NORANDA INCOME FUND ANNUAL REPORT 2004 WE WORK FOR … eng.pdf · Manager), which is wholly owned...

WE WORK FOR YOU

NORANDA INCOME FUND ANNUAL REPORT 2004

LAST YEAR, WE SAID: “WE WANT WHAT YOU WANT.”WE’VE PROVEN THAT – ALL OF OUR STABLE,MONTHLY DISTRIBUTIONS WERE PAID AND OUR PRODUCTIVITY HAS IMPROVED.

WE’VE PROVEN THAT WE WORK FOR YOU.

2004 Highlights

FINANCIAL HIGHLIGHTS

($ millions, except for $ per unit) 2004 2003

Net revenues less raw material costs $ 254 $ 238

Earnings before interest and minority interest 47 34

Net earnings 28 19

Long-term debt 175 174

Distributions declared to Unitholders 51 51

Distributable Cash attributable per Priority Unit $ 1.02 $ 1.01834

All of the monthly cash distributions were paid at the forecasted levels.

A new production recordwas set.

Dominion Bond Rating Serviceassigned a stability rating ofSTA-2 (Middle) to the NorandaIncome Fund units.

The Fund had a tax-deferral of 95%.

A new, three-year collectiveagreement was signed with our unionized employees.

The Fund generated $51.2 million and paid out $51 million. The operatingreserve increased to $4.1 million.

TO UNITHOLDERS: 2004 MARKED OUR THIRD YEAR OF STABLE, ON-SCHEDULE MONTHLY DISTRIBUTIONS. IT WAS A RECORD YEAR FOR ZINC PRODUCTION, AND WE SIGNED A NEW COLLECTIVE AGREEMENT THAT WILL PROVIDE FOR CONTINUED LABOUR STABILITY AT THE PLANT.

0% 10% 20% 30% 40% 50% 60%

May 3, 2002 to December 31, 2004

S&P/TSX Composite Index Noranda Income Fund

14%

27%

18%

52%

January 1 to December 31, 2004

Pictured on the front cover: on the cells: Sylvain Cardinal on the walkway: Martin Durocher, Renato Tatonetti, Luc Leduc and François Brisson

NORANDA INCOME FUND PERFORMANCE

ANNUAL REPORT 2004 NORANDA INCOME FUND 1

I’M JACQUES LECLERC.

I AM A PIPEFITTER IN THE CASTING DEPARTMENT. LAST YEAR, I WORKED ON IMPROVING EQUIPMENT PERFORMANCE.

WORKING WITH MY FELLOW OPERATORS AND MAINTENANCECOLLEAGUES, WE IMPLEMENTED A SPRAYING SYSTEM TO PREVENT

THE ZINC FROM STICKING TO THE MOULDS. THESE MOULDS ARE NOW USED CONTINUOUSLY,

RESULTING IN HIGHER ZINC PRODUCTION AND LOWER COSTS.

I WORK FOR YOU.

DEAR UNITHOLDERS: 2004 was a strong year for us. Our earnings rose to $28 million, on the back of record production and robust byproduct revenues. We paid all of our monthly distributions at the expected levels. One of our goals for 2004 was to maximize production, and we succeeded. In addition to resolving the seasonal factorsrelated to the first-quarter, we set a new record productionfor the year. We successfully negotiated a new, three-year collective agreement with the refinery’s unionizedemployees, who are represented by the United Steel Workersof America. This agreement will provide for continuedlabour stability at the plant. The year wasn’t without itschallenges. The strengthening of the Canadian dollar andhigher energy costs had a negative impact on earnings.

On the corporate governance front, the Noranda IncomeFund (“Fund”) has made improvements in the two-and-one-half years since its inception. I’m happy to report that we are in compliance with current and proposed securitiesregulations and Toronto Stock Exchange rules.

2 NORANDA INCOME FUND ANNUAL REPORT 2004

REPORT TO UNITHOLDERS

I’M LUCY ROSATO. I WORK FOR YOU.

DOMINION BOND RATING SERVICE HAS ASSIGNED A STABILITY RATING OF STA-2 (MIDDLE) TO THENORANDA INCOME FUND UNITS. THIS IS IN ADDITION TO THE SR-2 RATING THAT HAS BEEN ASSIGNEDBY STANDARD & POOR’S.

We will continue to work for you. We remain committed to our strategy of revenue enhancement, productivityimprovements and a disciplined approach to capital spending. All support our primary objective of stable cashdistributions. Our ability to deliver on this objective comesdown to our employees and I want to take this opportunity to thank them for their dedication and support.

Lucy RosatoPresident and Chief Executive Officer Canadian Electrolytic Zinc LimitedThe Noranda Income Fund’s Manager


I’M JACQUES CADIEUX.

I AM A STRIPPING MACHINE OPERATOR. LAST YEAR, I WAS PART OF A KAIZEN TEAM WHOSEOBJECTIVES WERE TO IMPROVE PRODUCTIVITY AND

ZINC QUALITY. BY REORGANIZING THE WORK PROGRAMAND ADDING A NEW TEAM MEMBER, WE IMPROVED THEMAINTENANCE PROGRAM AND THE UTILIZATION OF THE

STRIPPING MACHINE. THE RESULT IS LOWER ENERGYCONSUMPTION AND AN INCREASE IN THE QUANTITY

AND QUALITY OF OUR ZINC.

I WORK FOR YOU.


What are the key attributes of the Noranda Income Fund?There are two unique features that set the Fund apart from itspeers and make it a good investment. The first is the Supplyand Processing Agreement. Noranda Inc. (“Noranda”) isobliged to sell to the Processing Facility up to 550,000 tonnesof zinc concentrate annually at a concentrate price based on the price of zinc metal on the London Metal Exchange(“LME”) for the “Payable zinc metal” contained in theconcentrate, less a fixed, escalating processing fee. Thisagreement expires in 2017. In 2004, the processing feeaccounted for 81% of Net Revenues. The advantage to theFund is that the bulk of the revenue stream comes from a fixed price, and is not exposed to currency markets orcommodity prices. The second is the innovative subordinationfeature, whereby Priority Units always get paid beforeOrdinary Units. Distributions to the Ordinary Units willonly be made once the Priority Units have received theirBase Distribution of 8.333 cents per month. Thesubordination will last until 2017, enhancing the stability of the Priority Units. Since the inception of the Fund, thesubordination feature has not been exercised. In addition to these features, the Processing Facility has strong operatingcharacteristics, including size, location, premium productsand low-risk mature technology.

What stability ratings have been assigned to the NorandaIncome Fund? The Fund has a Standard & Poor’s stabilityrating of SR-2 and a Dominion Bond Rating Service of STA-2 (Middle). Both of these ratings underline the stablecash flow from the operation and make the Fund one of the highest-rated income trusts in Canada.

THERE ARE TWO UNIQUE ATTRIBUTES THAT SUPPORT THE OBJECTIVES OF THE FUND. THE FIRST IS THE SUPPLY AND PROCESSING AGREEMENT. THE SECOND IS THE SUBORDINATION FEATURE.

ALAIN BRAZEAUALAIN PAQUETTE CAMILLE PILONCLAUDE LITALIEN DENIS BEAULIEU

From where does Noranda access the zinc concentrate for the Processing Facility? In 2004, 72% of the ProcessingFacility’s annual requirements came from Noranda minesand the balance from third-party sources, with whichNoranda has long-standing relationships. Going forward,Noranda has the ability to procure sufficient concentrate for the Processing Facility.

How is the distributable cash calculated? Distributable Cashunder the Fund's indenture is based on 100% of the netearnings, adjusted to account for non-cash transactions, such as amortization, minority interest and reclamation, and is reduced by additions to capital assets, site restorationexpenditures and reasonable reserves. In 2004, thecalculation was as follows:

Net earnings $ 27,746,000Add:

Amortization and reclamation 28,608,000Minority interest 9,249,000Loss from sale of assets 52,000Proceeds from sale of assets 11,000

Less:Additions to property, plant and equipment (12,541,000)Site restoration expenditures (309,000)Increase in capital and siterestoration reserve (1,583,000)

Cash Generated during the period 51,233,000(Increase) decrease in operating reserve (233,000)

Distributable Cash for the period $ 51,000,000


150

180

210

240

270

300

040200989694

Zinc Production Sets a New Record in 2004

000s of tonnes

The Supply and Processing Agreement Generates a Predictable Revenue Stream

Processing Fee 81%

Premiums 10%

Byproducts and Recoveries 9%

Advantages of fixed processing fee:81% of the Net Revenuesare not subject to: • the currency market or • the commodity prices.

THE PRINCIPAL FACTOR AFFECTING THE FUND’S PERFORMANCE IS THE PROCESSING OF ZINCCONCENTRATE INTO METAL. IN 2004, WE RESOLVED THE SEASONAL FACTORS RELATED TO THEFIRST-QUARTER, AND WE SET A NEW ANNUAL PRODUCTION RECORD.

MARIE-CLAUDE BLOUIN JEAN TATONETTIGÉRARD MORINISABELLE NORMANDEAU LUC BASTIEN

What’s your sensitivity to the US dollar in 2005? The processingfee, which is paid in Canadian dollars generates 81% of ourNet Revenues, while only 19% are sensitive to the US dollar.At today’s prices, each one-cent increase/decrease in theCanadian dollar reduces/improves the Fund’s earnings byapproximately $500,000.

Who are the Fund’s customers? The Processing Facility has 10 customers that purchase about 60% of our production.Our largest customers are from the steel industry. Over theyears, we have developed good customer relations, and thislong relationship has enabled both parties to benefit fromlower inventories and warehousing costs.

What is the expected tax-deferral component for the Fund in 2005? In 2004, 95% of the distributions were taxdeferred. This year, that deferral will be reduced toapproximately 60-70%. With the average tax-deferral for all income funds around 23%, our Fund’s tax treatment for cash distributions in 2005 is very favourable.

How are the day-to-day operations of the Fund and its facilitiesmanaged? Canadian Electrolytic Zinc Limited (theManager), which is wholly owned by Noranda, operates and maintains the Processing Facility. It providesmanagement services, including preparation of the annualoperating and management plans, capital expenditurebudgets and strategic planning.

In consideration for supplying the management services, a fee of $250,000 is paid annually to Noranda. This fee is adjusted upwards by 2% per annum, beginning on January 1, 2004. The agreement will last until 2017.


LEADERSHIP IN ENVIRONMENTAL MANAGEMENT:

A RESPONSIBLE STEWARD

Environmental management is important to the NorandaIncome Fund. The philosophy behind our policies, programsand proven management practices is to ensure a safe andhealthy environment for our employees, the community and the future.

In 2004, we began implementation of ISO 14001, an environmental management system. In addition, we have revised our emergency response procedures andcommunication protocols, which allow us to respondefficiently to emergency situations.

As part of our continuous improvement program over the past few years, we have striven to reduce our energyconsumption. We are proud to have been able to use wastehydrogen from a neighbouring industry to generate steam inour boilers, thus reducing our consumption of fossil fuels.

HEALTH AND SAFETY IN THE WORKPLACE:

ALWAYS STRIVING TO IMPROVE

A safe and healthy workplace is fundamental to our ongoingsuccess. It contributes to our position as an employer ofchoice, enhancing our ability to attract and retain dedicatedemployees. A Joint Health and Safety Committee betweenunion and management has been working hard to implementpreventive measures regarding health and safety. In 2004, weare pleased to report a 30% reduction in accident frequency.

With the co-operation of our employees, we will continueto increase our focus on accident reduction, developingaccountabilities and working together to identify ways inwhich to establish safer practices.

MARIO DESCHAMPS MARTIN BARRIAULT NICOLE LATREILLENICOLE LATREILLE SERGE DIGNARD ANDRÉ MATHIEU

A JOINT HEALTH AND SAFETY COMMITTEE BETWEEN UNION AND MANAGEMENT HAS BEEN WORKINGHARD TO IMPLEMENT PREVENTIVE MEASURES REGARDING HEALTH AND SAFETY. IN 2004, WE AREPLEASED TO REPORT A 30% REDUCTION IN OUR ACCIDENT FREQUENCY.

THE PROCESSING FACILITY AND PORT IN SALABERRY-DE-VALLEYFIELD, QUEBEC.


CORPORATE GOVERNANCE

The Noranda Income Fund has a commitment to full and fair disclosure and bestpractices in corporate governance.

The Board of Trustees (the “Board”) is of the view that the corporate governancepolicies and practices of the Noranda Operating Trust (“NOT”) are comprehensiveand consistent with both the guidelines adopted by the Toronto Stock Exchange and the proposed Multilateral Instrument 58-101.

HIGHLIGHTS INCLUDE*:

• The Board is composed of seven Trustees, a majority of whom are independent. • The Chair is held by Don S. Wells, an independent Trustee. • At all regular meetings of the Board of Trustees in 2004, the independent

Trustees held scheduled meetings without the presence of management or theTrustees who are not independent.

