for our unitholders by growing both organically and through strategic acquisitions, and we look forward to positive contributions from our 2004 acquisitions and our acquisition of the Ridge landfill, in 2005. We are also very excited about our future growth opportunities in the United States and replicating the success we have achieved in Canada through our recently completed acquisition of IESI Corporation."

Contact BFI Canada Income Fund:
Joseph D. Quarin, Chief Financial Officer
Phone: 416-401-7722
joe.quarin@bficanada.com

or

Anne MacMicken, Manager, Investor and Employee Relations
Phone: 416-401-7729
anne.macmicken@bficanada.com


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