ALDERSYDE, AB, March 10 /PRNewswire-FirstCall/ -- (TSX - MTL.UN) The Mullen Group Income Fund ("Mullen" and/or the "Fund") is pleased to provide the following information which is intended to assist Canadian resident Unitholders in the preparation of a 2005 T1 Income Tax Return. The Fund has determined that for Canadian resident Unitholders, distributions declared and paid in respect of 2005 are comprised of 86.8 percent taxable income and 13.2 percent return of capital.
The information contained herein is based on the Fund's understanding of the Income Tax Act (Canada) ("Act") and the regulations there under, and is provided for general information only. Unitholders are advised to consult their personal tax advisors with respect to their particular circumstances.
Mullen qualifies as a mutual fund trust under the Act and as such, Units are qualified investments for registered retirement savings plans ("RRSPs"), registered retirement income funds ("RRIFs"), registered education savings plans ("RESPs"), and deferred profit sharing plans ("DPSPs"), all as defined in the Act. Unitholders who hold their Units in a RRSP, RRIF, RESP, or DPSP need not report any income related to Unit distributions on their 2005 Income Tax Return.
A Unitholder that does not hold his or her Units in an RRSP, RRIF, RESP or DPSP, must report taxable amounts allocated by Mullen in 2005 to the Unitholder (i.e., the taxable portion of 2005 cash distributions) in the Unitholder's 2005 Income Tax Return. This taxable amount will be reported on a "T3 - Statement of Trust Income and Allocations and Designations" ("T3 Slip") that will be issued (i.e., "Other income" - Box 26 on the T3 Slip) and mailed to all Unitholders before March 31, 2006.
During 2005, Mullen's distributions totaled $0.81 per Unit. The following table summarizes the taxable income and return of capital components of each monthly distribution declared and paid in respect of 2005, including the distribution paid on January 16, 2006 to Unitholders of record on December 31, 2005:
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DISTRI-
BUTION TAXABLE RETURN OF
RECORD PAYMENT TOTAL No. PER PORTION CAPITAL
DATE DATE DISTRIBUTION OF UNITS UNIT PER UNIT PER UNIT
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July August
31, 15,
2005 2005 $5,063,877.95 37,510,207 $0.135 $0.11714 $0.01786
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August Septem-
31, ber 15,
2005 2005 $5,097,627.94 37,760,207 $0.135 $0.11714 $0.01786
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Septem- Octo-
ber 30, ber 17,
2005 2005 $5,097,627.94 37,760,207 $0.135 $0.11714 $0.01786
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Octo- Novem-
ber 31, ber 15,
2005 2005 $5,097,627.94 37,760,207 $0.135 $0.11714 $0.01786
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Novem Decem-
ber 30, ber 15,
2005 2005 $5,097,627.94 37,760,207 $0.135 $0.11714 $0.01786
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Decem- Janu-
ber 31, ary 16,
2005 2006 $5,097,627.94 37,760,207 $0.135 $0.11714 $0.01786
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TOTAL $30,552,017.65 $0.810 $0.703 $0.107
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The return of capital portion of distributions reduces the Unitholder's adjusted cost base ("ACB") of Units. The ACB of a Unit generally equals the purchase price of the Unit, including commissions, less any return of capital distributions received or receivable from the date of acquisition. Unitholders should consult their own legal or tax advisors as to their particular tax consequences of holding Units.
Conversion of Shares to Trust Units
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The conversion ("Conversion") of common shares of Mullen Transportation Inc. ("Shares") to Units generally resulted in a taxable disposition unless the Shares were held in an RRSP, RRIF, RESP or DPSP. Mullen believes that the fair market value ("FMV") of a Share immediately prior to the Conversion was $61.69 per Share which is the weighted average trading price for the five trading days proceeding July 1, 2005 for the Shares. This FMV resulted in each Unit being valued at $20.5633 as each Share was converted to 3 Units.
This press release may contain forward-looking statements that are subject to risk factors associated with the oil and gas business and the overall economy. The Fund believes that the expectations reflected in this press release are reasonable, but results may be affected by a variety of variables. The Fund relies on litigation protection for "forward-looking" statements.
Mullen is an income trust governed by the laws of Alberta. The Fund was created in conjunction with Mullen Transportation Inc.'s conversion of its assets and operations into an income trust. The operating businesses owned by the Fund focus on two sectors of the economy - the oil and gas industry and the transportation and distribution of freight - areas where these businesses have developed strong business relationships and industry leadership. Mullen is a publicly traded income trust listed on the Toronto Stock Exchange under the symbol "MTL.UN". Additional information on Mullen is available on our website at http://www.mullen-group.com/.
