Investor FAQ's
Tax Information - up to December 31, 2019
Unitholder distributions declared by Boyd Group Income Fund (the “Fund”) are anticipated to be taxable primarily as other income for unitholders. The Fund will make an annual determination as to the breakdown of dividend and interest income. Unless otherwise communicated, dividends paid or allocated are eligible dividends. Complete tax treatment details will be sent to unitholders annually via a T3 Form. As well, the Fund will annually summarize the tax characteristics of distributions and include them within the investor relations section of its web site.
Class A Boyd Group Holdings Inc. shareholder distributions declared by the Fund are anticipated to be taxable as dividend income for shareholders. Unless otherwise communicated, dividends paid or allocated are eligible dividends. Complete tax treatment details will be sent to Class A Boyd Group Holdings Inc. shareholders annually via a T5 Form. As well, the Fund will annually summarize the tax characteristics of dividends and include them within the investor relations section of its web site.
Each year Fund unitholders will receive a T3 Form and Class A Boyd Group Holdings Inc. shareholders will receive a T5 Form the provides this information. The Boyd Group will also post this information annually on the Canadian Depository for Securities ("CDS") Web site and include a summary within the investor relations section of its web site.
For U.S. residents that own units of the Boyd Group Income Fund, the Fund's distributions are qualified as a dividend and are subject to a 15% non-resident withholding tax.
For U.S. unitholders that do not have a Tax Identification Number ("TIN") the Fund's interest or dividend paying agent (Computershare Trust Company ) is required to withhold an additional 25% backup withholding tax. A U.S. tax form (W9 Form) is sent to all U.S. unitholders to provide their TIN information.
U.S. residents that own units of the Boyd Group Income Fund can apply for an exemption from Canadian withholding tax by requesting a letter of exemption from the International Tax Services Office in Ottawa, Ontario (Tel: 1-800-267-3395)
Tax Information – beginning January 1, 2020
Shareholder dividends declared by Boyd Group Services Inc. are anticipated to be taxable primarily as dividend income for shareholders. Unless otherwise communicated, dividends paid or allocated are eligible dividends. Complete tax treatment details will be sent to shareholders annually via a T5 Form.
Each year, BGSI shareholders will receive a T5 Form the provides this information. BGSI will also post this information annually on the Canadian Depository for Securities ("CDS") website and include a summary within the investor relations section of its website.
For U.S. residents that own shares of BGSI, dividends are subject to a 15% non-resident withholding tax.
For U.S. unitholders that do not have a Tax Identification Number ("TIN") BGSI’s dividend paying agent (Computershare Trust Company ) is required to withhold a 25% backup withholding tax. A U.S. tax form (W9 Form) is sent to all U.S. shareholders to provide their TIN information.
An exemption from Canadian withholding tax may be available in limited circumstances. U.S. residents that own shares of BGSI can apply for an exemption from Canadian withholding tax by requesting a letter of exemption from the International Tax Services Office in Ottawa, Ontario (Tel: 1-800-267-3395).
Share Information: Pre-2003 to December 31, 2019
On February 28, 2003 the Company converted to an Income Trust. The following is an example of the conversion, assuming a shareholder of The Boyd Group Inc. owned 100 Class A shares prior to the conversion;
Step 1. Share Consolidation on a 4:1 basis
The 100 Class A shares of The Boyd Group Inc were consolidated on a 4:1 basis such that the shareholder would receive 25 new Class A shares of The Boyd Group Inc. This consolidation or reverse split applied to all shareholders such that the relative interest of any one shareholder as a result of this consolidation remained unchanged.
Step 2. Conversion of Class A Shares of The Boyd Group Inc.
As a result of the approved Plan of Arrangement, all Class A shares of The Boyd Group Inc. were exchanged for a combination of: a) Trust Units in Boyd Group Income Fund and b) Class A shares in a new holding company, Boyd Group Holdings Inc. The Class A shares that you refer to that are in your account today (after conversion) are not the publicly traded Class A shares of The Boyd Group Inc.
Here is what happened to the 100 Class A shares of The Boyd Group Inc. in our example: a) 64.96% of the Class A shares were exchanged for Trust Units (64.96%x25 = 16 Units).b) 35.04% of the Class A shares were exchanged for new Class A shares in the holding company mentioned above (35.04% x 25 = 9).
