PRT Forest Regeneration Income Fund
TSX : PRT.UN

PRT Forest Regeneration Income Fund

March 24, 2010 20:56 ET

PRT Announces Results for Year Ended December 31, 2009

VICTORIA, BRITISH COLUMBIA--(Marketwire - March 24, 2010) - PRT Forest Regeneration Income Fund (TSX:PRT.UN) (the "Fund") today announced results for its fourth quarter and year ended December 31, 2009. The Fund's annual financial report is enclosed as part of this release.

For the year ended December 31, 2009, the Fund reported operating earnings of $2,555,000 and net losses of $1,829,000 ($0.19 per unit) as compared to operating earnings of $4,093,000 and net losses of $23,191,000 ($2.41 per unit) in 2008.

Net losses for the year were reduced by a $1.8 million gain on disposal of property, plant and equipment recorded as a result of the settlement of an insurance claim for greenhouse losses in 2008. Losses were also impacted by a $2.6 million write-down of property, plant and equipment and intangibles related to the previously announced closures of the Summerland and Maple Ridge, BC nurseries. Neither item will directly affect operations, financial obligations, or Cash Available for Distribution. However, as previously announced, the Fund received the payment for the insurance claim in early 2010, and has since used a portion of the funds to retire the Fund's Canadian bank term debt in the amount of $3.7 million. Excluding the write-down, gain and other non-recurring charges, the net loss for the period would have been $502,000 ($0.05 per unit), which reflects the current cyclical downturn in the forest industry and the general economic environment.

For the three months ended December 31, 2009, the Fund recorded a net loss of $512,000 ($0.05 per unit). Excluding the fixed asset impairment charge, gain and other non-recurring charges, earnings in the fourth quarter would have been $343,000 ($0.04 per unit).

Cash Available for Distribution of $1,843,000 ($0.19 per unit) in 2009 compares to $3,602,000 ($0.38 per unit) for 2008. Operating Earnings and Cash Available for Distribution decreased year-over-year due to approximately 27% lower seedling volumes in 2009. For the fourth quarter, Cash Available for Distribution totaled $1,207,000 or $0.12 per unit. Operating Earnings and Cash Available for Distribution are terms which do not have standardized meaning under Canadian generally accepted accounting principles, and may not be comparable to similar measures provided by other reporting entities. Cash Available for Distribution is the Fund's measure of free cash flow from operating activities; however, in the current economic environment, the Fund is not making distributions in order to finance capital expenditures and business restructuring charges. Standardized Distributable Cash - a comparable measure of cash flow prepared under guidance issued by the Canadian Institute of Chartered Accountants - totaled $0.25 per unit in 2009, as compared to $0.68 per unit in 2008.

Revenues in the year decreased by $8.7 million or 22.5%, with lower contract volumes being the primary cause, which was attributed to the current downturn in the forest industry. Relative to PRT's combined markets, however, management estimates that market share has remained steady year over year. Production margins declined due to lower economies of scale with the reduced volume. Selling, general and administration costs were lower in 2009 due to ongoing cost reduction efforts.

President and CEO, Rob Miller, commented, "The unusually sharp and protracted decline in US housing markets and the general economy has created difficult operating conditions for our company and our forest product industry customers in the past few years, and our revenues and profitability have declined.

Nevertheless, we have adapted our business for the downturn and generated positive cash flow from operations, maintained our market share and continued to invest in new growth strategies that we believe will enable us to adapt to new realities in the forest products industry and to diversify our business.

We are seeing the early signs of improvement in North American housing markets and lumber prices. The strength and pace of this recovery, however, is uncertain. Demand for forest seedlings typically lags activity in the wood products and housing markets, so we expect 2010 to be our most challenging yet. However, we have positioned the Fund to weather this downturn, by remaining focused on maximizing cash flow and on providing exceptional customer service, and in doing so we are well positioned to benefit from the future recovery in forest seedling markets, as housing returns to more typical levels.

We also believe that our actions to improve our forest-seedling business and to capitalize on opportunities in the bioenergy sector will enable us to develop significant new revenue streams over the long term. These present unique opportunities to expand and diversify our markets, while levering off our core expertise in seedling propagation. By focusing on maintaining our key operational capabilities, managing our balance sheet, and developing new markets we will maximize long-term value creation for unitholders."

Management's Discussion and Analysis for the Fund is available at www.sedar.com.

About the Fund

PRT is the largest producer of container grown forest seedlings in North America, with 13 nursery locations expected to produce more than 120 million seedlings in 2010. Units of the Fund are listed for trading on the Toronto Stock Exchange under the trading symbol PRT.UN.

Conference Call and Taped Replay

The Fund will host a conference call to further discuss the matters contained in this press release. The call will take place on March 25, 2010 at 11:00 AM PST, 2:00 PM EST. To participate in this conference, please call 1-877-407-8031 or 201-689-8031.

Persons unable to attend the conference call may listen to a recorded version by dialing 1-877-660-6853, account # 286, and the conference ID# 342330. This option is available through March 31, 2010. A recorded web cast version of the call may also be accessed from the Fund's website at www.prt.com.

The Fund's next earnings conference call is expected to take place on May 6, 2010 after the release of the first quarter 2010 earnings information.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations for customer orders; the outlook for the forest industry, US housing markets, and future reforestation programs; and other statements that are not historical fact. Risks and uncertainties include, but are not limited to, future commodity prices and exchange rates, agricultural risks, our ability to grow and supply products in accordance with defined specifications, customer credit risks, and other risks identified from time to time in the Fund's annual report, and annual information return. These risks and uncertainties may cause actual results to differ materially from the expectations expressed herein. As such, readers are cautioned to not to place undue reliance on forward-looking statements.

Forward-looking statements are based on current expectations and neither the Fund nor PRT assumes any obligation to update such information to reflect later events or developments, except as required by law.

Auditors' Report

To the Unitholders of PRT Forest Regeneration Income Fund

We have audited the consolidated balance sheet of PRT Forest Regeneration Income Fund as at December 31, 2009 and the consolidated statements of operations, comprehensive income and cumulative earnings and cash flows for the year then ended. These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Fund as at December 31, 2009 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

The consolidated financial statements as at and for the year ended December 31, 2008 were audited by another firm of chartered accountants, who expressed an opinion without reservation on those statements in their report, dated March 31, 2009.