• In 2004, the Board adopted a written mandate. • All of the Audit Committee Trustees are independent, as defined by MI 52-110.

The Board has determined that all members of the Audit Committee are “financially literate,” as defined by MI 52-110.

• At all regular Audit Committee meetings, the members of the Committee heldscheduled meetings without the presence of management.

• The Governance and Nominating Committee is composed of the three Trustees,a majority of whom are independent.

• At these meetings, the members held scheduled meetings without the presence of management or the Trustee representing Noranda.

• The Board and the Governance and Nominating Committee work with Norandato assess new Trustees and recommend candidates for nomination to the Board.

• On the recommendation of the Governance and Nominating Committee, the Board sets the compensation and benefits for the Trustees.

• Every year, the Governance and Nominating Committee conducts a Board self-survey, as a whole and individually, and reports to the Board with recommendations based on feedback.

IN 2005,

• The Board intends to develop and implement a continuing education programregarding the role of the Board, the committees and its Trustees.

• The Board intends to develop position descriptions for the roles of Chairperson of the Board and Committee Chairpersons.

* For more information, please consult the Management Information Circular, the Annual Information Form, our website or www.sedar.com.

NORANDA OPERATING TRUST TRUSTEES

Don S. Wells 1, 2 Mr. Wells is Chairman of the Board of Noranda Operating Trust and is aneducator. Prior to that, he had a 29-year careerwith the Royal Bank. He sits on other boards,including Norbord Inc.

James Bacon 1 Mr. Bacon has been a companydirector and business consultant since 1997.Previously, he was an investment associate forYorkbridge Capital Inc. from June 1998 to January2000, and chairman of NBS Technologies.

Bob Sippel 3 Joining Noranda in 1977,Mr. Sippel has held a number of senior positionsin the copper, recycling, magnesium and zincbusinesses. He is currently president, zinc andmagnesium for Noranda. He is on the board ofdirectors of the International Zinc Association.

Lisa de Wilde 1, 2 Ms. de Wilde is a businessadvisor and currently serves as a director ofpublic companies and not-for-profit organizations,as well as chairman of a start-up informationtechnology company. Previously, she was CEO of Astral Television Networks Inc. and a partner at Heenan Blaikie.

Roger Garon Mr. Garon has been the chairmanof Multi-Vet Ltd. since 1995. He is also adirector of Prometic Life Science. In the past,Mr. Garon has served on numerous boards.

George Jones 2, 3 Mr. Jones held seniorpositions at Noranda in mining, metallurgical and marketing. He has extensive experience inthe zinc industry and served as director for manyindustry-related organizations. He is president of Novicourt Inc. and a director of Logistec Inc.

Steven Douglas 3 Mr. Douglas is the executivevice-president and Chief Financial Officer of Noranda. Prior to that, he was executive vice-president and Chief Financial Officer forBrookfield Properties Corporation and he worked for Ernst and Young in Toronto.

Notes: 1 Members of the Audit Committee2 Members of the Governance and Nominating

Committee3 Related to Noranda

DON S. WELLS JAMES BACON BOB SIPPELBOB SIPPEL LISA DE WILDELISA DE WILDE ROGER GARONROGER GARON GEORGE JONES STEVEN DOUGLASSTEVEN DOUGLAS


STATEMENT OF FINANCIAL INTEGRITY MANAGEMENT’S DISCUSSION AND ANALYSIS

This discussion provides a review of the performance

of the Noranda Income Fund and its subsidiaries (the

“Fund”), the Noranda Operating Trust (the “Operating

Trust”) and the Noranda Income Limited Partnership (the

“Partnership”) for the years ended December 31, 2004

and 2003. It should be read in conjunction with the

Fund’s audited consolidated financial statements and

notes to those statements. All financial information has

been prepared in accordance with Canadian generally

accepted accounting principles. All amounts are expressed

in Canadian dollars, the Fund’s reporting currency, except

where indicated. In addition, this discussion contains

certain forward-looking statements regarding the Fund’s

business and operations. Actual results may differ

materially from those contemplated by these statements

depending on, among others, such key factors as

production, premiums, exchange rates and commodity

prices. Where used, the words “anticipate”, “expect”,

“intend”, “should”, “forecast” and similar expressions

are intended to identify forward-looking statements.

The Management’s Discussion and Analysis has been

prepared as of February 7, 2005. Additional information

regarding the Fund, including the Fund’s Annual Information

Form is available on SEDAR at www.sedar.com.

OVERVIEWThe Fund is an unincorporated open-ended trust, establishedunder the laws of Ontario, whose units trade on the TorontoStock Exchange (“TSX”) under the symbol “NIF.UN”. The Fund was created to acquire Noranda Inc.’s (“Noranda”)CEZinc Processing Facility (the “Processing Facility”),located in Salaberry-de-Valleyfield, Quebec. The Funddistributes the cash generated by the Processing Facility to its unitholders. A board of trustees, the majority of whom are independent from Noranda, supervises the Fund.

The primary objective of the Fund is to provide stablemonthly cash distributions to its unitholders. CanadianElectrolytic Zinc Limited (the “Manager”) aims to achievethe Fund’s objectives by maximizing production, increasingbyproducts and recoveries and continuing to develop premiumproducts. The Manager also believes in a disciplinedapproach to capital spending.

There are two unique attributes that support the objectivesof the Fund. The first is the Supply and Processing Agreement,and the second is the subordination feature.

Pursuant to the Supply and Processing Agreement whichexpires in 2017, Noranda is obliged to sell to the Processing

TO OUR UNITHOLDERS: The primary goal of the NorandaIncome Fund is to provide stable monthly cash distributionsto our unitholders. In this regard, we aim to provide you witha clear and accurate representation of our business model.

Our accounting policies endeavour to provide a fair,transparent and timely report on how we generate our cashand how the business is performing.

Michael BooneChief Financial OfficerCanadian Electrolytic Zinc LimitedThe Noranda Income Fund’s Manager

I’M MICHAEL BOONE. I WORK FOR YOU.


Facility up to 550,000 tonnes of zinc concentrate annually at a concentrate price based on the price of zinc metal on the London Metal Exchange (“LME”) for the “Payable zincmetal” contained in the concentrate, less a fixed, escalatingprocessing fee calculated in Canadian dollars.

Noranda has subordinated itself in terms of thedistribution. The Priority Units 1 always get paid before theOrdinary Units 2. Distributions to the Ordinary Units willonly be made once the Priority Units have received theirBase Distribution of 8.333 cents per month. Throughout theexistence of the Fund, distributions to both the Ordinaryand Priority Unitholders have been made on an equal basis.The subordination feature lasts until 2017, enhancing thestability of the distributions for the Priority Units.

2004 Highlights - A Strong Year• All the monthly cash distributions were paid at the

forecasted levels.• 2004 production was 277,283 tonnes, exceeding the

267,270 tonnes produced in 2003.• In addition to resolving the seasonal factors related to

the first-quarter, a new annual production record was set.• A new, three-year collective agreement was signed with

the refinery’s unionized employees on November 1, 2004,which will provide for continued labour stability at theplant. The average annual wage increase was 2.35%.

• 2004 zinc sales of 273,893 tonnes exceeded the265,762 tonnes sold in 2003.

• Realized premiums were higher – 5.1 cents US per pound in 2004 versus 4.9 cents in 2003.

• Byproduct revenues, largely from sulphuric acid andcopper, doubled in 2004.

• The Fund generated $51.2 million and paid out $51million. The operating reserve, which was established to provide stable monthly cash distributions, increasedfrom $3.9 million to $4.1 million.

RESULTS OF OPERATIONSNet earnings for the year ended December 31, 2004 totalled$27.7 million, compared to $19.3 million for the year endedDecember 31, 2003. The $8.4 million increase was due to a higher volume of zinc metal production and sales, higherbyproduct revenues and premiums, offset by higheroperating costs and a stronger Canadian dollar. • Sales in 2004 compared to 2003 increased by $79.9

million to $438.9 million. The increase in sales was due to higher sales volumes and a higher average LME zincprice (48 cents US per pound versus 38 cents US) andbyproduct sales, offset by a stronger Canadian dollar.

• Transportation and distribution costs in 2004 of $14.0million increased from $12.1 million in 2003. Theincrease was due to both higher sales volumes of zinc andhigher energy prices.

• Raw material purchase costs in 2004 increased to $170.6million from $108.9 million in 2003. The increase was

attributable to a 27% increase in the LME zinc price and the increase in raw materials consumption related to higher zinc metal production, offset by a strongerCanadian dollar.

• Net revenues less raw material purchase costs (“NetRevenues”) in 2004 were $254.2 million, compared to$238.0 million in 2003. The $16.2 million variance wasdue to higher volumes of zinc metal sales and productionand higher revenues from byproducts, partially offset by a stronger Canadian dollar.

Zinc metal sales in 2004 were 273,893 tonnes, compared to 265,762 tonnes in 2003, due mostly to the strongerproduction levels.

In 2004, metal premiums improved to 5.1 cents US perpound from 4.9 cents in 2003. The higher premiums relatedto strong North American demand which resulted in higherspot premiums.

Byproduct revenues from sulphuric acid, copper cake and cadmium increased to $21.6 million during the year,compared to $9.8 million in 2003. The large increase wasdue to a 60% increase in the average LME copper price and an increase in the price for sulphuric acid.• Production costs in 2004 were $155.6 million, $1.1

million higher than the $154.5 million recorded in 2003.The $1.1 million increase was due mostly to higher salesvolumes and higher labour and energy costs offset by an increase in zinc metal and cathode inventory, whichresulted in more production costs being inventoriedduring 2004.

• Selling, general and administration costs in 2004 were$20.0 million, compared to $18.2 million in 2003. The increase in costs was due to additional spending on productivity initiatives.

• The foreign exchange loss for 2004 was $2.7 million,compared to a loss of $0.3 million for 2003. The Fundmaintains cash and cash equivalents, accounts receivableand accounts payable in US dollars.

• Amortization and reclamation in 2004 of $28.6 million,$2.6 million lower than the $31.2 million incurred in2003, related to certain plant and equipment being fullyamortized at the end of 2003.

• In 2004, net interest expense was $10.4 million,compared to $8.2 million in 2003. In December 2003,the Fund’s debt structure changed from 100% variabledebt to approximately two-thirds fixed and one-thirdvariable. As a result of the introduction of fixed-rate debt,the interest expense increased.

• Minority interest in earnings of subsidiaries was $9.2million, up from $6.4 million in 2003 due to the highernet earnings of the Fund.

At the end of 2003, the Fund had $6.5 million of assets thatwere not in use. These related to machinery and equipment inCellhouse 2, which was closed in 1991. In 2004, a portion ofthe machinery and equipment was put into use in the currentoperation. Management expects to continue to use the assetsto support the current operation. As a result, the amortizationof these assets was restarted in the fourth quarter of 2004 tocoincide with the resumption of the use of the assets.

1 Priority Units of the Noranda Income Fund are listed on the Toronto Stock Exchangeunder the symbol of NIF.UN. There are 37,500,000 units, representing a 75%economic interest in the Fund.

2 Ordinary Units total 12,500,000 units representing a 25% economic interest in the Fund. Ordinary Units, held by Noranda Inc., are subordinated to the PriorityUnits. They are not transferable and will be exchangeable for Priority Units on aone-for-one basis only in 2017, or upon the occurrence of certain events.


MANAGEMENT’S DISCUSSION AND ANALYSIS

SELECTED FINANCIAL INFORMATIONThe following table summarizes selected financialinformation for the past three years:

2004 2003(1) 2002(1,2,3)

Sales ($ millions) $ 438.9 $ 359.0 $ 383.6

Net revenues less raw material purchase costs ($ millions) 254.2 238.0 240.9

Net earnings ($ millions) 27.7 19.3 29.6

Basic and diluted earningsper trust unit ($ per unit) $ 0.74 $ 0.51 $ 0.79

Total assets ($ millions) 467.9 470.7 487.9

Total long-term financial liabilities ($ millions) 175.0 174.0 173.0

Distributions declared per Priority Unit ($) $ 1.02 $ 1.01834 $ 0.66126

Distributions declared per Ordinary Unit ($) $ 1.02 $ 1.01834 $ 0.66126

(1) Restated for the adoption of new accounting standards for asset retirementobligations and exchangeable securities and to conform to the current year’spresentation.

(2) The Supply and Processing Agreement has been in place since May 3, 2002,and it provides the Fund with a fixed processing fee that accounted for 81% of the Net Revenues in 2004.

(3) Prior to May 3, 2002, the Fund’s results were impacted upon to a greater extent bymarket variables such as zinc prices, market processing fees and exchange rates.

