3
Magna Entertainment Corp.
MEC 337 Magna Drive
- --- Aurora, Ontario,
Canada L4G 7K1
Tel (905) 726-2462
Fax (905) 726-2585
EXHIBIT 99
PRESS RELEASE
MAGNA ENTERTAINMENT CORP.
ANNOUNCES RESULTS FOR THE FIRST QUARTER
ENDED MARCH 31, 2002
May 3, 2002, Aurora, Ontario, Canada......Magna Entertainment Corp. ("MEC")
(NASDAQ: MIEC; TSE: MIE.A, MEH) today reported its financial results for the
first quarter ended March 31, 2002.
- ---------------------------------------------------------------------------------------------------------
Three Months Ended
March 31,
2002 2001
-------- --------
(unaudited)
Revenues $248,799 $244,526
Earnings before interest, taxes,
depreciation and amortization ("EBITDA") $ 37,046 $ 44,622
Net income $ 18,615 $ 22,468
Diluted earnings per share $ 0.22 $ 0.28
Results Excluding the Sale of Non-Core Real Estate
Revenues $248,162 $218,375
EBITDA $ 36,696 $ 32,564
Net income $ 18,409 $ 15,318
Diluted earnings per share $ 0.22 $ 0.19
All amounts are reported in U.S. dollars in thousands, except per share figures.
- ---------------------------------------------------------------------------------------------------------
In announcing these results, Jim McAlpine, President and Chief Executive Officer
of MEC, remarked: "We are pleased with our improved racetrack operating and
financial performance. Revenues and EBITDA excluding the sale of real estate
for the first quarter improved $29.8 million and $4.1 million, respectively,
over last year.
We expect that the balance of 2002 will see continued improvements in the
operating and financial performance of the racetrack segment of our business
through the ongoing integration of our strategic acquisitions and growth in our
account wagering operations. We will also continue to benefit from the sale of
our remaining non-core real estate."
4
Our racetracks operate for prescribed periods each year. As a result, our
racetrack revenues and operating results for any quarter will not be indicative
of our revenues and operating results for the year. We expect that these
seasonal fluctuations will reduce over time as the full impact of our
acquisition, off-track betting ("OTB") and account wagering initiatives are
realized.
Our financial results for the first quarter of 2002 reflect the full quarter's
operations for all of MEC's racetracks and related operations, except for our
XpressBet California operations which commenced on January 25, 2002. The
comparative results for the first quarter of 2001 do not reflect the operations
of MEC Pennsylvania and Multnomah Greyhound Park, which were acquired in April
2001 and October 2001, respectively, and Portland Meadows which commenced
activity in July 2001.
Revenues, excluding proceeds on the sale of non-core real estate, for the first
quarter of 2002 increased 13.6% to $248.2 million, compared to $218.4 million in
the prior year. The higher revenues in the first quarter of 2002 reflect
primarily the acquisition of MEC Pennsylvania, the additional live race days at
Gulfstream, the lease of Portland Meadows, the launch of XpressBet in the
California market and improved results at Santa Anita Park.
EBITDA, excluding gains on the sale of non-core real estate, for the three
months ended March 31, 2002 increased 12.7% to $36.7 million compared to $32.6
million in the first quarter of 2001.
Revenue on the sale of non-core real estate in the first quarter of 2002 was
$0.6 million, resulting in EBITDA of $0.4 million compared to revenue in the
first quarter of 2001 of $26.2 million and EBITDA of $12.1 million. We continue
to market our remaining non-core real estate, however, the timing of future
sales is uncertain.
Net income, excluding gains on the sale of non-core real estate, increased 20.2%
to $18.4 million in the first quarter of 2002 compared to $15.3 million in the
prior period.
Net income on the sale of non-core real estate was $0.2 million in the first
quarter of 2002 compared to $7.2 million in the comparative period.
Diluted earnings per share, excluding gains on the sale of non-core real estate,
increased $0.03 per share to $0.22 per share for the first quarter of 2002
compared to $0.19 per share in the first quarter of 2001. Diluted earnings per
share relating to the sale of non-core real estate were nil in the first quarter
of 2002 compared to $0.09 in the comparative period.