KPMG LLP

Chartered Accountants

Victoria, Canada

March 23, 2010



Consolidated Balance Sheets
As at December 31, 2009 and 2008

(in thousands of dollars)

As at As at
December 31, December 31,
2009 2008
----------------------------

Assets

Current assets
Cash $ - $ 192
Accounts receivable (note 20) 11,237 6,976
Inventories (note 4) 1,422 2,369
Prepaid expenses and deposits 224 199
Unbilled revenue 1,801 4,065
--------------------------------------------------------------------------
14,684 13,801

Investment (note 5) 333 265
Property, plant and equipment (note 6) 26,739 35,152
Property, plant and equipment held for sale
(note 7) 775 420
Intangible assets (note 8) 364 631
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$ 42,895 $ 50,269
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Liabilities

Current liabilities
Operating line (note 9) $ 3,566 $ 6,055
Accounts payable and accrued liabilities 1,799 4,051
Distribution payable to unitholders
(note 12) - 192
Current portion of long-term debt 1,698 262
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7,063 10,560

Long-term debt (note 10) 3,456 5,482

Future income taxes (note 13) 103 326
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10,622 16,368
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Unitholders' Equity

Capital contributions (note 11) 90,395 90,249

Cumulative earnings 13,982 15,811
Unit option grants 80 25
Cumulative distributions declared (72,184) (72,184)
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32,273 33,901
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$ 42,895 $ 50,269
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Organization and continuing operations (note 1)
Commitments (note 19)
Subsequent events (note 23)


Consolidated Statements of Operations, Comprehensive Income and
Cumulative Earnings
For the years ended December 31, 2009 and 2008

(in thousands of dollars, except per unit amounts and number of
units outstanding)

Year ended December 31
2009 2008
----------------------------

Revenue $ 30,062 $ 38,789
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Expenses
Costs of production 19,693 24,891
Selling, general and
administration 7,905 9,909
Gain on foreign exchange (91) (104)
--------------------------------------------------------------------------

Earnings before the following 2,555 4,093

Interest 561 843
Amortization of property, plant and equipment 2,691 3,684
Amortization of intangibles 267 267
Equity in loss (earnings) of investee (88) 39
Gain on disposal of property, plant and
equipment (note 16) (1,797) (21)
Long-lived asset impairment charges (note 6) 2,558 4,112
Exit activity charges (note 14) 566 251
Goodwill impairment (note 15) - 19,175
Loss in excess of insurance claims to date
(note 16) - 100
--------------------------------------------------------------------------

Loss before income taxes (2,203) (24,357)

Recovery of income taxes (note 13) 374 1,166
--------------------------------------------------------------------------

Net loss and comprehensive loss (1,829) (23,191)

Cumulative earnings - beginning of year 15,811 39,002
--------------------------------------------------------------------------

Cumulative earnings - end of year $ 13,982 $ 15,811
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Basic and diluted loss per Trust Unit $ (0.19) $ (2.41)
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Weighted average number of Trust Units
outstanding 9,671,961 9,603,116
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--------------------------------------------------------------------------


Consolidated Statements of Cash Flows
For the years ended December 31, 2009 and 2008

(in thousands of dollars)

Year ended December 31
2009 2008
----------------------------

Cash flows from operating activities
Net loss $ (1,829) $ (23,191)
Items not affecting cash
Amortization of property, plant and
equipment (excluding seedling containers) 2,691 3,684
Seedling container amortization included
in costs of production 851 1,317
Amortization of intangibles 267 267
Recovery of future income taxes (222) (1,184)
Gain on disposal of property, plant and
equipment (note 16) (1,797) (21)
Long-lived asset impairment charges 2,558 4,112
Equity in (earnings) loss of investee (88) 39
Unrealized loss (gain) on foreign exchange (248) 285
Unrealized loss (gain) on interest rate swaps (59) 122
Stock option grants (note 11) 55 25
Goodwill impairment - 19,175
--------------------------------------------------------------------------
2,179 4,630

Net change in non-cash working capital
balances (note 17) 1,190 3,035
--------------------------------------------------------------------------

3,369 7,665
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Cash flows from financing activities
Distributions paid to unitholders (note 12) (192) (3,284)
Repayment of long-term debt (266) (549)
Decrease in operating line (2,489) (3,284)
Issuance of Trust Units 146 -
--------------------------------------------------------------------------

(2,801) (7,117)
--------------------------------------------------------------------------

Cash flows from investing activities
Repayment of loans by investee 20 -
Purchase of property, plant and equipment (935) (1,054)
Proceeds from sale of property, plant and equipment 155 26
--------------------------------------------------------------------------
(760) (1,028)
--------------------------------------------------------------------------

Decrease in cash (192) (480)

Cash - beginning of year 192 672
--------------------------------------------------------------------------

Cash - end of year $ - $ 192
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Supplemental cash flow information (note 17)


Notes to Consolidated Financial Statements

Years ended December 31, 2009 and 2008

(in thousands of dollars except per Unit amounts)

1. Organization and continuing operations

PRT Forest Regeneration Income Fund (the "Fund") is an open-ended single purpose trust, created under the laws of British Columbia by a Declaration of Trust dated May 14, 1997. The Fund is the largest producer of container-grown forest seedlings in North America. The Fund provides seedling growing services from its nurseries in British Columbia, Alberta, Saskatchewan, Ontario and Oregon. These consolidated financial statements include the accounts of the Fund, its wholly owned subsidiary Pacific Regeneration Technologies Inc. ("PRT") and PRT's wholly owned subsidiary companies.

The market for forest seedlings and market outlook has continued to weaken as a result of the severe cyclical downturn in the forest industry. The forest industry is being impacted by the combined effects of a sharp falloff in US housing starts and low realized lumber prices; this has resulted in mill closures, reduced logging activity and cost reduction initiatives, which in turn reduces the demand for seedlings. Seedling order volumes declined by 27% in 2009 relative to 2008, and were approximately 46% below their peak level in 2006. As the North American housing market slowly recovers from the economic recession, management expects that the lag between increased housing starts and new seedling orders could see those orders decline by a further 6% or more in 2010. In consideration of this outlook, the Fund has maintained the suspension of monthly distributions which commenced in January 2009.

2. Significant accounting policies

Basis of presentation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada and are presented in Canadian dollars.

Principles of consolidation

These consolidated financial statements include the accounts of the Fund, its wholly owned subsidiary Pacific Regeneration Technologies Inc. ("PRT") and PRT's wholly owned subsidiary companies. Inter-group transactions and balances are eliminated on consolidation.