When your old Boyd Class A shares were exchanged for Trust Units, this is a taxable event. Depending on what you paid for Boyd Class A shares, the conversion of these shares to Trust Units will likely result in a capital gain to you. This capital gain will be taxable in 2003. When your old Boyd Class A shares were exchanged for Holding Company shares, this may or may not be a taxable event, at your option. When a shareholder exchanges shares in this fashion, there is an election available to the shareholder, within the Canadian Income Tax Act, that allows this exchange to take place without resulting in taxable capital gains. This "tax deferral" only continues until such time as you may decide to exchange your Holding Company shares for Trust Units. This exchange (like the exchange of the old Boyd Class A shares) to Trust Units is also a taxable event. Hence, every shareholder, as a result of this mechanism, has an opportunity to defer some tax as long as they may want to, by continuing to hold the shares of the Holding Company (these shares will always be exchangeable for Trust Units, so there is not reason to exchange, unless you want to sell, and in that event you would have a taxable gain anyway). It should be noted that if your holdings are within an RRSP or some other type of "tax deferral plan" then the tax deferral created by these Holding Company shares will not result in any additional benefit to you, hence you may want to elect to have the original conversion treated as a taxable event.
The Boyd Group Holdings Inc. ("Holdco") shares will not be publicly traded and as a result, most brokers have not attempted to establish the correct value for these shares. They have simply placed these shares in your account at 0 value. These Holdco shares do, however, have significant value for the following three reasons:
- The Holdco shares received monthly cash distributions at the same time as the Trust units receive distributions. During the first year after the effective date of the conversion (February 28, 2003), the Holdco shares received a monthly distribution equal to 40% of the distribution that was received on a trust unit. For example, we made the first cash distribution, for the month of March, on April 30, 2003. This distribution was $0.095 per trust unit and $0.038 for each Holdco share ($0.095 x 40% = $0.038). Holdco shares received distributions equivalent to 70% of a trust unit distribution during the second year and equal to 100% thereafter. The primary purpose of the reduced distribution in the first and second year was to provide an incentive for new investors to participate in the Initial Public Offering. The reduced distributions created a "cash reserve" in the company that provided added protection in making future distributions.
- The Holdco shares are exchangeable for Trust units at any time.
Tax Deferral on Holdco shares. The third reason why the Holdco shares have value is tax related. When your original Boyd Class A shares were converted to Trust units, this is a taxable event (to the extent this resulted in a capital gain to you, this gain would be taxable immediately). In the case of the conversion of your original Boyd Class A shares to Class A shares of Holdco you, as a shareholder, can elect to defer this gain. This tax deferral feature of the Holdco shares can be very significant to any shareholder that has significant holdings of shares that are not already held within a tax deferred plan (such as an RRSP). Whether or not this tax deferral is a benefit to a particular shareholder will depend on that shareholder's individual tax situation. This tax deferral also has value.
The BGHI Class A common shares are not traded. They must be converted to Trust Units which can then be sold on the public market.
The majority of shareholders hold their shares with a broker or financial institution. If your shares are held in such a manner, please contact your broker or financial institution and they will arrange for the exchange to Trust Units on your behalf.
For more information, please contact Investor Relations
Share Information: Post December 31, 2019
On January 1, 2020 the Fund converted to a corporation, named Boyd Group Services Inc. on a 1:1 basis. Unitholders of the Fund and shareholders of BGSI received one common share of BGSI for each unit and/or share held on December 31, 2019.
More information on the conversion is contained in the following documents:
No. As a result of the conversion, the Canadian non-resident ownership restriction has been eliminated.
- Simplifies interaction with capital providers, regulatory agencies and equity research analysts
- Simplifies structure and governance setup
- Removes restriction on non-Canadian ownership
- Provides for flexibility in structuring acquisitions on a tax-deferred basis
There will be no change in the distribution/dividend policy immediately following the corporate conversion, except that dividends will be declared and paid on a quarterly basis rather than on a monthly basis. However, the amount of dividends payable will remain at the discretion of the Board of Directors.
The following summary is intended to provide information that may be of assistance to former holders of units ("Units") of Boyd Group Income Fund ("Unitholders") or Class A Common shares ("Shares") of Boyd Group Holdings Inc. ("BGHI Shareholders") who participated in the court-approved Plan of Arrangement implemented on January 1, 2020 (the "Arrangement").
Please refer to the section entitled "Certain Canadian Federal Income Tax Considerations" in the Management Information Circular with respect to the Arrangement dated October 24, 2019 (the “Information Circular”) for further information. This summary is general information only and Unitholders and BGHI Shareholders are urged to consult their tax advisors concerning the tax consequences of the Arrangement to them.
As described in the Information Circular, under the Arrangement, each Unitholder and BGHI Shareholder exchanged their Units and Shares, respectively, for common shares of Boyd Group Services Inc. (“BGSI Shares”) on January 1, 2020.
On the exchange of Units for BGSI Shares pursuant to the Arrangement, a Unitholder who held their Units as capital property for tax purposes and is, at all relevant times and for the purposes of the Income Tax Act (Canada) (the "Tax Act"), a resident of Canada and not exempt from tax under Part I of the Tax Act (a "Resident Unitholder") will recognize a capital gain (or capital loss) equal to the amount, if any, by which the fair market value of the BGSI Shares received exceeds (or is less than) the aggregate of the adjusted cost base of the Units to the Resident Unitholder, determined immediately before the effective time of the unit-for-share exchange. The cost to a Resident Unitholder of their BGSI Shares acquired is equal to the fair market value thereof.