SUMMARY OF QUARTERLY RESULTS($ millions, except per-unit amounts and production amounts)

2004 (unaudited) Q1 Q2 Q3 Q4 Total

Net revenues 106.2 109.5 106.5 102.7 424.9Net earnings 7.0 7.3 8.7 4.7 27.7Earnings per

trust unit (basic and diluted) 0.19 0.20 0.23 0.12 0.74

Production (tonnes) 69,080 70,141 70,628 67,434 277,283

2003 (1) (unaudited) Q1 Q2 Q3 Q4 Total

Net revenues 79.5 79.7 91.9 95.8 346.9Net earnings 1.8 4.8 8.6 4.1 19.3Earnings per

trust unit (basic and diluted) 0.05 0.12 0.23 0.11 0.51

Production (tonnes) 62,055 65,673 69,891 69,651 267,270

(1) Restated due to the adoption of new accounting standards for asset retirementobligations and exchangeable securities and to conform to the current year’spresentation.

First-quarter production in 2002 and 2003 was low, partiallydue to the impact of the cold weather on the operations. In 2004, the method of operation was changed. As a result,production and earnings improved in the first quarter of 2004.

Fourth Quarter 2004 Results The Fund earned $4.7 million in the fourth quarter of 2004,compared to $4.1 million in the same period of 2003. The$0.6 million improvement was due to higher byproductrevenues and premiums, offset by lower volumes of zinc

metal sales and a stronger Canadian dollar. Production in the fourth quarter was 67,434 tonnes and realized premiumsimproved to 5.2 cents US per pound. Byproduct revenuescontinued to be strong during the quarter.

Key Performance Drivers The principal factor affecting the Fund’s performance is theprocessing of zinc concentrates into zinc metal. This activityresults in the Fund earning a processing fee. In 2004, theprocessing fee accounted for 81% of the Fund’s NetRevenues (2003 – 84%).

The second factor affecting the performance of the Fundis the premiums that are realized on the sale of zinc productsto customers. Zinc metal is sold to customers on the basis of a LME zinc price plus a premium, that is negotiatedbetween the buyer and seller. Premiums can vary accordingto product form, quantity, quality, payment terms etc. In2004, product premiums accounted for 10% of the Fund’sNet Revenues (2003 – 11%).

The sale of byproducts (copper, cadmium and sulphuricacid) and zinc metal recovery gains generated 8% and 1%,respectively of the Fund’s Net Revenues in 2004 (2003 – 4% and 1%).

The Canada/US exchange rate also impacts upon theFund’s performance through premiums, byproduct revenuesand zinc recovery gains (19% of the Net Revenues).

Two other performance drivers that impact upon theFund are managing costs and a disciplined use of capital.

Production Zinc metal production in 2004 of 277,283tonnes was 4% higher than the 267,270 tonnes produced in 2003. The Processing Facility recorded the highest levelof production in its 41-year history.

Zinc sales in 2004 were 273,893 tonnes, compared to 265,762 tonnes in 2003. Zinc metal inventory as ofDecember 31, 2004 is within the Processing Facility’starget range.

Premiums and Byproducts North American spotpremiums for slab zinc rose throughout the year, as demandfor zinc was strong due to increased steel production. In 2004, metal premiums were 5.1 cents US per pound, up from 4.9 cents US per pound in 2003.

Byproduct revenues in 2004 doubled, rising to$21.6 million from $9.8 million in 2003. The higherrevenue was due to higher sulphuric acid and copper prices.

Exchange Rate Each $C0.01 increase/decrease in theCanadian dollar reduces/increases the Fund’s net earningsby approximately $0.5 million. In 2004, the Canadian dollarappreciated from $1.40 to $1.30.

2004 2003

Zinc metal production (tonnes) 277,283 267,270Zinc metal sales (tonnes) 273,893 265,762Realized averagemetal premiums (US$/pound) 0.051 0.049Average US/Canadian exchange rate 1.30 1.40


Costs Production costs include labour, energy, supplies andother costs directly associated with the production process.Energy costs rose, due to the 4.4% increase in electricity ratesduring 2004. The cost increases were largely offset by increasein production costs being inventoried at the end of 2004, dueto the increase in zinc metal and cathode inventory.

Capital Expenditures For 2004, capital expenditurestotalled $12.5 million, compared to $14.1 million in 2003.The majority of the expenditures were related to maintainingthe Processing Facility’s current capacity.

Distribution Policy, Distributable Cash (3) and Operating ReserveThe Fund’s goal is to provide stable monthly distributions.The Fund pays monthly cash distributions to unitholders on or about the 25th day of each month.

In 2004, Cash Generated (“Distributable Cash beforechanges in operating reserves”) was $51.2 million andDistributable Cash was $51 million: $38.3 million declaredto Priority Unitholders and $12.7 million to OrdinaryUnitholders.

The operating reserve, which is used to offset the impactof variations in production and to meet the Fund’s goal ofstable monthly cash distributions, increased to $4.1 millionat the end of 2004 from $3.9 million at year-end 2003.

In 2004, all of the distributions made were funded bycash flow from operations.

Cash Flows Cash realized from operations, before net changes in non-cashworking capital, totalled $64.8 million in 2004, comparedto $56.6 million in 2003. The increase is due to higher netearnings in 2004. Site restoration expenditures were $0.3million in both 2004 and 2003. In 2004, non-cash workingcapital increased by $1.3 million, due to higher accountsreceivable and inventory balances related to higher zinc prices.

Capital expenditures in 2004 were $12.5 million, comparedwith $14.1 million in 2003. In 2003, property, plant andequipment were reduced by $0.6 million relating to thewriteoff of an absorption tower due to corrosion. A capitalexpenditure improvement of $1.2 million was incurred in2003 to maintain the tower.

LIQUIDITY AND CAPITAL RESOURCESCash and cash equivalents totalled $11.0 million onDecember 31, 2004, compared to $10.0 million at year-end 2003.

The Fund’s ability to generate sufficient cash will dependon both the key performance drivers outlined on page 10 andthe impact of factors discussed in the Outlook on page 14.

The Fund has a $55 million secured revolving facility(“Revolving Facility"), maturing on May 3, 2006. It is usedfor general corporate purposes, including financing workingcapital. The Revolving Facility bears interest at market rates,currently at the Canadian bankers’ acceptance rate plus 2%.

As of December 31, 2004, $21.5 million was drawn onthe Revolving Facility. It is the Fund’s intention to extend the Revolving Facility to May 3, 2007 during 2005.

Fluctuations in working capital balances as a result ofoperations are generally funded by, or used to repay, theRevolving Facility. During 2004, $41.5 million of debt was issued and $40.5 million was repaid related to thefluctuations in working capital.

On December 19, 2003, the Fund completed the issueof $153.5 million of senior secured notes (“Notes”) pursuantto a private placement. The Notes have a term of seven yearsand will mature on December 20, 2010. The Notes arecomprised of $114.5 million in fixed-rate notes with a couponof 6.529%, payable quarterly, and $39 million in floating-rateNotes at the three-month Canadian Dollar Offer Rate(“CDOR”) plus 1.94%. The net proceeds of the offeringwere used to repay the $150 million term facility.

At December 31, 2004, the Fund’s total debt was$175 million. Both the Notes and the Revolving Facilitycontain customary representations, warranties, covenants and conditions to funding. The Fund’s inability to meetthese representations, warranties, covenants and conditionsmay require the Fund to seek additional fundingrequirements and may impact upon the Fund’s ability tomake distributions. All the assets of the Fund have beenpledged in support of the obligations under the Notes and the Revolving Facility.

The Fund’s future financial requirements related to capitalexpenditures are expected to be funded from operating cash flow.

Outstanding Unit Data (As of December 31, 2004)

Priority Units 37,500,000Ordinary Units 12,500,000

Zinc Markets In 2004, the LME cash settlement zinc priceaveraged $0.475 cents US per pound, up by 27% over the2003 average of $0.375 cents US per pound. Over the past few years, concentrate availability has become tight asuneconomical mines have been forced to close. The pickupin global economic activity has led to increased demand forzinc, especially from the galvanizing sector. The strongestgrowth was in China, where zinc demand rose byapproximately 14% in 2004. There was also strong demandfrom the U.S. steel sector. LME inventories closed the yearat 629,000 tonnes, an 111,000 tonne decrease from year-end2003. For 2004, the global refined zinc market is estimatedto have been in deficit by 200,000 tonnes.

CONTRACTUAL OBLIGATIONS

(in $ millions) Payments Due by Period

Contractual Obligations Total 2005 2006-2007 2008-2009 2010

Long-Term Debt $ 175.0 – $ 21.5 – $ 153.5Operating Leases 1.4 0.7 0.5 0.2 –Purchase

Commitments 12.3 9.1 3.2 – –Total Contractual

Obligations $ 188.7 $9.8 $ 25.2 0.2 $ 153.5

(3) Distributable Cash is not a measure defined by generally accepted accountingprinciples and is dependent upon the definitions as contained in trust indenturesestablishing the Fund. Distributable Cash as calculated by the Fund may not becomparable to similar measures presented by other issuers. Distributable Cash is based on 100% of the net earnings adjusted to account for non-cashtransactions, such as amortization, minority interest and reclamation, and isreduced by the additions to capital assets, site restoration expenditures andreasonable reserves. See Note 12 in the Fund’s consolidated financial statementsfor a quantitative reconciliation of Distributable Cash.



TRANSACTIONS WITH RELATED PARTIESNoranda owns 12,500,000 Ordinary Units of the Partnership,which represents 100% of the Ordinary Units. The OrdinaryUnits are not transferable and will be exchangeable forPriority Units on a one-for-one basis after May 2, 2017.

Pursuant to the Supply and Processing Agreement whichexpires in 2017, Noranda is obligated to sell to the ProcessingFacility, up to 550,000 tonnes of zinc concentrate annually.In addition, Noranda acts as the exclusive agent for sales ofzinc metal and byproducts and the related hedgingarrangements.

Under the terms of an administration agreement betweenthe Fund and the Manager, a wholly owned subsidiary ofNoranda, the Manager provides administrative services to theFund and management services to the Operating Trust. Inaddition, the Manager operates and maintains the ProcessingFacility and provides management services to thePartnership.

Any agreements entered into by Noranda as agent onbehalf of the Partnership with any party related to Noranda,and which are material to the Partnership, must be on termsthat are, collectively, no less favourable to the Partnershipthan those available at the time from a reputable non-relatedparty, and must be reviewed and approved by the auditcommittee whose members are unrelated to Noranda.

In 2004, Noranda sold to the Partnership $165.2 millionof concentrate (2003 – $110.2 million) and provided $1.4million in sales agency services (2003 – $1.4 million). Thesales agency services are provided on a cost recovery basis.

The administration, management and operating servicesare also provided on a cost recovery basis and for amanagement fee of $0.25 million per annum, adjusted by 2%per annum beginning on January 1, 2004. The table belowsummarizes Noranda’s services to the Fund.

Services provided by Noranda ($ millions) 2004 2003

Salary and benefits $ 68.7 $ 63.6Support services 2.2 1.3Operating and management

agreement management fee 0.2 0.2

Total $ 71.1 $ 65.1

In addition, the Fund undertakes transactions with variousother Noranda Group companies and divisions, at terms thatreflect market rates. The table below summarizes sales andexpenses by Noranda.

Sales and Expenses by Noranda ($ millions) 2004 2003

SalesSales of zinc metal $ 15.9 $ 71.1Sales of by-products 21.4 9.5

ExpensesPurchases of raw materials and

operating supplies $ 6.8 $ 7.4

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTSDue to the structure of the Processing Facility’s purchaseand sale contracts, hedging of zinc price exposure is generallynot required to any material extent. Zinc metal productsare generally sold approximately two months after theconcentrate from which they are made is delivered. As a result,by pricing the Payable zinc metal contained in zinc concentrateto the Processing Facility at the LME zinc reference price in the second month following its delivery, and by pricing theprocessing fee in Canadian dollars, the Supply and ProcessingAgreement provides a natural hedge against zinc metal pricefluctuations. This results in matching the timing of pricing ofthe purchase of zinc concentrate with the expected timing ofsales of the refined zinc metal produced from that concentrate.The Processing Facility, through Noranda, enters into hedgesto the extent that the natural hedge does not fully minimizeexposure to fluctuations in zinc prices.

In addition, some customers request a fixed sales price(instead of the LME average price in the month of shipment)to lock in the price of their zinc purchases for a future periodof time, generally not exceeding one year. These arrangements,referred to as fixed forward sales contracts, are generallymade available to customers who request them and whomeet the Fund’s credit criteria for such contracts. Whenentering into a fixed forward sales contract, the ProcessingFacility, through Noranda, offsets this price risk by hedgingwith appropriate futures contracts, which will match thefuture months in which the customer has contracted topurchase the metal. These future contracts typically allowthe Processing Facility to receive the LME average price in the month of shipment, while customers pay the agreed-upon price plus premiums. Gains and losses on these futurescontracts are reported as a component of the relatedtransactions. Gains and losses on early termination ofhedging contracts are deferred until the hedged items arerecognized in earnings. Gains and losses are recognized in earnings only when the related commodity is sold. Themark-to-market value of the futures contract realized a gain of $2.9 million as of December 31, 2004.