Revenue recognition

Revenue from contracts is recognized as a percentage of the contract price, based on the percentage of total direct expenses incurred to total expected direct costs by order. Total revenue is recognized when seedling crops reach substantial completion, which is defined as meeting all contracted growth specifications. Any excess of revenues recorded using this percentage of completion method over amounts billed is recorded as unbilled revenue.

Revenue from non-contracted goods and services is recognized when the goods are delivered or the service has been substantially rendered.

Revenue from all sources is only recognized when collection is reasonably assured.

Inventories

Inventories of supplies are recorded at the lower of cost and replacement cost (which approximates net realizable value), with cost being determined on a weighted average basis. Seedling inventories ("spec stock") are valued at the lower of average cost or net realizable value. Effective January 1, 2008, the Fund adopted the new accounting standard for inventories (CICA 3031). Adoption of this standard had no impact on the Fund's financial statements.

Future income taxes

The Fund accounts for income taxes using the asset and liability method. Future income taxes are recognized for the future income tax consequences of differences between the carrying values of assets and liabilities and their respective income tax bases. Future income tax assets and liabilities are measured using substantively enacted income tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on future income tax assets and liabilities of a change in rates is included in income in the period that includes the enactment date. Future income tax assets are recorded in the financial statements if realization is considered more likely than not.

Investments

The Fund accounts for investments over which it exercises significant influence using the equity method. Under this method, the initial investment is recorded at cost and the Fund's pro rata share of the investments' earnings or losses is included in results of operations.

Property, plant and equipment and amortization

Property, plant and equipment are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method at rates that reflect the estimated useful lives of the assets as follows:



Buildings 10 - 40 years
Greenhouses 15 - 25 years
Equipment 3 - 15 years
Seedling Containers 5 years


Amortization related to seedling containers is included in costs of production in the consolidated statements of operations and cumulative earnings.

Intangibles and amortization

Intangibles represent customer lists, leases and non-competition agreements recorded on acquisition of subsidiaries. Intangibles are being amortized over their estimated useful lives of 5 to 15 years.

Impairment of long-lived assets

Property, plant and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances suggest that the carrying amount of an asset may not be recoverable and may be in excess of its fair value. Impairment is assessed using a two step approach. Under the first step, affected assets are tested for recoverability by comparing the carrying amount of the assets to the undiscounted estimated future net cash flows expected from their use and disposal. If the carrying amount of the assets exceed the undiscounted cash flows, they are considered to be impaired. If the asset is considered impaired, a second step is then carried out whereby an impairment loss is measured and recorded as the amount by which the carrying amount of the assets exceed their fair value. Fair value of the assets is estimated based on the discounted future expected cash flows from the assets.

Foreign exchange

Foreign currency transactions are translated into Canadian dollars at the exchange rates in effect at the transaction dates. Monetary account balances denominated in foreign currencies are translated into Canadian dollars at exchange rates in effect at the consolidated balance sheet dates. Non-monetary account balances denominated in foreign currencies are translated at their historical exchange rates. Exchange gains and losses arising from the translation or settlement of foreign currency denominated monetary items are included in the determination of net earnings.

The accounts of the Fund's United States operations are considered to be integrated and are translated into Canadian dollars using the temporal method. Exchange gains and losses arising from the translation of the Fund's foreign operations are included in the determination of net earnings.

Use of estimates

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual amounts could differ from those estimates.

The most significant estimates are related to the recoverability of accounts receivable, future income tax assets, asset impairment and useful lives for amortization.

Financial instruments

All financial instruments are required to be measured at fair value on initial recognition except for certain related party transactions. After initial recognition, financial instruments should be measured at their fair values, except for financial assets classified as held-to-maturity or loans and receivables and other financial liabilities, which are measured at cost or amortized cost using the effective interest method. Financial assets classified as available-for-sale that do not have a quoted market price in an active market are measured at cost. Amortization related to financial assets classified as held-to-maturity or loans and receivables and other financial liabilities and unrealized gains and losses related to financial assets and financial liabilities classified as held-for-trading are recorded in net earnings for the period in which it arises. If a financial asset is classified as available-for-sale, the cumulative unrealized gain or loss is recognized in Accumulated Other Comprehensive Income (AOCI) and recognized in earnings upon the sale or other-than-temporary impairment.

The Company has adopted the following classification for financial assets and financial liabilities:



-- Cash and cash equivalents are classified as held-for-trading. Changes in
fair value for the period are recorded in net earnings.

-- Accounts receivable are classified as loans and receivables.

-- Accounts payable and accrued liabilities, distributions payable,
operating line and long-term debt are classified as other financial
liabilities.


The Company has also elected to recognize financing charges on financial instruments as an expense in the statement of operations rather than deduct them from the face value of the instrument.

The standards require all derivative financial instruments to be measured at fair value on the consolidated balance sheet, even when they are part of an effective hedging relationship. An embedded derivative is a component of a hybrid instrument that also includes a non-derivative host contract, with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. If certain conditions are met, an embedded derivative is separated from the host contract (bifurcated) and accounted for as a derivative in the consolidated balance sheet, and measured at fair value. As at December 31, 2009, the Company does not have any material outstanding contracts or financial instruments with embedded derivatives that require bifurcation (2008 - none).

Hedges:

PRT has not elected to use hedge accounting on its existing derivative financial instruments.

Unit based compensation:

The Fund has a unit-based compensation plan, which is described in note 11. The Fund accounts for all unit based payments to non-employees, and employee awards that are direct awards of units, call for settlement in cash or other assets, or are unit appreciation rights that call for settlement by the issuance of equity instruments using the fair value based method.

Under the fair value based method, compensation cost attributable to awards to employees that are direct awards of unit appreciation rights that call for settlement by the issuance of equity instruments, is measured at fair value at the grant date and recognized over the vesting period. Compensation cost attributable to awards to employees that call for settlement in cash or other assets is measured at intrinsic value and recognized over the vesting period. Changes in intrinsic value between the grant date and the measurement date result in a change in the measure of compensation cost. For awards that vest at the end of the vesting period, compensation cost is recognized on a straight-line basis; for awards that vest on a graded basis, compensation cost is recognized on a pro-rata basis over the vesting period.

