##### 



EXHIBIT 99.3
 39
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 
 MANAGEMENTS REPORT
      -s- John W. Weaver
    
    -s- Pierre RougeauJOHN W. WEAVER
    
    PIERRE ROUGEAUPRESIDENT AND CHIEF EXECUTIVE OFFICER
    
    SENIOR VICE-PRESIDENT, CORPORATE DEVELOPMENTAND CHIEF FINANCIAL OFFICERFEBRUARY 28, 2006MONTRÉAL, QUÉBEC, CANADA
 
 AUDITORS REPORT
 To the Shareholders of Abitibi-Consolidated Inc.
    CHARTERED ACCOUNTANTS




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##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    40
 CONSOLIDATED STATEMENTS OF EARNINGS
   2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Sales
    
    
    5,342
    
    
    
    5,299
    
    
    
    4,980Cost of products sold, excluding amortization
    
    
    3,875
    
    
    
    3,777
    
    
    
    3,809Distribution costs
    
    
    591
    
    
    
    592
    
    
    
    555Countervailing and anti-dumping duties (note 3)
    
    
    67
    
    
    
    50
    
    
    
    77Selling, general and administrative expenses
    
    
    169
    
    
    
    169
    
    
    
    169Mill closure and other elements (note 5)
    
    
    37
    
    
    
    32
    
    
    
    67Amortization of plant and equipment (note 4 and note 14)
    
    
    863
    
    
    
    919
    
    
    
    641Amortization of intangible assets (note 15)
    
    
    16
    
    
    
    16
    
    
    
    16Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    21Operating loss from continuing operations
    
    
    (276
    )
    
    
    (256
    )
    
    
    (375
    )Financial
expenses (note 6)
    
    
    412
    
    
    
    375
    
    
    
    376Gain on translation of foreign currencies
    
    
    (101
    )
    
    
    (317
    )
    
    
    (739
    )Other
expenses (income) (note 7)
    
    
    10
    
    
    
    (16
    )
    
    
    8Loss from continuing operations before the following items
    
    
    (597
    )
    
    
    (298
    )
    
    
    (20
    )Income tax
recovery (note 9)
    
    
    (271
    )
    
    
    (176
    )
    
    
    (161
    )Share of earnings from investments subject to significant influence
    
    
    2
    
    
    
    6
    
    
    
    Non-controlling interests
    
    
    (29
    )
    
    
    (10
    )
    
    
    11Earnings (loss) from continuing operations
    
    
    (353
    )
    
    
    (126
    )
    
    
    152Earnings
from discontinued operations (note 8)
    
    
    3
    
    
    
    90
    
    
    
    23Net earnings (loss)
    
    
    (350
    )
    
    
    (36
    )
    
    
    175Per common
share (basic and diluted)
(note 22)Earnings (loss) from continuing operations
    
    
    (0.81
    )
    
    
    (0.29
    )
    
    
    0.35Net earnings (loss)
    
    
    (0.80
    )
    
    
    (0.08
    )
    
    
    0.40Weighted average number of common shares outstanding (in millions)
    
    
    440
    
    
    
    440
    
    
    
    440Common shares outstanding, end of year (in millions)
    
    
    440
    
    
    
    440
    
    
    
    440
 CONSOLIDATED STATEMENTS OF DEFICIT
   2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Deficit, beginning of year
    
    
    (481
    )
    
    
    (401
    )
    
    
    (499
    )Net earnings (loss)
    
    
    (350
    )
    
    
    (36
    )
    
    
    175Dividends declared
    
    
    (44
    )
    
    
    (44
    )
    
    
    (77
    )Deficit, end of year
    
    
    (875
    )
    
    
    (481
    )
    
    
    (401
    )




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##### 



41
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 CONSOLIDATED STATEMENTS OF CASH FLOWS
   2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Continuing operating activitiesEarnings (loss) from continuing operations
    
    
    (353
    )
    
    
    (126
    )
    
    
    152Amortization
    
    
    879
    
    
    
    935
    
    
    
    657Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    21Future income taxes (note 9)
    
    
    (194
    )
    
    
    (182
    )
    
    
    (160
    )Gain on translation of foreign currency long-term debt
    
    
    (154
    )
    
    
    (356
    )
    
    
    (824
    )Employee future benefits, excess of funding over expense
    
    
    (65
    )
    
    
    (116
    )
    
    
    (34
    )Long-term
portion of countervailing and anti-dumping duties receivable (note 3)
    
    
    
    
    
    
    (44
    )
    
    
    Non-cash mill closure elements
    
    
    19
    
    
    
    28
    
    
    
    Gain on disposal of asset (note 5 and note 7)
    
    
    (58
    )
    
    
    
    
    
    
    (5
    )Gain on disposal of investment (note 7)
    
    
    (2
    )
    
    
    (25
    )
    
    
    Share of earnings from investments subject to significant influence
    
    
    (2
    )
    
    
    (6
    )
    
    
    Non-controlling interests
    
    
    29
    
    
    
    10
    
    
    
    (11
    )Other non-cash items
    
    
    32
    
    
    
    25
    
    
    
    30131
    
    
    
    143
    
    
    
    (174
    )Changes in
non-cash operating working capital components
(note 10)
    
    
    33
    
    
    
    (146
    )
    
    
    193Cash flows from (used in) continuing operating activities
    
    
    164
    
    
    
    (3
    )
    
    
    19Financing activities of continuing operationsIncrease in long-term debt
    
    
    1,172
    
    
    
    1,004
    
    
    
    1,466Repayment of
long-term debt (note 19)
    
    
    (1,881
    )
    
    
    (766
    )
    
    
    (1,231
    )Financing fees
    
    
    (14
    )
    
    
    (9
    )
    
    
    (9
    )Cash contributions by non-controlling interests
    
    
    
    
    
    
    3
    
    
    
    32Dividends paid to shareholders
    
    
    (44
    )
    
    
    (55
    )
    
    
    (110
    )Dividends and cash distributions paid to non-controlling interests
    
    
    (31
    )
    
    
    (16
    )
    
    
    (5
    )Net proceeds
on issuance of shares (note 21)
    
    
    1
    
    
    
    
    
    
    
    2Cash flows from (used in) financing activities of continuing operations
    
    
    (797
    )
    
    
    161
    
    
    
    145Investing activities of continuing operationsAdditions to property, plant and equipment
    
    
    (177
    )
    
    
    (256
    )
    
    
    (229
    )Business
acquisitions, net of cash and cash equivalents (note 2)
    
    
    (13
    )
    
    
    8
    
    
    
    Acquisition of non-controlling interests (note 2)
    
    
    
    
    
    
    (7
    )
    
    
    Net proceeds on disposal of discontinued operations (note 2)
    
    
    693
    
    
    
    112
    
    
    
    Net proceeds
on disposal of investment (note 7)
    
    
    2
    
    
    
    57
    
    
    
    Net proceeds on disposal of property, plant and equipment and other assets
    
    
    64
    
    
    
    4
    
    
    
    7Investments
    
    
    
    
    
    
    (4
    )
    
    
    (31
    )Other
    
    
    (3
    )
    
    
    
    
    
    
    (22
    )Cash flows from (used in) investing activities of continuing operations
    
    
    566
    
    
    
    (86
    )
    
    
    (275
    )Cash generated by (used in) continuing operations
    
    
    (67
    )
    
    
    72
    
    
    
    (111
    )Cash
generated by discontinued operations (note 8)
    
    
    3
    
    
    
    15
    
    
    
    39Increase (decrease) in cash and cash equivalents
    
    
    (64
    )
    
    
    87
    
    
    
    (72
    )Foreign currency translation adjustment on cash
    
    
    (4
    )
    
    
    (5
    )
    
    
    (21
    )Cash and cash equivalents, beginning of year
    
    
    135
    
    
    
    53
    
    
    
    146Cash and cash equivalents, end of year
    
    
    67
    
    
    
    135
    
    
    
    53Cash and cash equivalents, end of year, related to:Continuing operations
    
    
    67
    
    
    
    115
    
    
    
    25Discontinued operations
    
    
    
