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CIBC Income Trust Conference Presentation

CIBC Income Trust Conference Presentation

September 9, 2004September 9, 2004TorontoToronto

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Forward-looking Statement DisclaimerForward-looking Statement Disclaimer

Statements made during this conference which are not historical facts – including any statements about the Company's targets, beliefs, plans, or expectations – are forward-looking statements and are based on Management’s current plans, estimates, and projections. The Company does not undertake to update any of these statements in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties, and investors should not place undue reliance on them. There are a number of important factors that could cause actual results to differ materially from those contained in such statements. These factors are described in more detail in the Company’s news releases and in filings with Canadian securities regulatory authorities, including the Company’s latest annual report.

Statements made during this conference which are not historical facts – including any statements about the Company's targets, beliefs, plans, or expectations – are forward-looking statements and are based on Management’s current plans, estimates, and projections. The Company does not undertake to update any of these statements in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties, and investors should not place undue reliance on them. There are a number of important factors that could cause actual results to differ materially from those contained in such statements. These factors are described in more detail in the Company’s news releases and in filings with Canadian securities regulatory authorities, including the Company’s latest annual report.

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Use of Non-GAAP Measures DisclaimerUse of Non-GAAP Measures DisclaimerReferences in this presentation to ‘‘EBITDA’’ are to earnings before interest, income taxes,

depreciation and amortization, after giving effect to foreign currency gains or losses and net earnings from discontinued operations. The Fund and Management of its operating subsidiaries believe that, in addition to net earnings, EBITDA is a useful complementary measure of cash available for distribution prior to debt service, capital expenditures and income taxes. However, EBITDA is not a recognized measure under Canadian GAAP or U.S. GAAP and does not have a standardized meaning prescribed by Canadian GAAP or U.S. GAAP. Investors are cautioned that EBITDA should not be construed as an alternative to net earnings determined in accordance with Canadian GAAP or U.S. GAAP, as an indicator of performance of the Bumble Bee or Clover Leaf businesses or to cash flows from operating, investing and financing activities as a measure of liquidity and cash flows. The Fund’s method of calculating EBITDA may differ from the methods used by other entities and, accordingly, its EBITDA may not be comparable to similarly titled measures used by other entities.

Distributable cash is not a recognized measure under Canadian GAAP or U.S. GAAP, and the Fund’s method of calculation may differ from methods used by other entities. Accordingly, distributable cash as presented may not be comparable to similar measures presented by other entities. The Fund and management of its operating subsidiaries believe that the method of determining distributable cash is comparable to cash flow from operating activities before changes in non-cash working capital, future income taxes and one-time gains/losses. In addition, the Fund’s method of determining distributable cash is derived directly from net earnings, which is a measure under Canadian GAAP and U.S. GAAP and is a measure of operating performance understood by unitholders. The Fund’s method of determining distributable cash is also consistent with the Fund’s historical operations as publicly disclosed to unitholders. Management believes that consistent disclosure enhances the comparability with prior periods and this method presents cash that will be distributable to unitholders based on the results of the relevant period, after adjusting for non-cash depreciation, the direct payment of interest and taxes and after adjusting for maintenance capital expenditures.

References in this presentation to ‘‘EBITDA’’ are to earnings before interest, income taxes, depreciation and amortization, after giving effect to foreign currency gains or losses and net earnings from discontinued operations. The Fund and Management of its operating subsidiaries believe that, in addition to net earnings, EBITDA is a useful complementary measure of cash available for distribution prior to debt service, capital expenditures and income taxes. However, EBITDA is not a recognized measure under Canadian GAAP or U.S. GAAP and does not have a standardized meaning prescribed by Canadian GAAP or U.S. GAAP. Investors are cautioned that EBITDA should not be construed as an alternative to net earnings determined in accordance with Canadian GAAP or U.S. GAAP, as an indicator of performance of the Bumble Bee or Clover Leaf businesses or to cash flows from operating, investing and financing activities as a measure of liquidity and cash flows. The Fund’s method of calculating EBITDA may differ from the methods used by other entities and, accordingly, its EBITDA may not be comparable to similarly titled measures used by other entities.

Distributable cash is not a recognized measure under Canadian GAAP or U.S. GAAP, and the Fund’s method of calculation may differ from methods used by other entities. Accordingly, distributable cash as presented may not be comparable to similar measures presented by other entities. The Fund and management of its operating subsidiaries believe that the method of determining distributable cash is comparable to cash flow from operating activities before changes in non-cash working capital, future income taxes and one-time gains/losses. In addition, the Fund’s method of determining distributable cash is derived directly from net earnings, which is a measure under Canadian GAAP and U.S. GAAP and is a measure of operating performance understood by unitholders. The Fund’s method of determining distributable cash is also consistent with the Fund’s historical operations as publicly disclosed to unitholders. Management believes that consistent disclosure enhances the comparability with prior periods and this method presents cash that will be distributable to unitholders based on the results of the relevant period, after adjusting for non-cash depreciation, the direct payment of interest and taxes and after adjusting for maintenance capital expenditures.