3. Adoption of new or future accounting changes

Goodwill and intangible assets

In February 2008, the CICA issued Handbook Section 3064, "Goodwill and Intangible Assets" which supersedes Section 3062, "Goodwill and Other Intangible Assets" and Section 3450, "Research and Development Costs". These Sections establish standards for the recognition, measurement, and disclosure of goodwill and intangible assets clarifying the criteria for recognition of an asset. The provisions relating to the definition and initial recognition of intangible assets, including internally generated intangible assets, are equivalent to the corresponding provisions of International Financial Reporting Standards IAS 38, "Intangible Assets".

The Fund adopted the new requirements effective January 1, 2009 without any significant effect to these financial statements.

International financial reporting standards ("IFRS")

In January 2006, the CICA ratified a strategic plan calling for the evolution and convergence of Canadian GAAP with IFRS, after a specified transition period, by publicly accountable enterprises in Canada. The CICA has more recently confirmed January 1, 2011 as the date IFRS will replace current Canadian standards and interpretations as GAAP for this category of reporting entity. As a result, the Fund will be required to prepare its consolidated financial statements in accordance with IFRS for interim and annual financial statements relating to fiscal periods beginning on or after January 1, 2011, at the latest.

The Fund is currently working through its implementation and conversion plan on the consolidated financial statements and disclosures of the Fund.

4. Inventories

PRT follows CICA Handbook Section 3031, Inventories and carries the following balances of raw materials consisting mainly of growing materials and supplies including: peat, sand and vermiculite, packaging material, and fertilizers and pesticides. Work in progress and finished goods both consist of seedlings grown specifically for non-contract sales:



December 31, December 31,
2009 2008
--------------------------
Raw Materials (Consumables) $ 1,158 $ 1,482
Work In Progress (Seedlings) 100 183
Finished Goods (Seedlings) 164 704
--------------------------

$ 1,422 $ 2,369
--------------------------
--------------------------


PRT provided for finished goods inventory during the year for $414 related to crops started in 2008 that remained unsold at the 2009 summer planting season.

5. Investment

In 2003 PRT acquired a 40% non-controlling interest in a privately held company for cash consideration of $742. The investment is accounted for by the equity method. The excess of the purchase price of the investment over the underlying book value at the date of acquisition, totalling $625, has been allocated to intangible assets, which are being amortized over their estimated useful lives on the basis of units sold. The investee is a supplier of software solutions for seedling supply management by forest companies and has a carrying value as follows:



December 31, December 31,
2009 2008
--------------------------

Opening carry value $ 265 $ 305

Equity in income of investee 93 98
Amortization of intangible assets (5) (138)
Repayment of shareholder loan (20) -
--------------------------

Closing carrying value $ 333 $ 265
--------------------------
--------------------------


As at December 31, 2009, the intangible asset related to the investee has been fully amortized (2008 unamortized portion - $5).

6. Property, plant and equipment

(excludes property held for sale - see note 7)



2009
Accumulated
Cost Depreciation Net
----------------------------------------------
Land $ 3,264 $ - $ 3,264
Buildings 6,684 1,646 5,038
Greenhouses 22,485 10,588 11,897
Equipment 19,622 14,317 5,305
Seedling containers 8,141 6,906 1,235
----------------------------------------------

$ 60,196 $ 33,457 $ 26,739
----------------------------------------------
----------------------------------------------

2008
Accumulated
Cost Depreciation Net
----------------------------------------------
Land $ 3,012 $ - $ 3,012
Buildings 7,172 1,633 5,539
Greenhouses 29,739 11,202 18,537
Equipment 19,528 13,215 6,313
Seedling containers 9,515 7,764 1,751
----------------------------------------------

$ 68,966 $ 33,814 $ 35,152
----------------------------------------------
----------------------------------------------


The following summarizes amortization charged to earnings:

2009 2008
------------------------------
Seedling container amortization
included in costs of production $ 851 $ 1,317
Other amortization 2,691 3,684
------------------------------

Total amortization $ 3,542 $ 5,001
------------------------------
------------------------------


In October 2008, the Fund announced that it will close its seedling nursery facility in Maple Ridge, BC. The closure took place in phases and operations ceased in the August of 2009. It is the Company's intention to relocate certain long-lived assets to other nursery locations in the first quarter of 2010 and dispose of other excess assets.

The Company reviews long-lived assets for impairment when events or changes in circumstances indicate that the carrying value of those assets may not be recoverable. As such, in relation to assets to be disposed of in 2010, in 2009 the Company recorded an impairment charge of $2,558 (2008 - $4,112) on property, plant and equipment located at Maple Ridge.



Asset Impairment Accumu-
($000's) lated Real-
Deprecia- Net Book izable
Cost tion Value Impairment NBV
------------------------------------------------------
Greenhouses $ 3,064 $ 788 $ 2,276 $ 1,920 $ 356
Open Compounds 685 262 423 408 15
Equipment 413 157 256 230 26
-------------------------------------------------------

$ 4,162 $ 1,207 $ 2,955 $ 2,558 $ 397
------------------------------------------------------
------------------------------------------------------


In November of 2009 the Company announced the temporary closure of its Kirkland Lake, Ontario nursery and permanent closure of its Summerland, BC nursery facility. Property, plant and equipment at the Summerland will be utilized at other facilities within the PRT group of nurseries.

In addition, given the current disruption and uncertainty in the global economy, and the decrease in the Fund's unit price over the last year, management also reviewed all of its other long-lived assets for potential impairment. Management performed asset recoverability tests on all finite life long-lived assets using undiscounted cash flows based on internal projections for revenues and expenses covering the estimated remaining life of the assets. The Fund concluded that the undiscounted cash flows exceeded the carrying value of all intangible assets tested, and therefore, no impairment was recorded.

7. Property, plant and equipment held for sale

PRT has removed from property held for sale assets located at is Nevada facility (2008 - $420) as the property does not meet the requirements under the CICA Handbook for a probability of sale within one year. The following summarizes the value of assets held for sale from the Maple Ridge site as of December 31, 2009 and the Nevada facility as of December 31, 2008:



Net Book Value ($000's)

2009 2008
------------------------
Land $ - $ 251
Buildings 312 15
Growing facilities 431 71
Equipment 32 83
------------------------
$ 775 $ 420
------------------------
------------------------


8. Intangible assets

PRT's intangible assets include customer lists acquired with the Coldstream and Maple Ridge, BC nurseries and certain agreements that arose from contractual agreements including non-competition agreements and leases. PRT amortizes intangibles over the period of those contracts. No additions or disposals took place during 2009 or 2008.