    
    
    
    20
    
    
    
    2867
    
    
    
    135
    
    
    
    53




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##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    42
 CONSOLIDATED BALANCE SHEETS
   2005
    
    
    2004$
    
    
    $ASSETSCurrent assetsCash and cash equivalents (NOTE 11)
    
    
    67
    
    
    
    115Accounts receivable
    
    
    436
    
    
    
    380Inventories (NOTE 12)
    
    
    652
    
    
    
    675Prepaid expenses
    
    
    52
    
    
    
    58Current assets of discontinued operations (NOTE 2)
    
    
    
    
    
    
    1741,207
    
    
    
    1,402Property, plant and equipment (NOTE 14)
    
    
    4,260
    
    
    
    5,005Intangible assets (NOTE 15)
    
    
    473
    
    
    
    468Employee future benefits (NOTE 20)
    
    
    248
    
    
    
    176Future income taxes (NOTE 9)
    
    
    414
    
    
    
    389Other assets (NOTE 17)
    
    
    146
    
    
    
    145Goodwill (NOTE 16)
    
    
    1,296
    
    
    
    1,296Non-current assets of discontinued operations (NOTE 2)
    
    
    
    
    
    
    9068,044
    
    
    
    9,787LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesAccounts payable and accrued liabilities (NOTE 18)
    
    
    933
    
    
    
    882Long-term debt due within one year (NOTE 19)
    
    
    18
    
    
    
    491Current liabilities related to discontinued operations (NOTE 2)
    
    
    
    
    
    
    181951
    
    
    
    1,554Long-term debt (NOTE 19)
    
    
    3,744
    
    
    
    4,121Employee future benefits (NOTE 20)
    
    
    154
    
    
    
    150Future income taxes (NOTE 9)
    
    
    716
    
    
    
    853Non-controlling interests
    
    
    78
    
    
    
    83Non-current liabilities related to discontinued operations (NOTE 2)
    
    
    
    
    
    
    300Shareholders equityCapital stock (NOTE 21)
    
    
    3,518
    
    
    
    3,517Contributed surplus (NOTE 23)
    
    
    34
    
    
    
    26Deficit
    
    
    (875
    )
    
    
    (481
    )Foreign currency translation adjustment (NOTE 24)
    
    
    (276
    )
    
    
    (336
    )2,401
    
    
    
    2,7268,044
    
    
    
    9,787
    -s- John W. Weaver
    
    -s- Gary J. LukassenJOHN W. WEAVER
    
    GARY J. LUKASSENPRESIDENT AND CHIEF EXECUTIVE OFFICER
    
    CHAIRMAN OF THE AUDIT COMMITTEE




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##### 



43
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 CONSOLIDATED BUSINESS SEGMENTS
   Amortization
    
    
    Operating
    
    
    
    
    
    
    Additions
    
    
    Salesand
    
    
    profit
    
    
    
    
    
    
    to capital
    
    
    volumeSales
    
    
    impairment1
    
    
    (loss)1
    
    
    Assets
    
    
    assets
    
    
    (unaudited)$
    
    
    $
    
    
    $
    
    
    $
    
    
    $2005Newsprint
    
    
    2,892
    
    
    
    531
    
    
    
    (228
    )
    
    
    4,490
    
    
    
    70
    
    
    
    3,972
    aCommercial printing papers 2
    
    
    1,552
    
    
    
    297
    
    
    
    (89
    )
    
    
    2,701
    
    
    
    69
    
    
    
    1,782
    aWood products 3
    
    
    898
    
    
    
    51
    
    
    
    41
    
    
    
    853
    
    
    
    38
    
    
    
    1,965
    bContinuing operations
    
    
    5,342
    
    
    
    879
    
    
    
    (276
    )
    
    
    8,044
    
    
    
    1772004Newsprint
    
    
    2,795
    
    
    
    702
    
    
    
    (362
    )
    
    
    5,011
    
    
    
    96
    
    
    
    3,971
    aCommercial printing papers 2
    
    
    1,479
    
    
    
    177
    
    
    
    (52
    )
    
    
    2,901
    
    
    
    141
    
    
    
    1,738
    aWood products 3
    
    
    1,025
    
    
    
    56
    
    
    
    158
    
    
    
    795
    
    
    
    19
    
    
    
    2,169
    bContinuing operations
    
    
    5,299
    
    
    
    935
    
    
    
    (256
    )
    
    
    8,707
    
    
    
    2562003Newsprint
    
    
    2,761
    
    
    
    423
    
    
    
    (232
    )
    
    
    
    
    
    
    72
    
    
    
    4,061
    aCommercial printing papers 2
    
    
    1,487
    
    
    
    176
    
    
    
    (57
    )
    
    
    
    
    
    
    128
    
    
    
    1,727
    aWood products 3
    
    
    732
    
    
    
    79
    
    
    
    (86
    )
    
    
    
    
    
    
    29
    
    
    
    1,930
    bContinuing operations
    
    
    4,980
    
    
    
    678
    
    
    
    (375
    )
    
    
    
    
    
    
    229
  Amortization
    
    
    Operatingand impairment
    
    
    expenses$
    
    
    $2005Newsprint
    
    
    247
    
    
    
    98Commercial printing papers 2
    
    
    124
    
    
    
    (53
    )Wood products
    
    
    
    
    
    
    1371
    
    
    
    462004Newsprint
    
    
    364
    
    
    
    25Commercial printing papers 2
    
    
    
    
    
    
    14Wood products
    
    
    
    
    
    
    (32
    )364
    
    
    
    72003Newsprint
    
    
    67
    
    
    
    50Commercial printing papers 2
    
    
    
    
    
    
    17Wood products
    
    
    21
    
    
    
    88
    
    
    
    67
 For the year ended December 31, 2005, operating loss for the
Newsprint segment includes $89 million of mill closure and other
elements, asset write downs of $247 million and $9 million of early
retirement program and labour force reductions (2004  $25 million of
mill closure and other elements and $364 million of asset write downs,
2003  $50 million of mill closure and other elements and $67 million of
asset write downs).For the year ended December 31, 2005, operating loss for the
Commercial printing papers segment includes a gain on sale of
timberlands of $53 million and asset write downs of $124 million (2004 
$7 million of mill closure and other elements and $7 million of start-up
costs, 2003  $17 million of mill closure and other elements).For the year ended December 31, 2005, operating profit (loss) for the
Wood products segment includes $1 million of mill closure and other
elements (2004  $32 million of countervailing and anti-dumping credit,
2003  $21 million of goodwill impairment charge).2
    
    Previously reported as Value-added groundwood papers.3
    
    Wood products sales are presented net of inter-segment sales of
$172 million in 2005 (2004-$177 million, 2003-$189 million).a
    
    In thousands of tonnesb
    
    In millions of board feet




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##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    44
 CONSOLIDATED GEOGRAPHIC SEGMENTS
  1
  Capitalassets andSales
    
    
    goodwill$
    
    
    $2005Canada
    
    
    4,417
    
    
    
    4,587United States
    
    
    741
    
    
    
    1,192Other countries
    
    
    184
    
    
    
    250Continuing operations
    
    
    5,342
    
    
    
    6,0292004Canada
    
    
    4,453
    
    
    
    5,046United States
    
    
    663
    
    
    
    1,439Other countries
    
    
    183
    
    
    
    284Continuing operations
    
    
    5,299
    
    
    
    6,7692003Canada
    
    
    4,094United States
    
    
    687Other countries
    
    
    199Continuing operations
    
    
    4,980
   2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Canada
    
    
    710
    
    
    
    817
    
    
    
    732United States
    
    
    3,547
    
    
    
    3,508
    
    
    
    3,299Other countries
    
    
    1,085
    
    
    
    974
    
    
    
    949Continuing operations
    
    
    5,342
    
    
    
    5,299
    
    
    
    4,980
 1
    
    Capital assets include property, plant and equipment and intangible assets.