The Fund does not enter into any hedging contracts forthe purposes of speculation. Noranda monitors the Fund’szinc price exposure through Noranda’s central riskmanagement system and uses policies for risk managementin accordance with normal practice. These practices includethe segregation of supervision, authorization and control of the trading, confirmations, settlement and accountingfunctions, the selection of creditworthy counter-parties andthe maintenance of enforceable trading documentation.

CRITICAL ACCOUNTING ESTIMATESFuture Site Restoration and Reclamation Effective January 1,2004, the Fund adopted the new Canadian Institute ofChartered Accountants (“CICA”) accounting standards withrespect to accounting for asset retirement obligationsincluded within future site restoration and reclamation.

Estimated future site restoration and reclamation costsmay vary based on changes in operations, costs of restorationand reclamation activities, and regulatory requirements.


The estimate for future site restoration and reclamationimpacts upon the amount of reclamation expense that isincurred on the statement of net earnings, and the balance of the future site restoration and reclamation found in thelong-term liabilities section of the balance sheet. Actual siterestoration and reclamation expenditures will reduce theFund’s cash flow.

Supplies Inventory As of December 31, 2004, the suppliesinventory balance was $9.0 million, net of an obsolescenceprovision of $0.5 million. The Fund uses the accountingprinciple of the lower of average cost and replacement value.The Fund has estimated the provision for obsolescence based on past experience. If a larger portion of the suppliesinventory were found to be obsolete, the Fund would berequired to write off the difference between the salvage value and the book value of the obsolete inventory.

If a supplies inventory writeoff were required, net earnings for that year would be reduced and the balance in the inventories account would have to be lowered. There would be no net impact on the Fund’s cash flow.

Revenue Recognition The Fund recognizes revenues from the sale of refined metals and byproducts at the time of thesale, when the rights and obligations of ownership pass tothe buyer. This generally occurs upon shipment. Prices forprovisionally priced sales are based on market prices andexchange prevailing at the time of shipment and are adjustedbased upon market prices and exchange rates until finalsettlement with customers pursuant to the terms of salescontracts. Price changes for shipments which are awaitingfinal pricing at year end, could have a material effect onfuture revenues.

Changes in Accounting PoliciesAsset Retirement Obligations Effective January 1, 2004, theFund adopted the new recommendations of the CICA withrespect to accounting for asset retirement obligationsincluded within future site restoration and reclamation costs.Under the new recommendations, the fair value of the futureliability for an asset retirement obligation is recognizedduring the period in which it is incurred, with an offsettingamount being recognized as an increase in the carryingamount of the corresponding asset. The liability accretes toits future value until the obligation is completed. Previously,future site restoration and reclamation provisions were made, net of expected recoveries, in a rational and systematicmanner. This change in accounting policy was appliedretroactively. Accordingly, as at January 1, 2003, future siterestoration and reclamation was reduced by $4.1 million andretained earnings was increased by $4.1 million. The changealso resulted in a decrease of $0.2 million from previouslyrecorded 2003 net earnings ($0.00 per trust unit).

Hedging Relationships Effective January 1, 2004, the Fundprospectively adopted the new CICA Accounting Guideline 13Hedging Relationships (“AcG 13”). AcG 13 addresses theidentification, designation, documentation and assessment of effectiveness of hedging transactions for the purpose ofapplying hedge accounting.

In August 2004, management determined that a portionof the fixed forward price hedges were not eligible for hedgeaccounting. As a result, the Fund recorded a deferred mark-to-market gain of $2.0 million, a corresponding short-termreceivable of $1.5 million and a long-term receivable of $0.5million. Deferred gain of $0.8 million was amortized intoincome during 2004.

Exchangeable Securities Issued by Subsidiaries of Income TrustsOn January 19, 2005, the Emerging Issues Committee(“EIC”) of the CICA issued EIC-151, ExchangeableSecurities Issued by Subsidiaries of Income Trusts. EIC-151is required to be applied retroactively to all financialstatements issued after January 19, 2005. Under EIC-151,exchangeable securities with a subordination feature shouldbe presented as either non-controlling interest or debt,depending on the characteristics of the exchangeablesecurities. The Ordinary Units issued by the NorandaIncome Limited Partnership, of which the Fund indirectlyowns 100% of the Partnership Units, are exchangeable securitiesthat contain a subordination feature. Previously, theseOrdinary Units were treated as part of unitholders’ capitalaccounts. Under EIC-151, these Ordinary Units are requiredto be presented as minority interest. This change inaccounting policy was applied retroactively and accordingly,as at January 1, 2003, unitholders’ capital accounts werereduced by $63.8 million, the retained earnings werereduced by $1.9 million and interests of Ordinaryunitholders of $65.7 were set up on the balance sheet. The change also resulted in a decrease of $6.4 million relatedto previously recorded 2003 net earnings for the 12 monthsending December 31, 2003. There is no impact on netearnings per trust unit because the per-unit calculation isbased only on the Priority Units outstanding under the newrecommendations.

Upcoming Changes in Accounting PolicyVariable Interests Entities The CICA issued AccountingGuideline AcG-15, “Consolidation of Variable InterestEntities”, to provide guidance for applying the principles inHandbook Section 1590, “Subsidiaries”, to certain entities.It will be effective for the Fund’s 2005 fiscal year. Althoughthe Fund is currently reviewing AcG-15, the impact of theguideline, if any, on the Fund’s consolidated financialstatements has not been determined.

RISKS AND UNCERTAINTIES Business Risks Demand for the Processing Facility’sproducts is a function of world industrial production growth,the development of new uses and markets, and substitution.

The Processing Facility is dependent upon key customers.In 2004, the Processing Facility’s 10 largest customersaccounted for approximately 60% of its direct or indirect sales(on a volume basis), with its largest customer accounting for12%. The loss of a significant customer may have a materiallyadverse effect on the Fund’s financial position and the resultsof operations. In 2004, the Processing Facility sold morethan 95% of its zinc to customers in the United States andCanada. If the Processing Facility lost certain customersin the United States and Canada, there is a risk that theProcessing Facility would be forced to find alternative markets.



This could increase distribution costs, thereby adverselyaffecting future Net Revenues and Distributable Cash.

A portion of the Processing Facility’s Net Revenuesresults from the premiums paid for value-added productssuch as zinc shapes, zinc shot and zinc powder. Changes in the supply and demand for these products can causepremiums to fluctuate, impacting upon the Fund’s netearnings and Distributable Cash. Each 0.1 cent US change in the zinc premium changes the Fund’s annualized Sales and Distributable Cash by US $0.6 million.

Operational Risk The Processing Facility is dependent uponthe continuing supply of zinc concentrate. Currently,Noranda is obligated to supply zinc concentrate based on theterms set out in the Supply and Processing Agreement. Upontermination of the contract in 2017, if the Fund is not ableto secure a supply of zinc concentrate on favourable terms,its Distributable Cash may decline.

The Processing Facility currently purchases approximately1,200 million kilowatt hours per year from Hydro-Quebec at the market price charged to industrial users. During 2004,the Fund’s electricity costs were approximately $48 million.Increases in energy costs could adversely affect DistributableCash. Changes in the Processing Facility’s electricity costswill be partially offset by adjustments to the processing fee in the following year.

Interest Rates As of December 31, 2004, $60.5 million ofthe Fund’s indebtedness bears interest at floating interestrates. In 2005, the sensitivity of a 1% change in the interestrate on the Fund’s annualized interest expense andDistributable Cash is expected to be $0.6 million.

Environment, Health and Safety The Processing Facility’soperations are subject to laws governing air emissions,discharges into water, waste, hazardous materials andworkers’ health and safety. As such, there is a risk ofenvironmental, health and safety liabilities. The ProcessingFacility has obtained the necessary permits and otherapprovals relating to the protection of the environment andworkers’ health and safety. Compliance with applicable lawsand future changes to them is material to the ProcessingFacility’s operation. Future legislation and regulations couldnecessitate additional expenses, capital expenditures andrestrictions on the operation of the Processing Facility, the extent of which cannot be predicted.

The Fund has a comprehensive environmentalmanagement system, which consists of an environmentalpolicy, as well as implementation codes and proceduresincluding codes of practice, job descriptions, operatingprocedures, rules and responsibilities, employee training,public and employee communications, emergencypreparedness, hazard analyses and audits.

Legal Proceedings The nature of the Fund’s business subjectsthe Fund to regulatory investigations, claims, lawsuits andother proceedings in the ordinary course of our business. The results of these legal proceedings cannot be predictedwith certainty. There can be no assurance that these matterswill not have a materially adverse effect on our results ofoperations in any future period, and a substantial judgement

could have a materially adverse impact on the Fund’sbusiness, financial condition, liquidity and results ofoperations.

Reliance on the Fund Manager The Fund is dependent upon Noranda for the operation and maintenance of theProcessing Facility. The agreement may be terminated after2017, or earlier, in certain circumstances. Upon termination,the Partnership will be required to establish replacementarrangements for the operation of the Processing Facility.

Employee Relations Good labour relations are fundamental tothe Fund’s ongoing success. The Processing Facility has 745employees, 502 of whom are represented by the United SteelWorkers of America, Local 6486. The last labour disruptionwas in 1986. Improved labour relations have translated intoseven consecutive collective agreements without a strike. InNovember 2004, a three-year agreement was reached thatwill run until October 31, 2007. A labour disruption, suchas a strike or lockout, could have a negative material effecton the Fund’s financial position and Distributable Cash.

Unitholder Protections, Rights and Remedies A unitholder inthe Fund enjoys virtually all of the same protections, rightsand remedies as a shareholder would have under theCanadian Business Corporations Act. These protections,rights and remedies are contained in the trust indenturedated April 19, 2002.

OUTLOOKThe Fund’s goal for 2005 is to continue to provide stablemonthly distributions of 8.5 cents per unit per month. • The Fund expects that improved conditions regarding

some key performance drivers will help to compensate for some of the negative impacts of others. The 1% annualescalator and the escalator related to the increase in thecost of electricity will increase the processing fee. Premiumlevels in 2005 are expected to be higher than those in2004, as improved market conditions in the United Stateshave led to higher contract premiums.

• Both the stronger Canadian dollar and the increase inelectricity rates by Hydro-Quebec will have a negativeimpact on 2005 results.

The 2005 targets for the key drivers of the Fund are:Production: 275,000 tonnesSales: 275,000 tonnesProcessing fee: 36.1 cents per poundPremiums: 5.6 cents USCapital expenditures: $17-20 million

FINANCIAL STATEMENTS


MANAGEMENT’S STATEMENT OF RESPONSIBILITY

The accompanying consolidated financial statements of theNoranda Income Fund (the “Fund”) have been prepared bymanagement in accordance with Canadian generally acceptedaccounting principles. Financial statements are not precise,since they include certain amounts based on estimates andjudgements. When alternative methods exist, managementhas chosen those which it deems most appropriate in thecircumstances in order to ensure that the consolidatedfinancial statements are presented fairly, in all materialrespects, in accordance with generally accepted accountingprinciples. The financial information presented elsewhere inthe annual report is consistent with that in these consolidatedfinancial statements.

Management maintains adequate systems of internalaccounting and administrative controls, consistent withreasonable cost. Such systems are designed to providereasonable assurance that the financial information isrelevant and reliable, and that the Fund’s assets areappropriately accounted for and adequately safeguarded.

The board of trustees ensures that management fulfils its responsibilities for financial reporting and internal control through an audit committee. This committee meetsperiodically with management and the external auditorsto discuss internal controls, auditing matters and financialreporting issues, and to satisfy itself that each party isproperly discharging its responsibilities. The committeereviews the consolidated financial statements and reportsto the board of trustees. The external auditors have fulland direct access to the audit committee.

Lucy Rosato Michael BoonePresident and Chief Financial OfficerChief Executive Officer Canadian Electrolytic Canadian Electrolytic Zinc LimitedZinc Limited The Noranda Income

The Noranda Income Fund’s ManagerFund’s Manager

January 21, 2005

AUDITORS’ REPORT

To the unitholders of the Noranda Income Fund:We have audited the consolidated balance sheets of the

Noranda Income Fund as at December 31, 2004 and 2003and the consolidated statements of earnings and retainedearnings (deficit) and cash flows for the years then ended.These financial statements are the responsibility of the Fund’smanagement. Our responsibility is to express an opinionregarding these financial statements based on our audits.

We conducted our audits in accordance with Canadiangenerally accepted auditing standards. Those standardsrequire that we plan and perform an audit to obtainreasonable assurance as to whether the financial statementsare free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by management, as well asevaluating the overall financial statement presentation.

In our opinion, these consolidated financial statementspresent fairly, in all material respects, the financial positionof the Fund as at December 31, 2004 and 2003 and theresults of its operations and its cash flows for the years thenended in accordance with Canadian generally acceptedaccounting principles.

