/FIRST AND FINAL ADD - TO407 - MDS Inc./
September 07 2006 - 7:00AM
PR Newswire (US)
12. Segmented Information Three months to July 31, 2006
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Pharmaceutical Instru- Diag- Corporate Services Isotopes ments
nostics and Other Total
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Net revenues $ 126 $ 88 $ 74 $ 89 $ - $ 377 Cost of revenues (105)
(45) (46) (51) - (247) Selling, general and administration (35)
(14) (7) (11) (10) (77) Research and development - (1) (4) - - (5)
Depreciation and amortization (9) (4) (5) (2) - (20) Restructuring
charges (1) - - - (1) (2) Other income (expense) 5 - - - - 5 Equity
earnings (loss) - - - 1 - 1
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Operating income (loss) $ (19) $ 24 $ 12 $ 26 $ (11) $ 32
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Total assets $ 912 $ 724 $ 205 $ 240 $ 544 $ 2,625
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Capital expenditures $ 14 $ - $ 2 $ 1 $ 3 $ 20
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Three months to July 31, 2005
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Pharmaceutical Instru- Diag- Corporate Services Isotopes ments
nostics and Other Total
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Net revenues $ 133 $ 79 $ 74 $ 82 $ - $ 368 Cost of revenues (95)
(43) (42) (53) - (233) Selling, general and administration (40) (7)
(6) (16) (3) (72) Research and development (1) (2) (4) - 1 (6)
Depreciation and amortization (8) (4) (2) (4) - (18) Restructuring
charges (5) - - - - (5) Other income (expense) (8) - - - - (8)
Equity earnings (loss) - - - - - -
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Operating income (loss) $ (24) $ 23 $ 20 $ 9 $ (2) $ 26
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Total assets $ 1,000 $ 799 $ 228 $ 307 $ 452 $ 2,786
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Capital expenditures $ 9 $ 23 $ 1 $ - $ 9 $ 42
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Nine months to July 31, 2006
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Pharmaceutical Instru- Diag- Corporate Services Isotopes ments
nostics and Other Total
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Net revenues $ 385 $ 253 $ 211 $ 262 $ - $ 1,111 Cost of revenues
(295) (128) (128) (153) - (704) Selling, general and administration
(98) (42) (15) (34) (29) (218) Research and development - (2) (10)
- - (12) Depreciation and amortization (24) (12) (15) (6) - (57)
Restructuring charges (1) - - (1) (3) (5) Other income (expense) 5
(10) - - (3) (8) Equity earnings (loss) (1) - - 2 (4) (3)
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Operating income (loss) $ (29) $ 59 $ 43 $ 70 $ (39) $ 104
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Capital expenditures $ 31 $ - $ 5 $ 3 $ 9 $ 48
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Nine months to July 31, 2005
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Pharmaceutical Instru- Diag- Corporate Services Isotopes ments
nostics and Other Total
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Net revenues $ 408 $ 229 $ 213 $ 249 $ - $ 1,099 Cost of revenues
(286) (118) (121) (156) - (681) Selling, general and administration
(115) (37) (16) (44) (11) (223) Research and development (2) (4)
(18) - 2 (22) Depreciation and amortization (22) (11) (9) (8) (1)
(51) Restructuring charges (4) - - - (1) (5) Other income (expense)
(8) - - - - (8) Equity earnings (loss) - - 1 1 - 2
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Operating income (loss) $ (29) $ 59 $ 50 $ 42 $ (11) $ 111
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Capital expenditures $ 17 $ 36 $ 5 $ - $ 20 $ 78
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13. Financial Instruments The carrying amounts and fair values for
all derivative financial instruments are as follows: As at July 31
2006 2005
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Carrying Fair Carrying Fair amount Value Amount Value
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Asset (liability) position: Currency forward and option - asset $ 1
$ 4 $ 4 $ 10 Currency forward and option - liabilities $ (1) $ (1)
$ (2) $ (2) Interest rate swap and option contracts $ (3) $ (4) $ -
$ -
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As of July 31, 2006, the Company had outstanding foreign exchange
contracts and options in place to sell up to US$105 million, and in
certain circumstances up to US$158 million, at a weighted average
exchange rate of C$1.1590 maturing over the next six months. The
Company also had interest rate swap contracts that economically
convert a notional amount of US$80 million of debt from a fixed to
a floating interest rate. Foreign exchange options and interest
rate swaps not eligible for hedge accounting are included in
accounts payable and are marked to market each period. 14. Income
Taxes A reconciliation of expected income taxes to reported income
tax expense is provided below. The effective rate for the quarter
was 16% (2005 - 30%). Three months to July 31 2006 2005
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Expected income taxes expense at MDS's 35% (2005 - 35%) statutory
rate $ 11 $ 8 Increase (decrease) to tax expense as a result of:
Benefit of tax losses previously not recognized (4) (4) Impact on
federal tax rate decrease on future tax balances (3) - Other 1 3
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Reported income tax expense $ 5 $ 7
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15. Commitments As at October 31, 2005, MDS had a remaining
five-year commitment of $211 million related to the outsourcing of
the information technology infrastructure. During the quarter, MDS
reached an agreement with the current service provider and has
begun to transition these services to new providers. The Company
has entered into contracts totaling $50 million over five years
associated with these new agreements. During the quarter, the
Company pledged a $15 million letter of credit in support of future
site remediation costs for our Kanata facility. 16. Comparative
Figures Certain figures for the previous year have been
reclassified to conform with the current year's financial statement
presentation. In addition, segmented information for 2005 has been
restated to reflect the discontinued operations reported.
DATASOURCE: MDS Inc. CONTACT: PRNewswire - - 09/07/2006
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