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##### 



45
    
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORTNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  PRINCIPLES OF CONSOLIDATION
  BUSINESS OF THE COMPANY
     USE OF ESTIMATES




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##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    
    46NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 REVENUE
  TRANSLATION OF FOREIGN CURRENCIES
 SELF-SUSTAINING FOREIGN OPERATIONS
  TRANSLATION OF OTHER FOREIGN CURRENCY TRANSACTIONS
   CASH AND CASH EQUIVALENTS
  ACCOUNTS RECEIVABLE
   INVENTORIES
   INVESTMENTS




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##### 



47
    
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORTNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 PROPERTY, PLANT AND EQUIPMENT AND AMORTIZATION
   YearsBuildings, pulp and paper mill production equipment
    
    
    20 - 25Sawmill production equipment
    
    
    10 - 12Woodlands, roads, timberlands, camps and equipment
    
    
    10 - 20Hydroelectric power plants
    
    
    40
  INTANGIBLE ASSETS AND AMORTIZATION
  YearsWater rights
    
    
    40Cutting rights
    
    
    25 - 33
 IMPAIRMENT OF LONG-LIVED ASSETS
  OTHER ASSETS
  GOODWILL
  ENVIRONMENTAL COSTS




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##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    
    48NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 ASSET RETIREMENT OBLIGATIONS
  EMPLOYEE FUTURE BENEFITS
 PENSION BENEFIT PLANS
  
    
    the cost of pension benefits provided in exchange of employees services
rendered during the year;
    
    the interest cost of pension obligations;
    
    the expected long-term
return on pension fund assets, which is based on a market-related value determined using a five-year moving average market value for equity securities and fair value for other asset classes;
    
    gains or losses on settlements, curtailments and special early retirement;
    
    the straight-line
amortization of past service costs and plan amendments over the average remaining service period of
the active employee group covered by the plans (approximately 11 years); and
    
    the amortization of
cumulative unrecognized net actuarial gains and losses in excess of 10% of the greater of the
accrued benefit obligation or market-related value of plan assets, at the beginning of the year,
over the average remaining service period of the active employee group covered by the plans.
  OTHER BENEFIT PLANS
  INCOME TAXES
    STOCK-BASED COMPENSATION PLANS




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##### 



49
    
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORTNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 DERIVATIVE INSTRUMENTS
     CHANGES IN ACCOUNTING POLICIES
 CONSOLIDATION OF VARIABLE INTEREST ENTITIES
 Consolidation of Variable
Interest Entities
 ACCOUNTING PRINCIPLES ISSUED BUT NOT YET IMPLEMENTED
 FINANCIAL INSTRUMENTS, HEDGES AND COMPREHENSIVE INCOME
 Financial
Instruments  Recognition and
Measurement Hedges Comprehensive Income
 COMPARATIVE FIGURES
  2. ACQUISITIONS AND DIVESTITURE
 2005
 DIVESTITURE
  ACQUISITION




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##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    
    50NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 2. ACQUISITIONS AND DIVESTITURE (CONTINUED)
 2004
 ACQUISITION OF NON-CONTROLLING INTERESTS
  BUSINESS ACQUISITIONS
     2005
    
    
    2004Net assets
    
    
    Net assets
    
    
    Net liabilitiessold
    
    
    acquired
    
    
    assumed$
    
    
    $
    
    
    $Net assets acquired, net liabilities assumed or net assets soldCurrent assets, excluding cash and cash equivalents
    
    
    174
    
    
    
    8
    
    
    
    21Property, plant and equipment
    
    
    814
    
    
    
    5
    
    
    
    78Intangible assets
    
    
    5
    
    
    
    21
    
    
    
    Other non-current assets
    
    
    4
    
    
    
    
    
    
    
    1Goodwill
    
    
    75
    
    
    
    
    
    
    
    4Current liabilities
    
    
    (81
    )
    
    
    (1
    )
    
    
    (11
    )Long-term debt
    
    
    (346
    )
    
    
    (1
    )
    
    
    (37
    )Employee future benefits
    
    
    
    
    
    
    
    
    
    
    (9
    )Future income tax liabilities
    
    
    (46
    )
    
    
    (8
    )
    
    
    Non-controlling interests
    
    
    (33
    )
    
    
    
    
    
    
    (55
    )Foreign currency translation adjustment
    
    
    120
    
    
    
    
    
    
    
    Fair value of net assets acquired or net liabilities assumed
or carrying value of net assets sold
    
    
    686
    
    
    
    24
    
    
    
    (8
    )Consideration paid (received)Cash (net of cash and cash equivalents)
    
    
    (689
    )
    
    
    13
    
    
    
    (8
    )Transaction costs payable
    
    
    (4
    )
    
    
    
    
    
    
    Carrying amount of investment in Gestofor Inc.
    
    
    
    
    
    
    11
    
    
    
    (693
    )
    
    
    24
    
    
    
    (8
    )




---



##### 



51
    
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORTNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 3. COUNTERVAILING AND ANTI-DUMPING DUTIES
   4. IMPAIRMENT OF LONG-LIVED ASSETS
 2005
  2004




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    
    52NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 5. MILL CLOSURE AND OTHER ELEMENTS
 2005
  2004
     2003
   2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Severance and other labour-related costs
    
    
    32
    
    
    
    3
    
    
    
    64Defined benefit pension and other benefits cost
    
    
    12
    
    
    
    
    
    
    
    Inventory obsolescence
    
    
    18
    
    
    
    17
    
    
    
    Asset retirement obligations related to environmental matters
    
    
    12
    
    
    
    11
    
    
    
    Gain on sale of timberlands
    
    
    (53
    )
    
    
    
    
    
    
    Gain on sale of air emission credits
    
    
    
    
    
    
    (8
    )
    
    
    Contractual obligations
    
    
    10
    
    
    
    
    
    
    
    Costs incurred for idling and other
    
    
    6
    
    
    
    9
    
    
    
    337
    
    
    
    32
    
    
    
    67




---



##### 



53
    
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORTNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Mill closure elements provision, beginning of year
    
    
    17
    
    
    
    62
    
    
    
    15Mill closure elements incurred during the year
    
    
    49
    
    
    
    12
    
    
    
    67Payments
    
    
    (28
    )
    
    
    (57
    )
    
    
    (20
    )Mill closure elements provision, end of year
    
    
    38
    
    
    
    17
    
    
    
    62
  6. FINANCIAL EXPENSES
 2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Interest on long-term debt
    
    
    376
    
    
    
    363
    
    
    
    370Amortization of deferred financing fees
    
    
    11
    
    
    
    8
    
    
    
    6Premium on early retirement of debt and other elements related
to early debt retirement
    
    
    32
    
    
    
    
    
    
    
    Interest income
    
    
    (17
    )
    
    
    (3
    )
    
    
    (7
    )Other
    
    
    10
    
    
    
    7
    
    
    
    7412
    
    
    
    375
    
    
    
    376
   7. OTHER EXPENSES (INCOME)
 2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Discount on sale of accounts receivable (NOTE 25 C)
    
    
    17
    
    
    
    7
    
    
    
    8Gain on disposal of investment
    
    
    (2
    )
    
    
    (25
    )
    
    
    Gain on disposal of other assets
    
    
    
    
    
    
    
    
    
    
    (2
    )Other
    
    
    (5
    )
    
    
    2
    
    
    
    210
    
    
    
    (16
    )
    
    
    8




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    
    54NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 8. DISCONTINUED OPERATIONS
  
 2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Sales
    
    
    430
    
    
    
    502
    
    
    
    470Operating profit
    
    
    33
    
    
    
    37
    
    
    
    49Financial expenses
    
    
    13
    
    
    
    13
    
    
    
    13Gain (loss) on
disposal of
business, net of
income taxes of $13
million
(2004  expense
of $15 million,
2003  recovery
of $1 million)
    
    
    (10
    )
    
    
    75
    
    
    
    (3
    )Earnings from
discontinued
operations
    
    
    3
    
    
    
    90
    
    
    
    23Earnings per common
share from
discontinued
operations
    
    
    0.01
    
    
    
    0.21
    
    
    
    0.05
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Cash flows from operating activities
    
    
    36
    
    
    
    69
    
    
    
