2Transitional adjustment January 1 2007

The decrease in the fair value of these forward exchange contracts for 2008 is due primarily to unrealized losses from the fluctuations in foreign exchange rates in the second half of 2008 and the settlement of certain foreign currency forwards with significant gains during the first half of 2008. The unrealized losses are a result of fluctuations in foreign exchange rates between the time the currency forward contracts were entered into and the valuation date at period end.(ii) In connection with the issuance of our 2011 Notes in June 2004, we entered into agreements to swap the fixed rate of interest for a variable interest rate The notional amount of the agreements is $500.0 The agreements mature in July 2011 See note 3(c). The fair value of the interest rate swap agreements at December 31, 2008 was an unrealized gain of $17.3, which is recorded in other long-term assets (December 31, 2007 - unrealized gain of $8.7). The increase in the fair value of the swap agreements of $8.6 for 2008 is recorded as a reduction of interest expense on long-term debt. Also see note 2(ii)(b) which summarizes the impact of our mark-to-market adjustments and our fair value hedge accounting. Fair value hedge ineffectiveness arises when the change in the fair values of our swap agreements, our hedged debt obligation and its embedded derivatives, and the amortization of the related basis adjustments, do not offset each other during a reporting period. The fair value hedge ineffectiveness for our 2011 Notes is recorded in interest expense on long-term debt and amounted to a loss of $0.9 for 2008.

This fair value hedge ineffectiveness is driven primarily by the difference in the credit risk used to value our hedged debt obligation as compared to the credit risk used to value our interest rate swaps. During the fourth quarter of 2008, we repurchased a portion of our 2011 Notes See note 3(d). Since the portion of the 2011 Notes that we repurchased in 2008 is considered insignificant, our fair value hedge relationship remained effective as of December 31, 2008 and we continued to apply fair value hedge accounting to our 2011 Notes.11. Shareholders' equity:Capital Contributed stockWarrantssurplus Deficit- - - -Balance - December 31, 2006....................$ 3,576.6 $ 8.4 $ 179.3 $(1,696.2)Change in accounting policy (note 2(ii)(b))..- - -(6.4)Shares issued............8.6 - - -Warrants cancelled.......-(5.3)5.3 -Stock-based compensation costs...................- - 5.1 -Other....................- - 0.6 -Net loss for 2007........- - - (13.7)- - - -Balance - December 31, 2007 ...................3,585.2 3.1 190.3(1,716.3)Shares issued............3.3 - - -Warrants cancelled.......-(3.1)3.1 -Stock-based compensation costs...................- -10.0 -Other....................- - 1.0 -Net loss for 2008........- - -(720.5)- - - -Balance - December 31, 2008....................$ 3,588.5 $ - $ 204.4 $(2,436.8)- - - - - -Accumulated other comprehensive income, Year ended December 31 net of tax:20072008- -Opening balance of foreign currency translation account.........................................$ - $35.2Transitional adjustment - January 1, 2007........ 26.5 -Foreign currency translation gain................8.711.5- -Closing balance.................................. 35.246.7Opening balance of unrealized net gain on cash flow hedges.....................................$ - $20.7Transitional adjustment - January 1, 2007....... (0.5)-Net gain (loss) on cash flow hedges (1)..........

37.5 (53.1)Net gain on cash flow hedges reclassified to operations (2)..................................(16.3) (4.9)- -Closing balance(3)............................... 20.7 (37.3)- -Accumulated other comprehensive income...........$55.9 $ 9.4- -(1)Net of income tax benefit of $0.6 and $0.8, respectively, for the three months and year ended December 31, 2008 ($0.2 income tax expense for 2007).(2)Net of income tax expense of $1.0 and $0.2, respectively, for the three months and year ended December 31, 2008 (no income tax for 2007).(3)Net of income tax benefit of $0.4 as of December 31, 2008 ($0.2 income tax expense as of December 31, 2007).We expect that the majority of the losses on cash flow hedges reported inaccumulated other comprehensive income at December 31, 2008 will bereclassified to operations during the next 12 months.12. Guarantees and contingencies:We have contingent liabilities in the form of letters of credit, lettersof guarantee, and surety and performance bonds which we have provided tovarious third parties. These guarantees cover various payments, includingcustoms and excise taxes, utility commitments and certain bankguarantees. These may include indemnifications against adverseimpacts due to changes in tax laws and patent infringements by thirdparties. We have also provided indemnifications in connection with thesale of certain businesses and real property.