pension plan

NORTEL NETWORKS CORP. $2.96 (Toronto symbol NT; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Speculative) has completed a review of its accounting policies, and restated its results for the past three years. Most of the problems stemmed from the timing of revenue from some major contracts. The company’s former management improperly recognized some revenue to meet certain profit targets. Nortel lost $0.59 a share (total $2.6 billion) in 2005, compared with a loss of $0.05 a share ($207 million) a year earlier (all amounts except share price in U.S. dollars). However, the 2005 loss included $2.5 billion to settle class-action lawsuits, and $217 million in other special charges. Revenue rose 10.5%, to $10.5 billion from $9.5 billion. While the restatement helps lift some of the uncertainty over Nortel, it still faces some major costs in 2006. It will contribute $335 million to its employee pension plan this year. Lawsuit settlements will cost it a further $575 million, and it plans to spend $380 million on capital upgrades....

RIOCAN REAL ESTATE INVESTMENT TRUST $22.86 (Toronto symbol REI.UN; SI Rating: Average) has agreed to form a joint venture with a U.S.-based finance company that will invest up to $500 million in real-estate assets. Like a similar fund that RioCan headed up in 2003, this one will focus on distressed retail properties that it can refurbish and sell for a profit. RioCan will commit $50 million to the new fund. Investing in turnaround properties through private funds like these gives RioCan a chance to earn higher returns compared to its traditional retail properties, at minimal risk. In addition, RioCan also earns fees for managing the new assets. RioCan already has alliances to acquire and manage properties with Kimco Realty, Ontario Municipal Employees Retirement System (OMERS), and the Canada Pension Plan Investment Board....

RIOCAN REAL ESTATE INVESTMENT TRUST $23.07 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT. RioCan has total assets of $4.2 billion consisting of ownership interests in a portfolio of 201 retail properties across Canada, including 14 under development. These properties contain over 50 million square feet of gross leasable area. RioCan is Canada’s largest owner of neighbourhood shopping centres. These are enclosed malls in smaller urban centres. But where it’s showing the strongest growth is as the largest owner of ‘New Format’ malls. These are in the suburbs of larger cities, and are made up largely of ‘Big Box’ stores with lots of parking and room for new building. RioCan’s revenue in the three months ended September 30, 2005 was $149.8 million, up 8.6% from $138 million a year earlier. Cash flow per unit fell 3.3%, to $0.29 from $0.30. RioCan’s annual distribution of $1.29 gives it a current yield of 5.6%....