    42Cash flows from financing activities
    
    
    33
    
    
    
    78
    
    
    
    34Cash flows used in investing activities
    
    
    (66
    )
    
    
    (132
    )
    
    
    (37
    )Cash flows generated by discontinued operations
    
    
    3
    
    
    
    15
    
    
    
    39
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $NewsprintSales
    
    
    354
    
    
    
    410
    
    
    
    393Amortization
    
    
    40
    
    
    
    40
    
    
    
    41Operating profit
    
    
    26
    
    
    
    30
    
    
    
    42Additions to capital assets
    
    
    64
    
    
    
    128
    
    
    
    34Commercial printing papersSales
    
    
    76
    
    
    
    92
    
    
    
    77Amortization
    
    
    6
    
    
    
    7
    
    
    
    5Operating profit
    
    
    7
    
    
    
    7
    
    
    
    7Additions to capital assets
    
    
    1
    
    
    
    2
    
    
    
    3




---



##### 



55
    
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORTNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 9. INCOME TAXES
 A) RECONCILIATION OF INCOME TAXES
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Income tax
recovery based on combined basic Canadian federal and provincial tax
rates
    
    
    (189
    )
    
    
    (97
    )
    
    
    (7
    )Manufacturing and processing allowances
    
    
    3
    
    
    
    (7
    )
    
    
    Difference in tax rates for foreign subsidiaries
    
    
    (6
    )
    
    
    (8
    )
    
    
    (17
    )Charge from change in tax rates
    
    
    38
    
    
    
    
    
    
    
    10Non-taxable portion of foreign exchange gain
    
    
    (30
    )
    
    
    (45
    )
    
    
    (88
    )Canadian large corporations tax
    
    
    6
    
    
    
    7
    
    
    
    8Re-evaluation of current and future income tax assets and liabilities
    
    
    (29
    )
    
    
    (17
    )
    
    
    (72
    )Tax exempt items
    
    
    (50
    )
    
    
    12
    
    
    
    13Non-taxable portion of gain on disposal of capital assets
    
    
    (11
    )
    
    
    
    
    
    
    Other
    
    
    (3
    )
    
    
    (21
    )
    
    
    (8
    )Income tax recovery
    
    
    (271
    )
    
    
    (176
    )
    
    
    (161
    )Effective income tax rate
    
    
    (45
    %)
    
    
    (59
    %)
    
    
    (792
    %)
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Current income tax expense (recovery)
    
    
    (77
    )
    
    
    6
    
    
    
    (1
    )Future income tax expense (recovery) relating to origination
and reversal of timing differences
    
    
    (198
    )
    
    
    (117
    )
    
    
    67Future income tax recovery relating to operating loss carry forwards
    
    
    (34
    )
    
    
    (65
    )
    
    
    (237
    )Future income tax charge resulting from rate changes
    
    
    38
    
    
    
    
    
    
    
    10Income tax recovery
    
    
    (271
    )
    
    
    (176
    )
    
    
    (161
    )
 B) COMPONENTS OF FUTURE INCOME TAX ASSETS AND LIABILITIES
  2005
    
    
    2004$
    
    
    $Future income tax assetsLoss carry forwards
    
    
    870
    
    
    
    852870
    
    
    
    852Future income tax liabilitiesProperty, plant and equipment and intangible assets
    
    
    (972
    )
    
    
    (1,154
    )Other
    
    
    (200
    )
    
    
    (162
    )(1,172
    )
    
    
    (1,316
    )(302
    )
    
    
    (464
    )Classified in the consolidated balance sheets asNet non-current future income tax assets
    
    
    414
    
    
    
    389Net non-current future income tax liabilities
    
    
    (716
    )
    
    
    (853
    )(302
    )
    
    
    (464
    )




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    
    56NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED DECEMBER 31, 2005, 2004 AND 2003(IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE NOTED)
 9. INCOME TAXES (CONTINUED)
 C) LOSS CARRY FORWARDS
 CANADA AND PROVINCIAL TAX JURISDICTIONS
  UNITED STATES FEDERAL AND STATE TAX JURISDICTIONS
  OTHER TAX JURISDICTIONS
   D) GEOGRAPHIC INFORMATION RELATED TO INCOME TAXES
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Domestic
    
    
    (460
    )
    
    
    (27
    )
    
    
    209Foreign
    
    
    (137
    )
    
    
    (271
    )
    
    
    (229
    )(597
    )
    
    
    (298
    )
    
    
    (20
    )
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Current income taxesDomestic
    
    
    (80
    )
    
    
    5
    
    
    
    (2
    )Foreign
    
    
    3
    
    
    
    1
    
    
    
    1(77
    )
    
    
    6
    
    
    
    (1
    )Future income taxesDomestic
    
    
    (139
    )
    
    
    (70
    )
    
    
    (44
    )Foreign
    
    
    (55
    )
    
    
    (112
    )
    
    
    (116
    )(194
    )
    
    
    (182
    )
    
    
    (160
    )Income tax recovery
    
    
    (271
    )
    
    
    (176
    )
    
    
    (161
    )




---



##### 



57
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 E) OTHER DISCLOSURES
   10. SUPPLEMENTAL CASH FLOW INFORMATION
 2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Changes in
non-cash operating working capital from continuing operationsAccounts receivable
    
    
    (51
    )
    
    
    (87
    )
    
    
    196Inventories
    
    
    7
    
    
    
    35
    
    
    
    15Prepaid expenses
    
    
    4
    
    
    
    (9
    )
    
    
    8Accounts payable and accrued liabilities
    
    
    73
    
    
    
    (85
    )
    
    
    (26
    )33
    
    
    
    (146
    )
    
    
    193
 11. CASH AND CASH EQUIVALENTS
 2005
    
    
    2004$
    
    
    $Cash
    
    
    51
    
    
    
    53Cash equivalents
    
    
    16
    
    
    
    6267
    
    
    
    115
 12. INVENTORIES
 2005
    
    
    2004$
    
    
    $Newsprint and commercial printing papers
    
    
    88
    
    
    
    143Wood products
    
    
    108
    
    
    
    98Logs, chips and other raw materials
    
    
    239
    
    
    
    212Production and maintenance supplies
    
    
    217
    
    
    
    222652
    
    
    
    675




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    58
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 13. INVESTMENTS IN JOINT VENTURES
   CONDENSED STATEMENTS OF EARNINGS
 2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Sales
    
    
    76
    
    
    
    136
    
    
    
    169Operating expenses
    
    
    70
    
    
    
    116
    
    
    
    158Operating profit
    
    
    6
    
    
    
    20
    
    
    
    11Non-operating expenses
    
    
    3
    
    
    
    5
    
    
    
    7Net earnings
    
    
    3
    
    
    
    15
    
    
    
    4
 CONDENSED STATEMENTS OF CASH FLOWS
 2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Cash flows from operating activities
    
    
    8
    
    
    
    20
    
    
    
    20Cash flows used in financing activities
    
    
    (1
    )
    
    
    (7
    )
    
    
    (5
    )Cash flows used in investing activities
    
    
    (1
    )
    
    
    (37
    )
    
    
    (5
    )
 CONDENSED BALANCE SHEETS
 2005
    
    
    2004$
    
    
    $AssetsCurrent assets
    
    
    20
    
    
    
    19Property, plant and equipment, intangible assets and other non-current assets
    
    
    41
    
    
    
    41LiabilitiesCurrent liabilities
    
    
    9
    
    
    
    5Long-term debt (including current portion)
    
    
    24
    
    
    
    25Other non-current liabilities
    
    
    1
    
    
    
    1




---



##### 



59
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 14. PROPERTY, PLANT AND EQUIPMENT
 2005
    
    
    2004Accumulated
    
    
    Net book
    
    
    
    
    
    
    Accumulated
    
    
    Net bookCost
    
    
    amortization
    
    
    value
    
    
    Cost
    
    
    amortization
    
    
    value$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Buildings, pulp and paper mill
production equipment
    
    
    6,793
    
    
    
    3,331
    
    
    
    3,462
    
    
    