Ernst & Young, LLPChartered AccountantsMontreal, CanadaJanuary 21, 2005


CONSOLIDATED BALANCE SHEETS

2003

(Restated – see note 3)

$ 10,044

47,577 6,803

37,393 4,078

105,895 1,762

362,994

470,651

$ 39

19,063 21,501 4,250

44,853

14,336 174,000 59,365

191,293 (13,196)

178,097

$ 470,651

As at December 31 ($ thousands) 2004

Assets (note 6)

Current assets:Cash and cash equivalents $ 11,000Accounts receivable

Trade (note 11) 51,138Noranda Group (note 13) 9,083

Inventories (note 4) 43,944Prepaids and other assets 3,523

118,688Deferred financing fees 1,532Property, plant and equipment (note 5) 347,673

467,893

Liabilities and Equity

Current liabilities:Bank indebtedness $ –Accounts payable and accrued liabilities

Trade (note 11) 16,862Noranda Group (note 13) 33,345

Distributions payable 4,250

54,457

Future site restoration and reclamation (notes 3 (a), 7 (b)) 14,979Long-term debt (note 6) 175,000Interests of Ordinary Unitholders (notes 3 (c), 9) 55,864

Unitholders’ Interest:Unitholders' equity (note 10) 191,293Retained earnings (deficit) (23,700)

167,593

$ 467,893

[See accompanying notes]

On behalf of the board of trustees of the Noranda Operating Trust:

Don S. Wells, James Bacon,Chairman Chairman,

Audit Committee


CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (DEFICIT)

2003


$ 358,980(12,063)

346,917

108,886

238,031

154,47018,215

26731,155

204,107

33,924

8,215

25,709

6,427

$ 19,282

3,4764,137(1,903)

5,710(38,188)

(13,196)

$ 0.51

Years ended December 31 ($ thousands) 2004

RevenuesSales (note 13) $ 438,855Transportation and distribution costs (14,001)

Net revenues 424,854

Raw material purchase costs (note 13) 170,606

Net revenues less raw material purchase costs 254,248

Other expensesProduction (note 13) 155,587Selling, general and administration (note 13) 19,968Exchange loss (note 11) 2,730Amortization and reclamation (notes 3 (a), 5) 28,608

206,893

Earnings before interest expense and minority interest 47,355

Interest expense, net (note 6) 10,360

Earnings before minority interest 36,995

Minority interest in earnings for Ordinary Unitholders 9,249

Net earnings $ 27,746

Retained earnings (deficit) as originally reportedbeginning of period (13,196)

Adjustment for asset retirement obligation (note 3 (a)) –Adjustment for EIC 151 (note 3(c)) –

Retained earnings (deficit) after adjustmentbeginning of period (13,196)

Distributions to Priority Unitholders (note 10) (38,250)

Deficit, end of period (23,700)

Net earnings per Priority Unit (basic and diluted) $ 0.74



CONSOLIDATED STATEMENTS OF CASH FLOWS

2003


$ 19,282

30,1096,4271,046

–9

114(343)

56,644

(988)(3,093)

4506,516

2,885

59,529

(14,136)1

(14,135)

(38,124)(12,708)

167,000(166,000)

(313)(1,771)

(51,916)

(6,522)16,566

$ 10,044

$ 6449,400

$ 7,827

Years ended December 31 ($ thousands) 2004

Cash realized from (used for) operations:Net earnings for the period $ 27,746Items not affecting cash:

Amortization 27,656Minority interest 9,249Reclamation (note 3 (a)) 952Mark-to-market (gain)/loss on derivative

financial instruments (note 3 (b)) (773)Amortization of deferred financing fees (note 6) 230Loss from sale of assets 52

Site restoration expenditures (note 3 (a)) (309)

64,803

Net change in non-cash working capital items:Receivables (5,841)Inventories (5,635)Prepaid expenses and other assets 555Accounts payable and accrued liabilities 9,643

(1,278)

63,525

Cash realized from (used for) investment activities:Purchases of property, plant and equipment (12,541)Proceeds from sale of property, plant and equipment 11

(12,530)

Cash realized from (used for) financing activities:Distributions – Priority Unitholders (note 10) (38,250)

– Ordinary Unitholders (note 9) (12,750)Long-term debt issued (note 6) 41,538Long-term debt repaid (note 6) (40,538)Change in bank indebtedness (39)Debt financing costs (note 6) –

(50,039)

Change in cash and cash equivalents during the period 956Cash and cash equivalents, beginning of period 10,044

Cash and cash equivalents, end of period $ 11,000

Cash and cash equivalents consist of:Cash $ 2,500 Cash equivalents 8,500

Supplemental Cash Flow InformationCash interest paid $ 10,298



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2004 [$ thousands except as otherwise indicated]

1. NATURE AND DESCRIPTION OF THE NORANDA INCOME FUNDThe Noranda Income Fund (the “Fund”) was created initiallyto acquire from Noranda Inc. (“Noranda”), indirectlythrough the Noranda Operating Trust (the “OperatingTrust”) and the Noranda Income Limited Partnership(the “Partnership”), the CEZinc processing facility (the“Processing Facility”) in Salaberry-de-Valleyfield in Quebec.The Processing Facility produces refined zinc metal andvarious byproducts from zinc concentrates.

Significant AgreementsPursuant to a 15-year Supply and Processing Agreementsigned on May 3, 2002 between Noranda and thePartnership, Noranda is obligated to sell to the ProcessingFacility, except in certain circumstances, up to 550,000tonnes of zinc concentrate annually at a concentrate pricebased on the price of zinc metal on the London MetalExchange (“LME”) for “Payable zinc metal” contained inthe concentrate, less a processing fee initially set at Canadian$0.352 per pound of “Payable zinc metal”. As of January 1,2004, the processing fee is the processing fee in the previousyear adjusted annually (i) upward by 1% and (ii) upward ordownward by 10% of the year-over-year percentage changein the average cost of electricity per megawatt hour for theProcessing Facility. The processing fee for 2004 wasCanadian $0.35552 per pound. “Payable zinc metal” inrespect of a quantity of concentrate will be equal to 96% of the assayed zinc metal content on that concentrate under the Supply and Processing Agreement.

Under the Supply and Processing Agreement, Norandaacts as the exclusive agent for the Partnership to arrange the sale of zinc metal and byproducts and related hedgingarrangements.

Under the terms of an administration agreement betweenthe Fund and the management of Canadian ElectrolyticZinc Limited (the “Manager”), a wholly owned subsidiaryof Noranda, and a management services agreement betweenthe Operating Trust and the Manager, the Manager providesadministrative services to the Fund and management servicesto the Operating Trust, respectively.

Under the terms of an operating and managementagreement between the Manager and the Partnership, theManager operates and maintains the Processing Facility andprovides management services to the Partnership.

Cash DistributionsThe Fund determines distributable cash (“DistributableCash”) on a monthly basis for the unitholders of record ofthe Fund on the last business day of each calendar month,and these distributions are to be paid on or about 25 daysthereafter.

Cash distributions on Ordinary Units are subordinate todistributions on Priority Units until 2017, except upon theoccurrence of certain events. Each Ordinary Unit is entitledto receive cash distributions on a monthly basis in an amountthat is equal to the monthly cash distributions paid to eachPriority Unit, provided that each Priority Unit is first paid anamount that is equal to the monthly cash distribution of notless than $0.08333 per Priority Unit (the “Base Distribution”)before any amount is paid to holders of Ordinary Units. If,notwithstanding the subordination of the Ordinary Units,Distributable Cash is not sufficient to make the Base

Distributions on Priority Units in a month, the amount ofthe deficiency shall not accumulate and will not be paid toholders of Priority Units. If Distributable Cash in a month is not sufficient to make a distribution on the OrdinaryUnits that is equal to the distribution on the Priority Units,the amount of the deficiency will accumulate and will be paid to holders of the Ordinary Units from excessDistributable Cash in a subsequent month. Any accumulatedDistributable Cash deficiency related to the Ordinary Unitswill not be accrued by the Fund until such time as excessDistributable Cash is available. As at December 31, 2004,there was no accumulated Distributable Cash deficiency.

2. ACCOUNTING POLICIESThese consolidated financial statements have been preparedin accordance with Canadian generally accepted accountingprinciples and within the framework of the significantaccounting policies summarized as follows:

Use of estimatesThe preparation of these consolidated financial statementsin conformity with Canadian generally accepted accountingprinciples requires management to make estimates andassumptions. These estimates affect the reported amountsof assets and liabilities and the disclosure of contingentassets and liabilities at the date of the financial statements,and the reported amounts of revenues and expenses duringthe reported period. Actual results could differ from theseestimates.

Translation of foreign currenciesForeign currency-denominated monetary assets and liabilitiesare translated at the exchange rate prevailing at the year-end,and revenues and expenses at average rates of exchangeduring the year. Exchange gains and losses arising on thetranslation of the accounts are included in the consolidatedstatement of earnings and retained earnings.

Cash equivalentsCash equivalents include demand deposits and short-terminvestments with original maturities of three months or lessand are stated at cost, which approximates market value.

InventoriesFinished goods, raw materials and in-process inventories arevalued at the lower of average cost or net realizable value.Inventories of spare parts are valued at the lower of averagecost or replacement value on a first-in and first-out basis.

Revenue recognitionRevenues from the sale of refined metals and byproducts arerecorded at the time of sale, when the rights and obligationsof ownership pass to the buyer, which generally occurs uponshipment. Prices used for provisionally priced sales are basedon market prices prevailing at the time of shipment and theeffects of any changes are recorded in the period duringwhich the price change occurs.




Property, plant and equipmentAmortization of property, plant and equipment is based onthe estimated service lives of the assets, calculated on thestraight-line basis at the following annual rates:

Computers and software 4 yearsAutomobiles and trucks 4 yearsMobile equipment 10 yearsBuildings and plant equipment 5 – 25 years

Assets under construction are not amortized until put into use.

Future site restoration and reclamationEffective January 1, 2004, the Fund adopted the newCanadian Institute of Chartered Accountants (“CICA”)accounting standards with respect to accounting for assetretirement obligations included within future site restorationand reclamation. Under the new recommendations, the fairvalue of the future liability for an asset retirement obligationis recognized during the period in which it is incurred, withan offsetting amount being recognized as an increase in thecarrying amount of the corresponding asset. See note 3 (a)for the impact of the adoption of the new standard.

Financial instrumentsThe Fund’s financial instruments, other than derivatives, are recognized on the balance sheets and consist of cash andcash equivalents, accounts receivable, bank indebtedness,accounts payable and accrued liabilities, distributions payableand long-term debt. The fair value of these financialinstruments included in current assets and current liabilitiesapproximates their carrying value because of their short-term nature. A portion of the long-term debt bears interestthat varies with the market and thus the carrying amountapproximates fair value.

The fair value of that portion of the long-term debtwhich bears interest at fixed rates, based on the estimatedfuture cash flow discounted using the current market ratefor instruments bearing the same maturities and credit risk,approximates the carrying amount as of December 31, 2004and 2003.

Income taxesAs the Fund is an unincorporated trust, it is entitled todeduct from income, for tax purposes, cash distributionspaid or payable to unitholders. Consequently, it is expectedthat the Fund will not be liable for tax under Part 1 of theIncome Tax Act (Canada). The deductibility of distributionsto the unitholders represents an exemption from futureincome taxes relating to temporary differences, as the Fundis committed to continue to distribute to its unitholders all,or virtually all of its taxable income that would otherwise be taxable in the Fund.

Hedging transactionsThe Fund periodically uses forward exchange contracts andforward contracts to hedge the effect of price changes on a portion of the commodities it sells. Gains and losses onthese contracts are reported as a component of the relatedtransactions. Gains and losses resulting from earlytermination of hedging contracts are deferred until thehedged items are recognized in earnings. Gains and losses

are recognized in earnings when the related commodity is sold, or when the foreign currency contract/forwardcontract matures.

Effective January 1, 2004, the Fund prospectively adoptedthe new CICA Accounting Guideline 13 Hedging Relationships(“AcG 13”). AcG 13 addresses the identification, designation,documentation and assessment of effectiveness of hedgingtransactions for the purpose of applying hedge accounting.See Note 3 (b) for the impact of the new guideline.

Deferred financing feesDeferred financing fees are recorded at cost and areamortized on an effective yield basis over a period thatcorresponds with the term of the notes.

Impairment of long-lived assetsWhen the carrying value of a long-lived asset is less than its net recoverable value as determined on an undiscountedcash flow basis, an impairment loss is recognized. Theimpairment loss is recognized to the extent that its fair value measured on a discounted cash flow basis, over the life of the asset, is below the asset’s carrying value.