2009
Accumulated
Cost amortization Net
---------------------------------------------
Customer lists $ 970 $ 873 $ 97
Non-competition agreements 404 259 145
Lease 176 54 122
---------------------------------------------

$ 1,550 $ 1,186 $ 364
---------------------------------------------
---------------------------------------------


2008
Accumulated
Cost amortization Net
---------------------------------------------
Customer lists $ 970 $ 679 $ 291
Non-competition agreements 404 198 206
Lease 176 42 134
---------------------------------------------

$ 1,550 $ 919 $ 631
--------------------------------------------
---------------------------------------------


Amortization expense for the year was $267 (2008 - $267).

9. Operating line

PRT has a demand revolving operating facility of up to $13,000 to fund the Company's working capital and general corporate requirements, and to provide temporary financing capital expenditures prior to conversion of this financing to term debt. The amount of operating line available is dependent upon meeting certain margin requirements. As at December 31, 2009, $13,000 of the facility was available for use, and the company had drawn $3,566 (2008 - $6,055) of cash advances bearing interest at prime plus 1%. A first fixed and floating charge over PRT's assets is provided as security.

10. Long-term debt

PRT has a term debt facility available in the amount of $4,000 (2008 - $15,000), or the equivalent in U.S. dollars, to fund earnings-enhancing capital expenditures and acquisitions. All loans are based on a ten year amortization period, repayable within five years of initial advance. Management typically refinances five year old debt for an additional five years to match the original ten-year amortization period. A wholly owned subsidiary of PRT has a term debt facility available in the amount of US$1,381 (2008 - US$1,596), which is amortized on a straight line basis over ten years.

In August 2008, PRT negotiated amendments to its Canadian banking facilities to allow principal payments on Canadian long-term debt to be deferred for a period of two years. The maturities of the term debt covered under the deferral have also been extended under the amendments to the credit agreement. The term debt facilities are subject to the maintenance of certain financial covenants (see note 21).

As at December 31, the following amounts have been drawn under the debt facilities:



2009 2008
----------------------------

Term loan #11, bearing interest at 6.37%,
maturing on October 1, 2011, with quarterly
payments $ - $ 375

Term loan #11a, bearing interest at prime
plus 2%, maturing on October 1, 2011, with
quarterly payments 375 -

Term loan #9, bearing interest at bank prime
plus 0.75%, maturing on October 1, 2011, with
quarterly payments - 900

Term loan #9a, bearing interest at bank prime
plus 2%, maturing on October 1, 2011, with
quarterly payments 900 -

Term loan #13, bearing interest at 6.05%,
maturing October 1, 2012, with monthly payments 780 913

Term loan #13a, bearing interest at prime plus
2%, maturing October 1, 2012, with monthly
payments 133 -

Term loan #16, bearing interest at 6.07%,
maturing October 1, 2013, with monthly payments 800 940

Term loan #16a, bearing interest at prime plus
2%, maturing October 1, 2013, with monthly
payments 140 -

Term loan #10 (USD), bearing interest at US Bank
Rate plus 2%, maturing October 1, 2011, with
blended monthly principal and interest payments
based on a 10-year amortization period (US$549) 576 670

Term loan #2 (USA), bearing interest at 6.44%,
maturing on April 29, 2010, with blended monthly
principal and interest payments based on a 10-year
period (US$1,381) 1,450 1,946
----------------------------

5,154 5,744

Less: Current portion 1,698 262
----------------------------

$ 3,456 $ 5,482
---------------------------
---------------------------

Interest paid on long-term debt $ 320 $ 355
---------------------------
---------------------------


PRT is subject to interest rate risk on floating rate payments under its long-term debt as detailed in note 19.

As at December 31, 2009, PRT had entered into two interest rate swap agreements for five years to fix the interest rates on its Canadian dollar term loans (internally numbered 13 expiring October 1, 2010, and 16 expiring October 3, 2011, in the table above). The rates noted in the previous table represent the fixed interest rates, including stamping fees, resulting from the swap agreements. In September 2009 swaps expired on loans 9 and 11 and PRT did not enter into new arrangements on these draws. In addition swap schedules required that principle under the arrangement be reduced at the original payment schedule. Principle amounts excluded from the swaps are noted within the schedule as loans 13a and 16a.

A first fixed and floating charge over PRT's assets is provided as security for the facilities.

The principal repayments required on the long-term debt are as follows:



2009
---------------
Year ending December 31
2010 $ 1,698
2011 1,910
2012 868
2013 678
Thereafter -
---------------

$ 5,154
---------------
---------------


A portion of the long-term debt was repaid subsequent to year-end - see note 23.

11. Capital contributions

The Declaration of Trust provides that an unlimited number of Trust Units may be created and issued. Each Trust Unit represents an equal undivided beneficial interest in the assets of the Fund. All Trust Units of the Fund are of the same class with equal rights and privileges. Each Trust Unit is transferable and entitles the holder to participate equally in allocations and distributions, and to one vote at all meetings of Unitholders. Unitholders are not subject to future calls or assessments.

Trust Units are redeemable at the holder's option at amounts related to market prices at the time, subject to a maximum of $75 in cash redemptions by the Fund in any particular month. The redemption limitation may be waived at the discretion of the Trustees of the Fund. Redemption in excess of the maximum, assuming no waiving of the limitation, shall be paid by way of a distribution in specie of a pro rata number of PRT common shares and unsecured variable interest rate subordinated notes (the "Notes").

PRT has established an Employee Stock Ownership Plan ("ESOP") whereby eligible directors and employees of PRT, or any subsidiary of PRT can purchase Units of the Fund through payroll deduction. Under the terms of the ESOP, eligible employees can contribute between 1% and 10% of their earnings to the plan, and PRT will contribute 15% of the employee contribution toward the purchase price of Units and pay all transaction fees on Unit purchases made under the plan. The plan allows for Units to be purchased through the market or by way of treasury issuances on the same terms.

Units outstanding as at December 31 are as follows:



2009 2008
-----------------------------
Capital Contributions - Beginning of period $ 90,249 $ 90,249
Units issued under ESOP program 146 -
-------------------------------------------------------------------------
Capital Contributions - End of period $ 90,395 $ 90,249
-------------------------------------------------------------------------
-------------------------------------------------------------------------

2009 2008
----------------------------
Units outstanding - Beginning of period 9,603,116 9,603,116
Units issued under ESOP program 112,742 -
-------------------------------------------------------------------------
Units outstanding - End of period 9,715,858 9,603,116
-------------------------------------------------------------------------


The Fund has a Unit option plan whereby the Trustees of the Fund may, from time to time, grant options to purchase Units to eligible officers, employees and consultants of the Fund or any subsidiary, and to directors of any subsidiary. The aggregate number of Units reserved under the plan is 560,572. The maximum term of any option is ten years. The exercise price of an option cannot be less than the average of the Unit price at the close of business on the five trading days preceding the grant date.

