Distribution & Tax Information
The Series A Subordinate Note component of TimberWest Forest Corp.'s Stapled Units bear interest at the rate of 2 - 12% per annum, accrued quarterly. Annual interest on the Series A Subordinate Notes amounts to CDN $0.179576131 to $1.077456788 per note. This amount was paid in quarterly installments of approximately $0.27 up to October 15, 2008. Commencing January 15, 2009 distributions will be deferred.
Distribution Dates
Interest on TimberWest Forest Corp.'s Stapled Units is accrued or paid quarterly.
Record Date January 1st
April 1st
July 1st
October 1st | Payment or Accrual Date January 15th
April 15th
July 15th
October 15th |
Distribution to Stapled Unit Holders – April 15, 2011
The Company will distribute to record holders of the Stapled Units as of the close on April 15, 2011 (the “Record Date”) 0.051572 of a Stapled Unit for each Stapled Unit held as of the Record Date, subject to rounding and applicable withholding taxes. This distribution is being made as payment-in-kind of deferred interest on the Series A Notes, which form part of the Stapled Units, of approximately $0.2666 per Stapled Unit. This interest was originally payable on the Series A Notes on January 15, 2009 and October 15, 2009 but was deferred by the Company as permitted under the indenture governing the Series A Notes, which also provides that such interest may be paid in Stapled Units at the Company's election. The Company has advised TSX that the delivery of additional Stapled Units will be made as soon as practicable after April 15, 2011. Any payment of a distribution that would result in fractional Stapled Units will be rounded down to the next whole number of Stapled Units.
Distribution to Stapled Unit Holders – January 17, 2011
The Company will distribute to record holders of the Stapled Units as of the close on January 17, 2011 (the “Record Date”) 0.008658 of a Stapled Unit for each Stapled Unit held as of the Record Date, subject to rounding and applicable withholding taxes. This distribution is being made as payment-in-kind of deferred interest on the Series A Notes, which form part of the Stapled Units, of approximately $0.0384 per Stapled Unit. This interest was originally payable on the Series A Notes on July 15, 2009 but was deferred by the Company for 18 months as permitted under the indenture governing the Series A Notes, which also provides that such interest may be paid in Stapled Units at the Company's election. The Company has advised TSX that the delivery of additional Stapled Units will be made as soon as practicable after January 17, 2011. Any payment of a distribution that would result in fractional Stapled Units will be rounded down to the next whole number of Stapled Units.
Distribution to Stapled Unit Holders – October 15, 2010
The Company will distribute to record holders of the Stapled Units as of the close on October 15, 2010 (the “Record Date”) 0.009852 of a Stapled Unit for each Stapled Unit held as of the Record Date, subject to rounding and applicable withholding taxes. This distribution is being made as payment-in-kind of deferred interest on the Series A Notes, which form part of the Stapled Units, of approximately $0.0388 per Stapled Unit. This interest was originally payable on the Series A Notes on April 15, 2009 but was deferred by the Company for 18 months as permitted under the indenture governing the Series A Notes, which also provides that such interest may be paid in Stapled Units at the Company's election. The Company has advised TSX that the delivery of additional Stapled Units will be made as soon as practicable after October 15, 2010. Any payment of a distribution that would result in fractional Stapled Units will be rounded down to the next whole number of Stapled Units.
Tax Information
Distributions paid or deferred by TimberWest Forest Corp. will first be on account of interest on the Series A Subordinate Notes, and second to dividends or return of capital, as approved by the Company's Board of Directors. In recent years, all cash distributions have been on account of interest. For resident holders, the amount of interest received or receivable on the Series A Subordinate Note to the end of the taxation year will be included in computing income for that taxation year and will include any interest that accrued (including deferred interest) in that year.
The tax allocation of distributions paid is detailed in the following schedules for recent taxation years:
Withholding Tax on Distributions to Non-residents
Interest paid under the terms of the Series A Subordinate Notes will be considered participating debt interest for purposes of the Income Tax Act (Canada) (the “Tax Act”). Consequently, Canadian withholding tax at a rate of 25% (subject to reduction under the provisions of any applicable tax treaty or convention) will be payable on interest paid or credited, or deemed to be paid or credited (including any premium on redemption and accrued interest on sales or transfers), to a non-resident holder. The rate of withholding tax applicable to interest paid on a Series A Subordinate Note to a non-resident holder that is a resident of the United States for the purposes of the U.S. Convention who beneficially holds the Series A Subordinate Note will generally be reduced to 15%, provided that the non-resident holder qualifies for the benefits of the U.S. Convention. A non-resident holder who is resident in the United States should consult its tax advisors in this regard. The rate of withholding tax on interest is also reduced under certain other income tax conventions to which Canada is a signatory.
For income and taxation information, please send e-mail to: invest@timberwest.com