Cervus Equipment Corporation Announces Agreement with CRA Regarding its Conversion Transaction

CALGARY, May 4, 2015 /CNW/ - Cervus Equipment Corporation ("Cervus") (TSX: CVL) announced today that it has entered into an agreement with the Canada Revenue Agency regarding its objection to the tax consequences of the conversion of Cervus from a limited partnership structure into a business corporation in October 2009.

The agreement will:

• not give rise to any cash outlay by Cervus for Canadian federal income taxes for the taxation years 2009 to 2014;
• leave Cervus with approximately $16.2 million in Canadian federal income tax pools at December 31, 2014, available to offset federal taxes payable of approximately $2.4 million in subsequent taxation years;
• leave Cervus with approximately $79.4 million in Canadian capital loss carry forwards at December 31, 2014 to apply to subsequent taxation years;
• result in approximately $3.4 million in provincial taxes payable as at December 31, 2014; and
• result in a non-cash charge of approximately $32.1 million in the consolidated statement of earnings for the second quarter of 2015 related to the adjustment of certain tax pools and the write-off of a portion of Cervus' deferred tax assets.

Cervus will provide an update of the agreement's impact on its deferred tax assets and liabilities as part of its management's discussion and analysis and its financial statements for the first quarter of 2015 to be issued on May 13, 2015.

About Cervus Equipment Corporation

Cervus acquires and operates authorized agricultural, construction, materials handling and transportation equipment dealerships.  The company has interests in 75 dealerships in Canada, New Zealand, and Australia, employing more than 1,700 people. The primary equipment brands represented by Cervus include John Deere agricultural equipment; Bobcat and JCB construction equipment; Clark, Sellick and Doosan material handling equipment; and Peterbilt transportation equipment. The common shares of Cervus are listed on the Toronto Stock Exchange and trade under the symbol "CVL".

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

SOURCE Cervus Equipment Corporation

Graham Drake - President & CEO, Telephone: [phone], Email: [email protected]; Randy Muth - Chief Financial Officer, Telephone: [phone], Email: [email protected]