During the first quarter of 2002, cash generated from operations before changes
in non-cash working capital was $24.1 million. Total cash used in investment
activities during the quarter was $13.5 million, primarily all for real estate
property and fixed asset additions.
As previously reported, a number of significant events have occurred to date in
2002. We re-branded our national account wagering service as XpressBet and
launched our new Internet account wagering platform (www.xpressbet.com) in
January. On January 24, XpressBet was granted a license to conduct account
wagering in the State of California and commenced operations on January 25. In
February, we entered into a joint venture, Racetrack Television Network ("RTN"),
that will telecast horse races on a private satellite horse racing service.
Coupled with XpressBet, RTN will make it much easier for our customers to enjoy
the thrill of horseracing from home or on the road. In March, we entered into
an agreement to acquire substantially all of the operations and related assets
of Lone Star Park at Grand Prairie near Dallas, Texas. Last month, we completed
a public offering of 23 million Class A Subordinate Voting shares, which raised
net proceeds of approximately $143.0 million. Most recently, we increased our
bank lines of credit by arranging a short-term credit facility in the amount of
$75.0 million.
We are continuing to pursue strategic acquisitions and make strategic
investments in our racetracks and related operations, including entertainment
operations, to grow and enhance our racing business. On a pro-forma basis,
after adjustment for the net proceeds from our recent share offering, we have
cash balances at March 31, 2002 of $188.9 million and unused and available
credit facilities of $85.0 million, aggregating $273.9 million, to pursue our
strategic plan.
5
Over the balance of the year, we will continue to focus on earnings growth
through the implementation, throughout our operations, of best practices and
common systems, utilization of our corporate purchasing power to reduce costs,
improved production and distribution of our simulcast program, growth of our
account wagering business and sales of non-core real estate holdings.
MEC, one of the largest operators of premier horse racetracks in the United
States, acquires, develops and operates horse racetracks and related pari-mutuel
wagering operations, including off-track betting facilities, and owns and
operates a national account wagering system called XpressBet.
The Company will hold a conference call to discuss its first quarter 2002
results on May 6, 2002 at 11:00 a.m. New York time. The number to use for this
call is 1-888-313-1094. Please call 10 minutes prior to the start of the
conference call. The overseas number to call is 1-416-641-6444. The conference
call will be chaired by Graham Orr, Executive Vice-President and Chief Financial
Officer of MEC. We will also be webcasting the conference call at
www.magnaentertainment.com.
This press release may contain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 (the "Act"). The Act
provides certain "safe harbor" provisions for forward-looking statements. Any
forward-looking statements made in this press release are made pursuant to the
Act. The reader is cautioned that these statements represent our judgment
concerning the future and are subject to risks and uncertainties that could
cause our actual operating results and financial condition to differ materially.
Forward-looking statements are typically identified by the use of terms such as
"may," "will," "expect," "anticipate," "estimate," and similar words, although
some forward-looking statements are expressed differently. Although we believe
that the expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will prove to be
correct. Important factors that could cause actual results to differ materially
from our expectations include, but are not limited to: the impact of competition
from operators of other racetracks and from other forms of gaming (including
Internet and on-line wagering); a substantial change in law or regulations
affecting our gaming activities; a substantial change in allocation of live
racing days; our continued ability to effectively compete for the country's top
horses and trainers necessary to field high-quality horse racing; our continued
ability to complete expansion projects designed to generate new revenues and
attract new patrons; our ability to sell some of our real estate when we need to
or at a price we want; the impact of inclement weather; and our ability to
integrate recent racetrack acquisitions. In this regard, readers are referred
to the Company's Annual Report on Form 10-K for the year ended December 31, 2001
and subsequent public filings. The Company disclaims any intention and
undertakes no obligation to update or revise any forward-looking statements to
reflect subsequent information, events or circumstances, or otherwise.
For more information contact:
Graham Orr
Executive Vice-President
& Chief Financial Officer
Magna Entertainment Corp.