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Connors Bros. Income Fund HighlightsConnors Bros. Income Fund Highlights

North American branded seafood powerhouse

Flexible low-cost global sourcing

Diversified revenue streams

Stable cash flow with significant growth potential

Strong and balanced management team

Attractive yield and payout ratio

North American branded seafood powerhouse

Flexible low-cost global sourcing

Diversified revenue streams

Stable cash flow with significant growth potential

Strong and balanced management team

Attractive yield and payout ratio

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Canada’s largest consumer products income fund Canada’s largest consumer products income fund

1. Latest 12 months 2003 at US$ 1.30 per C$.

High LinerHigh LinerClearwater

Clearwater

AmericanSeafoods

Group

AmericanSeafoods

Group

Chickenof theSea

Chickenof theSea

FPIFPI Star-kistStar-kist

Revenue1 (C$ Millions)Revenue1 (C$ Millions)

Connors BrosIncome FundConnors BrosIncome Fund

Connors BrosConnors Bros

Connors Bros

Connors Bros

North America’s Largest Branded Seafood Company

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CANADACANADA

Leadership in all Higher Margin CategoriesLeadership in all Higher Margin Categories

66% of revenues in higher margin products

66% of revenues in higher margin products

Tuna Albacore #1 56% #1 39% Lightmeat #1 42% #3 17% Total Tuna #1 45% #2 28%

Salmon Sockeye #1 63% #1 31% Pink #1 49% #2 17% Total Salmon #1 56% #1 20%

Specialty Seafoods1 #1 40% #1 20%

Tuna Albacore #1 56% #1 39% Lightmeat #1 42% #3 17% Total Tuna #1 45% #2 28%

Salmon Sockeye #1 63% #1 31% Pink #1 49% #2 17% Total Salmon #1 56% #1 20%

Specialty Seafoods1 #1 40% #1 20%

U.S.U.S.

RankRank ShareShare RankRank ShareShare

Connors Bros

Connors Bros

Source: AC Nielsen1 Includes oysters, clams, sardines, herring, crab and other specialty Source: AC Nielsen1 Includes oysters, clams, sardines, herring, crab and other specialty

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Diversified Product RevenueDiversified Product Revenue

1. For the 12 months periods ending Sept. 30, 2003 for Connors and Aug. 31, 2003 for Bumble Bee

1. For the 12 months periods ending Sept. 30, 2003 for Connors and Aug. 31, 2003 for Bumble Bee

Connors Bros

Connors Bros

Pro Forma LTM Sales1:$918 Million

Pro Forma LTM Sales1:$918 Million

Albacore Tuna37%

Albacore Tuna37%

Specialty –Sardines/Herring 16%

Specialty –Sardines/Herring 16%

Sockeye Salmon

6%

Sockeye Salmon

6%

Pink Salmon5%

Pink Salmon5%

Other7%

Other7%

Lightmeat Tuna22%

Lightmeat Tuna22%

Specialty - Other 7%

Specialty - Other 7%

8Specialty Co-packersSalmon Co-packersTuna Co-packers

Owned/Leased Plants – Tuna, Sardines, Shrimp

Flexible Low-Cost Global Sourcing

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First Half 2004 HighlightsFirst Half 2004 Highlights

Completed business combination between Connors Bros. and Bumble Bee

Made significant progress integrating sales, logistics and administration

Generated adjusted year-to-date distributable cash of $0.87/unit, up from $0.36/unit for the same period in 2003.

Achieved adjusted pro forma payout ratio for the first half of 78%

Announcing increase in annual distribution rate from $1.35 to $1.40 effective with September distributions (October payments)

Completed business combination between Connors Bros. and Bumble Bee

Made significant progress integrating sales, logistics and administration

Generated adjusted year-to-date distributable cash of $0.87/unit, up from $0.36/unit for the same period in 2003.

Achieved adjusted pro forma payout ratio for the first half of 78%

Announcing increase in annual distribution rate from $1.35 to $1.40 effective with September distributions (October payments)

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Reported Pro Forma Fund ResultsReported Pro Forma Fund Results

Volume off 3% year to date due primarily to soft U.S. lightmeat tuna demand

Revenues down 7% year to date, reflecting soft volume but a favorable mix; results also impacted $32 million by translation of U.S. dollar-denominated revenue.

Gross Profit, Operating Income, and other earnings figures are not meaningful without adjustments related to acquisition accounting. These will be discussed on subsequent pages.

