Fording Canadian Coal Trust

Fording Canadian Coal Trust

March 01, 2005 23:59 ET

Fording Announces First Quarter Cash Distribution

CALGARY--(CCNMatthews - March 1) - Fording Canadian Coal Trust (TSX:
FDG.UN, NYSE: FDG) today announced that its first quarter cash
distribution of $1.30 per unit will be paid on April 15, 2005 to
unitholders of record on March 31, 2005. The ex-distribution date is
March 29, 2005. This distribution is in respect of the period from
January 1, 2005 to March 31, 2005.

Tax Information for Cash Distributions

For unitholders resident in Canada, income distributed by the Trust
will generally be treated as ordinary income from property except where
the income is sourced from capital gains realized by the Trust or from
dividends received by the Trust. In these cases, the Trust intends to
make appropriate designations in its tax returns so that the capital
gains or dividends will retain their character when distributed to
unitholders and will be subject to income tax accordingly.
Distributions to unitholders made in a year that are greater than the
net income of the Trust for the year will not be included in
unitholders' income but will be considered a return of capital and a
reduction of the cost base of the units.

Income distributed by the Trust to non-residents of Canada will be
subject to Canadian withholding tax of 25% subject to reduction under
the provisions of any applicable tax treaty or conventions. Canadian
withholding tax is generally 15% for U.S. holders.

The Trust has made an election to be taxed as a corporation for U.S.
tax purposes. Accordingly, distributions by the Trust will be
considered foreign-source dividend income to the extent paid out of
current or accumulated earnings and profits of the Trust, determined
under U.S. income tax principles. Assuming that applicable unitholder-
level requirements are met, these distributions are "qualified
dividends," eligible for taxation at reduced rates under recent U.S.
federal income tax legislation. Payments in excess of current or
accumulated earnings and profits will be applied first to reduce the
cost base of the units and then as a capital gain should the cost base
of the units be reduced to zero.

It is expected that the Trust will issue a statement after the close of
its fiscal year (December 31) that will provide information for
Canadian and U.S. resident investors about the final characterization
of 2005 Trust distributions for income tax purposes.

Unitholders should consult their own tax advisors for advice with
respect to the income tax consequences based on their particular

About Fording

Fording Canadian Coal Trust is an open-ended mutual fund trust. Through
investments in metallurgical coal and industrial minerals mining and
processing operations, the Trust makes quarterly cash distributions to
unitholders. The Trust, through its wholly-owned subsidiary, Fording
Inc., holds a 60% interest in the Elk Valley Coal Partnership and is
the world's largest producer of the industrial mineral wollastonite.
Elk Valley Coal Partnership, comprised of Canada's senior metallurgical
coal mining properties, is the world's second largest exporter of
metallurgical coal, currently supplying approximately 25 million tonnes
of high-quality coal products annually to the international steel
industry. The Trust's shares are traded on the Toronto Stock Exchange
under the ticker symbol FDG.UN and on the New York Stock Exchange under
the symbol FDG.

Forward-looking Information

Certain information included in this document is of a forward-looking
nature. Forward-looking information is subject to known and unknown
risks, as well as uncertainties and other factors. Accordingly, actual
results may differ materially from those expressed or implied in
forward-looking information. Some of the risks, uncertainties and other
factors affecting Fording Canadian Coal Trust are discussed in our
public filings with the securities regulatory authorities in Canada and
the United States. Copies of Fording Canadian Coal Trust's Canadian
filings, including our most recent management information circular,
annual information form, annual report, quarterly reports, material
change reports and news releases, are available online at, and copies of our U.S. filings, including our most
recent annual report on Form 40-F as supplemented by filings on Form 6-
K, are available at Information in this document is
presented as of March 1, 2005 and is subject to change after this date.
However, Fording Canadian Coal Trust disclaims any intention or
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.

Contact Information

  • Fording Canadian Coal Trust
    Susan J. Soprovich
    Director, Investor Relations
    (403) 260-9834
    Fording Canadian Coal Trust
    Catherine Hart
    Coordinator, Investor Relations
    (403) 260-9817