During the quarter ended September 30, 2008 there were 248,600 Unit options granted to eligible officers and employees at an exercise price of $3.65 per unit. During the quarter ended December 31, 2008 there were 107,000 Unit options granted to directors of PRT at an exercise price of $1.26 per unit. No other Units have been previously issued under the Unit option plan, and no options were granted in 2009. The Fund has applied the fair value method of accounting for Unit option grants. The fair value of each option granted was estimated using the Black-Scholes option pricing model with the weighted average assumptions below:



Weighted Average Assumptions
December 31,
2008
-------------------
Risk-free interest rate 3.1%
Expected life (years) 6.0
Expected volatility 40.1%
Dividend yield 8.0%
Number of options granted 355,600
Fair value of each option granted $ 0.50
------------------------------------------------------


The fair value of the 107,000 Unit options granted in the quarter ended December 31, 2008 was estimated to be $28. The fair value of the 248,600 Unit options granted in the quarter ended September 30, 2008 was estimated to be $148. For both grants the compensation cost is being charged against earnings over the three-year vesting period of the underlying options. An expense of $55 has been recognized in net earnings for the year ended December 31, 2009 (2008 - $25), with a corresponding credit to capital contributions.



Summary of options outstanding
-----------------------------------------------------------------------
Options Outstanding Options Exercisable
-------------------------------- ----------------------
Weighted
Number Average Number
outstanding Remaining Weighted exercisable Weighted
Range of at Contract Average at Average
exercise December 31, Life Exercise December 31, Exercise
prices 2009 (Years) Price 2009 Price
-----------------------------------------------------------------------
$1-$2.50 67,000 4.97 $1.26 16,750 $1.26
$2.51-$5.00 248,600 3.51 $3.65 62,150 $3.65
-----------------------------------------------------------------------
$1-$5 315,600 4.24 $3.14 78,900 $3.14
-----------------------------------------------------------------------


As at and during the year ended December 31, 2009, 78,900 options vested, and 40,000 were forfeited and cancelled.



Summary of option plan status
December 31, December 31,
2009 2008
------------------------------
Outstanding at beginning of year 355,600 -
Granted - 355,600
Exercised - -
Forfeited 40,000 -
----------------------------------------------------------------
Outstanding at end of year 315,600 355,600
----------------------------------------------------------------


Options were issued subsequent to year-end - see note 23.

12. Distributions to unitholders

Subject to availability of distributable cash, the Fund's policy is to make a cash distribution each month equal to interest received from PRT by the Fund on the $72,900 of inter-group Notes plus interest charged on any other inter-group indebtedness less estimated Fund administration costs. In addition to the monthly distributions, an additional distribution (the "Thirteenth Distribution") may be made on or before March 31 of the following year based on the actual available cash for the year, less reserves, if any, as considered appropriate by the Board of Directors of PRT and the Trustees of the Fund.

For 2009 the Fund entered into a forbearance agreement with the Company to waive interest on the inter-group Notes, and suspended distributions to Unitholders from current year operations, in order to preserve cash flow during the current industry downturn (distributions in 2008 were $2,804 or $0.292 per Unit). Distributions of $192 declared in 2008 were paid in January of 2009.

The costs of issuing Trust Units are deductible for income tax purposes on a straight-line basis over a five-year period. The Fund incurred issue costs in 1997 of $3,003, in 2002 of $1,540 and in 2005 of $1,365. The Fund can designate these deductions as a non-taxable distribution of amounts to Unitholders. As at December 31, 2009, $541 (2008 - $541) of issue costs are available for future designation as non taxable distributions.

13. Income taxes

The Fund is not taxable on any income that is distributed to Unitholders. PRT is taxable on its income at Canadian statutory tax rates.

a) The consolidated income tax recovery (provision) comprises the following:



2009 2008
---------------------------
Current income taxes $ 152 $ (18)
Future income taxes 222 1,184
---------------------------

$ 374 $ 1,166
---------------------------
---------------------------


b) The recovery of income taxes shown in the consolidated statements of operations and cumulative earnings differs from the amounts obtained by applying statutory tax rates to the earnings before income taxes for the following reasons:



2009 2008
----------------------------
Income tax recovery computed at
statutory rates $ 667 $ 6,431
Goodwill impairment - (5,062)
Income tax benefit of Fund distributions - 582
Other (293) (784)
---------------------------

Recovery of income taxes $ 374 $ 1,166
---------------------------
---------------------------


c) The net future income tax liability comprises the following differences between book value and tax value at current tax rates:



2009 2008
---------------------------
Future income tax assets (liabilities)
Property, plant and equipment $ (798) $ (1,707)
Tax loss carry-forwards and other 1,417 1,381
Valuation allowances (721) -
---------------------------
Future income tax liability - net $ (102) $ (326)
---------------------------
---------------------------


d) Non-capital loss carry-forwards in subsidiary companies start to expire commencing in 2023.

14. Exit activity charges

In October 2008, the Fund announced that it will close its seedling nursery facility in Maple Ridge, BC and cease operations in the latter part of 2009 in order to improve production costs. Production that would otherwise have been located at the Maple Ridge nursery site has been absorbed by the Company's other nursery sites. It is expected that the exit activities will be completed during 2010. The Fund also announced, in November 2009, the permanent closure of its seedling nursery facility in Summerland, BC and the temporary closure of its Kirkland Lake, ON facility. The Summerland facility will be consolidated with PRT's other three sites in the Okanagan region.

Anticipated exit expenditures related to the site closures are as follows:



Exit Expenditures ($000's) Total Amounts Amounts
anticipated incurred incurred
expenditures current year to date
-----------------------------------------------
Legal $ 48 $ - $ 48
Employee costs 399 95 278
Deactivation of facilities 645 196 209
Dismantling and relocation
of long-lived assets 309 275 275
-----------------------------------------------
$ 1,401 $ 566 $ 810
-----------------------------------------------
-----------------------------------------------


The above table excludes costs associated with the disposal of capital assets from the Maple Ridge site (see note 6). Costs specific to exit activities are recognized when the activities take place and the costs are incurred, and are included in Statement of Earnings as exit activity charges.