Volume off 3% year to date due primarily to soft U.S. lightmeat tuna demand

Revenues down 7% year to date, reflecting soft volume but a favorable mix; results also impacted $32 million by translation of U.S. dollar-denominated revenue.

Gross Profit, Operating Income, and other earnings figures are not meaningful without adjustments related to acquisition accounting. These will be discussed on subsequent pages.

CONNORS BROS. INCOME FUND YTD 2004 PRO FORMA RESULTS

June 26, June 30,C$000 2004 2003 Index

(unaudited) (unaudited)

Volume (M eq Cases) 10,416 10,780 97%Revenue 429.4 460.6 93%Gross Profit 65.8 64.2 103%Gross Profit % 15.3% 13.9% 110%Earnings Before Income Taxes 23.0 28.5 81%Net Earnings 14.8 19.3 77%

EBITDA 30.2 35.1 86%Distributable Cash 17.5 13.0 135%Distributable Cash/ Unit $ 0.57 $ 0.42 135%

Six Months Ended

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Key Adjustments to Consider Key Adjustments to Consider

Three key adjustments are recommended to supplement evaluation of the Company’s operating results:

1. Elimination of the inventory step-up, a purchase accounting requirement that increases inventory value at time of acquisition and negatively affects gross profit

2. Elimination of foreign exchange contract mark-to-market gains or losses, which do not represent true business health and do not impact cash

3. Elimination of restructuring charges in CY04 related to achieving cost synergies

Three key adjustments are recommended to supplement evaluation of the Company’s operating results:

1. Elimination of the inventory step-up, a purchase accounting requirement that increases inventory value at time of acquisition and negatively affects gross profit

2. Elimination of foreign exchange contract mark-to-market gains or losses, which do not represent true business health and do not impact cash

3. Elimination of restructuring charges in CY04 related to achieving cost synergies

June 26, June 30,C$(000) 2004 2003

(unaudited) (unaudited)

Earnings Before Tax 23.0 28.5

Inventory Step - up 10.2 3.8Foreign Exchange Mark-to-Market Losses / (Gains) 2.8 (6.7)Restructuring and Other Charges 0.5 0.0Total Adjustments 13.4 (2.9)

Adjusted Net Earnings Before Tax 36.5 25.6

Adjusted Distributable Cash 26.7 11.0Adjusted Distributable Cash/Unit $ 0.87 $ 0.36Adjusted Payout Ratio 78% 189%

CONNOR BROS. YTD ADJUSTMENTS TO EARNINGS BEFORE TAX

Six Months Ended

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Adjusted Fund First Half ResultsAdjusted Fund First Half Results

On an adjusted basis, Gross Profit was up $8.3 million year to date, reflecting strong performance in fish purchasing and factory cost savings

Earnings before tax were up $10.9 million on a year to date basis, due to the absence of mark-to-market gains in the year ago period

Distributable Cash was up notably, at $0.87/unit on a year to date basis, for a year to date payout ratio of 78% at an annualized $1.35/unit level

On an adjusted basis, Gross Profit was up $8.3 million year to date, reflecting strong performance in fish purchasing and factory cost savings

Earnings before tax were up $10.9 million on a year to date basis, due to the absence of mark-to-market gains in the year ago period

Distributable Cash was up notably, at $0.87/unit on a year to date basis, for a year to date payout ratio of 78% at an annualized $1.35/unit level

CONNORS BROS. YTD 2004 ADJUSTED PRO FORMA RESULTS

June 26, June 30,C$000 2004 2003 Index

(unaudited) (unaudited)

Volume (M eq Cases) 10,416 10,780 97%Revenue 429.7 460.6 93%Gross Profit 76.3 68.0 112%Gross Profit % 17.8% 14.8% 120%Earnings before Income Taxes 36.5 25.6 142%

EBITDA 43.6 32.2 135%Distributable Cash 26.7 11.0 243%Distributable Cash/ Unit $ 0.87 $ 0.36 243%Payout Ratio 78% 189% 41%

Six Months Ended

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Adjusted EBT to Distributable Cash BridgeAdjusted EBT to Distributable Cash Bridge

Net interest, depreciation and amortization were slightly higher in 2004 vs. comparable periods in 2003, while year-to-date maintenance capital expenditures were reduced at Bumble Bee vs. year ago

Taxes paid were dramatically reduced at Bumble Bee vs. year ago, when Bumble Bee paid at U.S. corporate tax rates

Payments to the non-controlling interest represent the 31.7% ownership interest retained by the former owners of the Bumble Bee business

YEAR TO DATE 2004 ADJUSTEDEARNINGS BEFORE TAX TO DISTRIBUTABLE CASH BRIDGE

June 26, June 30,C$(000) 2004 2003

(unaudited) (unaudited)