3. ACCOUNTING CHANGES(a) Future site restoration and reclamation

Effective January 1, 2004, the Fund adopted the newCICA accounting standards with respect to accountingfor asset retirement obligations included within futuresite restoration and reclamation. Under the newrecommendations, the fair value of the future liability for an asset retirement obligation is recognized in theperiod during which it is incurred, with an offsettingamount being recognized as an increase in the carryingamount of the corresponding asset. The Fund hasdetermined the fair value of the future liability by using a discount rate of 8%. The liability accretes to its futurevalue until the obligation is completed. Previously, futuresite restoration and reclamation provisions were made,net of expected recoveries, in a rational and systematicmanner. This change in accounting policy was appliedretroactively and accordingly, as at January 1, 2003,future site restoration and reclamation was reduced by $4,137 and retained earnings were increased by$4,137. The change also resulted in an increase of $233($0.00 per trust unit) from previously recorded 2003 net earnings.

The majority of the estimated future site restorationand reclamation expenditures currently recorded relateto the reclamation of residue ponds at the ProcessingFacility. The estimated future site restoration andreclamation expenditures may vary based on changes inoperations, cost of restoration and reclamation activitiesand regulatory requirements. Although the ultimateamount to be incurred is uncertain, the liability for futuresite restoration and reclamation on an undiscounted basisis estimated to be approximately $42 million. The cashflows required to settle the liability are expected to beincurred from now until 2045.


Future Site Restoration and Reclamation Continuity 2004 2003

Balance January 1 $ 14,336 $ 13,633Accretion of reclamation expense 952 1,046Site restoration and reclamation

expenditures (309) (343)

Balance December 31 $ 14,979 $ 14,336

(b) Hedging RelationshipsEffective January 1, 2004, the Fund prospectivelyadopted the new CICA Accounting Guideline 13Hedging Relationships (“AcG 13”). AcG 13 addressesthe identification, designation, documentation andassessment of effectiveness of hedging transactions for the purpose of applying hedge accounting.

(c) Exchangeable Securities issued by Subsidiaries ofIncome TrustsOn January 19, 2005, the Emerging Issues Committee(“EIC”) of the CICA issued EIC-151, ExchangeableSecurities Issued by Subsidiaries of Income Trusts. EIC-151 is required to be applied retroactively to all financialstatements issued after January 19, 2005. Under EIC-151,exchangeable securities with a subordination featureshould be presented as either non-controlling interestor debt, depending on the characteristics of theexchangeable securities. The Ordinary Units issued byNoranda Income Limited Partnership, of which theFund indirectly owns 100% of the Partnership Units,are exchangeable securities that contain a subordinationfeature. Previously, these Ordinary Units were treated aspart of unitholders’ capital accounts. Under EIC-151,these Ordinary Units are required to be presented asminority interest. This change in accounting policy wasapplied retroactively and accordingly, as at January 1, 2003,unitholders’ capital accounts were reduced by $63,767,the retained earnings were reduced by $1,903 and interestsof Ordinary Unitholders of $65,570 were set up on thebalance sheet. The change also resulted in a decrease of$6,427 related to previously recorded 2003 net earningsfor the 12 months ending December 31, 2003. There isno impact on net earnings per trust unit because the per-unit calculation is based only on the Priority Unitsoutstanding.

4. INVENTORY

2004 2003

Spare parts $ 9,005 $ 9,569Raw materials 11,002 11,005Work in process 5,361 4,204Finished products 18,576 12,615

$ 43,944 $ 37,393

5. PROPERTY, PLANT AND EQUIPMENT

2004 Cost Accumulated Net BookAmortization Value

Plant equipment (1) $ 629,235 $ 339,486 $ 289,749Buildings 130,821 78,278 52,543Mobile equipment 3,537 2,391 1,146Computers and software 2,663 2,253 410Automobiles and trucks 416 390 26Land 3,799 – 3,799

$ 770,471 $ 422,798 $ 347,673

(1) Includes $12,427 of plant equipment in progress that was not beingamortized as of December 31, 2004.

2003 Cost Accumulated Net BookAmortization Value

Plant equipment (2) $ 619,582 $ 316,403 $ 303,179Buildings 128,591 74,419 54,172Mobile equipment 3,493 2,064 1,429Computers and software 6,424 6,009 415Automobiles and trucks 362 362 –Land 3,799 – 3,799

$ 762,251 $ 399,257 $ 362,994

(2) Includes $6,519 of plant equipment not in use and $9,808 of plantequipment in progress that was not being amortized as of December 31, 2003.

On an ongoing basis, management reviews the carryingvalue of its property, plant and equipment. Property, plantand equipment with a carrying value of $754, net ofaccumulated amortization of $148, was written off andcharged against operations in 2003.

6. DEBT

2004 2003

Revolving Facility $ 21,500 $ 20,500A-1 Notes 114,500 114,500A-2 Notes 39,000 39,000

$ 175,000 $ 174,000

The Fund has a $55,000 secured revolving operatingline of credit (the “Revolving Facility”), with a syndicateof Canadian chartered banks, that is used for generalcorporate purposes including financing working capital.As of December 31, 2004, $21,500 (2003 – $20,500) ofthe Revolving Facility was drawn. Borrowings under theRevolving Facility bear interest at rates that vary with theprime rate, the bankers’ acceptance rates, or Libor ratesplus applicable rates ranging from 0.75% to 2.5%. As ofDecember 31, 2004, the effective interest rate on theRevolving Facility was 4.72% (December 31, 2003 – 4.79%).If not renewed, the Revolving Facility will become due onMay 3, 2006.

On December 19, 2003, the Fund’s subsidiary, NorandaOperating Trust, completed the issue of $153,500 of seniorsecured notes (the “Notes”) pursuant to a private placement.The Notes have a term of seven years and will mature




on December 20, 2010. The Notes are comprised of$114.5 in million fixed-rate notes (“A-1 Notes”) with acoupon of 6.529%, payable quarterly, and $39 million infloating-rate notes (“A-2 Notes”) at a rate of the three-month Canadian Dollar Offer Rate (CDOR) plus 1.94%. As of December 31, 2004, the effective interest rate on theA-2 Notes was 4.52% (2004 – 4.65%). The net proceeds of the offering were used to repay the $150 million termfacility. The Fund is required to maintain a letter of credit or cash, for the benefit of the holders of the Notes, for anamount equal to three months’ interest expense.

Both the Revolving Facility and the Notes are securedby the assets of the Partnership, the Operating Trust andthe Manager. The Fund has provided covenants to itslenders. All of the covenants were complied with during2004 and 2003.

Interest, net 2004 2003

Interest on long-term debt $10,294 $8,544Amortization of financing fees 230 9Interest income (164) (338)

$10,360 $8,215

In 2003, deferred financing fees of $1,771 were recordedas a long-term asset relating to transaction costs for the issueof the Notes.

7. COMMITMENTS AND CONTINGENCIESa. Operating leases and purchase commitments

At December 31, 2004, the Fund had commitmentsunder operating leases requiring annual rental paymentsas follows:

2005 $ 6942006 3152007 2302008 2092009 and thereafter –

$ 1,448

At December 31, 2004, the Fund had purchasecommitments requiring payments as follows:

2005 $ 9,1352006 2,6032007 559

$12,297

b. Future site restoration and reclamationThe Fund’s operations are affected by federal, provincialand local laws and regulations concerning environmentalprotection. The Fund’s provisions for future site restorationand reclamation are based on known requirements. It isnot currently possible to estimate the impact on operatingresults, if any, of future legislative or regulatorydevelopments.

8. INCOME TAXESThe consolidated financial statements of the Fund as ofDecember 31, 2004 do not include future income taxes, as they are held directly by the Operating Trust, a trustwhich under the terms of the Income Tax Act (Canada), will not be subject to income taxes to the extent that itstaxable income in a year is paid or payable to a unitholder.

9. INTERESTS OF ORDINARY UNITHOLDERSThe Partnership has 12,500,000 Ordinary Units outstanding,which are exchangeable into Priority Units. Ordinary Unitsare entitled to distributions from the Fund equivalent todistributions paid by the Fund on the Priority Units,provided that the holders of the Priority Units are first paidthe Base Distribution of $0.08333 per unit, per month.

The Ordinary Units are entitled to a number of votesequal to the number of votes attached to a Priority Unit and vote with the Priority Unitholders as one class. Noranda’sOrdinary Units are generally not transferable and will beexchangeable for Priority Units on a one-for-one basis onlyafter May 2, 2017, or earlier upon the occurrence of certainevents.

10. UNITHOLDERS’ CAPITAL ACCOUNTS

Unitholders’ capital accounts Dec. 31, 2004 Dec. 31, 2003

37,500,000 Priority Units $ 191,293 $ 191,293

The equity of the Fund as of December 31, 2004 consists of 37,500,000 Priority Units. Pursuant to the NorandaIncome Fund’s trust indenture, an unlimited number ofPriority Units are issuable. Each Priority Unit represents an equal, undivided beneficial interest in the Fund and indistributions of the Fund. Each Priority Unit is transferableand entitles the holder thereof to participate equally indistributions of the Fund and to one vote.

Retained Earnings (Deficit)

2004 2003

Retained earnings beginning of period, as originallyreported $ (13,196) $ 3,476

Adjustment for asset retirement obligation (note 2) – 4,137

Adjustment for minority interest (note 2) – (1,903)

Retained earnings beginning of period, as adjusted (13,196) 5,710

Net earnings 27,746 19,282Distributions to Priority

Unitholders (38,250) (38,188)

$ (23,700) $ (13,196)


11. DERIVATIVE INSTRUMENTS AND CURRENCY RISKCommodity HedgesThe Fund purchases metal in zinc concentrate to be processedeventually into refined zinc metal for sale to customers. Dueto the structure of the Fund’s sales contracts and the Supplyand Processing Agreement with Noranda, hedging of zincprice exposure other than that undertaken in response tocustomer requests for fixed pricing is generally not requiredto any material extent. As agent of the Fund, Norandaprovides the hedging arrangements in the event that thestructure of the Fund’s sales contracts does not minimizeexposure to changes in zinc prices.

Certain customers request a fixed sales price instead ofthe LME average price in the month of shipment. Norandaenters into futures contracts (fixed forward price hedges) onbehalf of the Fund that allow the Fund to receive the LMEaverage price in the month of shipment, while customers paythe agreed-upon fixed price. Noranda accomplishes this bysettling the futures contracts during the month of shipment,which generally results in the realization of the LME averageprices. In the event that the futures contracts have to beterminated early, due to the customer cancelling a fixed-price order, Noranda has the right to charge the customerwith the cost of settling the LME contract.

At December 31, 2004, Noranda had futures contracts(fixed forward price hedges) hedging approximately30 million pounds of zinc (December 31, 2003 – 87 millionpounds) related to the Fund. At December 31, 2004, themark-to-market value of these positions which has not beenrecorded in the consolidated statement of earnings was anunrealized gain of $2,870 (December 31, 2003 – unrealizedgain of $5,676). The ultimate gain or loss from the fixedforward price hedges will be realized over the next two yearsas the sales of zinc occur.

In August 2004, management determined that a portionof the fixed forward price hedges was no longer eligible forhedge accounting. As a result, the Fund recorded a deferredmark-to-market gain of $2,014, and a corresponding short-term receivable of $1,493 and a long-term receivableof $521. $760 of the deferred gain was recorded intoincome during 2004 as a result of the maturity of the related forward price derivative. Subsequent to August2004, changes in the mark-to-market on these fixed-pricedderivatives are booked into earnings. During 2004, theFund recorded a mark-to-market gain of $11. At December31, 2004, Noranda had futures contracts for approximately10 million pounds of zinc, related to the Fund, which didnot qualify for hedge accounting. At December 31, 2004,the mark-to-market value of these positions was a gain of$2,025.

The Processing Facility’s commodity hedging programincludes inventory management hedges which hedgepurchases and sales of zinc metal. These contracts have theoption to settle physically, therefore, they do not fall withinthe definition of a derivative and the Processing Facility isnot required to mark them to market. At December 31,2004, the Processing Facility had sold forward approximately9 million pounds of zinc (December 31, 2003 – boughtforward 15 million pounds). At December 31, 2004, themark-to-market value of these positions was an unrealized lossof $485 (December 31, 2003 – unrealized gain of $255).

Currency RiskThe company maintains cash and cash equivalents, accountsreceivable and accounts payable in foreign currencies, and istherefore exposed to currency risk on these funds.

US$ balances in the following accounts: Dec. 31, 2004 Dec. 31, 2003

Cash and cash equivalents $ 1,104 $ 173Accounts receivable 43,120 26,196Accounts payable and

accrued liabilities (32,961) (22,808)

Total $ 11,263 $ 3,561

12. DISTRIBUTABLE CASHDistributable Cash is not a measure defined by generallyaccepted accounting principles and is dependent upon thedefinition as contained in the trust indentures establishingthe Fund. Distributable Cash under the Fund’s indenture isbased on 100% of the net earnings adjusted to account fornon-cash transactions such as amortization, reclamation andminority interest, and reduced by additions to capital assets,site restoration expenditures, reasonable reserves andrepayment of long-term debt. Fluctuations in workingcapital balances as a result of operations are generally fundedby, or used to repay, the Revolving Facility.