While an exchange of Shares for BGSI Shares pursuant to the Arrangement will generally automatically occur on a tax-deferred basis, a BGHI Shareholder who chooses to recognize a capital gain (or capital loss) and who held their Shares as capital property for tax purposes and is, at all relevant times and for the purposes of the Tax Act, a resident of Canada and not exempt from tax under Part I of the Tax Act (a "Resident BGHI Shareholder") will recognize a capital gain (or capital loss) equal to the amount, if any, by which the fair market value of the BGSI Shares received exceeds (or is less than) the aggregate of the adjusted cost base of the BGHI Shares to the Resident BGHI Shareholder, determined immediately before the effective time of the share-for-share exchange. The cost to a Resident BGHI Shareholder who chooses to recognize a capital gain (or capital loss) of their BGSI Shares acquired is equal to the fair market value thereof.
Neither Boyd Group Income Fund nor Boyd Group Holdings Inc. has the information to determine the adjusted cost base of any particular Resident Unitholder of their Units or of any particular Resident BGHI Shareholder of their BGHI Shares and each Unitholder and BGHI Shareholder must determine such adjusted cost base using its own records. If you require assistance, please contact your tax advisor.
Boyd Group Services Inc.’s estimate of the fair market value of the BGSI Shares issued in exchange for Units and BGHI Shares is $202.00 per share. This estimate of the fair market value was determined based on the trading price of the Units as of close of trading on December 31, 2019.
The estimate of fair market value is not binding on the Canada Revenue Agency or any particular Unitholder or BGHI Shareholder and all Unitholders and BGHI Shareholders should consult with their own tax advisors with respect to the appropriate mechanism of valuing the BGSI Shares received pursuant to the Arrangement.
Boyd Group Services Inc. is a Canadian company that is considered a qualified foreign corporation as a result of the U.S. and Canada tax treaty. In addition to dividends being paid by a qualified foreign corporation the shareholder must satisfy certain stock holding period requirements. For common stock, shares must be held for more than 60 days throughout the 120-day time period, which begins 60 days before the ex-dividend date. Qualified dividend classification needs to be reviewed on a shareholder-by-shareholder basis and performed by their investment institution.
General
The collision repair sector in Canada and the U.S. is an over US$37 billion industry.
Yes, we are one of the largest. It is estimated that, in aggregate the multi-shop operators inclusive of franchise networks, represent approximately 43% of the total North American market.
Our corporate culture is driven by our mission to “WOW” all of our customers with quality work and “best in class” service.
The company has approximately 10,000 employees across North America.
Our fiscal year end is December 31.
The Annual Report, as well as other financial documents are contained within the Investor Relations section of our web site. To receive hard copies, please contact Investor Relations. Boyd Group Services Inc. is listed on the Toronto Stock Exchange and also files disclosure documents required by provincial securities laws electronically through SEDAR. You can access these documents on the SEDAR web site at www.sedar.com.
Boyd Group Services Inc.’s shares are traded on the Toronto Stock Exchange under the symbol BYD.TO.
Boyd Group Services Inc. shares can be bought or sold through a stockbroker, bank, or any other financial institution that provides brokerage services.
Mail/Courier
Computershare
100 University Avenue, 8th Floor
Toronto, Ontario
M5J 2Y1
Canada
Website
www.computershare.com
We recommend that you contact your stockbroker. Should you require additional information regarding your account, or assistance with transactions, you may contact our transfer agent and registrar at the address listed above.
You may own Boyd GroupServices Inc.'s shares without actually having a paper certificate. When
shares
are purchased, they are electronically transferred to, and held by custodians through the Canadian Depository for Securities (CDS). If requested, certificates can be obtained in the name of the registered owner by making a request to Boyd's transfer agent and registrar at the address listed above. If your broker is the registered owner, they must make the request for a certificate on your behalf.Deloitte LLP
1745 Ellice Avenue
Winnipeg, Manitoba, R3H 1A6
Email: info@boydgroup.com
Tel: 204-895-1244
Fax: 204-895-1283
Craig MacPhail
NATIONAL Capital Markets
Ph (416) 586-1938 / (800) 385-5451
Email: cmacphail@national.ca
OR
Tim O’Day
President & CEO
Phone: (847) 410-6002
Email: tim.oday@boydgroup.com
OR
Jeff Murray
Vice President, Finance & Interim CFO
Phone: (204) 594-1773
Email: Jeff.murray@boydgroup.com
Boyd Group Services Inc.
1745 Ellice Avenue
Winnipeg, Manitoba, R3H 1A6
Email: info@boydgroup.com
Tel: 204-895-1244
Fax: 204-895-1283