Adjusted earnings before income taxes 36.5 25.6Add: Net interest expense 2.4 2.3Add: Depreciation and amortization 4.7 4.3Adjusted EBITDA 43.6 32.2

Less: Maintenance capital expenditures 2.0 3.2Interest paid 2.2 2.2Taxes paid 0.4 10.7

Total Adjusted distributable cash 39.1 16.1

Less: Distributable cash to the non-controlling interest 12.4 5.1

Adjusted distributable cash available for Fund unitholders 26.7 11.0Distributable Cash/Unit $0.87 $0.36

Six Months Ended

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Increase in Monthly DistributionIncrease in Monthly Distribution Based on solid distributable cash performance and good progress with the

business integration, we have announced an increase in our monthly distribution

On annual basis, moving from $1.35/unit to $1.40/unit – monthly basis $0.1125/unit to $0.1167/unit

Based on year-to-date results, this slightly increases distributable cash payout ratio to 81%, but still better than sector average

Based on solid distributable cash performance and good progress with the business integration, we have announced an increase in our monthly distribution

On annual basis, moving from $1.35/unit to $1.40/unit – monthly basis $0.1125/unit to $0.1167/unit

Based on year-to-date results, this slightly increases distributable cash payout ratio to 81%, but still better than sector average

$1.20

$1.35$1.40

$0.50$0.60$0.70$0.80$0.90$1.00$1.10$1.20$1.30$1.40

PreCombination

April 04 Sept 04

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Integration UpdateIntegration Update

Integration of U.S. sales / administration / logistics /IT completed end of June

Integration of Canadian sales / logistics completed end of July

Integration of Canadian and International IT and administration to be completed by end of September

Factory optimization opportunities identified and under evaluation; DoJ hampered ability to move more rapidly but results expected to be in place for 2005 pack season

Projected synergies continue to be estimated in the range of C$6-8 million

Integration of U.S. sales / administration / logistics /IT completed end of June

Integration of Canadian sales / logistics completed end of July

Integration of Canadian and International IT and administration to be completed by end of September

Factory optimization opportunities identified and under evaluation; DoJ hampered ability to move more rapidly but results expected to be in place for 2005 pack season

Projected synergies continue to be estimated in the range of C$6-8 million

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Business Challenges for Q3 and Year-to-goBusiness Challenges for Q3 and Year-to-go

With resolution of DoJ investigation, complete divestiture of Port Clyde and smaller sardine brands before calendar year end

Complete IT and administrative integration in Canada

Execute pricing actions to compensate for cost increases in tuna, steel, aluminum, packaging, fuel and soya oil

Initiate factory optimization initiatives

Launch new, higher margin items

With resolution of DoJ investigation, complete divestiture of Port Clyde and smaller sardine brands before calendar year end

Complete IT and administrative integration in Canada

Execute pricing actions to compensate for cost increases in tuna, steel, aluminum, packaging, fuel and soya oil

Initiate factory optimization initiatives

Launch new, higher margin items

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Outlook for Second HalfOutlook for Second Half

Revenue expected to be favorable versus YAG behind new items and higher pricing

Additional ‘inventory step-up’ entries will affect Q3 reported income

Adjusted gross profit expected to be favorable to first half but down versus CY03 due to strong prior year performance

Second half adjusted EBIT / EBITDA expected to be slightly favorable versus YAG with integration cost savings offsetting reduced gross profit

Second half distributable cash ahead of first half due to cash flow seasonality

Revenue expected to be favorable versus YAG behind new items and higher pricing

Additional ‘inventory step-up’ entries will affect Q3 reported income

Adjusted gross profit expected to be favorable to first half but down versus CY03 due to strong prior year performance

Second half adjusted EBIT / EBITDA expected to be slightly favorable versus YAG with integration cost savings offsetting reduced gross profit

Second half distributable cash ahead of first half due to cash flow seasonality

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Outlook for 2005 and BeyondOutlook for 2005 and Beyond

As we complete the integration of Connors and Bumble Bee, we are beginning to look at other growth opportunities

Income trust platform provides attractive acquisition vehicle, and current debt-to-EBITDA ratio is very low

In all cases, looking for opportunities that:

Are strategic and accretive

Provide strong brands

Fit with CBIF core competencies

Provide synergistic cost-savings

As we complete the integration of Connors and Bumble Bee, we are beginning to look at other growth opportunities

Income trust platform provides attractive acquisition vehicle, and current debt-to-EBITDA ratio is very low

In all cases, looking for opportunities that:

Are strategic and accretive

Provide strong brands

Fit with CBIF core competencies

Provide synergistic cost-savings

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In Conclusion In Conclusion

Thank you for your continued support of Connors Bros.

We look forward to tremendous opportunities ahead

Prepared to answer questions

Thank you for your continued support of Connors Bros.

We look forward to tremendous opportunities ahead

Prepared to answer questions