337 Magna Drive
Aurora, ON L4G 7K1
Tel: 905-726-7099
6
MAGNA ENTERTAINMENT CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
- --------------------------------------------------------------------------------
[Unaudited]
[U.S. dollars in thousands, except per share figures]
- ----------------------------------------------------------------------------------------------------------
Three months ended
March 31, March 31,
2002 2001
- ------------------------------------------------------------------------------------------------------------
Revenues
Racetrack
Gross wagering $220,353 $192,326
Non-wagering 23,675 22,589
-------- --------
244,028 214,915
Real estate -------- --------
Sale of real estate
Rental and other 637 26,151
4,134 3,460
-------- --------
4,771 29,611
- ------------------------------------------------------------------------------------------------------------
248,799 244,526
- ------------------------------------------------------------------------------------------------------------
Costs and expenses
Racetrack
Purses, awards and other 140,523 122,232
Operating costs 55,344 50,976
General and administrative 10,633 7,962
-------- --------
206,500 181,170
Real estate -------- --------
Cost of real estate sold
Operating costs 287 14,093
General and administrative 2,924 2,688
501 245
-------- --------
3,712 17,026
-------- --------
Predevelopment and other costs 1,541 1,708
Depreciation and amortization 5,326 5,354
Interest expense, net 67 1,400
- ------------------------------------------------------------------------------------------------------------
217,146 206,658
- ------------------------------------------------------------------------------------------------------------
Income before income taxes 31,653 37,868
Income taxes 13,038 15,400
- ------------------------------------------------------------------------------------------------------------
Net income 18,615 22,468
Other comprehensive loss
Foreign currency translation adjustment (659) (8,854)
- ------------------------------------------------------------------------------------------------------------
Comprehensive income $ 17,956 $ 13,614
============================================================================================================
Earnings per share of Class A Subordinate
Voting Stock, Class B Stock or Exchangeable
Share:
Basic $ 0.22 $ 0.28
Diluted $ 0.22 $ 0.28
============================================================================================================
Average number of shares of Class A
Subordinate Voting Stock, Class B Stock
and Exchangeable Shares outstanding during
the period [in thousands]:
Basic 84,089 80,472
Diluted 85,546 80,472
============================================================================================================
7
MAGNA ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------------------------------------------------
[Unaudited]
[U.S. dollars in thousands]
- --------------------------------------------------------------------------------------------------------------------------
Three months ended
March 31, March 31,
2002 2001
- --------------------------------------------------------------------------------------------------------------------------
Cash provided from (used for):
OPERATING ACTIVITIES
Net income $ 18,615 $ 22,468
Items not involving current cash flows 5,470 (9,507)
- --------------------------------------------------------------------------------------------------------------------------
24,085 12,961
Changes in non-cash items related to operations (3,136) 8,714
- --------------------------------------------------------------------------------------------------------------------------
20,949 21,675
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES
Real estate property and fixed asset additions (13,598) (4,204)
Other asset additions (1,109) (125)
Proceeds on sale of real estate 1,198 6,778
- --------------------------------------------------------------------------------------------------------------------------
(13,509) 2,449
- --------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Decrease in bank indebtedness - (7,609)
(Repayment of) increase in long-term debt, net (981) 9,876
Issuance of share capital 251 40
- --------------------------------------------------------------------------------------------------------------------------
(730) 2,307
- --------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash equivalents (67) (878)
- --------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents during the period 6,643 25,553
Cash and cash equivalents, beginning of period 39,212 31,976
- --------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 45,855 $ 57,529
==========================================================================================================================
8
MAGNA ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
- ---------------------------------------------------------------------------------------------------------
[Unaudited]
[U.S. dollars in thousands]