Cash Generated is defined as Distributable Cash beforechanges in operating reserves. Distributable Cash ascalculated by the Fund may not be comparable to similarmeasures presented by other issuers. The Distributable Cashfor the periods ending December 31 is as follows:

2004 2003

Restated (see note 3)

Net earnings $ 27,746 $ 19,282Add:

Amortization and reclamation 28,608 31,155Minority interest in earnings 9,249 6,427Loss from sale of assets 52 114Proceeds on sale of assets 11 1

Less:Additions to property, plant

and equipment (12,541) (14,136)Site restoration expenditures (309) (343)Increase in capital and site

restoration reserve (1,583) (143)

Cash Generated during the period 51,233 42,357

(Increase) decrease in operating reserve (233) 8,560

Distributable Cash for the period $ 51,000 $ 50,917

Priority units issued 37,500,000 37,500,000Ordinary units issued 12,500,000 12,500,000Distributable Cash attributable

to Priority Units $1.02 $1.01834Distributable Cash attributable

to Ordinary Units $1.02 $1.01834




In order to meet the Fund’s goal to provide a stable monthlydistribution, the Fund utilizes an operating reserve. In aperiod during which Cash Generated is greater than thedistribution declared, the operating reserve will increase.In a period during which Cash Generated is less than thedistribution declared, the operating reserve will decrease.As of December 31, 2004, the operating reserve was $4,091(December 31, 2003 – $3,858).

The Fund also utilizes a capital and site restoration reserve.As of December 31, 2004, the capital and site restorationreserve was $3,115 (December 31, 2003 – $1,532).

13. RELATED PARTY TRANSACTIONSAs discussed in Note 1, the Fund has entered into significantagreements with related parties.

As a result of the Supply and Processing Agreement,during 2004 Noranda sold $165,241 of concentrate (2003– $110,193) and provided $1,442 of sales agency services(2003 – $1,374) to the Fund. The sales agency services are provided on a cost recovery basis. As of December 31,2004, the Partnership has a payable of $19,105 to Noranda(2003 – $12,210) related to the Supply and ProcessingAgreement. This amount is included in accounts payableand accrued liabilities.

As a result of the administration agreement betweenthe Fund and the Manager, the management agreementbetween the Operating Trust and the Manager and anoperating and management agreement between thePartnership and the Manager, Noranda has provided thefollowing administrative, management and operating services to the Fund:

Selling, general and administration 2004 2003

Salary and benefits $ 6,947 $ 6,626Support services 1,394 1,382Research and technology costs 803 (120)Operating and management

agreement management fee 255 250

Total $ 9,399 $ 8,138

During 2004, the Fund’s production expenses included$61,739 (2003 – $56,953) of salary, and benefits providedby the Manager.

The support services, which include administration,management and operating services are provided on a costrecovery basis in addition to an annual management fee of$255 in 2004 (2003 – $250). The annual management feeis adjusted by 2% per annum at the beginning of eachcalendar year.

As of December 31, 2004, the Fund, Operating Trustand the Partnership had a payable of $13,438 (2003 –$8,456) related to the administrative, management, andoperating and management agreements. This amount was included in accounts payable and accrued liabilities.

In addition to the related party transactions above, the Partnership undertakes transactions with various otherNoranda Group companies and divisions at terms thatreflect market rates. The following table summarizes therelated party transactions for the period.

2004 2003

SalesSales of zinc metal $ 15,940 $ 71,069Sales of byproducts 21,368 9,468

ExpensesPurchases of raw materials and

operating supplies $ 6,779 $ 7,350

Included in the accounts receivable as at December 31, 2004was $9,083 (2003 – $6,803) of amounts due from sales ofzinc metal and byproducts. Included in accounts payableand accrued liabilities as at December 31, 2004 was $802(2003 – $835) of amounts due to related parties, excludingamounts due under agreements identified above.

In 2003, $499 was paid to an affiliated company ofNoranda for agency services provided for the issuanceof the Notes.

All amounts due to and from related parties are non-interestbearing and are due in the ordinary course of business. Alltransactions with Noranda and affiliated companies are carriedout in the normal course of operations, and are recorded atan agreed-upon exchange amount.

14. ECONOMIC DEPENDENCEThe Processing Facility is dependent on key customers.The loss of a significant customer may have a materiallyadverse effect on the Fund’s financial position and resultsof operations.

15. SEGMENTED INFORMATIONThe Fund operates in one business segment, and all sales aremade from Canada and all assets are located in Canada.

Sales are attributed to customers based on their location.

2004 2003

Canada $ 121,045 $ 91,853United States 310,946 262,007Other 6,864 5,120

$ 438,855 $ 358,980

16. COMPARATIVE AMOUNTSCertain of the comparative figures have been reclassified toconform to the current year’s presentation.

Registrar and Transfer AgentFor information concerning monthlydistributions, unit certificates, etc., please contact:Computershare Trust Company of Canada1500 University Street, Suite 700Montreal, Quebec Canada H3A 3S8Tel: 1-800-564-6253Fax: 1-888-453-0330E-mail:[email protected]

Head Office181 Bay Street, Suite 200P.O. Box 755, BCE PlaceToronto, Ontario Canada M5J 2T3Tel: 416-982-7111Fax: 416-982-7348www.norandaincomefund.com

ContactMichael BooneChief Financial OfficerNoranda Income Fund’s ManagerTel.: 416-982-7188 E-mail: [email protected]

AuditorsErnst & Young LLPChartered AccountantsMontreal, Quebec

Canadian Electrolytic Zinc Limited,Noranda Income Fund’s Manager

Officers:Lucy RosatoPresident and Chief Executive Officer

Michael BooneChief Financial Officer

Reid BowlbyVice-President, Marketing

Ginette BerthelCorporate Secretary

Stock SymbolTSX: NIF.UN

CORPORATE INFORMATION

The annual meeting of unitholders will be held at 3:00 p.m. on April 28, 2005 in the Gallery Room at the TSX Broadcast & ConferenceCentre, The Exchange Tower, 130 King Street West, Toronto, Ontario.

Unit Trading InformationQ1/03 Q2/03 Q3/03 Q4/03

High $ 9.97 $ 10.30 $ 9.99 $ 11.98 Low $ 9.50 $ 9.55 $ 9.42 $ 9.95 Close $ 9.75 $ 9.80 $ 9.99 $ 11.64

Volume (units) 1,605,574 3,218,121 6,353,412 11,651,971 Market Capitalization ($M) $ 488 $ 490 $ 500 $ 582

Q1/04 Q2/04 Q3/04 Q4/04

High $ 12.09 $ 12.10 $ 11.88 $ 12.97 Low $ 10.26 $ 10.65 $ 10.30 $ 11.22 Close $ 12.09 $ 11.30 $ 11.20 $ 12.55

Volume (units) 5,991,817 4,871,095 3,858,260 4,979,325Market Capitalization ($M) $ 605 $ 565 $ 560 $ 628

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WE ARE: CLAUDE GENEST FRANCINE LAMBERT PETER RENAUD RICHARD PILON MAURICE VACHON ÉTIENNE LANTEIGNE MARC LADOUCEUR CLAUDE LITALIEN CHRISTIANPILOTE SERGE VALLÉE LOUIS BENOIT SERGE NADEAU MATTHIEU JOUBARNE MICHEL LEROUX LOUIS RANGER PATRICK CUERRIER ROGER JOUBARNE RICHARD LEBLANCMICHEL BARRETTE GÉRALD LEBOEUF DENIS LAMBERT DOMINIC THIBEAULT JEAN-GUY HACHE YVES GRENIER YVAN POISSON GUYLAINE BLAIS MARTIN HÉBERT GAÉTANCHAMPAGNE BENOIT PROULX PHILIPPE LUNARDI CHRISTIAN DION MICHEL LEMIEUX DANIEL LÉCUYER MARCEL GRONDIN CLAUDE LEDUC ANDRÉ ASSELIN RICHARD GAUTHIERFRANÇOIS BEAUDOIN DENIS MATHIEU MARIO ROCHEFORT RICHARD MÉNARD MARTIN DUMONT JEAN-PIERRE PILON PAUL CLERMONT CHRISTIAN DESCHÈSNES MAURICE VIAUJEAN-CHARLES LAVIGNE LUCIE CARDINAL PIERRE LEFEBVRE RENÉ CHARLEBOIS MAURICE VALLÉE CLAUDE ST-DENIS ALAIN HOULE MICHEL GARIÉPY MICHEL DAOUST MARCLEDUC MICHAEL BOONE JOCELYN LEPAGE STÉPHANE YELLE RAOUF MALLOUH FRANÇOIS PAYANT CLAUDE GENEST STEVE MIRON MAURICE GIGUÈRE DANIEL RICHARD SIMONMARTEL JACQUES GROLEAU JEAN-FRANÇOIS GAGNON MARTIN FILLION PIERRE DUPUIS MARIE-CLAUDE BLOUIN GILLES PICARD MICHEL POIRÉ SERGE POIRIER YOHANN MAHIETROBERT PROULX PIERRE BOULIANE JEAN-JACQUES LAVALLÉE RONALD PRÉGENT GILLES PILOTE JEAN-GUY BOILY JEAN TATONETTI SYLVAIN LARAMÉE STEVE LEFEBVRE YVESHÉBERT DANIEL CYR GILLES ST-CYR JOANNE PERREAULT FRANÇOIS LAROUCHE ANDRÉ LÉGER CHRISTIAN SÉGUIN ANDRÉ MATHIEU RICHARD LEFEBVRE DENIS HOUDE MARCPRUD'HOMME DANIEL HUNEAULT ÉRIC SAUVÉ REID BOWLBY PATRICK PAQUETTE JAMES BACON DENIS THIBEAULT ÉRIC VERREAULT SIMON POIRIER JOANNE BRUNET SERGEMASSEY BENOIT LEMAY JOCELYN PERRIER LUC CÔTÉ FRANÇOIS CLAIROUX ANNIE SAUVÉ ROGER PRÉGENT ROBERT PHARAND ÉRIC MICHAUD ALAIN PILON PASCALNORMANDEAU FIDÈLE GINGRAS LOUISE BENJAMIN CHRISTIAN LABELLE STEVE CLOUTIER DENIS LEFEBVRE DONALD TURCOTTE MARCEL JR. PROULX JEAN-LUC FORTIN STEVEBERTRAND PAUL-ÉMILE MAILLOUX STEVE PELLETIER ALAIN DEBELLEFEUILLE SERGE LANDRY RENÉ BROSSEAU GAÉTAN PÉPIN GINETTE BERTHEL LOUIS-MARIE CHIASSONANDRÉ BOURCIER JEAN-PIERRE BOUGIE DENIS CÔTÉ STÉPHANE RÉMILLARD DENIS LALONDE HUGO DUCHESNE STÉPHANE SAUVÉ SOPHIE BOISVERT GUY TRUDEL MARIODELORME LÉO GAGNÉ GILLES ALLEN LINDA GUIMOND RÉJEAN LAMBERT MICHEL HUDON MARIO POULIN DENIS PROVOST LOUIS-MARIE PILOTE ANDRÉ GIGUÈRE MARCCHALIFOUR GÉRALD GAUTHIER MICHEL METRAS JOCELYN FERRON CLAUDE NORMAND CHRISTIAN VINET CHRISTIAN LAROCHELLE FRANÇOIS DUMESNIL DENIS CHAREST

MICHEL DAOUST STÉPHANE PRÉGENT SÉBASTIEN BÉRUBÉ ANDRÉ MIRON GARY MONTEITH LAURENT LARIVIÈREPATRICE AUGER MARIO LUSSIER SYLVAIN ROBINEAU ALAIN LÉCUYER YVON TROTTIER MANON LEMIEUX CAROLEGRÉGOIRE MARTIN MALSERVISI MARC CAOUETTE RITA ARSENAULT MARCEL LEBOEUF MARIE-FRANCE BEAUMONT