    7,065
    
    
    
    2,853
    
    
    
    4,212Sawmill production equipment
    
    
    625
    
    
    
    428
    
    
    
    197
    
    
    
    607
    
    
    
    397
    
    
    
    210Woodlands, roads, timberlands,
camps and equipment
    
    
    327
    
    
    
    143
    
    
    
    184
    
    
    
    320
    
    
    
    136
    
    
    
    184Hydroelectric power plants
    
    
    534
    
    
    
    123
    
    
    
    411
    
    
    
    504
    
    
    
    105
    
    
    
    399Construction in progress
    
    
    6
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    8,285
    
    
    
    4,025
    
    
    
    4,260
    
    
    
    8,496
    
    
    
    3,491
    
    
    
    5,005
      15. INTANGIBLE ASSETS
 2005
    
    
    2004Accumulated
    
    
    Net book
    
    
    
    
    
    
    Accumulated
    
    
    Net bookCost
    
    
    amortization
    
    
    value
    
    
    Cost
    
    
    amortization
    
    
    value$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Water rights
    
    
    500
    
    
    
    72
    
    
    
    428
    
    
    
    500
    
    
    
    58
    
    
    
    442Cutting rights
    
    
    97
    
    
    
    52
    
    
    
    45
    
    
    
    76
    
    
    
    50
    
    
    
    26597
    
    
    
    124
    
    
    
    473
    
    
    
    576
    
    
    
    108
    
    
    
    468




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    60
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 16. GOODWILL
 2005
    
    
    2004Commercial
    
    
    
    
    
    
    
    
    
    
    CommercialNewsprint
    
    
    printing papers
    
    
    Total
    
    
    Newsprint
    
    
    printing papers
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Goodwill, beginning of year
    
    
    857
    
    
    
    439
    
    
    
    1,296
    
    
    
    891
    
    
    
    403
    
    
    
    1,294Acquisition (note 2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Goodwill reallocation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36
    )
    
    
    36
    
    
    
    Foreign exchange adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Goodwill, end of year
    
    
    857
    
    
    
    439
    
    
    
    1,296
    
    
    
    857
    
    
    
    439
    
    
    
    1,296
 ®
 17. OTHER ASSETS
 2005
    
    
    2004$
    
    
    $Countervailing and anti-dumping duties receivable of US$52 million (2004  US$37 million)(NOTE 3)
    
    
    60
    
    
    
    44Investments (note 7)
    
    
    9
    
    
    
    20Deferred financing fees
    
    
    46
    
    
    
    44Other
    
    
    31
    
    
    
    37146
    
    
    
    145
 18. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
  2005
    
    
    2004$
    
    
    $Trade payable
    
    
    428
    
    
    
    391Payroll-related liabilities
    
    
    75
    
    
    
    70Compensated absences accrued
    
    
    81
    
    
    
    84Accrued interest
    
    
    78
    
    
    
    103Stumpage fees and silviculture payable
    
    
    35
    
    
    
    21Freight payable
    
    
    30
    
    
    
    34Payable on capital projects
    
    
    21
    
    
    
    24Provision for environment
    
    
    23
    
    
    
    22Income and other taxes payable
    
    
    55
    
    
    
    57Provision for mill closure elements (NOTE 5)
    
    
    38
    
    
    
    17Provision for asset retirement obligations
    
    
    24
    
    
    
    11Other
    
    
    45
    
    
    
    48933
    
    
    
    882




---



##### 



61
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 19. LONG-TERM DEBT
 A) RECOURSE
 2005
    
    
    2004$

    
    
    $Canadian and U.S. revolving facilities bearing interest at floating rates based on bankers
acceptance, prime, U.S. base rate or LIBOR, maturing in 2008
    
    
    70
    
    
    
    US$401 million 8.30% notes matured on August 1, 2005
    
    
    
    
    
    
    483US$15 million 6.95% notes due December 15, 2006 (2004  US$300 million)
    
    
    17
    
    
    
    361US$61 million 7.625% notes due May 15, 2007 (2004  US$200 million)
    
    
    71
    
    
    
    240US$200 million 6.95% notes due April 1, 2008 (2004  US$250 million)
    
    
    225
    
    
    
    286US$150 million 5.25% notes due June 20, 2008
    
    
    175
    
    
    
    180US$150 million 7.875% notes due August 1, 2009 (2004  US$250 million)
    
    
    171
    
    
    
    294US$395 million 8.55% notes due August 1, 2010 (2004  US$500 million)
    
    
    460
    
    
    
    601US$200 million 7.75% notes due June 15, 2011
    
    
    233
    
    
    
    240US$200 million, three-month LIBOR plus 3.5% floating-rate notes due June 15, 2011
    
    
    233
    
    
    
    240US$350 million 6.00% notes due June 20, 2013
    
    
    407
    
    
    
    421US$450 million 8.375% notes due April 1, 2015
    
    
    523
    
    
    
    US$100 million 7.40% debentures due April 1, 2018
    
    
    101
    
    
    
    104US$250 million 7.50% debentures due April 1, 2028
    
    
    241
    
    
    
    248US$250 million 8.50% debentures due August 1, 2029
    
    
    274
    
    
    
    283US$450 million 8.85% debentures due August 1, 2030
    
    
    523
    
    
    
    541Other
    
    
    14
    
    
    
    143,738
    
    
    
    4,536Less: Due within one year
    
    
    17
    
    
    
    4833,721
    
    
    
    4,053




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    62
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 19. LONG-TERM DEBT (CONTINUED)
 B) NON-RECOURSE
  2005
    
    
    2004$
    
    
    $Augusta7.70% senior secured notes, maturing in 2007 (2004  US$44 million)
    
    
    
    
    
    
    51Other
    
    
    24
    
    
    
    2524
    
    
    
    76Less: Due within one year
    
    
    1
    
    
    
    823
    
    
    
    68
  C) SCHEDULED LONG-TERM DEBT REPAYMENTS
 Non-Recourse
    
    
    recoursedebt
    
    
    debt$
    
    
    $2006
    
    
    17
    
    
    
    12007
    
    
    71
    
    
    
    12008
    
    
    470
    
    
    
    12009
    
    
    175
    
    
    
    12010
    
    
    463
    
    
    
    1Thereafter
    
    
    2,542
    
    
    
    193,738
    
    
    
    24
 D) FAIR VALUE OF LONG-TERM DEBT
  2005
    
    
    2004$
    
    
    $Recourse
    
    
    3,504
    
    
    
    4,717Non-recourse
    
    
    24
    
    
    
    763,528
    
    
    
    4,793
 20. EMPLOYEE FUTURE BENEFITS
 A) DEFINED CONTRIBUTION PLANS




---



##### 



63
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 B) DEFINED BENEFIT PLANS
  C) OTHER BENEFIT PLANS
  D) DESCRIPTION OF FUND ASSETS
  Targetallocation
    
    
    2005
    
    
    2004%
    
    
    %
    
    
    %Debt securities
    
    
    49
    
    
    
    49
    
    
    
    49Equity and other securities
    
    
    51
    
    
    
    51
    
    
    
    51100
    
    
    
    100
    
    
    
    100
 E) FUNDING POLICY
 The Company makes contributions that are required to provide for benefits earned in the year
and fund past service
obligations over periods not exceeding those permitted by the applicable regulatory authorities.
    F) INVESTMENT POLICY
  G) EXPECTED RETURN ON ASSETS ASSUMPTION




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##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    64
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 20. EMPLOYEE FUTURE BENEFITS (CONTINUED)
 H) INFORMATION ABOUT THE COMPANYS DEFINED BENEFIT PENSION PLANS AND OTHER BENEFIT PLANS IN
AGGREGATE
  Pension benefit plans
    
    
    Other benefit plans2005
    
    
    2004
    
    
    2005
    
    
    2004$
    
    
    $
    
    
    $
    
    
    $Change in accrued benefit obligationAccrued benefit obligation, beginning of year
    
    
    3,771
    
    
    
    3,407
    
    
    
    219
    
    
    
    171Service cost
    
    
    85
    
    
    
    80
    
    
    