- ---------------------------------------------------------------------------------------------------------
March 31, December 31,
2002 2001
- ---------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 45,855 $ 39,212
Restricted cash 26,330 18,782
Accounts receivable 54,076 33,101
Prepaid expenses and other 5,566 5,162
- ---------------------------------------------------------------------------------------------------------
131,827 96,257
- ---------------------------------------------------------------------------------------------------------
Real estate properties and fixed assets, net 581,357 574,677
- ---------------------------------------------------------------------------------------------------------
Other assets, net 180,725 179,665
- ---------------------------------------------------------------------------------------------------------
Future tax assets 4,123 3,657
- ---------------------------------------------------------------------------------------------------------
$898,032 $854,256
=========================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
- ---------------------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable and other liabilities $ 92,036 $ 78,337
Income taxes payable 12,672 1,312
Long-term debt due within one year 18,167 18,133
- ---------------------------------------------------------------------------------------------------------
122,875 97,782
- ---------------------------------------------------------------------------------------------------------
Long-term debt 66,653 67,768
- ---------------------------------------------------------------------------------------------------------
Other long-term liabilities 3,305 2,576
- ---------------------------------------------------------------------------------------------------------
Future tax liabilities 119,138 118,276
- ---------------------------------------------------------------------------------------------------------
Shareholders' equity:
Capital stock issued and outstanding -
Class A Subordinate Voting Stock 159,977 157,633
Exchangeable Shares 14,707 16,800
Class B Stock 394,094 394,094
Contributed surplus 7,290 7,290
Retained earnings 30,089 11,474
Accumulated comprehensive loss (20,096) (19,437)
- ---------------------------------------------------------------------------------------------------------
586,061 567,854
- ---------------------------------------------------------------------------------------------------------
$898,032 $854,256
=========================================================================================================
9
MAGNA ENTERTAINMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Summary of Significant Accounting Policies
Basis of presentation
- ---------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with United States generally accepted accounting principles ("U.S.
GAAP") for interim financial information and with instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by U.S. GAAP for complete financial
statements. The preparation of the consolidated financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from estimates. In the opinion
of management, all adjustments, which consist of normal and recurring
adjustments, necessary for fair presentation have been included. Operating
results for the three month period ended March 31, 2002 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2002. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 2001.
The Company's racetrack business is seasonal in nature. The Company's racetrack
revenues and operating results for any quarter will not be indicative of the
revenues and operating results for the year. A disproportionate share of annual
revenues and net earnings are earned in the first quarter of each year.
2. Accounting Change and Pro-Forma Impact
a) Accounting Change
Effective January 1, 2002, the Company implemented Financial Accounting
Standards Board Statement No. 142 ("SFAS 142") Goodwill and Other
Intangible Assets. SFAS 142 requires the application of the non-
amortization and impairment rules for existing goodwill and other
intangible assets that meet the criteria for indefinite life beginning
January 1, 2002. The Company completed the required initial impairment
test during the three months ended March 31, 2002 and determined that the
value of its racing licenses was not impaired. As at March 31, 2002,
racing licenses with a net book value of $171.3 million are included in
Other Assets on the balance sheet.
b) Acquisitions
On April 5, 2001, the Company completed the acquisition of Ladbroke
Racing Pennsylvania, Inc. and Sport Broadcasting, Inc. On October 26,
2001, the Company acquired all the outstanding capital stock of MKC
Acquisition Co., operating as Multnomah Greyhound Park. Both of these
acquisitions are fully disclosed in the Company's consolidated financial
statements for the year ended December 31, 2001. As a result of these
acquisitions being completed subsequent to March 31, 2001, their results
of operations are not included in the Company's results for the three
months ended March 31, 2001.