15. Goodwill

Under Canadian GAAP, goodwill is not amortized but is subject to an annual impairment test which management performs every August; this test is referenced to the Fund's fair value, as evidenced by its unit trading price and other indicators. After making a preliminary adjustment to the carrying value of goodwill at December 31, 2007 for an estimated impairment, management completed its evaluation of goodwill impairment as part of its annual impairment test for 2008. As a result of the further declines in the Fund's unit price, the carrying value of the Fund's net assets exceeded the Fund's market capitalization at August 2008. Management therefore performed the second step of the goodwill impairment test, which compares the implied fair value of the Fund's goodwill, determined as the excess of the market capitalization over the fair value assigned by management to the Fund's other assets and liabilities, to its carrying value. From this test, management determined that the fair value of the Fund's net assets and liabilities, excluding goodwill, exceeded the Fund's market capitalization. Therefore management concluded that the remaining value of goodwill had been impaired and recorded a goodwill impairment charge of $19,175 at August 31, 2008. This impairment is a non-cash charge and has no impact on cash available for distribution. During management's ongoing evaluation no impairment to the value of other identifiable intangible assets or property, plant and equipment has been identified, except as disclosed in note 6 to these financial statements.

16. Unusual item - insurance claim settlement

In late December 2008 the Company suffered damage to greenhouses at its two lower mainland nurseries as a result of unusually heavy snowfall. The loss is insured at replacement cost subject to an insurance deductible of $100 which was charged to earnings in 2008. The demolition and salvage operation was completed in 2009 and an agreement reached on a cash settlement in December 2009 on the crop and greenhouse losses. PRT recognized proceeds of the cash settlement agreement on greenhouse losses of $4,667 at December 31, 2009 of which $4,534 was receivable at that time. The proceeds of the cash settlement agreement also resulted in a gain on disposal of property, plant and equipment of $1,798 and a reduction in the balance of property, plant and equipment of $2,869.

17. Supplemental cash flow information



2009 2008
----------------------------
Interest paid $ 561 $ 843
Income taxes paid 10 17
----------------------------
----------------------------

Changes in non-cash working capital
(000's)
2009 2008
----------------------------
Decrease in trade accounts receivable $ 273 $ 2,000
Decrease (increase) in inventory 947 (133)
Decrease (increase) in prepaid
expenses and deposits (25) 297
Decrease in unbilled revenue 2,264 94
Increase (decrease) in accounts payable
and accrued liabilities (2,252) 607
Other working capital changes (17) 170
----------------------------
$ 1,190 $ 3,035
----------------------------
----------------------------


The change in accounts receivable excludes a non-trade receivable of $4,534 for insurance proceeds outstanding as of December 31, 2009.

18. Segmented information - geographic areas

PRT has one operating segment - the production of forest seedlings.

The following tables provide geographic revenue and property, plant and equipment information:



2009
----------------------------
Property, plant
and
Revenue equipment
----------------------------
Canada $ 25,730 $ 23,964
United States 4,332 3,550
----------------------------

$ 30,062 $ 27,514
----------------------------
----------------------------

2008
----------------------------
Property, plant
and
Revenue equipment
----------------------------
Canada $ 32,202 $ 31,905
United States 6,587 3,247
----------------------------

$ 38,789 $ 35,152
----------------------------
----------------------------


19. Commitments

PRT has commitments for facility operating leases and natural gas supply contracts. Future minimum payments are as follows:



Year ending December 31
2010 $ 890
2011 569
2012 123
2013 113
2014 62
Thereafter 391
-----------

$ 2,148
-----------
-----------


20. Financial instruments

Fair value:

The fair values of accounts receivable, operating line, accounts payable and accrued liabilities approximate their carrying values given the short-term maturity of these instruments.

Management considers that the fair value of the long-term debt approximates its carrying amount because it is floating rate debt; where the effective interest rate is fixed through interest rate swaps, which, in turn, are marked to market, and risk is addressed through the renewal of the credit agreement annually.

Credit risk:

A substantial portion of PRT's accounts receivable is with customers in the forest industry and is subject to normal industry credit risks. Credit risk is managed by continuous evaluation by management of credit exposure on key accounts which includes current and future billings and contract values, and aged receivable balances in conjunction with specific client knowledge, past experience, and industry analysis.

Allowance for doubtful accounts and past due receivables are reviewed by management at each balance sheet reporting date. PRT updates its estimate of allowance for doubtful accounts based on the specific evaluation of each customer's accounts receivable balance considering the account's historical collection trends and outlook. Accounts receivable are written-off once determined not to be collectible.

Accounts receivable includes a non-trade receivable of $4,534 for insurance proceeds outstanding as of December 31, 2009 (see also note 16). Trade receivables have been netted against the allowance for bad debts against specific receivables of $85 (2008 - $74).



2009 2008
----------------------------
Trade $ 6,666 $ 6,775
Non-Trade 4,571 201
----------------------------

$ 11,237 $ 6,976
----------------------------
----------------------------


With regards to their respective terms, trade accounts receivable are aged as follows as at December 31:



2009 2008
----------------------------
Current $ 6,580 $ 6,474
Past due less than 30 days - 147
Past due over 30 days 86 154
----------------------------

Trade accounts receivable $ 6,666 $ 6,775
----------------------------
----------------------------


PRT's trade accounts receivable are stated after deducting a provision of $85 (2008 - $74). The changes in the allowance for doubtful accounts were as follows:



2009 2008
----------------------------
Balance, beginning of year $ 74 $ 82
Bad debt expense, net of recovery 11 15
Written-off - (23)
----------------------------

Balance, end of year $ 85 $ 74
----------------------------
----------------------------


The carrying amount of financial assets recorded in the financial statements, net of allowances for doubtful accounts, represents the Fund's maximum exposure to credit risk.

Interest rate risk:

PRT is exposed to interest rate risk on a portion of its long-term debt. PRT mitigates this risk primarily through the use of interest rate swaps.

PRT uses interest rate swap contracts to fix interest rates on its variable rate long-term debt. Payments and receipts under interest rate swaps are recognized as adjustments to interest expense in a manner that matches them to interest payments under floating rate financial liabilities. Swap terms are matched to the maturity of the underlying loan obligation. However, the Company could incur a gain or loss on the contract in the event the swap was cancelled before the scheduled maturity date. PRT periodically obtains mark-to-market valuations on its swap contracts. PRT opted to not renew swaps on debt where arrangements expired in the third quarter of 2009 while considering options to reduce the overall debt.