    3
    
    
    
    2Interest cost
    
    
    222
    
    
    
    212
    
    
    
    13
    
    
    
    13Plan amendments
    
    
    10
    
    
    
    83
    
    
    
    20
    
    
    
    12Actuarial loss on accrued benefit obligation
    
    
    354
    
    
    
    193
    
    
    
    23
    
    
    
    28Curtailment and special early retirement
    
    
    (6
    )
    
    
    (13
    )
    
    
    (3
    )
    
    
    3Settlement
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    Business acquisition
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    11Foreign exchange gain
    
    
    (23
    )
    
    
    (15
    )
    
    
    (4
    )
    
    
    (5
    )Benefits paid
    
    
    (237
    )
    
    
    (218
    )
    
    
    (15
    )
    
    
    (16
    )Accrued benefit obligation, end of year
    
    
    4,167
    
    
    
    3,771
    
    
    
    256
    
    
    
    219Change in fair value of plan assetsFair value of plan assets, beginning of year
    
    
    2,992
    
    
    
    2,711
    
    
    
    
    
    
    
    Actual return on plan assets
    
    
    350
    
    
    
    265
    
    
    
    
    
    
    
    Employers contributions
    
    
    180
    
    
    
    182
    
    
    
    15
    
    
    
    16Plan participants contributions
    
    
    30
    
    
    
    26
    
    
    
    
    
    
    
    Benefits paid
    
    
    (237
    )
    
    
    (218
    )
    
    
    (15
    )
    
    
    (16
    )Settlement
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    Business acquisition
    
    
    
    
    
    
    34
    
    
    
    
    
    
    
    Foreign exchange loss and other
    
    
    (13
    )
    
    
    (8
    )
    
    
    
    
    
    
    Fair value of plan assets, end of year
    
    
    3,293
    
    
    
    2,992
    
    
    
    
    
    
    
    Funded status of the plansFunded status of the plans (deficit)
    
    
    (874
    )
    
    
    (779
    )
    
    
    (256
    )
    
    
    (219
    )Unrecognized prior service cost
    
    
    100
    
    
    
    113
    
    
    
    26
    
    
    
    8Unrecognized actuarial loss
    
    
    1,022
    
    
    
    842
    
    
    
    75
    
    
    
    60Other components
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Net amount recognized in balance sheets
    
    
    248
    
    
    
    176
    
    
    
    (154
    )
    
    
    (150
    )
  Pension benefit plans
    
    
    Other benefit plans2005
    
    
    2004
    
    
    2005
    
    
    2004$
    
    
    $
    
    
    $
    
    
    $Accrued benefit obligation
    
    
    3,991
    
    
    
    3,568
    
    
    
    256
    
    
    
    219Fair value of plan assets
    
    
    3,108
    
    
    
    2,780
    
    
    
    
    
    
    
    883
    
    
    
    788
    
    
    
    256
    
    
    
    219




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##### 



65
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 I) COMPONENTS OF PERIODIC COST FOR DEFINED BENEFIT PENSION AND OTHER BENEFIT PLANS
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Current service cost, net of participant contributions
    
    
    55
    
    
    
    54
    
    
    
    47Interest cost
    
    
    222
    
    
    
    212
    
    
    
    207Actual return on assets
    
    
    (350
    )
    
    
    (265
    )
    
    
    (310
    )Plan amendments
    
    
    10
    
    
    
    83
    
    
    
    1Actuarial loss on accrued benefit obligation


354



193



99Settlement, curtailment and special
early retirement
    
    
    16
    
    
    
    10
    
    
    
    13Benefit costs before adjustments to recognize the long-term nature of plans
    
    
    307
    
    
    
    287
    
    
    
    57Adjustments to recognize the long-term nature of plans:Difference between expected return and actual return on plan assets
    
    
    123
    
    
    
    35
    
    
    
    92Difference between actuarial loss recognized for year and actual actuarial loss on
accrued benefit obligation for year
    
    
    (323
    )
    
    
    (188
    )
    
    
    (97
    )Difference between amortization of past service costs for year and actual plan
amendments for year
    
    
    3
    
    
    
    (74
    )
    
    
    4Defined benefit pension cost recognized
    
    
    110
    
    
    
    60
    
    
    
    56
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Current service cost, net of participant contributions
    
    
    3
    
    
    
    2
    
    
    
    3Interest cost
    
    
    13
    
    
    
    13
    
    
    
    12Plan amendments
    
    
    20
    
    
    
    12
    
    
    
    Actuarial loss (gain)on accrued benefit obligation
    
    
    23
    
    
    
    28
    
    
    
    (7
    )Curtailment and special early retirement
    
    
    
    
    
    
    3
    
    
    
    1Benefit costs before adjustments to recognize the long-term nature of plans
    
    
    59
    
    
    
    58
    
    
    
    9Adjustments to recognize the long-term nature of plans:Difference between
actuarial loss (gain)recognized for year and actual actuarial loss (gain) on
accrued benefit obligation for year
    
    
    (20
    )
    
    
    (25
    )
    
    
    8Difference between amortization of past service costs for year and actual plan
amendments for year
    
    
    (19
    )
    
    
    (11
    )
    
    
    Other benefit cost recognized
    
    
    20
    
    
    
    22
    
    
    
    17
 J)MEASUREMENT DATE AND ASSUMPTIONS
   2005
    
    
    2004
    
    
    2003%
    
    
    %
    
    
    %Discount rate
    
    
    6.00
    
    
    
    6.25
    
    
    
    6.50Expected long-term return on plan assets
    
    
    7.25
    
    
    
    7.50
    
    
    
    7.75Rate of compensation increase
    
    
    3.10
    
    
    
    3.55
    
    
    
    3.70




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##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    66
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 20. EMPLOYEE FUTURE BENEFITS (CONTINUED)
  2005
    
    
    2004%
    
    
    %Discount rate
    
    
    5.25
    
    
    
    6.00Rate of compensation increase
    
    
    3.10
    
    
    
    3.10
  2005
    
    
    2004%
    
    
    %Initial health care cost trend rate
    
    
    9.43
    
    
    
    10.31Cost trend rate declines to
    
    
    6.14
    
    
    
    6.17Year that the rate reaches the rate it is assumed to remain at
    
    
    2014
    
    
    
    2014
 K) SENSITIVITY ANALYSIS
  Increase
    
    
    Decreaseof 1%
    
    
    of 1%$
    
    
    $Net periodic benefit cost
    
    
    1
    
    
    
    (1
    )Accrued benefit obligation
    
    
    18
    
    
    
    (16
    )
 L) EXPECTED BENEFIT PAYMENTS
  ExpectedsubsidyPension benefits
    
    
    Other benefits
    
    

receipts1$
    
    
    $
    
    
    $2006
    
    
    213
    
    
    
    18
    
    
    
    2007
    
    
    319
    
    
    
    19
    
    
    
    2008
    
    
    227
    
    
    
    21
    
    
    
    2009
    
    
    235
    
    
    
    22
    
    
    
    12010
    
    
    243
    
    
    
    23
    
    
    
    12011-2015
    
    
    1,363
    
    
    
    122
    
    
    
    3
 
 1
    
    In 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was
passed, which introduced amongst others, a federal subsidy to sponsors of retiree
health care benefit plans offering a prescription drug program comparable to Medicares drug
program. The FASB issued, in 2004, Staff Position 106-2, Accounting and
Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization
Act of 2003, which requires employers who sponsor post retirement
health care plans that provide drug benefits to provide some disclosures as to the expectation of
the subsidy to be received. This only applies to our US other benefits plans.  21. CAPITAL STOCK
 A) AUTHORIZED




---



##### 



67
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 B) ISSUED COMMON SHARES
 2005
    
    

    2004
    
    

    2003Million
    
    
    
    
    
    
    Million
    
    
    
    
    
    
    Millionshares
    
    
    $
    
    
    shares
    
    
    $
    
    
    shares
    
    
    $Common shares, beginning of year
    
    
    440
    
    
    
    3,517
    
    
    
    440
    
    
    
    3,517
    
    
    