10
c) Impact of Accounting Change and Acquisitions
The pro-forma impact of the implementation of SFAS 142 and our
acquisitions is as follows:
Three months ended
March 31,
Revenues 2002 2001
----------------------
Revenues as reported $248,799 244,526
Restatement for acquisitions - 20,165
-------- --------
Pro-forma revenues $248,799 $264,691
======== ========
Pro-forma revenues excluding
proceeds on the sale of real estate $248,162 $238,540
======== ========
Three months ended
March 31,
Net Income 2002 2001
----------------------
Net income as reported $ 18,615 $ 22,468
Restatement for change in
intangible assets amortization - 832
Restatement for acquisitions - (987)
-------- --------
Pro-forma net income $ 18,615 $ 22,313
======== ========
Pro-forma net income excluding
gains on the sale of real estate $ 18,409 $ 15,163
======== ========
Three months ended
Basic and Diluted March 31,
Earnings per Share 2002 2001
---------------------
Basic and diluted earnings per share
as reported $ 0.22 $ 0.28
Restatement for change in
intangible assets amortization - 0.01
Restatement for acquisitions - (0.02)
-------- --------
Pro-forma basic and diluted earnings
per share $ 0.22 $ 0.27
======== ========
Pro-forma basic and diluted earnings
per share excluding gains on the
sale of real estate $ 0.22 $ 0.18
======== ========
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3. Capital Stock
Changes in Class A Subordinate Voting Stock, Exchangeable Shares and Class B
Stock for the three months ended March 31, 2002 are shown in the following table
(number of shares and stated value in the following table have been rounded to
the nearest thousand):
Class A Subordinate Exchangeable
Voting Stock Shares Class B Stock
--------------------------- ----------------------------- ---------------------------
Number of Stated Number of Stated Number of Stated
Shares Value Shares Value Shares Value
- ------------------------------------------------------------------------------------------------------------------------------
Issued and outstanding at
December 31, 2001 23,324 $157,633 2,263 $16,800 58,466 $394,094
Issued under the Plan 43 251 - - - -
Conversion of Exchangeable
Shares to Class A
Subordinate Voting Stock 282 2,093 (282) (2,093) - -
- ------------------------------------------------------------------------------------------------------------------------------
Issued and outstanding at
March 31, 2002 23,649 $159,977 1,981 $14,707 58,466 $394,094
==============================================================================================================================
The Company has a Long-term Incentive Plan (the "Plan") (adopted in 2000) which
allows for the grant of nonqualified stock options, incentive stock options,
stock appreciation rights, restricted stock, bonus stock and performance shares
to directors, officers, employees, consultants, independent contractors and
agents. A maximum of 7.9 million shares are available to be issued under the
Plan, of which 6.5 million are available for issuance pursuant to stock options
and tandem stock appreciation rights and 1.4 million are available for issuance
pursuant to any other type of award under the Plan. During the three months
ended March 31, 2002, 42,900 shares were issued under the Plan.
The Company grants stock options to certain directors, officers, key employees
and consultants to purchase shares of the Company's Class A Subordinate Voting
Stock. All of such stock options give the grantee the right to purchase Class A
Subordinate Voting Stock of the Company at a price no less than the fair market
value of such stock at the date of grant. Generally, stock options under the
Plan vest over a period of two to six years from the date of grant at rates of
1/7/th/ to 1/3/rd/ per year and expire on or before the tenth anniversary of the
date of grant, subject to earlier cancellation in the events specified in the
stock option agreements entered into by the Company with each recipient of
options.
During the three months ended March 31, 2002, 137,500 stock options were
granted, no stock options were exercised and 5,000 stock options were cancelled.
At March 31, 2002, there were 4,585,833 options outstanding with the exercise
price of the options ranging from $3.91 to $9.43 and an average exercise price
of $6.08.
There were 2,868,500 options exercisable at March 31, 2002 with an average
exercise price of $6.06.