At both December 31, 2009 and 2008 the fair value of the Company's outstanding interest rate swaps was lower than their carrying amount based on reference to current market interest rates, and the difference in 2009 of $59 has accordingly been charged to earnings in the period net of charges recognized in prior years. In 2008 the fair value of the swaps were higher than their carrying amount and the difference of $115 was credited to earnings in that year.

Management estimates that a 1% change in interest rates would affect earnings per Trust Unit by $0.012 based on current levels of borrowing.

Currency risk:

PRT operates internationally and is exposed to risk from changes in foreign currency rates. PRT mitigates this risk principally through the use of foreign currency denominated debt, and local currency denominated growing contracts.

PRT may use foreign currency forward sales contracts to manage currency exposure on net US dollar cash flows. The terms of such contracts are designed to match the receipt of US dollars under seedling sales contracts. Outstanding foreign currency forward sales contracts are revalued on a mark-to-market basis at the end of each reporting period, and any resulting gains or losses are recorded in income during the period. At December 31, 2009 there were no foreign currency forward sales contracts outstanding.

The consolidated balance sheets include significant foreign financial assets such as cash and accounts receivable, as well as significant foreign financial liabilities, such as accounts payable and accrued liabilities; in the reporting currency, Canadian dollars, these amounted to $662, $971, and $359 respectively, as of December 31, 2009 ($679, $396 and $270, respectively, as of December 31, 2008). As at December 31, 2009, US dollar cash, accounts receivable, and accounts payable and accrued liabilities balances amounted to US$646, US$377 and US$257 respectively.

Management estimates that a CAD $0.01 increase in the CAD/USD exchange rate would decrease earnings per Trust Unit by $0.002 based on current levels of production and borrowing.

Liquidity risk:

PRT manages liquidity through a combination of operating cash flow, an operating line of credit, and a term debt facility; the latter is used to finance long-term capital or project expenditures only.

From an operating point of view, the management of the Company's liquidity exposures is centralized by a daily cash concentration process which enables PRT to manage its liquidity requirements according to the actual need of the Company and each nursery. The Company's short- and mid-term liquidity takes into account the maturities of financial assets and liabilities and estimates of cash flows from the operating business. The Company maintains various levels of generally 10 year amortizing debt against a $5,500 total term debt facility. Detailed information on PRT's financial liabilities is provided in Notes 9, 10, 18 and 20 to the consolidated financial statements.

Market risk:

The business of PRT is highly dependent on the forest industry in Canada. While the Company is not materially dependent on any one customer, regional markets may be impacted by changes in global markets and government regulations and by more consolidated buying decisions by larger customers. PRT manages and reduces this risk through diversification of operations across a wider variety of customers, and Provincial and State jurisdictions.

21. Capital management

The Fund's objectives when managing capital are: (i) to maintain a flexible capital structure which optimizes the cost of capital at acceptable risk; and (ii) to manage capital in a manner which considers the interests of equity (Unit) holders and obligations to debt holders.

In the management of capital, the Fund includes Unitholders Equity, Long-term Debt (including any associated hedging assets or liabilities), short term bank indebtedness (Operating Line), cash and temporary investments in the definition of capital.

The Fund manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Fund may adjust the amount of distributions paid to unitholders, issue new units, issue new debt, retire existing debt, or issue new debt to replace existing debt with different characteristics.

PRT is subject to certain externally imposed capital requirements as related to both the Operating Line and Long-term Debt. These obligations require the Company to report to the lender on certain covenants including margin requirements monthly for the Operating Line, and the following key ratios reported quarterly for Long-term Debt:



1. Ratio of principal, interest, and other monies payable on loans and the
notes issued under the Trust Deed to EBITDA less cash taxes and
sustaining capital expenditures and adjusted by a notional "Fund for
Debt Service" not to exceed 1:1;
2. Ratio of total debt (excluding the Notes issued under the Trust Deed) to
EBITDA less cash taxes and sustaining capital expenditures not to exceed
3.5:1;
3. Working capital ratio not less than 1:1;
4. Tangible net worth not less than $25,000; and
5. Total Debt to Tangible Net Worth is not greater than 1:1.


The Company is in compliance with all externally imposed capital requirements as at and for the year ended December 31, 2009.

22. Significant customers

In 2009, one customer accounted for more than 10% of PRT's revenues (2008 - one customer).

23. Subsequent events

Subsequent to December 31, 2009 the following significant transactions or events occurred:



1. In February 2010 there were 120,000 Unit options granted to eligible
officers and employees at an exercise price of $2.074 per unit.
2. In February 2010 PRT received the balance of the cash settlement agreed
to with the insurers for the greenhouses lost at the Maple Ridge and
Pitt Meadows BC sites (note 16).
3. PRT repaid all Canadian bank term debt in February 2010. This includes
all term debt disclosed in note 10 to these financial statements with
the exception of the subsidiary's US$ debt (Term loan #2).
4. Assets held for sale as of December 31, 2009 included $350 in
greenhouses which were sold in March 2010.


24. Comparative figures

Certain of the comparative figures have been reclassified to conform with the presentation adopted in the current period.



INFORMATION

Mailing Office PRT Forest Regeneration Income Fund
Pacific Regeneration Technologies Inc. Board of Trustees
#101 - 1006 Fort Street Robert K. Withers
Victoria, BC John G. Taylor, CA
Canada, V8V 3K4 Stuart E. Wolfe
Tel: 250-381-1404 J. Mark Gardhouse
Fax: 250-381-0252 Robert A. Miller, CA

Registrar and Transfer Agent Pacific Regeneration Technologies
Valiant Trust Company Inc.
Board of Directors and Officers
World Wide Web Robert K. Withers, Chairman &
www.prt.com Director
Robert A. Miller, CA, President &
Market Information CEO & Director
Stock symbol: PRT.UN John G. Taylor, CA, Director
Stock Exchange: Toronto Stuart E. Wolfe, Director
J. Mark Gardhouse, Director
Investor Relations Antony A. Pollard, CA, V.P.
Tel: 250-381-1404 ext. 229 Finance & Administration, CFO
Toll free: 1-866-553-8733 & Secretary
Email: investor_relations@prt.com Herb Markgraf, V.P. Marketing
Robert Maxwell, V.P. Production
John Kitchen, V.P. Business
Development

Contact Information

  • PRT Forest Regeneration Income Fund
    Tony Pollard
    VP Finance/CFO
    (866) 553-8733 ext. 229
    www.prt.com