    440
    
    
    
    3,520Share purchase financing agreements
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )Common shares, end of year
    
    
    440
    
    
    
    3,518
    
    
    
    440
    
    
    
    3,517
    
    
    
    440
    
    
    
    3,517
   22. EARNINGS (LOSS) PER SHARE
    23. STOCK-BASED COMPENSATION PLANS
 A) EMPLOYEE SHARE OWNERSHIP PLAN
  B) PERFORMANCE SHARE UNITS PLAN




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    68
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 23. STOCK-BASED COMPENSATION PLANS (CONTINUED)
 C) DEFERRED SHARE UNITS PLANS
    D) RESTRICTED SHARE UNITS PLAN
  E) STOCK OPTION PLANS
     2005
    
    
    2004
    
    
    2003AssumptionsDividend yield
    
    
    1.6
    %
    
    
    1.0
    %
    
    
    3.6
    %Volatility
    
    
    25.4
    %
    
    
    32.5
    %
    
    
    36.5
    %Risk-free interest rate
    
    
    4.1
    %
    
    
    4.1
    %
    
    
    4.7
    %Expected option lives (in years)
    
    
    6.1
    
    
    
    6.1
    
    
    
    5.9Weighted average fair value of each option ($/ option)
    
    
    2.11
    
    
    
    4.19
    
    
    
    4.78




---



##### 



69
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2005
    
    
    2004
    
    
    2003Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedOptions
    
    
    average
    
    
    Options
    
    
    average
    
    
    Options
    
    
    average(in millions
    
    
    exercise
    
    
    (in millions
    
    
    exercise
    
    
    (in millions
    
    
    exerciseof shares)
    
    
    price
    
    
    of shares)
    
    
    price
    
    
    of shares)
    
    
    price$/option
    
    
    
    
    
    
    $/option
    
    
    
    
    
    
    $/optionOutstanding, beginning of year
    
    
    13.9
    
    
    
    13.61
    
    
    
    13.0
    
    
    
    13.95
    
    
    
    10.9
    
    
    
    14.75Granted
    
    
    1.4
    
    
    
    6.12
    
    
    
    1.3
    
    
    
    10.45
    
    
    
    2.3
    
    
    
    10.94Forfeited
    
    
    (1.3
    )
    
    
    15.06
    
    
    
    (0.3
    )
    
    
    13.91
    
    
    
    (0.2
    )
    
    
    21.45Expired
    
    
    (0.4
    )
    
    
    17.29
    
    
    
    (0.1
    )
    
    
    15.54
    
    
    
    
    
    
    
    Outstanding, end of year
    
    
    13.6
    
    
    
    12.61
    
    
    
    13.9
    
    
    
    13.61
    
    
    
    13.0
    
    
    
    13.95Options exercisable, end of year
    
    
    9.7
    
    
    
    13.89
    
    
    
    9.5
    
    
    
    14.61
    
    
    
    7.9
    
    
    
    15.20
  Options outstanding
    
    
    Options exercisableOptions
    
    
    Average
    
    
    Weighted
    
    
    Options
    
    
    Weightedoutstanding
    
    
    remaining
    
    
    average
    
    
    exercisable
    
    
    average(in millions
    
    
    life
    
    
    exercise
    
    
    (in millions
    
    
    exerciseRange of exercise prices
    
    of shares)
    
    
    (in years)
    
    
    price
    
    
    of shares)
    
    
    price$ /option
    
    
    
    
    
    
    $ /option$6.12
  to $9.82
    
    
    1.4
    
    
    
    9
    
    
    
    6.27
    
    
    
    0.1
    
    
    
    9.81$9.93
  to $10.66
    
    
    1.3
    
    
    
    8
    
    
    
    10.45
    
    
    
    0.3
    
    
    
    10.44$10.97 to $11.73
    
    
    2.2
    
    
    
    7
    
    
    
    10.98
    
    
    
    1.1
    
    
    
    10.98$11.77 to $12.23
    
    
    1.8
    
    
    
    5
    
    
    
    11.82
    
    
    
    1.8
    
    
    
    11.82$12.86 to $13.33
    
    
    2.3
    
    
    
    6
    
    
    
    13.32
    
    
    
    1.8
    
    
    
    13.32$13.42 to $14.27
    
    
    1.3
    
    
    
    4
    
    
    
    13.45
    
    
    
    1.3
    
    
    
    13.45$14.40 to $15.37
    
    
    1.6
    
    
    
    3
    
    
    
    14.43
    
    
    
    1.6
    
    
    
    14.43$16.42 to $21.53
    
    
    1.7
    
    
    
    1
    
    
    
    19.03
    
    
    
    1.7
    
    
    
    19.0313.6
    
    
    
    5
    
    
    
    12.61
    
    
    
    9.7
    
    
    
    13.89
 24. FOREIGN CURRENCY TRANSLATION ADJUSTMENT
  2005
    
    
    2004$
    
    
    $Foreign currency translation adjustment, beginning of year
    
    
    (336
    )
    
    
    (266
    )Unrealized losses for the year on translation of net assets
    
    
    (60
    )
    
    
    (70
    )Business divestiture (note 2)
    
    
    120
    
    
    
    Foreign currency translation adjustment, end of year
    
    
    (276
    )
    
    
    (336
    )




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    70
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 25. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
 A) FOREIGN EXCHANGE RISK MANAGEMENT
   Contract rates
    
    
    Contract amountto convert US$ into Canadian dollar
    
    
    (in millions of US dollars)2005
    
    
    2004
    
    
    2005
    
    
    2004Average
    
    
    Average
    
    
    Average
    
    
    AverageMaturity
    
    floor
    
    
    ceiling
    
    
    floor
    
    
    ceiling2005
    
    
    
    
    
    
    
    
    
    
    1.3337
    
    
    
    1.3950
    
    
    
    
    
    
    
    5952006
    
    
    1.2157
    
    
    
    1.2754
    
    
    
    1.2581
    
    
    
    1.3193
    
    
    
    407
    
    
    
    186
  Contract rate
    
    
    Contract amountto convert US$ into Canadian dollar
    
    
    (in millions of US dollars)Maturity
    
    2005
    
    
    2004
    
    
    2005
    
    
    20042006
    
    
    1.1866
    
    
    
    
    
    
    
    195
    
    
    
    
  Contract rates
    
    
    Contract amountto convert Euro into Canadian dollar
    
    
    (in millions of Euros)2005
    
    
    2004
    
    
    2005
    
    
    2004Average
    
    
    Average
    
    
    Average
    
    
    AverageMaturity
    
    floor
    
    
    ceiling
    
    
    floor
    
    
    ceiling2005
    
    
    
    
    
    
    
    
    
    
    1.5944
    
    
    
    1.6572
    
    
    
    
    
    
    
    49




---



##### 



71
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 B) INTEREST RATE RISK MANAGEMENT
      C) CREDIT RISK MANAGEMENT
     D) FAIR VALUE OF FINANCIAL INSTRUMENTS




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    72
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 26. COMMITMENTS AND CONTINGENCIES
 A) CONTINGENCIES
   B) ENVIRONMENT MATTERS
        C) COMMITMENTS
  D) INDEMNITIES




---



##### 



73
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 27. RELATED PARTY TRANSACTIONS
  2004
    
    
    2003$
    
    
    $Value of fibre supplied to SFK GP
    
    
    14
    
    
    
    92Purchases of market pulp
    
    
    3
    
    
    
    25
 28.
    