12
4. Earnings Per Share
The following is a reconciliation of the numerator and denominator of the basic
and diluted earnings per share computations (in thousands except per share
amounts):
Three months ended
March 31,
- -------------------------------------------------------------------------------------------------------------------------
2002 2001
- -------------------------------------------------------------------------------------------------------------------------
Net income $18,615 $22,468
=========================================================================================================================
Basic Diluted Basic &
Diluted
Weighted Average Shares Outstanding:
Class A Subordinate Voting Stock 23,478 24,935 14,234
Class B Stock 58,466 58,466 58,466
Exchangeable Shares 2,145 2,145 7,772
- -------------------------------------------------------------------------------------------------------------------------
84,089 85,546 80,472
- -------------------------------------------------------------------------------------------------------------------------
Earnings Per Share $ 0.22 $ 0.22 $ 0.28
=========================================================================================================================
5. Commitments and Contingencies
a) The Company is currently considering a major redevelopment of its
Gulfstream Park racetrack in Florida (the "Gulfstream Park
Redevelopment"). Should it proceed as currently contemplated, the
Gulfstream Park Redevelopment would include a simulcast pavilion, a
sports and entertainment arena and a new turf club and grandstand. In
addition, there would be significant modifications and enhancements to
the racetracks and stable areas. If completed, the Gulfstream Park
Redevelopment would require the demolition of a substantial portion of
the current buildings and related structures, which include the
grandstand, turf club and annex. The aggregate carrying value at March
31, 2002 of the assets that would be demolished if the Gulfstream Park
Redevelopment is completed is approximately $23.0 million. If the
Company decides to proceed with the Gulfstream Park Redevelopment and
obtains the approval of its Board of Directors, a reduction in the
expected life of the existing assets would occur and a write-down
would be necessary.
b) On March 6, 2002, the Company entered into an agreement with Lone Star
Race Park, Ltd. and LSJC Development Corporation to acquire
substantially all the operations and related assets of Lone Star Park
at Grand Prairie, a Thoroughbred and American Quarter Horse racetrack
located near Dallas, Texas. The acquired assets include the rights
under a long-term lease of Lone Star Park and a related purchase
option exercisable at termination of the lease in 2027. The purchase
price of the acquisition will be satisfied by the payment of $80.0
million in cash and the assumption of certain liabilities, including
the Lone Star Park capital lease obligation of approximately $19.0
million, subject to usual adjustments at closing. The transaction is
expected to close in the second quarter of 2002, subject to certain
conditions, including the receipt of regulatory approvals.
13
6. Segment Information
The Company's reportable segments reflect how the Company is organized and
managed by senior management. The Company has two operating segments: racetrack
and real estate operations. The racetrack segment includes the operation of
eight thoroughbred racetracks, one standardbred racetrack, one greyhound track
and one horse boarding and training center. In addition, the racetrack segment
includes off-track betting ("OTB") facilities and a national account wagering
business. The real estate segment includes the operation of two golf courses
and related facilities, a residential housing development adjacent to our golf
course located in Austria and other real estate holdings.
The accounting policies of each segment are the same as those described in the
"Significant Accounting Policies" section in the Company's annual report on Form
10-K for the year ended December 31, 2001.
The following summary presents key information by operating segment (in
thousands):
Three months ended March 31, 2002
Racetrack Real Estate
Operations Operations Total
- ----------------------------------------------------------------------------------------------------------------
Revenues $ 244,028 $ 4,771 $ 248,799
================================================================================================================
Income before income taxes $ 30,223 $ 1,430 $ 31,653
================================================================================================================
Real estate property and fixed asset additions $ 10,350 $ 3,248 $ 13,598
================================================================================================================
Three months ended March 31, 2001
Racetrack Real Estate
Operations Operations Total
- ----------------------------------------------------------------------------------------------------------------
Revenues $ 214,915 $ 29,611 $ 244,526
================================================================================================================
Income before income taxes $ 25,875 $ 11,993 $ 37,868
================================================================================================================
Real estate property and fixed asset additions $ 920 $ 3,284 $ 4,204
================================================================================================================
7. Subsequent Events
a) On April 10, 2002, the Company completed a public offering of 20
million shares of its Class A Subordinate Voting Stock, at a price to
the public of US$6.65 per share in the United States, or Cdn. $10.60
per share in Canada. The underwriters for the offering also exercised
their over-allotment option, in full, by purchasing an additional 3
million shares of Class A Subordinate Voting Stock at the offering
prices. The total proceeds to the Company from the offering, net of
underwriters' commissions and issue expenses, are approximately
US$143.0 million.
b) On May 1, 2002, the Company entered into an agreement with respect to
a $75.0 million senior unsecured revolving credit facility. The credit
facility has a term of one year which may be extended with the consent
of both parties.