DENIS BERGERON DANIEL AMYOT ALAIN GAULIN GILLES LALONDE GUY ST-LAURENT ALAIN PAQUETTE DON WELLS MARIE-PIER BÉDARD LUC GLAUDE GÉRARD DAOUST EUGÈNENAUD LOUIS RENAUD GILLES ANDRÉ MICHEL LECOMPTE YVES GILBERT JAMES WEDGE MICHEL PAQUETTE YVES LECOMPTE JACQUES CADIEUX JONATHAN LAPALME JULESBOYER ÉRIC COURCHESNE JACQUES NADON JOEL DESCHAMPS GUY DESCHAMPS JEAN-LUC DAOUST FRANCIS LATOUR MARK RENAUD ÉMILIEN CLOUTIER CLAUDE ANDRÉPIERRE PAUL BOULÉ PIERRE MYRE STEVE VERTH ÉRIC LAPRISE RICHARD MARCIL DANIEL LEBLANC DENIS BEAULIEU SERGE CAMPBELL LUC ARSENAULT CARL LEGAULTGLEN SEPÉRICH MARC DUCHESNE MICHEL AUDETTE ÉRIC PERRON SYLVAIN ST-AMANT ALAIN QUENNEVILLE JACQUES ARSENAULT SERGE DIGNARD NOEL MEUNIER GILBERTLÉGER ROBERT RENAUD LIONEL BRUNET BERNARD DESCHAMPS GAÉTAN BRAZEAU MICHEL LEBLANC PHILIPPE PARENTEAU MARCEL PELLETIER ÉRIC ST-ONGE MICHELDUPÉRÉ HÉLÈNE LAFOREST YVON RANCOURT MARC BERGERON JEAN PAUL DUBÉ MARIO GARAND FERNAND LEDUC ALAIN BRUNET LORRAINE QUENNEVILLE YVAN DUMESNILJACQUES ROBINEAU JACQUES GILBERT GÉRALD BÉDARD YVES PELLETIER CLAUDE MARION PIERRE RICHARD CLAUDE DUPRAS MICHEL CYR JEAN-MARIE PILOTE JACQUESVIGER DANIEL MOISE PIERRE GAUDREAU RICHARD CHARTRAND STEVE LACHANCE BRUNO GENDRON PIERRE DUMESNIL DANIEL FRAPPIER JACQUES PINSONNAULT YVESLAFLEUR JOCELYN ARCOUETTE LUC BASTIEN JENNY REYNOLDS DENIS THOMAS FRANÇOIS PARISIEN YVAN CHASSÉ NATHALIE BIRON MARTIN BARRIAULT MICHEL VACHONRAOUL CAZA MICHEL BRUNET ROBERT LARCHE RICHARD DOMPIERRE MICHEL CYR FRANÇOIS GERVAIS GAÉTAN LATOUR DANIEL DAVID GILBERT CARON MARIO GIRARDKARINE ALLARD SERGE POIRIER NICOLE LATREILLE RENÉ PRIMEAU RENÉ HUDON MICHEL RUEL NORMAND LEDUC YVES PROULX RICHARD BISSON RÉJEAN GENIER SYLVAINRODRIGUE JEAN-FRANÇOIS GAGNÉ DENIS LATOUR JOSÉE DUMOUCHEL CLAUDE LEDUC FRANÇOIS BRISSON JACQUES BÉRUBÉ RENAUD TREMBLAY JEAN-PIERRE FORTIERSERGE MAHEU STÉPHANE BOURGET LILIANE DUQUETTE DENIS SAUVÉ RÉAL DESROSIERS TIMMY THIBERT CLAUDE MORIN JEAN-MARC TURCOTTE PIERRE ROCHEFORTRAYNALD HUOT NICOLE SMITH RAYNALD SIMARD FRANÇOIS LAMOUREUX JEAN-GUY BERTRAND GÉRALD LAUZON ROBERT VAILLANCOURT YANNICK MONETTE MARIO CHEVRIERRAYMOND CARRIÈRE GILLES LEDUC MARTIN LEMIEUX WAYNE BROPHY TONY ALLEN GILLES CARPENTIER RICHARD PILON GÉRARD MORIN LUC HALLÉ GILLES LEMIEUX ROBERTDAOUST ADRIAN BOUFFARD LUC DENIGER JACQUES LABERGE YVAN LAVOIE DALE ORR MARC MORIN RICHARD BRAIS STÉPHANE LEDUC KEVIN THOMSON SYLVAIN CARDINALCAMILLE PILON DANIEL BEAUDRY GUY AUDETTE PATRICE LAFRAMBOISE MARC LÉGER DOMINIC MAHER SEAN O'CONNOR MARCEL CURADEAU JEAN GUY BOUCHARD STÉPHANEMCSWEEN EDOUARD SAMSON ROGER YELLE CLAUDE RANCOURT STÉPHANE CAPISTRAN PIERRE GAGNON MICHEL TOUPIN STÉPHANE PLOURDE ALAIN BRAZEAU MARTINGRENIER GAÉTAN MAILLOUX JEAN-DENIS GENDRON GUY PARENT ALAIN GIBEAULT ALAIN LARAMÉE MARIO FILION BERNARD BEAUDRY PAUL PILON JOCELYN DUMAS LUCYROSATO CLAUDE LEGAULT LUC SOUCISSE JEAN-MAURICE CARON YVES POULIN RONALD MC CAIG CLAUDE MERCIER SERGE LATOUR STÉPHANE RICHER MELISSA COMTOISSTÉPHANE CORRIVEAU RÉJEAN JOANNETTE DIANE PICARD JACQUES LAROCQUE MICHEL MAC DONALD GILBERT VINCENT JEAN-CLAUDE ROTHERY ROGER MARTEL SERGECOMTOIS HÉLÈNE BOILARD DIANE SÉGUIN YVAN THIBAULT FRANCIS CHOUINARD ALCIDE VIAU RICHARD CARON RAOUL DUVAL JACQUES DIGNARD NORMAND MARTINBERTRAND BRISSON GILLES MARTIN MICHEL VILLENEUVE MARIO KINGSBURY MICHEL LACROIX STEEVE TREMBLAY GÉRARD TREMBLAY STEVE PROULX GASPARD SIMARDJAMES ST-PIERRE MICHEL LEDUC DENIS ARSENAULT CLAUDE LÉCUYER PATRICK FRASER SERGE PAYEUR LYNE ARSENAULT GILLES AMESSE GAÉTAN ST-ONGE DENIS LOISELLEPIERRE LANIEL ANDRÉ BRUNETTE GUY QUEVILLON ANDRÉ LAPLANTE FRANÇOIS ROTHERY JEAN-FRANÇOIS LEDUC RÉJEAN LÉGER MARIO FRIGAULT ÉRIC SERGERIE SYLVAINCARIGNAN MICHEL LESSARD LAURENT WARLET PASCAL TAILLEFER GILLES GOYETTE JOCELYNE HOULE JEAN-PAUL BOILY JOCELYN ROBINEAULT MAURICE COURVAL GHISLAINLÉVESQUE RÉAL LÉGER ÉRIC POISSANT JEAN-PIERRE LUPIEN PIERRE MONTPETIT JEAN LAROCHELLE GERMAIN BILLETTE BENOIT BILODEAU SYLVAIN BRABANT SERGELEFEBVRE GAÉTAN SARAULT RENÉ GUERIN MICHEL LEMELIN DANNY FRANCOEUR FRANÇOIS POIRIER JEAN-PIERRE LEDUC LUC LEDUC MARTIN DUROCHER CLAUDE GINGRASBENOIT LEGAULT STEVEN DOUGLAS NORMAND CÔTÉ ROBERT QUENNEVILLE PIERRE ANDRÉ BERTRAND NORMAND MARCEL BOUGIE STEVE GOLLAIN YVES CORMIER ROBERTDUMONT MICHÈLE-HÉLÈNE LEBLANC JEAN BERLINGUETTE MARTIN GODIN BERNARD VÉZINA JACQUES ISABELLE BOB SIPPEL SYLVAIN LEPAGE YVAN LÉGER GILLES LATOURPIERRE LAFONTAINE JEAN-GUY CHASSÉ MARCEL DESROCHERS LOUISE C. COUTURE PATRICE DUBÉ DANIEL DAOUST NOEL AMYOT CLAUDE LEDUC FRANÇOIS PERRIER PIERREBOMBARDIER BRUNO FORTIER NORMAND BOUGIE LINDA JACKSON MICHEL PROULX CLAUDE RENÉ SYLVAIN LAVOIE DANIEL GALLANT DANY BEAUDOIN PIERRE THIBEAULTMANON DUMOUCHEL CLÉMENT HIMBEAULT ROBERT MONETTE SYLVAIN VACHON CHRISTINA BARBARESSO JEAN KRAOUSE MARCEL POIRIER RENATO TATONETTI FRANÇOISBARRETTE ROBERT BEAULIEU PIERRE BLANCHETTE JEAN-PIERRE PERRAS DENIS HALLÉ STEPHEN CHAMPAGNE DONALD GLAUDE GAÉTAN SAUVÉ MICHEL LAPERRIÈRE JOSÉELÉCUYER ANDRÉE-ANNE DROUIN RENÉ LAGACÉ ROGER GRENIER DENIS LAMBERT GENEVIÈVE CLAESSENS GILLES RODRIGUE FRANÇOIS D'ARCY MAURICE ROBERT SYLVIETHÉORET PIERRE THIBEAULT DANIEL MAHEU DANY BOUCHER BRUNO MAINVILLE SOPHIE POIRIER CLAIRE LEDUC LUC OLIGNY CLAUDE-ANDRÉ DAOUST ANIK MAJOR LUCARSENAULT LUC LAJEUNESSE LYNE GENDRON STÉPHANE TAILLEFER GEORGE JONES LLOYD NESTERUK CLAUDE MONGRAIN DENIS BRAULT PATRICK MILLETTE YVES GENDRONROGER LAUZON ALAIN SAVOIE PATRICK ALEXANDRE GILLES WARREN LEOPOLD DION JACQUES DUPLESSIS GILLES LECLERC ANGELA BERALDIN JULIE DAIGLE SYLVAIN TESSIERGEORGES HART RÉJEAN RODRIGUE SYLVAIN DUVAL MICHEL BEAUPRÉ GILLES LACOMBE JEAN DUPONT GAÉTAN CASTAGNIER STÉPHANE HALLÉ YVAN BOILEAU LISA DE WILDEANDRÉ MATHIEU YVES BOUGIE DENIS BAROLET DONALD GIGUÈRE SYLVAIN SEYER RÉMI BELLIVEAU RONALD BISSON GUY POISSON NANCY TURCOTTE JACQUES VERREAULTJOSÉE LEVAC CELINE JOUBERT RÉMI DAOUST GUY LANTEIGNE ANDRÉ AUDETTE ROBERT BENOIT REGIS POIRIER MANON CASTONGUAY RICHARD JEAN DIANE LAMOTHEJACQUES LECLERC MATHIEU LEGAULT DANIEL FORTIER GINETTE LABERGE GUY PARADIS SERGE THIBOUTOT SYLVAIN FORTIER MICHEL DAOUST PASCAL PAQUETTE FRANCEFOREST RONALD DUPONT MARTIN VIAU SYLVAIN BOISCLAIR NICOLE CHALIFOUR CLAUDE PAQUETTE SYLVIE GLAUDE MARYSE MARLEAU ÉRIC HALLÉ DENIS BOISVERT SYLVIELECOMPTE MARIO LAUZON JEAN-LOUIS HÉBERT JACQUES MARTEL GAÉTAN MARCIL PAUL QUESNEL JEAN-CLAUDE LAVOIE FRANÇOIS JANELLE JOCELYN FRASER ROGER GARONMARC BOULAIS ERNEST HACHÉ FRANÇOIS PICARD GAÉTAN DUROCHER DONALD PARISIEN GAÉTAN BOISVERT BENOIT DUPRAS JEAN-PIERRE POIRIER ANDRÉ LECLERC JACQUESBRIÈRE JEAN-FRANÇOIS DUROCHER DENIS NORMAND MICHEL CÔTÉ SERGE LALONDE JACQUES LEGAULT LISE GARAND CLAUDE RHÉAUME DENIS ROCHEFORT JACQUESPAULIN LUC DEBONVILLE MICHEL LAFLAMME CAROLE LAURIN DENIS HAMEL MARIO DESCHAMPS MARCEL GAGNÉ PIERRE GIGUÈRE LUC ST-ARNAUD GUY VALLÉE GUYMATHIEU NATALIE SAVOIE JEAN MATHIEU NINON LECOMPTE CHRISTOPHER JR. O'NEILL ANDRÉE LEVERT MICHEL LAVIGNE ELIZABETH GARDINER MARIO LAMBERT JEAN-CLAUDE LEGROS PASCAL CHIASSON LUC KINGSBURY JEAN MARC DION PIERRE LÉCUYER ROLLAND LEDUC JEAN-CLAUDE RICHER MARC SAURIOL JEAN-LOUIS BENOIT ROGERLEMAY MAURICE LAROCQUE SERGE SAVOIE BENOIT CHASSÉ GORDON DUKE ROGER BISSON DANIEL VAILLANCOURT ANDRÉ ROLLAND GUY DESGAGNÉS JEANNIN MARLEAULUCY ROUSSEAU ALAIN SCOTT GUY BÉLAIR FRANÇOIS VINET LUC ROBERGE JEAN-LUC BILODEAU DENIS PRIMEAU DIANE MESSIER DANIEL LÉGER ALAIN VEILLEUX JACQUOTLALONDE MICHAEL PERRON VICTOR POULIN CHRISTIAN BOURCIER JACQUES MATHIEU RICHARD VARRIEUR GAÉTAN LAUZON GAÉTAN MICHAUD GUY LECLAIR PAUL

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