    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES
  A) NET EARNINGS (LOSS) ADJUSTMENTS
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Net earnings (loss), as reported in the consolidated statements
of earnings per Canadian GAAP
    
    
    (350
    )
    
    
    (36
    )
    
    
    175Current year adjustmentsCurrency options and forward contracts1
    
    
    
    
    
    
    
    
    
    
    18Stock option expense8
    
    
    
    
    
    
    (2
    )
    
    
    4Income tax expense
    
    
    
    
    
    
    
    
    
    
    (6
    )Net earnings (loss), as adjusted per US GAAP
    
    
    (350
    )
    
    
    (38
    )
    
    
    191Composition of net earnings, as adjusted per US GAAP10Earnings (loss) from continuing operations
    
    
    (350
    )
    
    
    (113
    )
    
    
    194Earnings (loss) from discontinued operations
    
    
    
    
    
    
    75
    
    
    
    (3
    )Net earnings (loss), as adjusted per US GAAP
    
    
    (350
    )
    
    
    (38
    )
    
    
    191Per common share (basic and diluted), as adjusted per US GAAP10Earnings (loss) from continuing operations
    
    
    (0.80
    )
    
    
    (0.26
    )
    
    
    0.44Earnings (loss) from discontinued operations
    
    
    
    
    
    
    0.17
    
    
    
    Net earnings (loss), as adjusted per US GAAP
    
    
    (0.80
    )
    
    
    (0.09
    )
    
    
    0.44




---



##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    74
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 28. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
 B) CONDENSED CONSOLIDATED BALANCE SHEETS
  2005
    
    
    2004Canadian
    
    
    US
    
    
    Canadian
    
    
    USGAAP
    
    
    GAAP
    
    
    GAAP
    
    
    GAAP$
    
    
    $
    
    
    $
    
    
    $ASSETSCurrent assets1, 7
    
    
    1,207
    
    
    
    1,218
    
    
    
    1,402
    
    
    
    1,302Investments3
    
    
    9
    
    
    
    31
    
    
    
    20
    
    
    
    567Property, plant and equipment
    
    
    4,260
    
    
    
    4,226
    
    
    
    5,005
    
    
    
    4,967Intangible assets5
    
    
    473
    
    
    
    568
    
    
    
    468
    
    
    
    575Employee future benefits5
    
    
    248
    
    
    
    
    
    
    
    176
    
    
    
    Future income taxes5
    
    
    414
    
    
    
    428
    
    
    
    389
    
    
    
    403Other assets6
    
    
    137
    
    
    
    132
    
    
    
    125
    
    
    
    119Goodwill4
    
    
    1,296
    
    
    
    1,253
    
    
    
    1,296
    
    
    
    1,330Non-current assets of discontinued operations10
    
    
    
    
    
    
    
    
    
    
    906
    
    
    
    8,044
    
    
    
    7,856
    
    
    
    9,787
    
    
    
    9,263LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities2
    
    
    951
    
    
    
    984
    
    
    
    1,554
    
    
    
    1,379Long-term debt2, 6
    
    
    3,744
    
    
    
    3,674
    
    
    
    4,121
    
    
    
    4,079Employee future benefits5
    
    
    154
    
    
    
    667
    
    
    
    150
    
    
    
    628Future income taxes1, 5
    
    
    716
    
    
    
    528
    
    
    
    853
    
    
    
    721Non-controlling interests
    
    
    78
    
    
    
    78
    
    
    
    83
    
    
    
    83Non-current liabilities related to discontinued operations10
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    Shareholders equity8
    
    
    2,401
    
    
    
    1,925
    
    
    
    2,726
    
    
    
    2,3738,044
    
    
    
    7,856
    
    
    
    9,787
    
    
    
    9,263
  C) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  2005
    
    
    2004
    
    
    2003Canadian
    
    
    US
    
    
    Canadian
    
    
    US
    
    
    Canadian
    
    
    USGAAP
    
    
    GAAP
    
    
    GAAP
    
    
    GAAP
    
    
    GAAP
    
    
    GAAP$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Cash flows from (used in) operating activities9
    
    
    164
    
    
    
    159
    
    
    
    (3
    )
    
    
    8
    
    
    
    19
    
    
    
    45Cash flows from (used in) financing activities
    
    
    (797
    )
    
    
    (796
    )
    
    
    161
    
    
    
    168
    
    
    
    145
    
    
    
    150Cash flows from (used in) investing activities
    
    
    566
    
    
    
    592
    
    
    
    (86
    )
    
    
    (49
    )
    
    
    (275
    )
    
    
    (274
    )Cash generated by discontinued operations10
    
    
    3
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    39
    
    
    
    Increase (decrease) in cash and cash equivalents
    
    
    (64
    )
    
    
    (45
    )
    
    
    87
    
    
    
    127
    
    
    
    (72
    )
    
    
    (79
    )Currency translation adjustment on cash
    
    
    (4
    )
    
    
    (4
    )
    
    
    (5
    )
    
    
    (4
    )
    
    
    (21
    )
    
    
    (9
    )Cash and cash equivalents (bank indebtedness),
beginning of year
    
    
    135
    
    
    
    111
    
    
    
    53
    
    
    
    (12
    )
    
    
    146
    
    
    
    76Cash and cash equivalents (bank indebtedness),
end of year
    
    
    67
    
    
    
    62
    
    
    
    135
    
    
    
    111
    
    
    
    53
    
    
    
    (12
    )




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##### 



75
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 D) DIFFERENCES BETWEEN CANADIAN AND US GAAP
 1 ) CURRENCY OPTIONS AND FORWARD CONTRACTS
 Accounting for Derivative Instruments and Hedging Activities Accounting for Certain Derivative Instruments and Certain Hedging Activities
   2 ) INTEREST RATE SWAP CONTRACTS
   3 ) JOINT VENTURES
  4 ) DUPLICATE PROPERTY PROVISIONS
 Recognition of Liabilities in Connection with a Purchase Business Combination




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##### 



ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
    
    76
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 28. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
 5 ) EMPLOYEE FUTURE BENEFITS
 Employers Accounting for Pensions
  6 ) LONG-TERM DEBT DISCOUNTS
  7 ) ACCOUNTS RECEIVABLE
  8 ) STOCK-BASED COMPENSATION PLANS
 Accounting for Stock-Based
Compensation-Transition and Disclosure, an amendment of FASB Statement No. 123
 Stock-based Compensation and Other Stock-Based Payments
 9 ) DIVIDENDS FROM INVESTMENTS SUBJECT TO SIGNIFICANT INFLUENCE
  10 ) DISCONTINUED OPERATIONS
  11 ) RESEARCH AND DEVELOPMENT TAX CREDITS
   12 ) CONSOLIDATION OF VARIABLE INTEREST ENTITIES
 Consolidation of Variable Interest
Entities




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##### 



77
    
    ABITIBI-CONSOLIDATED / 2005 ANNUAL REPORT
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 E) COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)  COMPREHENSIVE INCOME (LOSS)
  2005
    
    
    2004
    
    
    2003$
    
    
    $
    
    
    $Net earnings (loss) in accordance with US GAAP
    
    
    (350
    )
    
    
    (38
    )
    
    
    191Other comprehensive income (loss)Foreign currency translation adjustment
    
    
    60
    
    
    
    (70
    )
    
    
    (315
    )Gain (loss) on currency options and forward contracts
qualifying as a cash flow hedge, net of taxes of
$18 million (2004 $3 million, 2003 $47 million)1
    
    
    (42
    )
    
    
    (6
    )
    
    
    96Additional minimum liability adjustment of defined benefit pension plans,
net of taxes of $38 million (2004  $76 million, 2003  $37 million)5
    
    
    (80
    )
    
    
    (175
    )
    
    
    81(62
    )
    
    
    (251
    )
    
    
    (138
    )Comprehensive income (loss)
    
    
    (412
    )
    
    
    (289
    )
    
    
    53
  ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 2005
    
    
    2004$
    
    
    $Foreign currency translation adjustment
    
    
    (276
    )
    
    
    (336
    )Unrealized gain on currency options and forward contracts1
    
    
    22
    
    
    
    64Additional minimum liability of defined benefit pension plans5
    
    
    (454
    )
    
    
    (374
    )Accumulated other comprehensive loss
    
    
    (708
    )
    
    
    (646
    )
  F) RECENT ACCOUNTING DEVELOPMENTS
 INVENTORY COSTS
 Inventory Costs  an amendment of ARB No. 43,
Chapter 4
 STOCK-BASED COMPENSATION
 Accounting for Stock-Based Compensation Accounting for Stock-Based
Compensation  Transition and Disclosure  an amendment of FASB Statement No. 123